I. Spokesperson of Chroma ATE Inc.

Name: Paul Ying

Title: Senior Vice President of Finance & Administration Center

TEL: (03) 327-9999 ext. 82001

Email: [email protected]

Deputy spokesperson of Chroma ATE Inc.

Name: Jennifer Chien

Title: Director, Investor Relation & Corporate Investment

TEL: (03) 327-9999 ext. 82701

Email: [email protected]

II. Addresses and telephone numbers of head office, branches and plants Head Office: No. 88, Wenmao Rd., Guishan Dist., Taoyuan City 333001, Taiwan TEL: (03) 327-9999

Taoyuan Huaya plant: 68 Huaya 1st Rd., Guishan Dist., Taoyuan 333411, Taiwan TEL: (03) 327-9999

Hsinchu Branch: 6F, No. 5, Technology Rd., Hsinchu Science Park, Hsinchu City 300092, Taiwan

TEL: (03) 563-5788

Kaohsiung Branch: No. 1, Neihuan E. Rd., Nanzi Dist., Kaohsiung City 811623, Taiwan TEL: (07) 365-6188

III. Stock transfer agent

Name: Taishin Securities Co., Ltd., Shareholders Service Agency Dept.

Address: B1, No.96, Jianguo North Road, Sec. 1, Taipei City 104496

Website: https://www.tssco.com.tw

TEL: (02) 2504-8125

IV. Attesting Certified Public Accountants (CPAs) for the most recent financial statements Name: CPAs Wen-Chin Lin, Chien-Liang Liu

Name of accounting firm: Deloitte & Touche

20F, No. 100, Songren Rd., Xinyi Dist., Taipei City 110016, Taiwan

Website: http://www.deloitte.com.tw

TEL: (02) 2725-9988

V. The name of any exchanges where the Company’s securities are listed offshore, and the method by which to access information on the offshore securities: None.
VI. Company website: http://www.chromaate.com

Critical financial indicators (integrated)

Unit: NT$ million

	2020	2021	2022
Consolidated net operating revenues	15,533	17,584	22,067
Net income (attributable to the parent Corporation)	2,324	4,179	5,106
Earnings per share, EPS (NT$)	5.56	9.96	12.14
Capital stock	4,213	4,219	4,254
Total assets	28,129	29,546	33,829
Total equity	16,389	18,947	21,873
Return on total assets	8.85	14.62	16.25
Return on total equity	15.21	24.17	25.61

Consolidated net operating revenues for the 5 most recent years

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24000
22067
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18000 16931
15533
16000
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6000
4000
2000
0
2018 2019 2020 2021 2022
Unit：NT$ million
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Net income for the 5 most recent years

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6000
5500
5106
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4500 4179
4000
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1000
500
0
2018 2019 2020 2021 2022
Unit：NT$ million
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Earnings per share for the 5 most
years
13.0
12.14
12.0
11.0
9.96
10.0
9.0
8.0
7.0 6.22
6.0 5.56
5.0 4.48
4.0
3.0
2.0
1.0
0.0
2018 2019 2020 2021 2022
Unit：NT$
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Chapter 1 Reports to Shareholders............................................................................................. 1	Chapter 1 Reports to Shareholders............................................................................................. 1
Chapter 2 Company Introduction
I.	Date of founding ............................................................................................................ 2
II.	Company overview ........................................................................................................ 2
Chapter 3 Corporate Governance Report
I.	Organization ................................................................................................................... 4
II.	Directors, president, vice presidents, assistant vice presidents, and heads of
	departments and branches .............................................................................................. 6
III.	Total remuneration paid to directors, president, and vice presidents in the most
	recent year .................................................................................................................... 12
IV.	Operation of corporate governance .............................................................................. 17
V.	Information on the CPAs’ professional charge............................................................. 50
VI.	Replacement of CPAs: ................................................................................................. 51
VII.	The Company’s Chairman, president, or any managerial officer in charge of
	finance or accounting matters who has held a position at the accounting firm of
	its CPAs or at an affiliated company in the most recent year. ...................................... 51
VIII.	Shareholding transfer and equity pledge changes of directors or managerial
	officers holding more than ten percent (10%) of Company shares during the most
	recent year up to the publication date of this annual report ......................................... 52
IX.	Information on the ten largest shareholders who are related parties or each
	other’s spouses and relatives within the second degree of kinship .............................. 54
X.	Number of shares held by the Company, and the directors and managerial
	officers of the Company, and companies directly or indirectly controlled by the
	Company in a single company invested in, and the comprehensive shareholding
	percentage calculated on a consolidated basis. ............................................................ 55
Chapter 4 Capital Raising
I.	Capital and shares ........................................................................................................ 56
II.	Corporate Bonds. ......................................................................................................... 64
III.	Preferred shares. ........................................................................................................... 64
Ⅳ.	Overseas depositary receipt. ........................................................................................ 64
V.	Employee stock warrant. .............................................................................................. 64
VI.	New restricted employee shares ................................................................................... 65
VII.	Issuance of new shares in connection with the merger or acquisition of other
	companies..................................................................................................................... 69
VIII.	Implementation of capital utilization plan. .................................................................. 69
Chapter 5 Operation summary
I.	Business content ........................................................................................................... 70
II.	Market, production, and sales summary ...................................................................... 79
III.	Employee information in the two most recent years up to the publication date of
	this annual report .......................................................................................................... 86
IV.	Environmental protection expenditure ......................................................................... 87
V.	Labor relations ............................................................................................................. 87
VI.	Cyber security management ......................................................................................... 89
VII.	Important contracts ...................................................................................................... 91

Chapter	6 Financial summary
I.	Condensed balance sheet and statement of comprehensive income in the five
	most recent years .......................................................................................................... 92
II.	Financial analysis in the five most recent years ........................................................... 95
III.	Audit Committee’s audit report on financial statements in the most recent year……..98
IV.	Financial statements in the most recent year: Please refer to Page ~ of this report. .... 99
V.	The Company’s parent company-only financial statements audited and attested
	by the CPA in the most recent year: Please refer to Page ~ of this report.................... 99
VI.	Any financial difficulties experienced by the Company and its affiliated
	companies during the most recent year up to the publication date of this annual
	report as well as the impact of the said difficulties on the financial condition of
	the Company. ............................................................................................................... 99

Chapter	7	Review, analysis, and risks of financial position and performance
I.		Financial condition ..................................................................................................... 100
II.		Financial performance ................................................................................................ 101
III.		Cash flow ................................................................................................................... 102
IV.		Impact of material expenditures on the Corporation’s finances and operations in
		the most recent year ................................................................................................... 102
V.		Investment policies in other companies, the main reasons for profit/losses,
		improvement plan, and investment plans for the upcoming year .............................. 103
VI.		Risk analysis and assessment of the most recent year up to the publication date
		of this annual report ................................................................................................... 103
VII.		Other important matters ............................................................................................. 108
Chapter	8	Special Notes
I.		Information on affiliated companies .......................................................................... 109
II.		Private placement of securities in the most recent year up to the publication date
		of this annual report. .................................................................................................. 115
III.		Holding or disposition of the Company’s shares by subsidiaries in the most
		recent year up to the publication date of this annual report ....................................... 115
IV.		Other supplementary matters. .................................................................................... 115
V.		Any event that results in substantial impact upon shareholders’ equity or prices
		of the Corporation’s securities as prescribed by Article 36, Paragraph 3,
		Subparagraph 2 of the Securities and Exchange Act that have occurred in the
		most recent year up to the publication date of this annual report. ............................. 115

Chapter 1 Reports to Shareholders

Business Report

In 2022, after the widespread administration of vaccines, the global pandemic gradually eased. The economy noticeably recovered, and manufacturing industries in all fields accelerated their expansion of production capacity to respond to surging market demand. Despite this, labor and material shortages continued to stifle production and disrupted shipment of goods. However, as demand for consumer products remained sluggish towards the end of the year, manufacturers were able to digest and adjust inventory to cope with the rapid changes in the market. Our company was able to fully grasp market opportunities and overcome the difficulties caused by material shortages, allowing us to create record-high revenue and profits. Last year, our operating income reached NT$13.461 billion, while the group's revenue totaled NT$22.067 billion. Including disposal of investment benefits, the total net profit after tax amounted to NT$5.106 billion, and our basic earnings per share were NT$12.14.

Looking back at last year, the group's overall revenue from measurement instruments grew by 50%. Revenue from power electronics test instruments grew by 27% driven by the vigorous development of electric vehicles and strong demand for related component testing. Semiconductor/photonics test system revenue also continued to grow due to the increasing demand for HPC and AI, reaching a growth of 26%. In addition, MAS Automation, a subsidiary of the group, was responsible for the development of battery formation system automation, and its revenue also grew steadily by 6%. Overall group revenue grew significantly by 25%, setting a new historical record. Other relevant financial figures are shown in the following table:

Other relevant financial figures are shown in the following table:	Other relevant financial figures are shown in the following table:	Other relevant financial figures are shown in the following table:
Financial Revenue and ProfitabilityAnalysis
	Item	2022	2021
Financial Structure (%)	Debt-to-Asset Ratio	35.34	35.87
	Long-term Capital to Fixed Assets Ratio	349.73	355.40
Debt Servicing Capacity (%)	Current Ratio	191.39	186.87
	Quick Ratio	137.28	133.86
Profitability (%)	Return on Assets	16.25	14.62
	Return on Equity	25.61	24.17
	Net Profit Margin	23.14	23.77

Business plan, development strategies, external competition and environment, legal environment, and macro-business environment

Looking further ahead into 2023, while the pandemic has eased, the consumer market is only slowly getting back on its feet, and manufacturers need more time to digest and adjust inventory. Still, the economy is expected to recover in the second half of the year. In response to this trend, our company will take the following measures to overcome current difficulties, seize opportunities yielded by economic recovery, and continue generating high revenue and profits:

(1) Actively respond to the impact of material shortages, ensure production capacity, and meet customer needs.
(2) Accelerate the development of Test Turnkey Solutions required for advanced semiconductor front-end/back-end processes.
(3) Actively strive to attract new world-class, 1st-tier customers.

Finally, we would like to express our sincere gratitude to all shareholders for their long-term support and encouragement. We wish you good health and all the best!

Chairman Leo Huang

Chapter 2 Company Introduction

I. Date of founding: November 8, 1984

II. Company overview:

November 1984 Founded in Taipei City with a capital of NT$2 million.

Launched the first Taiwanese-invented programmable video signals generator (65MHz).

November 1986 Released the world’s first automatic testing with simultaneous and parallel testing architecture for switched-mode power supplies.
February 1993 Invested in U.S. subsidiary Chroma ATE Inc., as a sales office based in the United States.
December 1993 Official opening of the new Wugu plant.
February 1994 Invested in the establishment of Hong Kong subsidiary Neworld Electronics Limited as a base for expanding the Chinese market.
December 1994 Granted the ISO9002 quality certification.
November 1995 Passed the Chinese National Laboratory Accreditation (CNLA).
December 1996 The Company's shares were listed and traded on TWSE on December 21. August 1997 Granted the ISO9001 quality certification. December 1997 Received the 6th Taiwan Excellence Award for the 9107 Uninterruptible Power Supply and the 3203 Memory IC Test System.
April 1998 Received the Outstanding Performance Award during the 6th MOEA Industrial Technology Development Award.
Invested in DynaScan Technology Corp.
July 1998 Received the 2nd Outstanding Photonics Product Award for the 7100 Colour Analyser.
September 1998 Invested in ADLINK Technology Inc.
December 1998 Received the 7th Taiwan Excellence Award for the 2225 and 2325 Series Video Pattern Generators and the 9105 Uninterruptible Power Supply.
May 1999 Received the Excellent Product Design Award for the 9105/9107

Uninterruptible Power Supply. June 1999 Acquired Hita Technology Co., Ltd. September 1999 Established Chroma ATE Europe B.V.subsidiary in the Netherlands as a sales office in the European market.

November 1999 Grand opening of the new Tauyuan plant.

June 2000 First issuance of unsecured convertible corporate bonds in Taiwan, worth NT$ 1.5 billion.
August 2000 Invested in EVT Technology Co., Ltd. January 2001 Acquired Zentech Tech Inc. March 2003 Set up a branch office in Hsinchu Science Park
September 2003 Set up the global headquarters in Taiwan.
December 2004 20th anniversary of the Corporation and grand opening of the Taoyuan headquarters.
June 2005 Expiration and delisting of the first unsecured convertible corporate bonds issued in Taiwan.

Spun off the Special Material business unit as new subsidiary, Chroma August 2006 New Material Corp.

January 2007 Invested in Wei Kuang Automatic Equipment (Nanjin) Co., Ltd., Mou Kuan Technologies (Nanjin) Co. Ltd., Sajet Technology Co., Ltd., and MAS Automation Corp.
February 2007 Invested in Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. March 2007 Invested in Testar Electronic Corporation.
2 -

April 2007	Established the MES business unit.
March 2008	Simple merger of subsidiary Silver Town Electronic Co., Ltd.
May 2008	Invested in the establishment of Chroma Japan Corp.
March 2009	Granted ISO 9001:2008 certification.
September 2009	Established the Kaohsiung branch.
September 2009	Invested in Chroma Systems Solutions, Inc., as a sales office based in the
	United States.
August 2010	Received Finance Awards as the Best Managed Company, the Best
	Corporate Governance, and the Best Mid-cap Company in Taiwan.
October 2010	Granted ISO/TS 16949 certification.
August 2011	Acquired Wise Life Technology Co., Ltd.
January 2012	Acquired the tender for the Industrial Development Zone (Tender A) in the
	Taoyuan International Airport Access MRT Station A7 Transit-Oriented
	Development Zone.
January 2012	Received the Excellent Industrial Contribution Award for the LED 2D
	CCD Light Bar Test System in the 2011 MOEA Technical Excellence
	Program.
November 2012	Simple merger of subsidiary Novatest Electronics Co., Ltd.
December 2012	Acquired the world’s first SAE J1772 certification from UL for automated
	communication protocol test system.
February 2013	Received the 1st MOEA Taiwan Mittelstand Award.
February 2013	Invested in Adivic Technology Co.
May 2014	Second issuance of unsecured convertible corporate bonds in Taiwan worth
	NT$ 2 billion.
January 2016	Invested in Quantel Private. Ltd. in Singapore as a Southeast Asia branch.
January 2017	Received the Distinguished Enterprise Innovation Award, the highest honor
	available from the 5th National Industrial Innovation Award.
August 2017	Established Innovative Nanotech Incorporated.
September 2017	Established subsidiary Chroma Germany GmbH in Germany.
October 2017	Invested in Touch Cloud Inc..
October 2017	Received the “Best Trade Contribution Award” from MOEA.
January 2018	Received the 26th Taiwan Excellence Award for the 61800 Series
	Regenerative Grid Simulator and 3160-C Tri-Temp Quad Sites Handler.
February 2018	Established Chroma Korea as a branch office in South Korea.
January 2019	Received the 27th Taiwan Excellence Award for the “17040 Regenerative
	Battery Pack Test System” and “2238 Video Pattern Generator”.
February 2019	Invested Camtek Ltd. in Israel.
September 2019	Approved the joint housing construction with Fu Yu Construction.
October 2019	Awarded as “2019 Top 35 of the MOEA Best Taiwan Global Brands”.
November 2019	Received Bronze Award at 12th TSCA Taiwan Corporate Sustainability
	Report Award.
November 2020	Awarded as “Top 40 of the MOEA Best Taiwan Global Brands” for 2020.
December 2020	Headquarters relocation and expansion.
November 2021	Received the Bronze Award at the 2021 TSCA Taiwan Corporate
	Sustainability Report Awards.
December 2021	Awarded as a “Top 40 of the MOEA Best Taiwan Global Brands” for
December 2021	2021.
January 2022	Donated to establish the Chroma Cultural Educational and Foundation.
November 2022	Invested in Environmental Stress Systems, Inc..
	Awarded as “Top 40 of the MOEA Best Taiwan Global Brands” for 2022.

Chapter 3 Corporate Governance Report

I. Organization

(I) Organizational structure

==> picture [527 x 389] intentionally omitted <==

(II) Responsibilities and functions of main departments


Department	Responsibilities
CEO Office	Set up market planning center, Legal Affairs Dept., and Safety & Health Center. Formulate Corporation-wide administrative and business objectives, implement communication and coordination, product planning, new business development and planning, patent management, contract review environmental protection, and occupation safety and health (OSH) management.
Internal Auditor	Establish, update, and revise internal audit and control systems. Review, revise, and audit internal control systems.
Semiconductor Test Equipment BU	Responsible for the planning, research, and development (R&D), and marketing of semiconductor test equipment and products.
Test & Measurement BU	Responsible for the R&D and marketing of measurement instruments. In charge of calibration services as well as operations of calibration labs for measurement instruments.
Integrated System Solution BU	Responsible for the R&D and sales of MES systems. Responsible for the planning, R&D, and marketing of modular instruments and products. Responsible for the planning, R&D, and marketing of system integration solutions.
Intelligent Manufacturing System BU	Responsible for the R&D and marketing of IMS systems.
Optical Inspection Solution BU	Responsible for the R&D and marketing of optical inspection systems.
Manufacturing Center	Responsible for the raw material purchasing and production for the entire Corporation. Responsible for the planning and maintenance of product quality systems.
Advanced Technology Research Center	New technology planning, development, and supporting the business units (BU) to comprehend the future development of new industries.
Finance & Administration Center	Consists of the Financial Division, Accounting Division, HR Division, General Affairs Department, and Facilities Department Financial Division: Responsible for capital planning and utilization for the entire Corporation, assessing investment plans, and providing support for certain operations. Accounting Division: Responsible for establishing and implementing an accounting system, and handling various taxation and accounting affairs. HR Department: Planning HR resources, organizational development, and training for the entire Company. General Affairs Department: Responsible for the purchase of routine equipment and items, as well as the management of equipment and fixed assets for the entire Corporation. Facilities Department: Responsible for factory maintenance and safety.
Operation Management Center	Responsible for building and managing the Corporation’s operations management system. Established the IT Division (including the IT System Development Department, the IT System Management Department, and the Data Control Department), carried out planning and safety controls for IT equipment and application systems throughout the entire Corporation, and issuance and control of rules and regulations.

II. Directors, president, vice presidents, assistant vice presidents, and heads of departments and branches

(I)Director Information

																April 11, 2023	April 11, 2023	April 11, 2023	April 11, 2023
Position title	Nationality or place of registration	Name	Gender and age	Date elected	Final date of term of office	Date first elected	Number of shares held when elected		Shares currently held		Shares held by spouse or minor children		Shareholding in the name of others/ shareholding percentage	Major experience/academic background	Positions currently assumed in the Company or other corporations	Any managerial officer, director, or supervisor who is a spouse or relative withinthe second degree of kinship			Remark
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio				Position title	Name	Relations
Chairperson	Republic of China	Leo Huang	Male 71~80	2020.06.10	2023.06.09	1984.10.23	20,763,897	4.94%	20,859,897	4.90%	9,294,362	2.18%	0	Engineering, National Chiao Tung University	CEO of the Company Chairman of Dynascan Technology Corp. Director of LEADTEK Research Inc. Director of I-SHENG Electric WIRE & CABLE CO., LTD. Director of DARWIN Precisions Corp Independent Director of Ichia Technologies Inc. Director of Tian Zheng International Precision Machinery RefertoPage112~113fordetails onpositions assumedin related companies	None	None	None	Note 1
Director	Republic of China	I-Shih Tseng	Male 61~70	2020.06.10	2023.06.09	2012.06.06	424,548	0.10%	240,548	0.06%	9,722	0	244,000./ 0.06%	PhD, Mechanical Engineering, University of Pennsylvania Senior Engineer, Institute for Information Industry	General managers ,Integrated System Solution BU of the Company Refer to Page 112~113 for details on positions assumed in related companies	None	None	None	None
Director	Republic of China	Tsun-I Wang	Male 71~80	2020.06.10	2023.06.09	2005.05.18	19,339	0	19,000	0	0	0	0	Ph.D., Institute of Electro-Engineering, National Chiao Tung University Vice President, Tailyn Technologies, Inc. Vice President, Champion-Lighting Technologies Limited	Chief Technology Officer of DynaScan Technology Corp. Independent Director of Dynapack International Technology Refer to Page 112~113 for details on positions assumed in related companies	None	None	None	None
Director	Republic of China	Chung-Ju Chang	Male 71~80	2020.06.10	2023.06.09	2012.11.01	0	0	0	0	0	0	0	Ph.D. of Electrical Engineering, National	Lifetime Chair Professor of Department of Electrical Engineering, National Chiao Tung University Director of Ting-Shiun Telecommunication Development Foundation Director of National Information Infrastructure Enterprise Promotion Association	None	None	None	None
														Taiwan University
														Chair Professor, Department of Electrical and Computer Engineering, National Chiao Tung University Vice President for R&D, Office of Research and Development, National Chiao Tung University Dean and Director of the Institute of Communications Engineering, National Chiao Tung University Review committee member, MOEA Leading Projects/Industrial Technology Projects
														Technology advisor, MOE - Technology
														advisor,MOTC
Independent Director	Republic of China	Tai-Jen George Chen	Male 71~80	2020.06.10	2023.06.09	2017.06.08	0	0	0	0	0	0	0	Ph. D., Department of Atmospheric Sciences, State University of New York at Albany, U.S.A. Executive Vice President for Academic Affairs of National Taiwan University Dean of Academic Affairs of National Taiwan University Professor, Department of Atmospheric Sciences,National Taiwan University	Chairman of Chinese Culture University Emeritus & Distinguished Chair Professor of National Taiwan University Independent Director of Ichia Technologies Inc. Independent Director of Goldsun Building Materials CO., LTD.	None	None	None	None
Independent Director	Republic of China	Jia-Ruey Duann	Male 61~70	2020.06.10	2023.06.09	2020.06.10	0	0	0	0	0	0	0	Ph. D., Physics, North Dakota State University Harvard Business School Advanced Management Program Senior vice president of ITRI General Director of ITRI Central Region Campuses General Director of ITRI Southern Region Campuses General Director, Center for Measurement Standards, ITRI Senior Researcher, Director of Planning & Promotion Division, Center for Measurement Standards, ITRI Associate Professor, Department of Physics of Chung Yuan Christian University President of Automatic Optical Inspection Equipment Association Assistant Researcher, Manager of Optics Shop, Precision Instrument Development Center, NationalScience Council,TheExecutiveYuan	Distinguished expert of ITRI Independent Director of Powertip Tech Corp. Director of Industrial Technology Investment Corporation (ITIC) Consultant of CTCA	None	None	None	None
Independent Director	Republic of China	Steven Wu	Male 51~60	2020.06.10	2023.06.09	2020.06.10	0	0	0	0	0	0	0	MBA from George Washington University B.S., Industrial Management, National Cheng Kung University Senior Vice President of China Venture Management Senior Vice President of WI Harper Vice president of the Investment Department at Central Investment Holding Assistant Vice President of Investment Investigation Department at KMT Business Management Committee Senior Consultant in Financial Advisory Service Division of Arthur Andersen Investment Manager of the Pacific Capital	Vice President of CDIB Capital Managing Director of CDIB Capital International Vice-Chairman of JINTEX Corporation Chairman of Jintex Biomaterials Co., Ltd. Chairman of Prime Express International Limited Director of Prime Express Holdings Limited Director of Great Rich Technologies Limited. Director of Jiangsu Junhui Optoelectronics Technology Co., Ltd. Director of Jiangyin Suda Huicheng Composite Materials Co., Ltd. Director of Dongjin Green Tech Co., Ltd. Director of Dongjin Environmental Technology Co., Ltd. Director of Billion View Investments Limited Director of Dongjin Green Tech Holdings Co., Ltd. Director of CHIEH SHOU KAI TAI Resources Recycling Co., Ltd. Directorof AnhuiJUNGTAI ResourcesRecycling Co.,Ltd.	None	None	None	None

Note 1: If the Chairman of the Board and the president or their equivalent (chief managerial officer) are the same person, each other’s spouse, or a relative of the first degree of kinship, the reason, reasonableness, necessity, and response measures (e.g. increasing the number of independent directors and more than half of the directors do not concurrently serve as employees or managerial officers) shall be stated:

(1) The Chairman of the Company holds the concurrent position as the CEO to enhance the overall operating efficiency and decision execution of the Group. In order to reinforce the independence of the Board, the Company has set up three independent directors, representing 3/7 of the total number of directors of the Company.
(2) In order to enhance the functions of the Board of Directors and strengthen its supervisory function, the Company has the following measures in place: 1. A majority of the Board members are not also managerial officers or employees. 2. The three independent directors of the Company have extensive working experience in finance, investment, talents, and the electronic technology industry, respectively, and can carry out their supervisory functions effectively. 3. Members of the Audit Committee and the Remuneration Committee of the Company consist of independent directors, and all committees can thoroughly discuss and make recommendations for the Board’s decision to implement corporate governance.
(3) The Company is engaged in the development and production of a wide range of electronic measuring and testing instruments covering monitors, power supplies, passive components, semiconductors, battery modules, solar energy, electric vehicles, and energy-related electronic sub-industries. The related technologies are highly technical and complicated. Therefore, the Company’s management must be familiar with the development context of and accumulate contacts in various sub-industries, in order to foresee opportunities for industrial development, control the timing to sprout industries, and launch the testing products needed by the industries in a timely manner. Only then may the Company have a chance to secure its market position. To this end, only rich industrial experience may help management craft the right strategy. In contrast with general industries that adopt the business model of mass production, the test and measurement instrument industry adopts the business model of producing many diverse product types of limited quantities. Having the Company’s Chairman also serve as CEO allows the Company to seize opportunities amid industrial changes and set forth product development strategies in a timely manner, investing heavily in R&D and recruitment of talents. The Company’s products play a critical role in the industry and business performance is outstanding. Operating revenue for the most recent three years: NT$9.180 billion, NT$10.308 billion and NT$13.461 billion, with profit growing at the same time. The fact that the Company’s Chairman concurrently holds the position of CEO is therefore not considered inadequate or otherwise problematic.

1. Professional qualifications of directors and information on independence of independent directors

(1) Professional qualifications and experiences of directors

Name	Professionalqualifications and experiences
Chairperson/ Leo Huang	Graduated from the Electronics Engineering Department, National Chiao Tung University Currently is the Chairman and President of the Company and a director of several TWSE-listed companies including Leadtek Research Inc. with more than five years of experience in electronic information technology, marketing, strategic planning and operation management.
Director/ I-Shih Tseng	PhD, Mechanical Engineering, Pennsylvania State University Currently, the General Manager of the Company’s Integrated System Solution BU, has more than five years of professional experience in electronic information and management.
Director/ Tsun-I Wang	Ph.D., Institute of Electro-Engineering, National Chiao Tung University Currently Chief Technology Officer, DynaScan Technology Corp. and Independent Director, Dynapack International Technology, with at least five years of professional and operational management experienceinelectronicinformationtechnology.
Director/ Chung-Ju Chang	Ph.D., of Electrical Engineering, National Taiwan University
	Formerly a professor in the Department of Electrical Engineering at National Chiao Tung University, specializing in electrical engineering, with more than five years of professiona qualifications as a professor at a public university in the relevant disciplines required for company business.
Independent director/ Tai-Jen George Chen	Graduated from the Department of Atmospheric Sciences, State University of New York, USA The convener of the Remuneration Committee and a member of the Audit Committee of the Company, currently Chairman, Chinese Culture University, Independent Director, Ichia Technology Inc., and Independent Director, Goldsun Building Materials Co., Ltd.Formerly Academic Vice President of National Taiwan University with at least five years of professional and talent management qualifications in the field of atmospheric sciences.
Independent director/ Jia-Ruey Duann	Ph. D., Physics North Dakota State University A member of the Remuneration Committee and Audit Committee of the Company, independent director of Powertip Tech Corp., formerly an Assistant Vice President, ITRI with more than five years of experience in the electronic technology industry and talent management.
Independent director/ Steven Wu	MBA, Georgetown University The convener of the Audit Committee and a member of the Remuneration Committee of the Company, currently Vice President, Own Capital Investment Dept., CDIB Capital International Corp., with at least five years of experience in financial investment and asset management.

(2) Information on the independence of independent directors

Name	Where none of the circumstances in the subparagraphs of Article 30 of the Company Act applies.	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Status of Independence(Note 1)	Currently serving as the independent director of other public-owned corporations
		1	2	3	4	5	6	7	8	9	10	11
Chairman/ Leo Huang	V												1
Director /I-Shih Tseng	V												0
Director /Tsun-I Wang	V												1
Director /Chung-Ju Chang	V												0
Independent director /Tai-JenGeorge Chen	V	V	V	V	V	V	V	V	V	V	V	V	2
Independent director /Jia-RueyDuann	V	V	V	V	V	V	V	V	V	V	V	V	1
Independent director /Steven Wu	V	V	V	V	V	V	V	V	V	V	V	V	0

Note 1: Please check “ ✓ ” the corresponding boxes if the independent directors met/meet the following conditions during the two years prior to their nomination and during their term of office.
(1) Not employed by the Company or an affiliated business.
(2) Not serving as a director or supervisor of the Company or any affiliated business (this does not apply in cases where the person is an independent director of the Company, its parent or subsidiary, or a subsidiary of the same parent company established pursuant to this law or local laws).
(3) Not a natural person shareholder who holds more than 1% of issued shares or is ranked top 10 in terms of the total quantity of shares held, including the shares held in the name of the person’s spouse, minor children, or in the name of others.
(4) Not a manager in (1), or a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship in (2) and (3).
(5) Not a director, supervisor, or employee of a corporate shareholder who directly holds more than 5% of the total number of issued shares of the Company or is ranked top 5 in holdings or is a legal person shareholder who is a director or supervisor of the Company per paragraph 1 or 2 of Article 27 of the Companies Act (this does not apply in cases where the person is an independent director of the Company, its parent or subsidiary, or a subsidiary of the same parent company established pursuant to this law or local laws).
(6) Not a director, supervisor, or employee of another company that is controlled by the same person but holds more than half of the shares carrying voting rights or director seats (this does not apply in cases where the person is an independent director of the Company, its parent or subsidiary, or a subsidiary of the same parent company established pursuant to this law or local laws).
(7) Not a director (a member of the governing board), supervisor (a member of the supervising board) or employee of a company or institution which is the same person or spouse as the chairman, general manager or equivalent of the Company (except where the same person is an independent director of the Company and its parent, subsidiary or subsidiary which is the same parent company in compliance with the local laws or regulations).
(8) Not a director (a member of the governing board), supervisor (a member of the supervising board), managerial officer, or shareholder who holds more than 5% of the shares of a specified company or institution that has a financial or business relationship with the Company (this does not apply in cases where the specified company or institution holds more than 20% of the total number of issued shares of the Company and does not exceed 50% of the total number of shares of the Company and the person is an independent director of the Company, its parent or subsidiary, or a subsidiary of the same parent company established pursuant to this law or local laws)
(9) Not a professional individual, owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides auditing services to the Company or any affiliated company of the Company, or that provides commercial, legal, financial, accounting or related services to the Company or any affiliated company of the Company for which the provider in the past 2 years has received cumulative compensation not exceeding NT$500,000, or a spouse thereof. However, members of the special committee on remuneration, public acquisition review, or merger and acquisition who perform their functions and powers in accordance with the provisions of the Securities and Exchange Act or Business Mergers and Acquisitions Act and other relevant regulations shall not be subject to this provision.
(10) Not a spouse or relative within the second degree of kinship with any other director.
(11) Not elected as a government, juristic person or its representative according to Article 27 of the Company Act.

2. Diversity policy and independence of the Board of Directors:

In order to strengthen corporate governance and promote the sound composition of the

Board of Directors, the Company considers diversity for the composition of the Board of Directors. In addition to the fact that the number of directors who are also managerial officers of the Company shall not exceed one-third of the Board of Directors, the Company follows an appropriate diversity policy for the election of Board members in accordance with its operation, business model and development needs. In order to achieve the desired objectives of corporate governance, Article 20 of the Corporate Governance Best Practice Principles state that the Board of Directors as a whole should have the following competencies: (1) The ability to make judgments about operations. (2) Accounting and financial analysis ability. (3) Business management ability. (4) Crisis management ability. (5) Industry Knowledge (6) An international market perspective. (7) Leadership (8) Decision-making ability.

Diversity of the Board of Directors: The Company is in the electronic measurement instrument industry with a wide range of products and is R&D technology-intensive with rapid changes in downstream industries. Therefore, in order to make forward-looking decisions, many of the Board members have many years of experience in the information electronics industry. In addition, the Company’s R&D manpower accounts for one-third of the Company’s manpower, so human resources management is relatively important. Many of our Board members are experienced in operations and human resources management. In addition, the Company has a number of management and financial investment professionals in the Board of Directors.

In summary, the Company’s Board of Directors is diversified in age and expertise with members being more than 50 years old, and the quality of decision making is balanced against the multifaceted nature of the business. The Company’s Board of Directors consists of seven directors, including three independent directors, whose terms of office have not exceeded three terms and each has a different professional background and is fully independent. Further, none of the seven directors are related to each other within two degrees, and there are no cases as stipulated in paragraph 3, Article 26-3 of the Securities and Exchange Act, therefore, the operation of the Board of Directors is independent.

Specific management objectives of the 2023 Board diversity policy: To re-elect the Board of Directors to add 1 female director and 4 independent directors in 2023.

Diversity Core items Name of director			Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition		Capability possessed	Capability possessed	Capability possessed	Capability possessed	Capability possessed
	Nationality	Gender	Age			Concurrently serving as an employee of the Company	Years of service as an independent director		Industry Knowledge	Business management	Technology	Marketing	Human resources management	Finance
			51 to 60	61 to 70	71 and above		Less than 3 years	3 to 6 years
Chairperson/ Leo Huang	Republic of China	Male			V	V			V	V	V	V	V	V
Director/ I-Shih Tseng	Republic of China	Male		V		V			V	V	V	V	V	V
Director/ Tsun-I Wang	Republic of China	Male			V				V	V	V		V
Director/ Chung-Ju Chang	Republic of China	Male			V				V	V	V		V
Independent director/ Tai-Jen George Chen	Republic of China	Male			V			V	V	V	V		V
Independent director/ Jia-RueyDuann	Republic ofChina	Male		V			V		V	V	V		V
Independent director/ StevenWu	Republic ofChina	Male	V				V		V	V		V	V	V

(II) CEO, general managers, vice presidents, assistant managers, and supervisors at various departments and branches

													April 11,	April 11,	April 11,	2023
Position title	Nationality	Name	Gender	Date of assuming position	Shares held		Shares held by spouse or minor children		Shares held in the name of other persons		Major experience/academic background	Positions currently assumed in the Corporation	Any managerial officer who is a spouse or a relative within the second degree of kinship			Remark
					Number of shares	Shareholdin g percentage	Number of shares	Shareholdin g percentage	Number of shares	Shareholdi ng percentage			Position title	Name	Relations
President	R.O.C	Leo Huang	Male	1984.11.08	20,859,897	4.90%	9,294,362	2.18%	0	0	Electronics Engineering Department, National Chiao Tung University	Director of Sheng Industrial (Stock Co.) Corporation, Director of Leadtek Technology Corporation, Independent Director of Yi Jia Technology (Stock Co.), Director of Tianzheng International Precision Machinery Co., Ltd., and Director of Dayun Optoelectronics Co., Ltd., Guangyuan Technology (Co.) Chairman Refer to Page 112~113 for details on positions assumed in related companies	None	None	None	Note 1
General Manager, Test & Measurement BU	R.O.C	David Yang	Male	1992.08.14	54,000	0.01%	0	0	0	0	Electronics Engineering Department, National Chiao Tung University Teaching Assistant, Department of Information Technology, College of Engineering, Chung Hua University	Refer to Page 112~113 for details on positions assumed in related companies	None	None	None	None
General Manager, Integrated System Solution BU	R.O.C	I-Shih Tseng	Male	1998.07.16	240,548	0.06%	9,722	0	244,000	0.06%	Mechanical Engineering, Pennsylvania State University, US Project Manager, Institute for Information Industry	Refer to Page 112~113 for details on the positions assumed in the related companies	None	None	None	None
General Manager, Semiconductor Test Equipment BU	R.O.C	George Chang	Male	2006.08.01	40,400	0.01%	0	0	0	0	Electrical and Control Engineering Department, National Chiao Tung University Manager, Business Department, Lian Li Co., Ltd.	None	None	None	None	None
Senior Vice President of Finance & Administration Center	R.O.C	Paul Ying (Note 2)	Male	1999.05.03	147,969	0.03%	0	0	0	0	School of Management, New York Institute of Technology Vice President of Finance, Hsin Yu Energy Development Co., Ltd.	Refer to Page 112~113 for details on positions assumed in related companies	None	None	None	None
Senior Vice President, Operation Management Center	R.O.C	Benjamin Huang	Male	1992.06.22	176,723	0.04%	0	0	0	0	Electrical Engineering Department, National Taiwan University Vice President, R&D Department, Test & Measurement BU of the Corporation	None	None	None	None	None
Senior Vice President of Joint Manufacturing Center	R.O.C	Steven Liu	Male	1991.08.22	118,012	0.03%	0	0	0	0	Department of Information & Communications, Chinese Culture University Divisional Head, Property and Product Management Division of the Company	None	None	None	None	None
Vice President, Marketing Division, Integrated System Solution BU	R.O.C	Herbert Tsai	Male	2005.07.01	1,974	0	0	0	0	0	Machinery and Automation Engineering, Nanya Institute of Technology Vice President, Dasike Technology Corporation	None	None	None	None	None
Vice President, CEO Office	R.O.C	C.C.Fan	Male	2010.08.01	181,235	0.04%	0	0	0	0	Department and Institute of Industrial Engineering and Management, Minghsin University of Science and Technology Vice President, R&D Department, Wei Kuang Automation Co., Ltd.	None	None	None	None	None
Vice President, Product Planning Division, Test & Measurement BU	R.O.C	Bobby Tseng	Male	2001.01.01	1,000	0	0	0	0	0	Electrical Engineering, Waseda University Division Head, Product Planning Division, Measurement Instrument BU of the Company	None	None	None	None	None
Vice President, Greater China Area Sales Department, Test & Measurement BU	R.O.C	Vincent Chen	Male	2001.01.01	87,860	0.02%	0	0	0	0	Department of Electrical Engineering, Lunghwa University of Science and Technology Division Head, Greater China Area Sales Division, Test & Measurement BU	Refer to Page 112~113 for details on positions assumed in related companies	None	None	None	None

10 -

Position title	Nationality	Name	Gender	Date of assuming position	Shares held	Shares held	Shares held by spouse or minor children	Shares held by spouse or minor children	Shares held in the name of other persons	Shares held in the name of other persons	Major experience/academic background	Positions currently assumed in the Corporation	Any managerial officer who is a spouse or a relative within the second degree of kinship	Any managerial officer who is a spouse or a relative within the second degree of kinship	Any managerial officer who is a spouse or a relative within the second degree of kinship	Remark
					Number of shares	Shareholdin g percentage	Number of shares	Shareholdin g percentage	Number of shares	Shareholdi ng percentage			Position title	Name	Relations
Vice President, Technical Service Division, Test & Measurement BU	R.O.C	Tony Yang	Male	2003.07.01	96,154	0.02%	0	0	0	0	Department of Electrical Engineering, National Taitung Junior College Manager, Engineering Division, Tiger Power Co., Ltd.	None	None	None	None	None
Vice President, R&D Division, Test & Measurement BU	R.O.C	Vincent Wu	Male	2003.07.16	90,665	0.02%	903	0	0	0	Electrical and Control Engineering Department, National Chiao Tung University Department Manager, R&D Department, Test & Measurement BU of the Corporation	None	None	None	None	None
Vice President, R&D Division, Integrated System Solution BU	R.O.C	Lance Ouyang	Male	2009.07.01	50,500	0.01%	0	0	0	0	Mechanical Engineering Department, National Chiao Tung University Vice President, Global Target Corporation	None	None	None	None	None
Vice President, Marketing Division, Integrated System Solution BU	R.O.C	Jeff Lee	Male	2007.01.01	86,500	0.02%	0	0	0	0	Department of Electrical Engineering, Hsinpu Institute of Technology Divisional Manager, Product Planning Division, Integrated System BU of the Company	None	None	None	None	None
Vice President, Product Planning Division, Test & Measurement BU	R.O.C	Kenny Wang	Male	1993.04.23	459,928	0.11%	0	0	0	0	Department of Electrical Engineering, Hsinpu Institute of Technology Division Head, Product Planning Division, Measurement Instrument BU of the Company	None	None	None	None	None
Vice President, Turnkey Solution Sales & Marketing Division, Test & Measurement BU	R.O.C	Cindy Tai	Female	2009.11.01	11,936	0	0	0	0	0	Bachelor of Chemical Engineering Manager, Product Planning Department, Test & Measurement BU of the Company	None	None	None	None	None
Vice President, Product Planning Division, Test & Measurement BU	R.O.C	Galen Chou	Male	1996.07.01	9,000	0	0	0	0	0	Electrical and Control Engineering Department, National Chiao Tung University Division Head, Product Planning Division, Measurement Instrument BU of the Company	None	None	None	None	None
Vice President, Marketing Division, Intelligent Manufacturing System BU	R.O.C	Arno Wu	Male	2007.04.01	0	0	0	0	0	0	Department of Business Management, Tamkang University Assistant Vice President, Sajet Technology	Refer to Page 112~113 for details on positions assumed in related companies	None	None	None	None
Vice President, Product Planning Office ,Optical Inspection Solution BU	R.O.C	Alex Zheng	Male	2020.06.15	0	0	0	0	0	0	Institute of Electronic Engineering, University of Warwick Institute of Biomechanical Engineering, National Taiwan University Vice President of Asia Pacific Region and Vice President of Taiwan Branch, Fortemedia, Inc.	None	None	None	None	None
Vice President, Product Planning Office, Semiconductor Test Equipment BU	R.O.C	Eugene Lin	Male	2018.12.17	0	0	0	0	0	0	Business Management Institute, National Chengchi University Manager, Keysight Technologies Inc.	None	None	None	None	None
Corporate governance officer	R.O.C	Amy Huang	Female	1992.07.16	48,311	0.01%	0	0	0	0	Department of Accounting, Tunghai University Division Head, Finance Division of the Company	Refer to Page 112~113 for details on positions assumed in related companies	None	None	None	None

Note 1: If the chairman of the Board and the CEO or their equivalent (chief manager) are the same person, each other’s spouse, or a relative of the first degree of kinship, the reason, reasonableness, necessity, and response measures (e.g. increase the number of independent directors and more than half of the directors do not concurrently serve as employees or managers) shall be stated:

(1) The chairman of the Company holds the concurrent position as the CEO to enhance the overall operating efficiency and decision execution of the Group. In order to reinforce the independence of the Board, the Company has set up three independent directors, representing 3/7 of the total number of directors of the Company. The Chairman also maintains adequate communication with each director on the Company’s operating status and performance in order to implement corporate governance.

(2) In order to enhance the functions of the Board of Directors and strengthen its supervisory function, the Company has the following measures in place:1. A majority of the Board members are not also managerial officers or employees. 2. The three independent directors of the Company have extensive working experience in finance, investment, HR management and electronical technology related industry, respectively, and can carry out their supervisory functions effectively. 3. Members of the Audit Committee and the Remuneration Committee of the Company consist of independent directors, and all committees can thoroughly discuss and make recommendations for the Board’s decision to implement corporate governance.

Note 2: Senior Vice President Paul Ying also concurrently holds the position of the Company’s financial officer and accounting officer.

11 -

III. Total remuneration paid to directors, president, and vice presidents in the most recent year

(I). Remuneration for the director (including independent directors)

																Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$
Position title	Name (Note 1)	Director’s remuneration								Proportion of NIAT after summing the 4 items of A, B, C, and D (Note 4)		Remuneration paid to				concurrent employee				Proportion of NIAT after summing the 7 items of A, B, C, D, E, F, and G (Note 4)		Compensation paid to the president and vice presidents from an invested company other than the Company’s subsidiaries or parent company (Note 7)
		Remuneration (A)		Severance and pension (B)		Remuneration for directors (C) (Note 2)		Business execution fees (D) (Note 3)				Salaries, bonuses, and special expenses (E) (Note 5)		Retirement pension (F)		Remuneration for employee (G) (Note 6)				The Company	All entities in the financial statements
		The Company	All entities in the financial statements	The Company	All entities in the financial statements	The Company	All entities in the financial statements	The Company	All entities in the financial statements	The Company	All entities in the financial statements	The Company	All entities in the financial statements	The Company	All entities in the financial statements	The Company		All entities in the financial statements
																Cash Amount	Stock Amount	Cash Amount	Stock Amount
Director	Leo Huang	0	0	0	0	7,500	8,400	405	405	7,905 0.15%	8,805 0.17%	12,643	12,643	231 (Note 8)	231 (Note 8)	18,700	0	20,700	0	39,479 0.77%	42,379 0.83%	4,525
	I-Shih Tseng
	Tsun-I Wang
	Chung-Ju Chang
Independent director	Tai-Jen George Chen	0	0	0	0	4,500	4,500	315	315	4,815 0.09%	4,815 0.09%	0	0	0	0	0	0	0	0	4,815 0.09%	4,815 0.09%	0
	Jia-Ruey Duann
	Steven Wu
1. Description of the policies, systems, standards, and structure of the remuneration packages of independent directors and their correlations with the amount of remuneration paid, taking into account their responsibilities, risks, and time commitment: Bonuses paid by the Company mainly comprise bonuses for directors. According to Article 34 of the Company’s Articles of Incorporation, bonuses distributed to directors shall not be greater than 1.5% of the Company’s net income before taxes before deducting bonuses distributed to employees and directors in the current year. The independent directors’ bonus distribution policy not only takes into account the operating performance of the entire Corporation, but also the individual director’s contributions to the performance of the Company. The Remuneration Committee and the Board review the remuneration of the Directors, and the remuneration system is reviewed from time to time based on actual operating conditions, to strike a balance between the Company’s sustainable operation and risk control. 2. Except for the information disclosed above, remuneration paid for services rendered by Directors of the Company to all consolidated entities (e.g. serving as a non-employee consultant in the parent company/all entities in the financial statements/investees) in the most recent fiscal year: None.

Table of remuneration ranges

	Table of remuneration ranges	Table of remuneration ranges	Table of remuneration ranges	Table of remuneration ranges
Remuneration range for each director in the Corporation	Name of director
	Sum of the first 4 items(A+B+C+D)		Sum of the first 7 items(A+B+C+D+E+F+G)
	The Company	Parent companyand all reinvested businesses(Note 7)	The Company	Parent companyand all reinvested businesses(Note 7)
Less than NT$1,000,000
NT$1,000,000 (inclusive) to 2,000,000 (not inclusive)	I-Shih Tseng, Tsun-I Wang, Chung-Ju Chang, Tai-Jen George Chen, Jia-RueyDuann,Steven Wu	Tsun-I Wang, Chung-Ju Chang, Tai-Jen George Chen, Jia-RueyDuann,Steven Wu	Chung-Ju Chang, Tai-Jen George Chen, Jia-Ruey Duann,Steven Wu	Chung-Ju Chang, Tai-Jen George Chen, Jia-Ruey Duann, Steven Wu
NT$2,000,000(inclusive)to 3,500,000(not inclusive)	Leo Huang	I-Shih Tseng,Leo Huang
NT$3,500,000(inclusive)to 5,000,000(not inclusive)
NT$5,000,000(inclusive)to NT$10,000,000(not inclusive)			Tsun-I Wang
NT$10,000,000(inclusive)to 15,000,000(not inclusive)			I-Shih Tseng	I-Shih Tseng,Tsun-I Wang
NT$15,000,000(inclusive)to NT$30,000,000(not inclusive)			Leo Huang	Leo Huang
NT$30,000,000(inclusive)to NT$50,000,000(not inclusive)
NT$50,000,000(inclusive)to NT$100,000,000(not inclusive)
NT$100,000,000 and above
Total	7people	7people	7people	7people

Note 1: The names of the Directors shall be listed separately, and the names of the general Directors and independent Directors shall be listed individually, and the amount of remuneration paid shall be disclosed collectively.

Note 2: It refers to bonuses distributed to directors upon approval by the Board of Directors in 2022.

Note 3: It refers to business expenses paid to directors in the most recent year (including transport, special expenses, various allowances, accommodation, and provision of physical items such as vehicles)

Note 4: NIAT refers to those acquired from recent years. According to the International Financial Reporting Standards employed for this report, NIAT shall refer to that of the most recent fiscal year of the entity.

Note 5: Remuneration for directors concurrently holding positions in the Corporation (for positions that include the General Manager, Deputy General Manager, other managerial officers, or employees) shall include salaries, job remuneration, severance, bonuses, performance fees, transport fees, special expenses, various subsidies, accommodation, vehicles, and provision of physical items and services. Salary expenses recognized under IFRS 2 - Share-based Payment, such as employee stock option certificates, new restricted employee shares, and participation in subscription of stocks in cash capital increase, shall also be included within the remuneration.

Note 6: Employee bonus for directors in 2022 shall be distributed this year according to the actual distribution percentage of the previous year

Note 7: a. If the director receives remuneration from investments in other companies that are not subsidiaries of the Company or the parent companies, the said remuneration shall be included in the remuneration range table. The name of the column shall also be changed to “All investments in parent companies other companies”. b. Remuneration, in this case, shall refer to remuneration, fees (including remuneration as a company employee, director, or supervisor), business expenses, and other related payments received by the director of the Company or the parent companies for being a director, supervisor, or managerial officer of other nonsubsidiary companies that the Company has invested in.

Note 8: It refers to the amount of retirement pension contributed.

12 -

(II) Remuneration for president, and vice presidents

												Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$
Position title	Name	Salary (A)		Severance and pension (B)		Bonuses and allowances (C) (Note 1)		Remuneration for employees (D) (Note 2)				Proportion of NIAT after summing the 4 items of A, B, C, and D (%)		Compensation paid to the president and vice presidents from an invested company other than the Company’s subsidiaries or parent company (Note 3)
		The Company	All entities in the financial statements	The Company	All entities in the financial statements	The Company	All entities in the financial statements	The Company		All entities in the financial statements		The Company	All entities in the financial statements
								Cash amount	Stock amount	Cash amount	Stock amount
President	Leo Huang	63,956	64,799	3,033 (Note 4)	3,033 (Note 4)	36,333	39,518	78,555	0	80,955	0	181,877 3.56%	NT$188,305 3.69%	None
General Manager, Test & Measurement BU	David Yang
General Manager, Integrated System Solution BU	I-Shih Tseng
General Manager, Intelligent Manufacturing System BU	Joe Lin(Note 5)
General Manager, Semiconductor Test Equipment BU	George Chang
Senior Vice President of Finance & Administration Center	Paul Ying
Senior Vice President, Operation Management Center	Benjamin Huang
Senior Vice President of Joint Manufacturing Center	Steven Liu
Vice President, Marketing Division, Integrated System BU	Herbert Tsai
Vice President, CEO Office	C.C. Fan
Vice President, Product Planning Division, Test & Measurement BU	Bobby Tseng
Vice President, Greater China Area Sales Department, Test & Measurement BU	Vincent Chen
Vice President, Technical Service Division, Test & Measurement BU	Tony Yang
Vice President, R&D Division, Test & Measurement BU	Vincent Wu
Vice President, R&D Division, Integrated System Solution BU	Lance Ouyang
Vice President, Marketing Division, Integrated System Solution BU	Jeff Lee
Vice President, Product Planning Division, Test & Measurement BU	Kenny Wang
Vice President, Turnkey Solution Sales & Marketing Division, Test & Measurement BU	Cindy Tai
Vice President, Product Planning Division, Test & Measurement BU	Galen Chou
Vice President, Marketing Division, Intelligent Manufacturing System BU	Arno Wu
Vice President, Product Planning Office, Optical Inspection Solution BU	Alex Zheng
Vice President, Product Planning Office, Semiconductor Test Equipment BU	Eugene Lin

13 -

Table of remuneration ranges

Remuneration range for each General Managers and Vice Presidents in the Corporation	Name of the General Managers and Vice Presidents	Name of the General Managers and Vice Presidents
	The Company	All entities in the financial statements
Less than NT$ 1,000,000
NT$1,000,000 (inclusive) to 2,000,000 (not inclusive)
NT$2,000,000 (inclusive) to 3,500,000 (not inclusive)	C.C. Fan	C.C. Fan
NT$3,500,000 (inclusive) to 5,000,000 (not inclusive)	Joe Lin, Arno Wu	Joe Lin, Arno Wu
NT$5,000,000 (inclusive) to NT$10,000,000 (not inclusive)	Herbert Tsai, Bobby Tseng, Vincent Chen, Lance Ouyang, Vincent Wu, Jeff Lee, Kenny Wang, Cindy Tai, Galen Chou, Alex Cheng, Eugene Lin, Tony Yang	Herbert Tsai, Bobby Tseng, Vincent Chen, Lance Ouyang, Vincent Wu, Jeff Lee, Kenny Wang, Cindy Tai, Galen Chou, Alex Cheng, Eugene Lin, Tony Yang
NT$10,000,000 (inclusive) to 15,000,000 (not inclusive)	David Yang, I-Shih Tseng, Paul Ying , George Chang, Benjamin Huang, Steven Liu	David Yang, I-Shih Tseng, Paul Ying , George Chang, Benjamin Huang, Steven Liu
NT$15,000,000 (inclusive) to NT$30,000,000 (not inclusive)	Leo Huang	Leo Huang
NT$30,000,000 (inclusive) to NT$50,000,000 (not inclusive)
NT$50,000,000 (inclusive) to NT$100,000,000 (not inclusive)
NT$100,000,000 and above
Total	22 people	22 people

Note 1: It includes the amount of various bonuses, rewards, transport fees, special expenses, various allowances, accommodation, provision of physical items such as vehicles, and other types of remuneration for president, and vice presidents in the most recent year. Salary expenses recognized under IFRS 2 - Share-based Payment, such as employee stock option certificates, new restricted employee shares, and participation in subscription of stocks in cash capital increase, shall also be included within the remuneration.
Note 2: The amount of employee compensation approved by the Board of Directors for distribution to the President and Vice President in 2022 is based on the proportion of the actual distribution amount last year to calculate the proposed distribution amount for this year.
Note 3: a. If the Company’s CEO, general managers or vice presidents receive remuneration from investments in other companies that are not subsidiaries of the Company or the parent companies, the said remuneration shall be included in the remuneration range table. The name of the column shall also be changed to “All investments in the parent companies and other companies”.
b. Remuneration in this case refers to remuneration, bonuses (including employee, director, or supervisor bonuses), and allowances received by the president and vice presidents of the Company as the directors, supervisors, or managerial officers of invested companies other than subsidiaries or parent company.
Note 4: Amount of retirement pension contributed. Note 5: Retired on December 31, 2022
(III) Compare and analyze the total remuneration paid to the directors, president, and vice presidents of the Company in the two most recent years by all companies listed in the Company’s parent company-only and consolidated financial statements as a percentage of NIAT listed in the parent company-only financial statements, and describe the policies, standards, and packages for payment of remuneration, the procedures for determining remuneration, and its connection to business performance and future risk exposure.
1. Analysis of total remuneration paid to the Company’s directors, CEO, general managers, and vice presidents in the 2 most recent years as a percentage of NIAT:
14 -

Total compensation paid to directors, President, and Vice President as a percentage of NIAT in 2022 (Note)	Total compensation paid to directors, President, and Vice President as a percentage of NIAT in 2022 (Note)	Total compensation paid to directors, President, and Vice President as a percentage of NIAT in 2021	Total compensation paid to directors, President, and Vice President as a percentage of NIAT in 2021
The Company	All entities in the consolidated financial statements	The Company	All entities in the consolidated financial statements
3.80%	3.95%	3.49%	3.79%

Note: The amount of directors and employee compensation allocated for 2022 was approved by the Board of Directors on February 23, 2023.
Policies, standards, and packages for payment of remuneration, the procedures for determining remuneration, and its linkage to business performance and future risk exposure.
(1) Directors:
- Bonuses paid by the Corporation mainly comprise bonuses for directors. According to Article 34 of the Corporation’s Articles of Incorporation, the bonuses distributed to directors shall not be greater than 1.5% of the Corporation’s net income before taxes before deducting bonuses distributed to employees and directors in the current year. The remuneration policy of the Directors is to provide reasonable remuneration, taking into account the Company’s overall operating performance, future operating risks and development trends in the industry, and individual contribution to the Company’s performance. Directors (including independent directors) who attend the Board meetings and independent directors who attend the functional committee meetings are entitled to the attendance fees for practicing professionalism. The Remuneration Committee and the Board have reviewed the director remuneration, and review at any time the remuneration system in line with real operating conditions and laws and regulations, so as to strike a balance between risk control and sustainable management of the Company. The fixed amount of directors’ remuneration for 2022 and 2021 was $12 million and NT$9.6 million, which accounted for both 0.18% of the pre-tax net income for each year. The Company also paid directors’ attendance fees for each Board meeting, which amounted to NT$720,000 and NT$630,000 for 2022 and 2021, respectively.
(2) Managerial officer: According to the Company’s “Regulations Governing Compensation for Senior Executives”, when a managerial officer is appointed, he/she shall be paid a fixed monthly salary based on the pay standards for similar positions in the industry, pay level, organizational framework, and position in the territory where he/she is situated. Variable pay refers to employee remuneration and bonuses, etc. Employee remuneration means the reward for risk responsibility that the senior management are entitled to for achieving the annual performance appraisal indicators. The employee remuneration shall take the Company’s business performance, personal performance, and special contributions into account, and adjusted subject to the performance appraisal results. According to the Company’s Articles of Incorporation, annual profits concluded by the Company (i.e. the income before tax less the remuneration to employees and directors), if any, shall be subject to employee remuneration of 5%~20%. Among other things, the Company’s business performance accounts for one third, by taking into account the indicators including gross profit, performance achievement rate, budget achievement rate, and operating income. Personal performance accounts for one third, subject to the personal annual target achievement rate. Personal
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special contribution accounts for the other one third. The employee remuneration shall be proposed subject to the Company’s annual production and business target plan and senior management’s personal performance. The proposal shall be submitted to the Remuneration Committee and become effective per resolution by the Board of Directors.

(3) Employees:

The Company’s compensation policy takes into account the salary levels of benchmark companies in the market, and provides differentiated and competitive salaries to employees based on the achievement of performance indicators to reflect employee abilities and to measure salary and bonus levels. The salary composition includes the salary and allowances, bonuses and employee compensation, welfare, etc.; the welfare system is designed on the premise that it is better than the laws and regulations for better talent attraction, motivation, and retention.

(4) The Company shall generate a budget for the following year at the end of the current year. The following shall be referenced, including the current state of the economy and market environment and forecasts of overall business performance and risk exposure in the following year, to make suitable adjustments to compensation paid to managerial officers.

Names of managerial officers who receive employee bonus, and distribution of employee bonus

				March 31,2023(Unit: In thousands of NT$)	March 31,2023(Unit: In thousands of NT$)	March 31,2023(Unit: In thousands of NT$)
	Position title	Name	Stock Amount	Cash Amount (Note)	Total	Total amount of bonus as a percentage ofNIAT
Managerial Officer	President	Leo Huang	0	78,555	78,555	1.54%
	General Manager, Test & Measurement BU	David Yang
	General Manager, Integrated System Solution BU	I-Shih Tseng
	General Manager, Semiconductor Test Equipment BU	George Chang
	Senior Vice President of Finance & AdministrationCenter	Paul Ying
	Senior Vice President, Operation Management Center	Benjamin Huang
	Senior Vice President of Joint Manufacturing Center	Steven Liu
	Vice President, Marketing Division, Integrated System BU	Herbert Tsai
	Vice President, CEO Office	C.C. Fan
	Vice President, Product Planning Division, Test & Measurement BU	Bobby Tseng
	Vice President, Greater China Area Sales Department, Test & Measurement BU	Vincent Chen
	Vice President, Technical Service Division, Test & Measurement BU	Tony Yang
	Vice President, R&D Division, Test & MeasurementBU	Vincent Wu
	Vice President, R&D Division, Integrated System Solution BU	Lance Ouyang

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	Position title	Name	Stock Amount	Cash Amount (Note)	Total	Total amount of bonus as a percentage of NIAT
	Vice President, Marketing Division, Integrated System Solution BU	Jeff Lee
	Vice President, Product Planning Division, Test & Measurement BU	Kenny Wang
	Vice President, Turnkey Solution Sales & Marketing Division, Test & Measurement BU	Cindy Tai
	Vice President, Product Planning Division, Test & Measurement BU	Galen Chou
	Vice President, Marketing Division, Intelligent Manufacturing System BU	Arno Wu
	Vice President, Product Planning Office, Optical Inspection Solution BU	Alex Zheng
	Vice President, Product Planning Office, Semiconductor Test Equipment BU	Eugene Lin
	Corporate governance officer	Amy Huang

Note: Allocation of profit-sharing employee bonuses approved by the Board of Directors in 2022 for managerial officers is based on the actual allocation sum ratio of the previous year.

IV. Operation of corporate governance

(I) Operation of Board of Directors

A total of 7 Board of Directors’ meetings were held in 2022 with the following attendance

records from directors:

Position title	Name	Number of attendance in person	Delegated presence	Percentage of attendance in person (%)
Chairperson	Leo Huang	7	-	100%
Director	I-Shih Tseng	6	-	85.7%
Director	Chung-Ju Chang	7	-	100%
Director	Tsun-I Wang	7	-	100%
Independent director	Tai-Jen George Chen	7	-	100%
Independent director	Jia-Ruey Duann	7	-	100%
Independent director	Steven Wu	7	-	100%
Other matters to be recorded: I. Where one of the following circumstances applies to the operations of the Board of Directors’ meetings, the date, session, topics discussed, opinions of every independent director, and the Company’s handling of the opinions of the independent directors shall be explained: (I) Items listed in Article 14-3of theSecurities and Exchange Act:

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Board of Directors Date	Session	Proposal	All independent directors’ opinions	The Corporation’s actions in response to independent directors’ opinions
January 11, 2022	1st meeting in 2022	Windup of the subsidiary “Chroma New Material Corporation”	No objection	Proposal approved as presented
February 23, 20222	2nd meeting in 2022	(1) Annual remuneration for directors, and attendance fees for directors who attended the Board of Directors’ meetings. (2) 2022 compensation for members of the Audit Committee, and attendance fees for members who attended Audit Committee meetings (3) 2022 salary adjustment for managerial officers. (4) 2021 employee bonus distribution plan. (5) 2021 business report and financial statements. (6) 2021 earnings distribution. (7) Issuance of the Company’s 2021 statement of internal control system. (8) Capital loans for Chroma Japan Corp. (9) Establishment of the Company’s “Procedures of Loaning to Others”. (10) Loaning of funds between the Company’s 100%- owned foreign subsidiaries. (11) Amendments to the Company’s “Procedures for Acquisition and Disposal of Assets”. (12) Submission of the Company’s receivables overdue for more than 90 days are not of a fund loan nature. (13) The Company’s plan to issue the restricted stock awards (RSAs). (14) Investment in ENTELIGENT INC. (15) 2022 business plan. (16) Amendments to the Company’s Articles of Incorporation (17) Convening of 2022 annual general meeting and collection of shareholders’proposals.	No objection	Proposal approved as presented
March 30, 2022	3rd meeting in 2022	In order to develop the electric vehicle-related testing industry, the Company plans to invest in establishment ofChromaAutomationGmbH inGermany.	No objection	Proposal approved as presented
April 28, 2022	4th meeting in 2022	(1) Q1 2022 consolidated financial statements. (2) Endorsement and guarantee for Chroma ATE (Suzhou) Co., Ltd. (3) Evaluation on attesting CPAs’ independence (4) Submission of the Company’s receivables overdue for more than 90 days are not of a fund loan nature. (5) Acquisition of the land for the employee dormitory. (6) Disposal of the stock, totaling 10,000 thousand shares,of the non-core business,ADLINK	No objection	Proposal approved as presented

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		Technology Inc. (7) Determination of the capital increase base date for employee stock options.
June 23, 2022	5th meeting in 2022	(1) Endorsement and guarantee for Chroma ATE Inc. (USA). (2) Endorsement and guarantee for Chroma ATE Europe B.V. (3) Ratification of the amendments to the 2022 Regulations Governing Issuance of RSAs. (4) 2021 employee remuneration distributed to the Company’s managerial officers. (5) Name list of subscribers for RSAs issued by the Company and the subscription quantity. (6) Authorization to the Chairman for determination of the record date for distribution of dividends and distribution of cash dividends in 2022. (7)Investment inGaius Automotive Inc.	No objection	Proposal approved as presented
July 28, 2022	6th meeting in 2022	(1) Q2 2022 consolidated financial statements. (2) Capital loans to Chroma Systems Solutions, Inc. (3) Endorsement and guarantee for Chroma ATE (Suzhou) Co., Ltd. (4) Submission of the Company’s receivables overdue for more than 90 days are not of a fund loan nature. (5) Amendments to the Company’s “Corporate Governance Best Practice Principles”. (6) Enactment of the Company’s “Procedures for Management of Material Insider Information”.	No objection	Proposal approved as presented
October 31, 2022	7th meeting in 2022	(1) 2023 audit plan. (2) Amendments to the Company’s “Internal Control System” and “Enforcement Rules for Internal Audits”. (3) Q3 2022 consolidated financial statements. (4) Endorsement and guarantee for MAS Automation Corp. (5) Capital loans to Chroma Systems Solutions, Inc. (6) Submission of the Company’s receivables overdue for more than 90 days are not of a fund loan nature. (7) Ratification of the cash capital increase of TFBS Bioscience, Inc. (8) Budget for the A7 Plant 2 construction project. (9) Amendments to the Company’s “Rules of Procedures for Board of Directors’ Meetings” and “Procedures for Management of Material Insider Information”.	No objection	Proposal approved as presented
(2) In addition to the aforementioned matters, any other resolutions from the Board of Directors where an independent director expressed a dissenting or qualified opinion that has been recorded or stated by writing: None. II. During the execution process where the director abstains from being a stakeholder, the name of the director, the content of the proposal, the reason for abstinence, and the results of the voting should be stated: On June 23, 2022, the Board of Directors discussed the name list and number of subscriptions for RSAs issued by the Company. In accordance with Article 206 of the Company Law, Director I-Shih Tseng abstainedfromthe discussiondue to a potentialconflict of interest.Afterconsultationwiththe

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Chairman, the resolution of this matter was approved, with the abstention of the conflicted director. III. TWSE/TPEx listed companies shall disclose information such as the evaluation cycle and period, scope, method, and items of the Board’s self (or peer) evaluation, and fill out the implementation status of evaluation of the Board in Table 2(2). The Company’s “Rules for Evaluation of the Performance of the Board” stipulates that the Board shall perform performance evaluation of itself, its members, the Remuneration Committee and the Audit Committee at least once a year. The performance evaluations of the Board of Directors shall be completed before the end of the first quarter in the following year. Internal questionnaires were used by the meeting staff and four areas were covered including overall operation of the Board, assessment of the Directors’ participation, operation of the Compensation Committee, and operation of the Audit Committee. The results of the evaluations of the Board of Directors and functional committees of the Company for 2022 were submitted to the Board of Directors on February 23, 2023. The results of performance self-assessment regarding the Board of Directors and its members were between 4.86 to 5.00 (out of 5) on average. Among them, the scores for “directors’ attendance to shareholders meetings” are relatively lower. Functional committees include the Audit Committee and the Compensation Committee, and their overall performance assessment results averaged between 4.92 and 5.00 (out of 5). The score of “full communication and exchange between the Audit Committee and certified public accountants” is relatively low. On the whole, the Board of Directors is operating well and will continue to improve based on the results of this Board of Directors’ assessment and plan to convene the communicating meeting between the independent directors and CPAs only, in order to enhance the effectiveness of corporate governance. IV. Goals for enhancing the functions of the Board of Directors (such as establishing an Audit Committee or increasing information transparency) for the current year and most recent year as well as the assessment of the actions implemented: The Company has set up the Audit Committee, and has formulated the “Audit Committee Charter”. The operation of the Audit Committee complies with the relevant laws and regulations. The Company’s website also discloses important resolutions of the Board of Directors in the most recent year to safeguard the rights and interests of the shareholders. In order to improve the Board of Directors’ functions, the Company amended the “Rules of Procedures for the Board of Directors Meetings” on October 31, 2022. The quarterly financial statements shall be subject to approval of the Board of Directors. The Company completed the 2022 Board of Directors’ performance evaluation in accordance with the “Regulations Governing the Evaluation of the Performance of the Board of Directors” and disclosed the evaluation results on the MOPS and in its annual report. The regulations governing the evaluation were also disclosed on the Company’s official website. In order to enable the Board members to exercise their functions and strengthen the promotion of continuing education of directors, all of the Company’s directors have completed the continuing education program for the hours required under the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies” in 2022.

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(II) Evaluation of the Board of Directors

Frequency	Period	Scope	Method		Content
Once a year	2022.01.01 ~ 2022.12.31	(1) The entire Board of Directors (2) Individual Board directors (3) Audit Committee (4) Remuneration Committee	Self- evaluation		Assessment Items for the Board of Directors (1) participation in the Company’s operations (2) the quality of Board decisions (3) the composition and structure of the Board of Directors (4) the selection and continuing education of directors (5) internal control, etc. Assessment items for individual Board members (1) Alignment of the Company’s objectives and tasks (2) directors’ awareness of their duties and responsibilities (3) participation in the Company’s operations (4) internal relationship management and communication (5) directors’ professionalism and continuing education (6) internal control. Performance evaluation on functional committees (1) Participation in company operations (2) awareness of functional committee responsibilities (3) quality of functional committee decisions (4) composition and selection of functional committee members (5)internalcontrol

(III) Operation Overview of the Audit Committee:

A total of 7 meetings were convened by the Audit Committee in 2022, with the attendance of independent directors listed as follows:

Position title	Name	Attendance in person	Delegated presence	Percentage of attendance in person (%)
Convener	Steven Wu	7	-	100%
Committee member	Jia-Ruey Duann	7	-	100%
Committeemember	Tai-JenGeorge Chen	7	-	100%
Other matters to be recorded: I. If the operation of the Audit Committee is under any of the following circumstances, the date, period, proposal content, the content of the objections, reservations or major recommendations of the independent directors, resolution of the Audit Committee and the Company’s handling of the Audit Committee’s opinions should be described: (I) Items listed in Article 14-5 of the Securities and Exchange Act: Date of the Audit Committee meeting Session Proposal Content of the objections, reservations, or major recommendations of the independent directors Resolution of the Audit Committee The Company’s actions in response to the opinions of the Audit Committee January 11, 2022 2nd term 10th meeting Windup of the subsidiary “Chroma New Material Corporation” None Approved by all members. Proposal approved as presented

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February 23,2022	2nd term 11th meeting	(1) Annual remuneration for directors, and attendance fees for directors and supervisors who attended the Board of Directors’ meetings (2) 2022 compensation for members of the Audit Committee, and attendance fees for members who attended Audit Committee meetings. (3) Proposal of salary adjustment for the Company’s managerial officers in 2022. (4) The Company’s 2021 business report and financial statements (5) Issuance of the Company’s 2021 statement of the internal control system. (6) Capital loans for Chroma Japan Corp. (7) The Company’s establishment of the “Procedures for Loaning to Other Subsidiaries”. (8) Loaning of funds between the Company’s 100%-owned foreign subsidiaries. (9) Amendments to the Company’s “Procedures for Acquisition and Disposal of Assets”. (10) The Company’s plan to issue the restricted stock awards (RSAs). (11) The Company’s investment in ENTELIGENT INC.	None	Approved by all members.	Proposal approved as presented
March 30, 2022	2nd term 12th meeting	In order to develop the electric vehicle- related testing industry, the Company plans to invest in establishment of Chroma Automation GmbH in Germany.	None	Approved by all members.	Proposal approved as presented
April 28, 2022	2nd term 13th meeting	(1) Q1 2022 consolidated financial statements. (2) Endorsement and guarantee for Chroma ATE (Suzhou) Co., Ltd. (3) Evaluation on attesting CPAs’ independence (4) Acquisition of the land for employee dormitory. (5) Disposal of the stock, totaling 10,000 thousand shares, of the non- core business, ADLINK Technology Inc..	None	Approved by all members.	Proposal approved as presented
June 23, 2022	2nd term 14th meeting	(1) Endorsement and guarantee for Chroma ATE Inc. (USA). (2) Endorsement and guarantee for Chroma ATE Europe B.V. (3) 2021 employee remuneration distributed to the Company’s	None	Approved by all members.	Proposal approved as presented

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					managerial officers.
					(4) Name list of subscribers for RSAs
					issued by the Company, and
					subscription quantity.
					(5) Investment in Gaius Automotive
					Inc.
		July 28, 2nd term			(1) The Company’s Q2 2022 financial	None	Approved	Proposal
		2022		15th	statements.		by all	approved as
				meeting	(2) Capital loans to Chroma Systems		members.	presented
					Solutions, Inc.
					(3) Endorsement and guarantee for
					Chroma ATE (Suzhou) Co., Ltd.
	October			31, 2nd term	(1) 2023 audit plan.	None	Approved	Proposal
		2022		16th	(2) Amendments to the Company’s		by all	approved as
				meeting	“Internal Control System” and		members.	presented
					“Enforcement Rules for Internal
					Audits”.
					(3) Q3 2022 consolidated financial
					statements.
					(4) Endorsement and guarantee for
					MAS Automation Corp.
					(5) Capital loans to Chroma Systems
					Solutions, Inc.
					(6) Ratification of the cash capital
					increase of TFBS Bioscience, Inc.
					(7) Budget for the A7 Plant 2
					constructionproject.
		(II) Except for the aforementioned matters, other resolutions which were approved by two-thirds or more of
			all the directors but have yet to be approved by the Audit Committee: None.
II.		With		respect to the recusal of any independent director with		a stake in a proposal, the name of the independent
		director, the proposal, the reason for recusal, and their participation in the voting must be						specified: None
III.		Communication between directors and head of internal audit and CPA (including material issues, audit
		methods, and results relating to the Corporation’s finances				and business).
			1. Communication methods between independent directors and internal audit director:
			(1) The Internal		Auditing Officer shall complete an audit report at the end		of every month and submit the
				aforesaid report to the independent directors and they may request			clarification	from the Internal
				Auditing Officer upon any inquiry.
			(2) The Head of Internal Audit shall attend the meetings			of the Audit Committee at least once a quarter to
				give an internal audit business report, which shall include the description of audit projects, significant
				items for improvement of internal audit and improvement policies, etc., so the independent directors
				may have immediate access for consultation and communication.
			Date of		Content of the communication		Results of the
			meeting				communication
			February (1) Reporting on internal audit activities.				Approved by independent
			23, 2022 (2) Discussion on issuance of the Company’s 2021				directors without objections
					statement oftheinternalcontrolsystem.
			April 28, Briefing of Internal audit activities.				Approved by independent
				2022			directors without objections
			June 23, Briefing of Internal audit activities.				Approved by independent
				2022			directors without objections
			July 28, Briefing of Internal audit activities.				Approved by independent
				2022			directors without objections
			October (1) Reporting on internal audit activities.				Approved by independent
			31, 2022 (2) Discussion of the 2023 audit plan.				directors without objections
				(3) Amendments to the Company’s“Internal Control

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System” and “Enforcement Rules for Internal Audits”.
February
23, 2023
(1) Reporting on internal audit activities.
(2) Discussion on the issuance of the Company’s 2022
statement oftheinternalcontrolsystem.
Approved by independent
directors without objections
2. Communication between independent directors and CPAs:
The Audit Committee of the Company comprises independent directors, and the CPA reports to the
independent directors on the audit of annual financial statements regularly each year.
Summary ofcommunicatingmeetings between independent directors and CPAs:
Date
Method of the
communication
Content of the communication
Results of the
communication
February
23, 2023
Communicating
Meeting
(1) Audit scope and results of the 2022 financial
statements.
(2) Key audit matters in 2022.
(3) Communication with the governance unit for
AQI.
(4) Descriptions about the recent update on laws
andregulations.
No comments from
independent
directors at this
meeting.

(IV) The state of the Company’s implementation of corporate governance, any departure of such implementation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such departure.

Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
I. Has the Company formulated and disclosed its corporate governance best practice principles in accordance with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies?	`ˇ`		The Company has stipulated its own “Corporate Governance Best Practice Principles”. Please visit the MOPS or the official website of the Company to peruse the details.	No difference
II. Equity structure and shareholders’rights of the Corporation (I) Has the Company established an internal operating procedure for handling matters related to shareholders’ recommendations, doubts, disputes, and lawsuits, and implemented them accordingly? (II) Does the Company maintain a list of major shareholders who have actual control over the Company and persons who have ultimate control over the major shareholders?	`ˇ` `ˇ`		(I) The Company has established a system of spokespersons and deputy spokespersons for handling shareholders’ proposals, inquiries, and other relevant matters. (II) The Company has delegated a dedicated person to manage the relevant information in order to effectively assess shareholding by the Company’s directors, managerial officers, and major shareholders holding more than 10% of the Company’s shares, and	No difference

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Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed corporations, and the cause ofthe said gaps
	Yes	No	Summary and Explanation
(III) Does the Company establish and enforce risk control and firewall systems with its related corporation? (IV) Has the Company formulated internal regulations that prohibit insiders of the Company from trading securities using undisclosed information in the market?	`ˇ` `ˇ`		disclosed this information in accordance with the relevant regulations. (III) The Company has established regulations for the monitoring of subsidiaries and delegated personnel for supervising the financial operations of these subsidiaries. (IV) The Company has established its own “Regulations for the Prevention of Insider Trading”. In order to protect shareholders’ rights and interests and to implement equal treatment of shareholders, the Regulations expressly prohibit insiders from trading marketable securities using unpublished information in the market, including stock trading control measures from the date the Company’s insiders are informed of the Company’s financial reports or related results, including directors and managerial officers from trading their shares during the closed period of 30 days prior to the announcement of annual financial reports and 15 days prior to the announcement of quarterly financial reports. These Regulations may be perused at the Corporation’s officialwebsite.
III. Composition and responsibilities of Board of Directors: (I) Has the Board of Directors formulated diversity policies, specific management objectives, and implemented them?	`ˇ`		(I) The Company stipulated Best Practice Principles for Corporate Governance where the composition of the Board of Directors must consider diversity as well as the principles of diversity that include the basic criteria, professional knowledge, and skills which correspond to the operations, business, and development required by the Company. In order for the Board of Directors to make effective decisions, the Board of Directors should be composed of a	No difference

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Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
(II) Has the Company voluntarily established other functional committees, other than the remuneration committee and audit committee that are established in accordance with the law? (III) Does the Company stipulate regulations for assessing the performance of the Board and the process of assessment, conduct performance appraisals on an annual basis regularly, and submit the results of the performance appraisal to the Board? Are the results used as a reference for the remuneration of individual Directors and the nomination for re-appointment?	`ˇ`	`ˇ`	variety of professionals, including those specializing in the management of the electronic information industry, and those specializing in finance and finance. The Company has 7 directors and 3 independent directors, each of whom has different professional backgrounds and whose terms of office have not exceeded 3 terms. The composition of the Board of Directors is diversified, and the number of directors who are also managerial officers of the Company does not exceed one-third of the total number of directors. The next re-election will aim to elect female directors. (II) The Company has established the Compensation Committee and the Audit Committee in accordance with the law. (III) The Board of Directors of the Company has formulated the Regulations Governing the Evaluation of the Performance of the Board of Directors and its evaluation methods, which stipulate that the Board shall perform performance evaluation of the Board, its members, the compensation Committee, and the Audit Committee at least once a year. The Company’s Remuneration Committee shall regularly review the policy, system, standards, and structure for the performance appraisal, salary, and remuneration of directors and managerial officers, and shall submit its recommendations to the Board of Directors’ for deliberation. The results of the evaluation of the Board of Directors for 2022 were

26 -

Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
(IV) Does the Company regularly evaluate the independence of CPAs?	`ˇ`		submitted to the Board on February 23, 2023. (IV) The Company conducts its assessment of the independence and qualifications of the Company’s CPAs regularly. The evaluation procedures are performed internally (please refer to Note 1 for details). The assessment results for the most recent year were submitted to and approved by the Board of Directors on February23,2023.
IV. Does the TWSE/TPEx listed company have a suitable and appropriate number of corporate governance personnel and appoint a corporate governance officer to be in charge of corporate governance-related matters (including but not limited to supplying the information requested by the directors and supervisors for the execution of their duties, assisting the directors and supervisors in compliance with legal regulations, handling matters related to board meetings and shareholders’ meetings and preparing minutes of board meetings and shareholders’ meetings)?	`ˇ`		The Company’s Finance Division has designated dedicated personnel to handle corporate governance matters, and the Head of the Finance Division, Amy Huang, has been designated as the corporate governance officer in accordance with the law, and is the highest authority responsible for governance-related matters of the Company. The main duties are: (1) Administer the meetings of the Board of Directors and the shareholders’ meetings in accordance with the law. (2) Prepare minutes of the Board of Directors’ and shareholders’ meetings. (3) Assist directors in their appointment and continuing education. (4) Provide information necessary for directors to carry out their business. (5) Assist directors in complying with the law (6) Other matters as set forth in the Articles of Incorporation or contract,etc.	No difference
V. Has the Company established channels of communication with stakeholders (including but not limited to shareholders, employees, customers, and suppliers), dedicated a section of the Company’s website for stakeholder affairs, and adequately responded to stakeholders’ inquiries on material corporate social responsibility (CSR)issues?	`ˇ`		The Company has established a CSR area on its official website which provides contact information, emails, and other channels of communication to stakeholders so that they may raise topics that they are concerned with. These concerns would then be promptly addressed by the Company.	No difference
VI. Does the Company engage any professional shareholder	`ˇ`		The Company has appointed Taishin International Bank to handle the affairs of	No difference

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Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
services agents to manage affairs for shareholders’ meetings?			the shareholders’ meeting.
VII. Information disclosure (I) Has the Company established a website to disclose information on financial operations and corporate governance? (II) Has the Company adopted other means of information disclosure (such as establishing a website in English, appointing specific personnel to collect and disclose company information, implementing a spokesperson system, and disclosing the process of investor conferences on the Company’s website)? (III) Has the Company published and reported its annual financial report within two months after the end of a fiscal year, and published and reported its financial reports for the first, second, and third quarters, as well as its operating status for each month before the specified deadline.	`ˇ` `ˇ`	`ˇ`	(I) The Company has set up a website with special pages on investor services and regular updates on financial operations and corporate governance. Website: (www.chromaate.com) (II) The Company has established Chinese and English language websites as well as a special area for investor services. A professional has been charged with collecting information and providing regular updates for financial operations. The Company has delegated a spokesperson and deputy spokesperson. Investor conferences are held on a regular basis, and relevant information has been disclosed using the Company’s official website. (III) The Company publishes and reports its annual financial reports and first, second, and third-quarter financial reports, together with its operating status for each month, before the specified deadline.	No difference
VIII. Does the Company provide other important information that can help establish a better understanding of the state of corporate governance (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholders’ rights, continuing education among directors and supervisors, implementation of risk management policies and risk measurement standards, implementation of customer	`ˇ`		1. Employees’ equity: According to the Labor Standards Act and the Company’s personnel regulations, the Company takes employee equity seriously and as such has set up the employees’ feedback mail box, communications channels, and various specific areas for discussion to provide a comprehensive selection of channels for feedback. 2. Employee care: In addition to providing a good office environment, employees also enjoy a diverse selection of recreational facilities such	No difference

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Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
policies, and purchasing of liability insurance for directors and supervisors of the Company)?			as swimming pools and gyms. The Company also subsidizes club activities to provide employees with a variety of after-work leisure options. 3. Investor relations: The Company’s website has an investors’ service page, a spokesperson, and a deputy spokesperson, specifically responsible for public disclosure of the Company’s information. The Company will also organize road-shows regularly to disclose relevant information regarding the Company’s operations, and at the same time update that information on the Company’s website. 4. Supplier relations: The business strategy adopted by the Company upholds trust as the highest guiding principle and respects every commitment made with both suppliers and stakeholders. The Company aims at building positive and interactive relationships with suppliers and will not delay payments without proper cause. 5. Stakeholders’ rights: To provide public investors with information transparency and prompt notifications, with financial and business information posted on the Company’s website shall be regularly updated. 6. All directors of the Company have academic backgrounds and practical experiences in business management applications to the business scope of the Company. The following lists financial, business, and professional courses recently taken by the directors and managerial officers (please refer to Note 2 for details). 7. Implementation of the risk management policy and risk evaluation standards: The Company has carefully stipulated various internal control regulations to manage and evaluate various risks. 8. Execution of customer policies: The Corporation is involved in the sales of

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Evaluation Items	State of implementation	State of implementation	State of implementation
	Yes	No	Summary and Explanation
			instruments and equipment, and provides excellent product inquiry responses as well as rapid maintenance and other post-sales services to ensure that the clients’ production lines operate smoothly while maintaining positive customer relationships. 9. The Company has purchase liability insurance for all the directors and important staff. This action was reported to the Board of Directors on February23,2023
IX. Improvements made in the most recent year in response to the results of corporate governance evaluation conducted by the Corporate Governance Center of the Taiwan Stock Exchange Corporation, and prioritized matters and measures to be improved upon for matters that have not been improved. (this section need not be completed by corporations not listed for evaluations) 1. Improvements made in the most recent year: (1) Inviting directors to attend the shareholders meeting, and improving the attendance. (2) Providing refresher course information to the directors, and increasing the number of directors’ refresher hours. 2. Prioritized matters and measures yet to be improved: (1) Arrangement of the communicating meetings between independent directors and CPAs. (2) Upon evaluation, it is proposed to appoint an external professional and independent organization orgroupconsistingof external experts and scholars toperform the assessment.

Note 1: Assessment of independence and competence of the Company’s CPAs:	Note 1: Assessment of independence and competence of the Company’s CPAs:
Evaluation Items	Y/N	Whether it meets the required independence and competence
1. The CPA did not serve as directors and supervisors of the Company	Y	
2.The CPA isnot a shareholderofthe Company	Y	
3. The CPA does not work part-time in the Company or is engaged in regularwork, andis paid	Y	
4. The CPA has no significant financial interest in the Company	Y	
5.The CPA hasno borrowingfromor lending to the Company	Y	
6. The CPA is not involved in the management function of the Company’s decisionsmaking	Y	
7. The CPA has not served in the Company in the first two years of practicing	Y	
8. Receipt of a declaration of independence by the CPA	Y	
9. The CPA has not provided the Company’s audit certification service for 7 consecutive years	Y	
10. There are no interaction issues between the CPAs and management, governance units, and the internal audit supervisor.	Y	
11. The quality of audit and tax services meets the requirements in a timely and effective manner	Y	
12. The Company’s financial report has not been litigated or corrected by	Y	

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the competent authority

Acquire the AQIs and perform the assessment:
(1) Professional indicator (audit experience, training hours, turnover rate, and professional support) - sufficient
(2) AQI indicator (CPA’s load, engagement in audits, EQCR recheck status, and quality control support ability) - sufficient
(3) Independence (proportion of non-audit services and customer Y  familiarity) - no abnormal situation
(4) Supervision (defects found in external inspections and disposition, and the competent authority’s reminder for improvement) - no abnormal situation
(5) With the ability to innovate and plan the audit.

Note 2: Progress of FY2022 training for the Company’s directors up to the publication date of this annual report.

report.
Position title	Name	Training date		Organizer	Curriculum	Training hours	Total training hours for the year
		From	To
Director	Leo Huang	June 22, 2022	June 22, 2022	Taiwan Academy of Banking and Finance	Corporate Governance and Corporate Sustainability Workshop (19th session)	3	8
		July 20, 2022	July 20, 2022	TWSE/TPEx	Sustainable Development Roadmap Industry Themed-Based PresentationConference	2
		October 25,2021	October 25,2021	Taiwan Academy of Banking andFinance	Corporate Governance Lecture	3
Director	I-Shih Tseng	October 26, 2022	October 26, 2022	Accounting Research and Development Foundation	Interpretation of Common Defects Found in Audits on Financial Statements and Important Internal Control Laws, Regulations, and Practices	6	6
Director	Tsun-I Wang	December 29, 2022	December 29, 2022	Accounting Research and Development Foundation	Development Trend of Internet Technology and the Internal Auditor’s New Thinking	6	6
Director	Chung-Ju Chang	April 22, 2022	April 22, 2022	Taiwan Institute for Sustainable Energy	Taishin 30th Anniversary Sustainable Net-Zero Summit Forum – Earnest Net Zero Achievement Sustainability 2030	3	6
		October 25, 2021	October 25, 2021	Taiwan Academy of Banking and Finance	Corporate Governance Lecture	3
Independent director	Jia-Ruey Duann	April 22, 2022	April 22, 2022	Taiwan Institute for Sustainable Energy	Taishin 30th Anniversary Sustainable Net-Zero Summit Forum – Earnest Net Zero Achievement Sustainability2030	3	6
		October 14, 2022	October 14, 2022	Securities and Futures Institute	2022 Annual Seminar on Prevention of Insider Trading	3

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Position title	Name	Training date	Training date	Organizer	Curriculum	Training hours	Total training hours for the year
		From	To
Independent director	Tai-Jen George Chen	April 22, 2022	April 22, 2022	Taiwan Institute for Sustainable Energy	Taishin 30th Anniversary Sustainable Net-Zero Summit Forum – Earnest Net Zero Achievement Sustainability2030	3	11
		July 20, 2022	July 20, 2022	TWSE/TPEx	Sustainable Development Roadmap Industry Themed-Based PresentationConference	2
		August 5, 2022	August 5, 2022	Securities and Futures Institute	Risk and Opportunity Brought by Climate Change and Net-Zero Policy to Business Administration	3
		October 19, 2022	October 19, 2022	Securities and Futures Institute	2022 Insider Equity Trading Compliance Publicity Seminar	3
Independent director	Steven Wu	June 22, 2022	June 22, 2022	Taiwan Academy of Banking and Finance	Corporate Governance and Corporate Sustainability Workshop (19thsession)	3	6
		October 25,2022	October 25,2022	Taiwan Academy of Banking andFinance	Corporate Governance Lecture	3

Corporate governance continuing education and training for the Company’s managerial officers in 2022 up to the publication date of this annual report:

Position title	Name	Training date	Training date	Organizer	Curriculum	Continuing education hours
		From	To
Accounting Officer	Paul Ying	September 26, 2022	September 27, 2022	Accounting Research and Development Foundation	Continuing Training Course for Principal Accounting Officers of Issuers, Securities Firms, andSecurities Exchanges	12
Corporate governance officer	Amy Huang	March 25, 2022	March 25, 2022	Accounting Research and Development Foundation	Finance & Tax issues and Tax Governance Practices on Taiwanese Businessmen’s Investment Abroad	3
		April 7, 2022	April 7, 2022	Accounting Research and Development Foundation	Interpretation of False Financial Reports and How to Read Key Information in the Financial Report	3
		April 22, 2022	April 22, 2022	Taiwan Institute for Sustainable Energy	Taishin 30th Anniversary Sustainable Net-Zero Summit Forum - Earnest Net Zero Achievement Sustainability 2030	3

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(V) Composition, duties, and operation of the Remuneration Committee

Information on the members of the Remuneration Committee

Identity	Conditions Name	Professional qualifications and experiences	Status of Independence	Number of salary and remuneration committee memberships concurrently held in other public corporations
Independent director (convener)	Tai-Jen George Chen	Please refer to Page 7~9 for detailed information on directors.	Please refer to Page 7~9 for detailed information on directors.	2
Independent director	Jia-Ruey Duann	Please refer to Page 7~9 for detailed information on directors.	Please refer to Page 7~9 for detailed information on directors.	1
Independent director	Steven Wu	Please refer to Page 7~9 for detailed information on directors.	Please refer to Page 7~9 for detailed information on directors.	0

Operations of the Remuneration Committee

(1) The Company has a Remuneration Committee composed of 3 members.

(2) Duration of the current term of service: from July 3, 2020 until June 9, 2023, a total of 2 Remuneration Committee meetings were held in 2022. Members qualifications and attendance are as follows:

Position title	Name	Attendance in person	Delegated presence	Percentage of attendance in person (%) (Note)
Convener	Tai-JenGeorge Chen	2	-	100%
Committee member	Jia-Ruey Duann	2	-	100%
Committeemember	StevenWu	2	-	100%
Other matters to be recorded: I. Indicate the date of the Remuneration Committee’s meeting in the most recent fiscal year, sessions, the content of proposals, resolutions of the Committee, and the results of the Company’s actions in response to the opinions oftheRemunerationCommittee Session Date Content of Motion and Follow-up Actions Voting results The Company’s actions in response to the opinions of the Remuneration Committee 2022 1st meeting February 23, 2022 (1) Proposal of the 2022 salary adjustment for the Company’s senior managerial officers. (2) Proposal of the annual rewards for directors, and attendance fees for directors who attended Audit Committee meetings (3) Proposal of 2022 compensation for members of the Audit Committee, and attendance fees for members who attended Audit Committee meetings Approved by all committee members Proposed by the Board of Directors and adopted with the approval of all attending Directors 2022 2nd meeting June 23, 2022 (1) Proposal of 2021 employee remuneration distributed to the Company’s managerial officers. (2) Review on the roster of subscribers for RSAs issued by the Company to managerial officers in 2022, and granted subscription quantity. Approved by all committee members Proposed by the Board of Directors and adopted with the approval of all attending Directors

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II. If the Board of Directors does not adopt or amend the recommendations made by the Remuneration Committee, the date and session of the Board of Directors’ meeting, resolutions, voting results, and handling of opinions from the Remuneration Committee by the Company shall be disclosed (if the remuneration approved by the Board of Directors is better than that recommended by the Remuneration Committee, the discrepancies and related reasons shall be stated): None.
III. Where resolutions of the Remuneration Committee include dissenting or qualified opinion which is on record or stated in a written statement, the date, session, contents discussed, opinions from every member, and disposition of the members’ opinions shall be described in detail: None.

3. Information on the members of the Nomination Committee and its operation: None.

(VI) Implementation of sustainable development, deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and reasons thereof

Evaluation Items	State of implementation (Note 1)	State of implementation (Note 1)	State of implementation (Note 1)	Gaps with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the said gaps
	Yes	No	Summary and Explanation
I. Has the Company established a governance structure to promote sustainable development, and set up a dedicated (part-time) unit to promote sustainable development, which is authorized by the Board of Directors to be handled by senior management, and the supervision situation of the Board of Directors? (A TWSE/TPEx listed company must specify the implementation status, instead of compliance or interpretation).	`ˇ`		The Company established the ESG Office in	No difference
			2022. The Senior Vice President of Finance
			& Administration Center is appointed to hold
			the position as CEO, who governs 7 major
			functional groups responsible for the
			planning and execution of ESG practices and
			reporting of the implementation status and
			results to the senior management and Board
			of Directors on a regular basis each year. The
			ESG Office has reported the ESG
			implementation status to the Board of
			Directors on October 31, 2022. The report
			primarily explains the practices and results in
			terms of corporate governance, sustainable
			supply chain, sustainable environmental
			protection, construction of safe and healthy
			workplaces, employee care, and social
			participation. Meanwhile, it establishes the
			channel of communication with stakeholders
			and responds to the communication report on
			important issues concerning the stakeholders,
			the Company’s short-term and long-term
			goals, and TCFD climate change risk and
			opportunity evaluation report. The Board of
			Directors is responsible for supervising the
			promotion of sustainable development and
			annual implementation status thereof.
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	`ˇ`		The Company has formulated the “Corporate Governance Best Practice Principles” and “Sustainable Development Best Practice Principles”, which were already approved by the Board of Directors for management and all employees to followand managingthe	No difference

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Evaluation Items	State of implementation (Note 1)	State of implementation (Note 1)	State of implementation (Note 1)	Gaps with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
management policies or strategies? (A TWSE/TPEx listed company must specify the implementation status, instead of compliance or interpretation.)			Company’s impact on the environment, society, and corporate governance.
III. Environmental Issues (I) Has the Company referred to the nature of its industry to establish a suitable environmental management system (EMS)? (II) Is the Company committed to improving the usage efficiency of energies and utilizing renewable resources with reduced environmental impact? (III) Has the Company assessed the potential risks and opportunities arising from climate change at present and in the future and taken related countermeasures?	`ˇ` `ˇ` `ˇ`		(I) All environmental safety operations are regulated in accordance with the laws and regulations. The Company regularly tracks and declares the amount of waste generated, sets targets for waste reduction, implements ideas for resource recycling, and sets various energy- saving programs to achieve the goal of energy conservation and love for the earth. The Company has obtained ISO 14001 attestation. (II) The Company is committed to the development of green energy products, giving priority to environmental protection products and building its headquarters in accordance with green building regulations. The Company is committed to reducing the use of hazardous substances, and generating lead-free production processes. Suitable recycling processes are applied according to the attributes of waste. Waste sorting is implemented through policy announcement and promotion, lectures, labeling, posting and secondary sorting to reduce waste and increase resource recovery rate in fulfilling the environmental protection responsibility. (III) The Company has established a greenhouse gas inventory system for the 7th year, established an inventory mechanism for all possible sources of greenhouse gases in the organization, and regularly checked the greenhouse gas emission of Scope 1, Scope 2, and Scope 3 of the plant in the previous year on an annual basis, and it has been verified by a third-party external verification agency and obtained	No difference

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Evaluation Items	State of implementation (Note 1)	State of implementation (Note 1)	State of implementation (Note 1)	Gaps with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
(IV) Has the Company calculated the greenhouse gas emissions, water consumption, and total weight of waste over the past two years and established the policies with regard to energy conservation and carbon reduction, greenhouse gas reductions, water consumption, and waste management?	`ˇ`		ISO14064-1 certification. By fully understanding the Company’s GHG emissions and formulating short, medium, and long-term reduction plans based on individual emissions, the Company’s actions in environmental protection are demonstrated. In the future, the Company will continue to examine the greenhouse gases emitted by the Company and formulate related reduction measures to capture the impact on the environment. (IV) The Company has introduced ISO 14001 and ISO 14064 systems and has passed external third-party inspection. The Company has implemented measures such as enhancing the efficiency of the air-conditioning cooling system, reducing energy consumption hardware improvement projects, installing power-saving designs for air-conditioning containers, replacing air-conditioning temperature control systems with refrigerant flow measurement systems, strengthening power usage monitoring, water-saving packing devices, and gradually replacing all factory-wide public lighting equipment with LED lights to achieve energy saving and carbon reduction, and reducing energy consumption, so as to reduce carbon emissions intensity and fulfill the obligation of environmental protection.
IV. Social Issues (I) Does the Company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	`ˇ`		(I) The Company abides by the laws and regulations where it operates around the world, respects and supports recognized international norms and principles of human rights, including the “International Code of Human Rights”, “Universal Declaration of Human Rights” and the International Labor Organization’s “Declaration of Fundamental Principles and Rights at	No difference

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Evaluation Items	State of implementation (Note 1)	State of implementation (Note 1)	State of implementation (Note 1)	Gaps with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
(II) Has the Company established and offered proper employee benefits (including compensation, leave, and other benefits) and reflected the business performance or results in employee compensation appropriately? (III) Does the Company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis? (IV) Has the Company established an effective career competence training plan for its employees? (V) Has the Company followed the relevant laws, regulations, and international guidelines for issues	`ˇ` `ˇ` `ˇ` `ˇ`		Work”, treats with dignity and respects all employees, contract and temporary personnel, interns, etc., and formulates the Company’s internal management policies and related procedures accordingly. (II) In addition to providing employees with various leave according to the law, the Company also allows paid sick leave up to five days and one-day birthday leave that are superior to the law. It has also formulated a competitive salary plan that is superior to legal standards, and allocates employee rewards based on annual operating performance. The Company’s operating performance and employee personal performance are appropriately reflected in employee compensation policies to ensure the recruitment, retention, and incentives of human resources, achieving the sustainable operation goal. (III) In order to fulfill its corporate social responsibilities and protect all colleagues, the Company regularly implements in-service employee education and training, new employee education and training, and fire drills. (IV) The Company regards talent cultivation and development as a competitive advantage, plans a complete education and training system and development training courses to help employees improve their professionalism, management capabilities, and self- growth. Formulate the “Education and Training Management Measures”, and introduce education and training courses every year, put forward training plans according to the needs of various departments, and continue to optimize the professional functions of employees. (V) The Company focuses on leading manufacturers in the field of measurement and provides customers

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Evaluation Items	State of implementation (Note 1)	State of implementation (Note 1)	State of implementation (Note 1)	Gaps with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
such as customer health and safety, customer privacy, and marketing and labeling of its products and services and established related consumer or customer protection policies and grievance procedures? (VI) Has the Company established the supplier management policies requesting suppliers to comply with laws and regulations related to environmental protection, occupational safety and health or labor rights and supervised their compliance?	`ˇ`		with innovative and quality services to meet their needs. Also, we provide customers with satisfactory product quality, complete sales services, and conduct regular customer satisfaction surveys every year, and we regard customer satisfaction evaluations and survey results as an important basis for improving customer relationship development. By turning customer feedback into the driving force for improving products and services, the ultimate goal is to exceed customer expectations. The Company complies with regulations and international standards in the marketing and labeling of products and services. The Company upholds the highest principle of maintaining confidential information for business with customers. In addition to the Code of Business Conduct for Employees, all confidential information of the Company shall be kept by professional units in custody to ensure the safety of the property of customers. (VI) The ESG Office establishes a sustainable supply chain taskforce which, on the basis of supply chain management, complies with the relevant domestic and foreign laws and regulations, solidifies the supply chain management structure, and sets forth the sustainable supply chain management policy accordingly, in order to fulfill the corporate social responsibility jointly. The Company has established supplier management rules to clearly regulate and require suppliers to comply with relevant laws and regulations, implement supplier evaluations and review operations for high-risk suppliers, and replace those who fail to meet the standards.

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Evaluation Items	State of implementation (Note 1)	State of implementation (Note 1)	State of implementation (Note 1)	Gaps with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
V. Does the Company make reference to international reporting standards or guidelines to prepare sustainability or other reports that disclose non-financial information about the Company? Has the assurance or opinion from third- party certifying institutions been obtained for the aforementioned reports?	`ˇ`		The Company prepares the report with reference to the requirements of the GRI Standards, which is validated and certified by BV via a third party.	No difference
VI. Where the Company has stipulated its own Best Practices on sustainable development according to the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, please describe any gaps between the prescribed best practices and actual activities taken by the Company: The corporation has stipulated “Sustainable Development Best Practice Principles” which provided various specifications on environmental management, community services, human rights, stakeholders’ rights, and participation in community services. These Best Practices may be perused on the corporation’s website. For the status of sustainability operations of the corporation, please peruse the CSR/ESG reports compiled by the Company.
VII. Any important information useful for understanding the state of sustainable development operations: (I) The Company promotes sustainable development in a long-term manner. Every year, the Company reveals its sustainable development status and business philosophy through CSR/ESG reports, and reports the implementation of sustainable development to the public based on the concept and practice of transparency, openness, and corporate social sustainability. (1) Environmental sustainability Reducing the impact on the environment is a very important part of sustainable development. Our company is actively developing high-tech, low-pollution, low energy consumption products, such as the energy recovery battery pack testing system launched in recent years, which can save a lot of electrical energy consumed in the discharge process and recycle the electrical energy generated by the battery pack discharge to the power grid for reuse, solving the traditional equipment discharge energy waste and meeting the needs of environmental protection. (2) Talent cultivation The Company has been promoting and participating in various social welfare activities and investing in the cultivation of talents. The Company holds the “2022 Chroma Precision Machinery and Measurement Technology Thesis Award” to encourage young students to engage in research and development and creative applications in the field of precision measurement, and to recruit talents for the industry, thereby promoting the upgrading and innovation of precision machinery and measurement technology and the sustainable development of society. (II) Activities to promote sustainable development in 2022 (1) Targets of donations in 2022: Friends of Taoyuan Police Association, Friends of Guishan Police Association, Little Tree Charity Association, Boyo Social Welfare Foundation, Paper Windmill Arts and Educational Foundation, and National Chiao Tung University Q557 Scholarship Fund for disadvantaged students, with total donations of NT$2.53 million. (2) Promoted the concept of environmental protection to save energy and reduce carbon emissions by collecting used shoes and bags and delivered them to STEP30, the International Christian care association,so that the used shoes can be recycled and used again,as our response tojointly protect the

VII. Any important information useful for understanding the state of sustainable development operations: (I) The Company promotes sustainable development in a long-term manner. Every year, the Company reveals its sustainable development status and business philosophy through CSR/ESG reports, and reports the implementation of sustainable development to the public based on the concept and practice of transparency, openness, and corporate social sustainability.

Reducing the impact on the environment is a very important part of sustainable development. Our company is actively developing high-tech, low-pollution, low energy consumption products, such as the energy recovery battery pack testing system launched in recent years, which can save a lot of electrical energy consumed in the discharge process and recycle the electrical energy generated by the battery pack discharge to the power grid for reuse, solving the traditional equipment discharge energy waste and meeting the needs of environmental protection.
The Company has been promoting and participating in various social welfare activities and investing in the cultivation of talents. The Company holds the “2022 Chroma Precision Machinery and Measurement Technology Thesis Award” to encourage young students to engage in research and development and creative applications in the field of precision measurement, and to recruit talents for the industry, thereby promoting the upgrading and innovation of precision machinery and measurement technology and the sustainable development of society.
(1) Targets of donations in 2022: Friends of Taoyuan Police Association, Friends of Guishan Police Association, Little Tree Charity Association, Boyo Social Welfare Foundation, Paper Windmill Arts and Educational Foundation, and National Chiao Tung University Q557 Scholarship Fund for disadvantaged students, with total donations of NT$2.53 million.
(2) Promoted the concept of environmental protection to save energy and reduce carbon emissions by collecting used shoes and bags and delivered them to STEP30, the International Christian care association, so that the used shoes can be recycled and used again, as our response to jointly protect the
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Evaluation Items	State of implementation (Note 1)	State of implementation (Note 1)	State of implementation (Note 1)	Gaps with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the saidgaps
	Yes	No	Summary and Explanation
environment any time any where (3) Cooperate with Buy NearBuy Co., Ltd. to provide fruits for employees’ lunch to help farmers in remote areas, and help produce and sell agricultural products. (4) Continuing to care about the issue of environmental sustainability, the Company organized two beach cleanups in 2022. ◎In response to the “Action Plan for Returning the Ocean” (Project Blue) organized by Business Today on October 31, 162 employees of the Company and their family members participated in the Plan at Dingliao Beach in Linkou and cleaned up marine waste weighing 534KG on the same day. ◎The Company self-organized a beach cleanup on November 12, and applied with the beach adoption system of the Environmental Protection Administration for adoption of the Shalun Section of Zhuwei District. A total of 127 of the Company’s employees participated and picked up marine waste weighing174KG.

(3) Cooperate with Buy NearBuy Co., Ltd. to provide fruits for employees’ lunch to help farmers in remote areas, and help produce and sell agricultural products.
(4) Continuing to care about the issue of environmental sustainability, the Company organized two beach cleanups in 2022.

◎In response to the “Action Plan for Returning the Ocean” (Project Blue) organized by Business Today on October 31, 162 employees of the Company and their family members participated in the Plan at Dingliao Beach in Linkou and cleaned up marine waste weighing 534KG on the same day. ◎The Company self-organized a beach cleanup on November 12, and applied with the beach adoption system of the Environmental Protection Administration for adoption of the Shalun Section of Zhuwei District. A total of 127 of the Company’s employees participated and picked up marine waste weighing 174KG.

Note 1: If “Yes” under the “Status of Implementation” is ticked off, please specifically explain the key policies, strategies, and measures adopted and their implementation results. If “No” is ticked off, please explain the deviations and reason in the section of “Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, and the reasons thereof”, and specify the related policies, strategies, and measures to be adopted in the future. Notwithstanding, with respect to Items 1 and 2, TWSE/TPEx listed companies shall specify the governance and supervision framework of their sustainable development, including but not limited to, the enactment of management policies, strategies and targets, review of the measures, etc. Meanwhile, please specify the Company’s risk management policies or strategies against the ESG issues, and the evaluation thereof.

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(VII) Compliance with ethical corporate management and measures implemented

Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the said gaps.
	Yes	No	Summary and Explanation
I. Formulating ethical corporate management policies and programs (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) Has the Company established a risk assessment mechanism against unethical conduct, analyze and assess activities within its business scope which are at a higher risk of being involved in unethical conduct regularly, and establish prevention programs accordingly, which shall at least include the preventive measures specified in Paragraph 2, Article 7 of the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”? (III) Has the Company specified in its prevention programs the operating procedures, guidelines, punishments for violations, and a grievance system and implemented them and review the prevention programs regularly?	`ˇ` `ˇ` `ˇ`		(I) The Company has formulated its “Ethical Corporate Management Best Practice Principles”, “Operating Rules for Ethical Corporate Management Best Practice Principles” and “Code of Ethical Conduct”, and relevant policies and proposals were approved by the Board. The internal rules and regulations include the “Employee Reward and Punishment Regulations” and “Supplier Management Regulations” to actively implement ethical corporate management policies. (II) The Company has evaluated and prevented the risk of high dishonest behavior, and preventive measures cover at least the behaviors specified in Paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles of the Company. (III) In addition to communicating to the internal personnel of the Corporation regarding the importance of ethical conduct and prescribing various procedures for handling and forestalling unethical conduct within the “Code of Integrity Practice Rules”, the Corporation also requires suppliers to sign a Supplier Commitment towardsBusinessIntegrity that	No difference

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Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the said gaps.
	Yes	No	Summary and Explanation
			clearly stipulates a prohibition against improper or unethical conduct during the process of business transactions. Meanwhile, the Company stipulated the Regulations for Employee Rewards and Disciplinarian Actions as the basis for rewarding and penalizing employee conduct. The rewarding and penalizing of employee conduct, as well as disciplinarian actions which were taken against violations, and handling of personal appeals are implemented according to these Regulations.
II. Implementing ethical corporate management (I) Has the Company evaluated the ethical records of its counterparty? Does the contract signed by the Company and its trading counterparty clearly provide terms on ethical conduct? (II) Has the Company set up a dedicated unit under the Board of Directors to promote ethical corporate management and regularly (at least once every year) report to the Board of Directors the implementation of the ethical corporate management policies and prevention programs against unethical conduct?	`ˇ` `ˇ`		(I) To ensure that mutual trust and integrity form the basis of all business dealings, the Company’s management regulations have provided that suppliers must sign a letter of commitment towards business integrity which clearly prohibited any improper or unethical conduct in business activities and immediate blacklisting of any violators. Standard purchasing/sales contracts of the Company also clearly stipulate terms for business integrity and prohibition of unethical dealings and conduct. (II) The Company designated the Auditing Office directly under the Board of Directors as the responsible owner for revising, implementing, interpreting, providing counseling services, reporting, registering, and filing the contents of the Operational Rules for Best Practices for Ethical Corporate Management, supervising the implementation of these rules, and providing regular reports to the Board of Directors.	No difference

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Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the said gaps.
	Yes	No	Summary and Explanation
(III) Has the Company established policies to prevent conflicts of interest, provided an appropriate channel for reporting such conflicts and implemented them? (IV) Has the Company established effective accounting systems and internal control systems to implement ethical corporate management and had its internal audit unit, based on the results of an assessment of the risk of involvement in unethical conduct, devise relevant audit plans and audit the compliance with the prevention programs accordingly or entrusted a CPA to conduct the audit? (V) Does the Company regularly hold internal and external training related to ethical corporate management?	`ˇ` `ˇ` `ˇ`		The implementation and audit of ethical corporate management in the most recent year has been reported to the Board of Directors on October 31, 2022. (III) The Company has established the “Ethical Corporate Management Best Principles Practice”, which clearly specifies the policy to prevent conflicts of interest. The official website of the Company displays an independent e-mail address and dedicated telephone line as channels for internal and external personnel of the Company to make whistleblower reports. Any report shall be immediately handled by the responsible unit. (IV) To implement ethical corporate management, the Corporation has established an effective accounting system and internal control system according to the constituent elements of the internal system, and the internal auditing unit shall conduct audits according to the annual audit plan. (V) New recruits are regularly taught with the Company’s organizational, cultural, and internal workplace morality and ethics, emphasizing the importance of individual and work integrity, in the mean time, conducts internal awareness programs conveying the importance of integrity. The rules and guidelines regarding ethical conduct are posted on the Company’s website and are available for review by employees at all times. A total of 6 sessions were organized for the orientation

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Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the said gaps.
	Yes	No	Summary and Explanation
			training in 2022, attended by about 178 persons.
III. Implementation of the Company’s whistleblowing system (I) Has the Company established a specific whistleblowing and reward system, set up convenient whistleblowing channels, and designated appropriate personnel to handle investigations against wrongdoers? (II) Has the Company established the standard operating procedures for investigating reported misconduct, follow-up measures to be adopted after the investigation, and related confidentiality mechanisms? (III) Has the Company set up protection for whistleblowers to prevent them from being subjected to inappropriate measures as a result of reporting such incidents?	`ˇ` `ˇ` `ˇ`		(I) The Company has established and announced an independent whistleblowing email address and a dedicated telephone line for whistleblowers to report cases to the Company’s dedicated personnel. (II) The Company stipulated standard operation procedures for handling whistle-blowing investigations, as well as confidentiality mechanisms. The handling personnel shall investigate the case being exposed by the whistleblower, generate records, submit a report, file relevant documents, and ensure confidentiality of the identity of the whistleblower and the content of the reported case. (III) The Company has established the standard operating procedures for handling whistleblowing investigations and the relevant confidentiality mechanisms to maintain the confidentiality of whistleblowers’ identities and the content of reported cases.	No difference
IV. Enhancing information disclosure (I) Has the Company disclosed the contents of its best practices for ethical corporate management and the effectiveness of relevant activities upon its official website or Market Observation Post System (MOPS)?	`ˇ`		The Corporation has established an electronic bulletin board, providing prompt announcements to relevant regulations and activities. Any regulations related to the corporate governance as well as compliance to ethical conduct shall also be disclosed uponthe Company’s officialwebsite.	No difference
V. If the Company has formulated its own principles of integrity operations based on the “Code of Integrity Practice Rules for TWSE/TPEx Listed corporations”, please state the difference between its principles and its operation: No difference.
VI. Other important information that facilitates the understanding of the implementation of ethical corporate management: (such as review and amendment of the Corporation’s Ethical Corporate Management Best PracticePrinciples)

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Evaluation Items	State of implementation	State of implementation	State of implementation	Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed corporations, and the cause of the said gaps.
	Yes	No	Summary and Explanation
The implementation of the ethical management policy in 2022 is stated as follows: ◎Education & training The Company teaches new employees about the Company’s organization, culture, and important internal professional ethics regularly, and emphasizes the importance of personal and professional integrity. In 2022, the Company organized a total of 6 orientation training sessions, attended by 178 new employees in total. Each new employee shall execute the “Employment and Non-Disclosure Agreement”, which already includes the integrity clause. ◎Legal compliance The management conducts internal awareness programs conveying the importance of integrity from time to time. The rules and guidelines regarding ethical conduct are posted on the Company’s website and are available for review by employees at all times. ◎Regular inspection Through the self-inspection conducted by the Head Office and various units of the subsidiaries each year, the Company conducts the risk assessment on corruption with respect to the business activities at all business locations, in order to achieve the effective control. Meanwhile, the Company has stipulated the “Regulations for Employee Reward and Disciplinarian Actions” and “Code of Ethical Conduct” to include the ethical management practices into the employee performance appraisal and HR policy, and also set the definite and effective reward and punishment system. The Internal Audit Office conducts an audit independently each year, in order to ensure the whole mechanism’s effective operation. The audit results in 2022 showed no corruption or anti-competition activity found, and the results were already reported to the Board of Directors. ◎Whistleblowing system and protection of whistleblowers The “Corporate Governance Best Practice Principles”, “Ethical Management Best Practice Principles”, and “Operational Rules for Ethical Management Best Practice Principles” provide a whistleblowing system to proactively prevent any unethical conduct and encourage insiders and external personnel to whistleblow on any unethical conduct or misconduct. Meanwhile, the Internal Audit Office is designated as the dedicated unit in charge of the whistleblowing cases to accept the reports on any colleagues involved in unethical conduct. The Stakeholder Section on the official website also provides the effective channel of communication with employees, shareholders, stakeholders, and outsiders, and discloses the Internal Audit Office’s email address. The whistleblowing involving directors or senior management shall be reported to independent directors. Meanwhile, the whistleblower protection system is also in place to keep the whistleblower’s identity and reported contents in confidence, and protect whistleblowers from any unfair treatment due to whistleblowing. In 2022, the Company received 0 whistleblowing cases. The Company engages in business activities in a fair and transparent manner, and evaluates the trading counterparts with care before engaging in business activities. When executing any business contract with a trading counterpart, the legal affairs unit will review the contractual terms and conditions to avoid trading with any person with a record of unethical conduct. The Company’s suppliers shall execute the “Supplier Commitment” to undertake that if they violate any commitment toward ethics, they shall pay liquidated damages equivalent to the amount of the bribe or unjustified benefit as sought, and the Company is entitled to decide on revocation, termination, or rescissionofthe transactionbetweenbothparties atits sole discretion.

The Company teaches new employees about the Company’s organization, culture, and important internal professional ethics regularly, and emphasizes the importance of personal and professional integrity. In 2022, the Company organized a total of 6 orientation training sessions, attended by 178 new employees in total. Each new employee shall execute the “Employment and Non-Disclosure Agreement”, which already includes the integrity clause.

The management conducts internal awareness programs conveying the importance of integrity from time to time. The rules and guidelines regarding ethical conduct are posted on the Company’s website and are available for review by employees at all times.

Through the self-inspection conducted by the Head Office and various units of the subsidiaries each year, the Company conducts the risk assessment on corruption with respect to the business activities at all business locations, in order to achieve the effective control. Meanwhile, the Company has stipulated the “Regulations for Employee Reward and Disciplinarian Actions” and “Code of Ethical Conduct” to include the ethical management practices into the employee performance appraisal and HR policy, and also set the definite and effective reward and punishment system. The Internal Audit Office conducts an audit independently each year, in order to ensure the whole mechanism’s effective operation. The audit results in 2022 showed no corruption or anti-competition activity found, and the results were already reported to the Board of Directors.

The “Corporate Governance Best Practice Principles”, “Ethical Management Best Practice Principles”, and “Operational Rules for Ethical Management Best Practice Principles” provide a whistleblowing system to proactively prevent any unethical conduct and encourage insiders and external personnel to whistleblow on any unethical conduct or misconduct. Meanwhile, the Internal Audit Office is designated as the dedicated unit in charge of the whistleblowing cases to accept the reports on any colleagues involved in unethical conduct. The Stakeholder Section on the official website also provides the effective channel of communication with employees, shareholders, stakeholders, and outsiders, and discloses the Internal Audit Office’s email address. The whistleblowing involving directors or senior management shall be reported to independent directors. Meanwhile, the whistleblower protection system is also in place to keep the whistleblower’s identity and reported contents in confidence, and protect whistleblowers from any unfair treatment due to whistleblowing. In 2022, the Company received 0 whistleblowing cases.

The Company engages in business activities in a fair and transparent manner, and evaluates the trading counterparts with care before engaging in business activities. When executing any business contract with a trading counterpart, the legal affairs unit will review the contractual terms and conditions to avoid trading with any person with a record of unethical conduct. The Company’s suppliers shall execute the “Supplier Commitment” to undertake that if they violate any commitment toward ethics, they shall pay liquidated damages equivalent to the amount of the bribe or unjustified benefit as sought, and the Company is entitled to decide on revocation, termination, or rescission of the transaction between both parties at its sole discretion.

(VIII) If the Company has established the corporate governance best practice principles and other relevant regulations, the means to search for these regulations shall be disclosed.

Refer to MOPS or the official website of the Corporation for details regarding the Corporate Governance Best Practice Principles formulated by the Corporation and specifications provided by these best practice principles with regard to protecting shareholders’ rights and interests, enhancing the functions of the Board of Directors, respecting stakeholders’ rights and interests, and enhancing information transparency.

(IX) Other important information to enhance the understanding of the implementation of

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corporate governance at the Company

The Company has stipulated its “Regulations for the Prevention of Insider Trading” as the basis of the Company’s major news and information disclosure mechanism. It is also inspected intermittently to ensure compliance with the statutory laws and regulations, and is published on the Company’s internal website for inquiries.

(X) Protective measures for the work environment and personal safety of employees
(1) Employee safety
Employee fire safety teams shall work with local fire departments to conduct fire safety and evacuation exercises, disaster prevention, and practical disaster response drills.
Establish and enforce self-inspection plans to regularly inspect, maintain, and repair high- and low-voltage electrical equipment, elevators, air conditioning, fire safety equipment, potable water, water towers, and other forms of machinery and equipment to protect employee safety.
Commissioned professional cleaning corporations to maintain building sanitation and implement sterilization processes.
Commissioned qualified security firms to enforce access controls and security operations.
(2) Employee insurance
Follow the relevant laws and table of insurance ranges to provide employees with labor and health insurance.
Purchase social insurance for personnel stationed overseas following local laws.
Provide employees with regular life insurance, accidental injury insurance, accident and health insurance, hospitalization insurance, cancer healthcare insurance, and workplace accident insurance.
(3) Physical and mental health care for employees
Entrust qualified medical institutions to regularly perform employee health checks, apply health checks that are superior to laws and regulations, and establish a sound health management system to implement and implement health management to safeguard employees’ health.
Incorporate the Sexual Harassment Prevention Act in employees’ work regulations, establish the Sexual Harassment Prevention Committee, and designate dedicated personnel for handling such matters.
Set up a nursing room to configure a complete breastfeeding environment and equipment to provide a quality breastfeeding environment for women breastfeeding staff and maintain their breastfeeding privacy.
Carry out four cancer screenings and special health check-ups each year to promote employee health care and early detection of diseases.
AED automatic external defibrillators, first-aid kits and qualified first-aid personnel were set up at each factory site, and first-aid and AED education training courses were conducted. The branch office also obtained the certification for peace of mind and workplace safety.
Established employee recreation centers with swimming pools, gyms, dance classrooms, equipment, and other materials for employee use.
Conduct health promotion courses from time to time, such as emotional management, interpersonal communication, parenting, healthy eating, and health care.
Regularly organizes health promotion activities, promotes healthy meals, diverse sports instruction courses, health promotion lectures, and health testing activities, etc. Every year, it provides measures for physical and mental relaxation, physical management, and weight control of disease prevention and health promotion.
Regularly organize health promotion activities, promote healthy meals, and conduct a diverse range of sports and dancing areas within the perimeter of the factory.
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(XI) Implementation of internal control system 1. The Statement on Internal Control System

CHROMA ATE INC

The Statement on Internal Control System

Date: February 23, 2023

The Statement on Internal Control System is issued based on the Company’s 2022 self-assessment:
The Company acknowledges that the establishment, implementation, and maintenance of the internal control system are the responsibilities of the Company’s Board of Directors and managerial officers, and have established such a system. The objectives of this system are to meet various goals including achieving operational benefits and efficiency (including profitability, performance, as well as asset and safety protection), and ensuring the reliability, timeliness, transparency, and regulatory compliance of reporting, thereby providing reasonable assurance.
An internal control system has inherent constraints. No matter how comprehensive its design may be, an effective internal control system is only capable of providing adequate assurance for achieving the abovementioned objectives. In addition, the effectiveness of an internal control system may change with the environment and under different situations. However, the Company’s internal control system has been furnished with self-monitoring systems. The Company shall also initiate corrective actions for any verified defects.
The Corporation determines whether or not the design and implementation of its internal control system are effective according to the items for determining the effectiveness of the internal control system as stated in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (hereinafter referred to as the “Regulations”). The internal control system is divided into 5 key components according to the process of management control to generate internal control system assessment items adopted by the Regulations, including: 1. control environment; 2. risk assessment; 3. control operations; 4. information and communications and; 5. monitoring operations. Each key component also includes several sub-items. Refer to the Regulations for more information on the abovementioned items.
The Company has adopted the aforementioned internal control system assessment items to evaluate the effectiveness of its ICS design and implementation.
Based on the findings of such evaluation, the Company believes that, on December 31, 2022, it has maintained, in all material respects, an effective internal control system (that includes the supervision and management of our subsidiaries), to provide reasonable assurance over our operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws, and regulations.
The Statement shall be a major content of the Corporation that the design and implementation shall be publicly disclosed. Where any of the disclosed content contains misrepresentations, nondisclosures, or other illegal acts, the Company shall be subject to legal responsibilities provided in Articles 20, 32, 171, and 174 of the Securities and Exchange Act.
This statement has been approved by the Board of Directors on February 23, 2023, amongst the 7 directors that attended the meeting, none objected, and the remaining have all agreed with the contents of this statement.

CHROMA ATE INC Chairman: Leo Huang: signature: President: Leo Huang signature:

Where CPAs are commissioned to audit the Corporation’s internal control system, the audit report prepared by the CPAs shall be disclosed: None.
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(XII) Penalties imposed on the Corporation and its internal staff, penalties imposed on its internal staff by the Company for violation of internal control regulations, major deficiencies and status of improvements made in the most recent year up to the publication date of this annual report: None. (XIII) Major resolutions of the shareholders meeting and the Board of Directors in the most recent year up to the publication date of this annual report 1. Major resolutions of the Shareholders’Meeting and status of implementation	(XII) Penalties imposed on the Corporation and its internal staff, penalties imposed on its internal staff by the Company for violation of internal control regulations, major deficiencies and status of improvements made in the most recent year up to the publication date of this annual report: None. (XIII) Major resolutions of the shareholders meeting and the Board of Directors in the most recent year up to the publication date of this annual report 1. Major resolutions of the Shareholders’Meeting and status of implementation
Date convened	2022 Regular Shareholders’ Meeting
June 9, 2022	1. Adoption of the 2021 business report and financial statements. Status of implementation: The resolution was passed. 2. Adoption of the 2021 earnings distribution. Status of implementation: The resolution was passed. The Company’s distribution of earnings was carried out in the form of cash dividends, which was approved by the Board of Directors on February 23, 2022, and the ex-dividend date was set by the Board of Directors on June 23, 2022 as July 31, 2022. Cash dividends to shareholders were paid on August 10, 2022. (Dividends were paid at NT$6.98089243 per share.) 3. Approval of the amendments to the “Articles of Incorporation”. Status of implementation: The resolution was passed, and the amended Articles of Incorporation shall apply. 4.Approval of amendments to the Company’s “Procedures for Acquisition and Disposal of Assets”. Implementation status: The resolution was passed, and the amended Procedures shall apply. 5. Approval of the Company’s issuance of RSAs. Status of implementation: The resolution was passed 2,960,000 shares were issued on July1,2022actually, which may be subscribedforat NT$40 pershare.
2. Key resolutions of the Board of Directors
January 11, 2022	Approval of the closing of the subsidiary “Chroma New Material Corporation”
February 23, 2022	1. Approved the annual rewards for directors and supervisors, and attendance fees for directors who attended Audit Committee meetings 2. Approval of 2022 compensation for members of the Audit Committee, and attendance fees for members who attended Audit Committee meetings 3. Approved the 2022 salary adjustment for managerial officers. 4. Approval of 2021 employee bonus distribution plan. 5. Approval of 2021 business report and financial statements. 6. Approval of 2021 earnings distribution. 7. Issuance of the Company’s 2021 statement of internal control system. 8. Approval of capital loans to Chroma Japan Corp. 9. Approval of the establishment of the Company’s “Procedures of Loaning to Others”. 10. Approval of the loan of funds between the Company’s 100%-owned foreign subsidiaries. 11. Approval of amendments to the Company’s “Procedures for Acquisition and Disposal of Assets”. 12. Approval of the Company’s receivables overdue for more than 90 days are not of a fund loan nature. 13. Approval of the Company’s issuance of new employee restricted stocks 14. Approval of investment in ENTELIGENT INC. 15. Approval of the 2022 business plan. 16. Approval of amendments to the Company’s Articles of Incorporation. 17. Convening of the 2022 annual general meeting and collection of shareholders’ proposals.
March30,2022	Approvalofthe plantoinvestinthe establishment ofChromaAutomationGmbH in

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	Germany.
April 28, 2022	1. Approved Q1 2022 consolidated financial statements. 2. Approved the endorsement and guarantee for Chroma Electronics (Suzhou) Co., Ltd. 3. Approved the evaluation of the attesting CPAs’ independence. 4. Approved the report on the Company’s receivables overdue for more than 90 days which are not of a fund loan nature. 5. Approved the acquisition of the land for employee dormitory. 6. Approved the disposal of the stock, totaling 10,000 thousand shares, of the non-core business, ADLINK Technology Inc. 7. Approved the determination of the capital increase base date for employee stock options. 8. Approved the renewed line of credit extension between financial institutions and the Company.
June 23, 2022	1. Approved the endorsement and guarantee for Chroma ATE Inc (USA). 2. Approved the endorsement and guarantee for Chroma ATE Europe BV. 3. Approved the ratification of the amendments to the Company’s 2022 Regulations Governing Issuance of RSAs. 4. Approved the 2021 employee remuneration distributed to the Company’s managerial officers. 5. Approved the name list of subscribers for RSAs issued by the Company, and subscription quantity. 6. Approved the authorization to the Chairman for determination of the record date for distribution of dividends and distribution of cash dividends in 2022. 7.Approved theinvestmentinGaiusAutomotiveInc.
July 28, 2022	1. Approved Q2 2022 consolidated financial statements. 2. Approval of capital loan for Chroma Systems Solutions, Inc. 3. Approved the endorsement and guarantee for Chroma Electronics (Suzhou) Co., Ltd. 4. Approved the Company’s receivables overdue for more than 90 days which are not of a fund loan nature. 5. Approved the amendments to the Company’s “Corporate Governance Best Practice Principles”. 6. Enactment of the Company’s “Procedures for Management of Material Insider Information”.
October 31, 2022	1. Approval of the 2023 internal audit plan. 2. Approval of amendments to the Company’s “Internal Control System” and “Enforcement Rules for Internal Audits”. 3. Approval of Q3 2022 consolidated financial statements. 4. Approval of the endorsement and guarantee for MAS Automation Corp. 5. Approval of capital loans to Chroma Systems Solutions, Inc. 6. Approved the Company’s receivables overdue for more than 90 days which are not of a fund loan nature. 7. Approval of cash capital increase of TFBS Bioscience, Inc. 8. Approval of the budget for the A7 Plant 2 construction project. 9. Approval of the financial institution application for credit of line. 10. Approval of the amendments to the Company’s “Rules of Procedures for the Board of Directors’ Meeting” and “Procedures for the Management of Material Insider Information”. 11. Approval of change of the address of the Company’s branch in Korea.
February 23, 2023	1. Approved the annual rewards for directors and supervisors, and attendance fees for directors who attended Audit Committee meetings 2. Approval of 2023 compensation for members of the Audit Committee, and attendance fees for members who attended Audit Committee meetings 3. Approval of the Company’s 2023 managers’ raise. 4. Approval of the distribution of remuneration to employees in 2022. 5.Approvalofthe Company’s2022businessreport andfinancialstatements.

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1. Approval of the Company’s 2022 earnings distribution plan.
2. Approval of the Company’s 2022 statement of internal control system.
3. Approval of the endorsements/guarantees for subsidiaries.
4. Approval of capital loans to Chroma Japan Corp.
5. Approval of the evaluation of the independence and competence of the Company’s external auditors.
6. Approval of that the Company’s receivables overdue for more than 90 days are not of a fund loan nature.
7. Approval of the donation of NT$6 million, to the Chroma Cultural Educational and Foundation.
8. Approval of the Company’s 2023 business plan.
9. Approval of the amendments to the Company’s “Regulations Governing the Election of Directors”.
10. Approval of the amendments to the “Corporate Governance Best Practice Principles” and “Sustainable Development Best Practice Principles” of the Company.
11. Approval of re-election of the directors and nomination of directors (including independent directors).
12. Removal of the non-competition restrictions imposed on new directors and their representatives.
13. Convening of the 2023 annual general meeting and collection of shareholders’ proposals.
14. Approval of the subsidiary’s GHG accounting and verification schedule planning. 20. Determination of the capital reduction base date for cancellation of RSAs.
(XIV) Dissenting Opinions or Qualified Opinions on Resolutions Passed by the Board of Directors Which are Made by Directors and are Documented or Issued through Written Statements, in the Most Recent Year Up to the Publication Date of This Annual Report: None
(XV) Any resignation or dismissal of the Company’s chairperson of the Board, President, accounting manager, financial executive, internal audit manager, and chief corporate governance officer in the most recent year up to the publication date of this report: None.
V. Information on the CPAs’ professional charge
(I) Amount of audit and non-audit fees paid to CPAs, accounting firm and its affiliated companies, and content of non-audit services

Information on the CPAs’ professional fees

					Amount unit: In thousands of NT$	Amount unit: In thousands of NT$
Name of the accounting firm	Name of the CPA	CPA Audit period	Audit fee	Non-audit fee	Total	Remark
Deloitte & Touche	Wen-Chin Lin Chien-Liang Liu	January 1, 2022~ December 31, 2022	6,560	1,684	8,244	TP payment, subsidiary audit disbursement, English report, direct credit check, accounting standards advisory service for subsidiaries, and review on issuance of RSAs..

(II) Where the accounting firm was replaced, and the audit fees for the year when replacement was made was less than that in the previous fiscal year before replacement, the amount of audit fees paid before replacement and the reasons for paying such an amount shall be disclosed: None.
(III) Where the audit fees for the year were reduced by more than 10% compared to the previous year, the amount and percentage of decrease in audit fees, as well as the reason for such decrease shall be disclosed: None.
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VI. Replacement of CPAs:

(I) About the predecessor CPAs

Date of replacement	Approved by the Board of Directors on April 28, 2021	Approved by the Board of Directors on April 28, 2021	Approved by the Board of Directors on April 28, 2021	Approved by the Board of Directors on April 28, 2021	Approved by the Board of Directors on April 28, 2021
Reason for replacement and explanation	In accordance with the internal rotation of Deloitte and Touche, the attesting CPA of the Company were changed from Cheng-Ming Lee and Wen-Chi, Kuo to Wen- Chin Lin andChien-LiangLiu effective from the firstquarter of 2021.
Indicate whether the appointment is terminated or not accepted by the client or CPAs	Party involved Circumstance			CPA	Client
	Proactively terminated the appointment			Not applicable	Not applicable
	Not accepted (continued) the appointment			Not applicable	Not applicable
Opinions on audit reports issued within the last two years without qualificationandreasons	None
Any disagreement with the issuer	Yes		Accounting principles or practices
			Disclosure of financial statements
			Audit scope or procedures
			Others
	None	`ˇ`
	Explanation
Other disclosures (required to be disclosed under paragraphs 6.1-6.7 of Article 10 of the Regulations)	None

(II) About the successor CPAs

(required to be disclosed under paragraphs 6.1-6.7 of Article 10 of the Regulations) None (II) About the successor CPAs
Name of the accountingfirm Name of the CPA Date of appointment Matters and results of consultation on the accounting treatment or accounting principles for specific transactions and on the possible issuance of financialstatements priorto the appointment Written opinion of the successor CPA on matters on which the successor CPAs disagreed with the predecessorCPAs.	Deloitte & Touche
	Wen-Chin Lin, Chien-LiangLiu
	Approved bythe Board of Directors on April 28, 2021
	None
	None

(III) The predecessor CPAs’ reply to Paragraphs 1.6.1 and 1.6.2.3 of Article 10 of the Regulations: None.
VII. The Company’s Chairman, president, or any managerial officer in charge of finance or accounting matters who has held a position at the accounting firm of its CPAs or at an affiliated company in the most recent year: None.
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VIII. Shareholding transfer and equity pledge changes of directors or managerial officers holding more than ten percent (10%) of Company shares during the most recent year up to the publication date of this annual report

Transfer of shares and changes in equity pledge relating to the directors, managerial officers and primary shareholders:

Position title	Name	2022	2022	Ended April 11,2023	Ended April 11,2023
		Increase (decrease) in the number of shares held	Increase (decrease) in the number of shares pledged	Increase (decrease) in the number of shares held	Increase (decrease) in the number of shares pledged
Chairperson and General Manager	Leo Huang	0	0	0	0
Director and General Manager, Integrated SystemSolution BU	I-Shih Tseng	0	0	0	0
Director	Tsun-I Wang	0	0	0	0
Director	Chung-Ju Chang	0	0	0	0
Independent director	Tai-Jen George Chen	0	0	0	0
Independent director	Jia-Ruey Duann	0	0	0	0
Independent director	Steven Wu	0	0	0	0
General Manager, Test & Measurement BU	David Yang	0	0	0	0
General Manager, Intelligent Manufacturing System BU	Joe Lin (Note 1)	(5,000)	0	-	-
General Manager, Semiconductor Test Equipment BU	George Chang	0	0	0	0
Senior Vice President of Finance &AdministrationCenter	Paul Ying	(9,000)	0	0	0
Senior Vice President of Joint Manufacturing Center	Steven Liu	0	0	0	0
Senior Vice President, Operation Management Center	Benjamin Huang	0	0	0	0
Vice President, Marketing Division,Integrated System BU	Herbert Tsai	0	0	0	0
Vice President,CEO Office	C.C. Fan	0	0	18,000	0
Vice President, Product Planning Division, Test & Measurement BU	Bobby Tseng	(9,000)	0	0	0
Vice President, Greater China Area Sales Department, Test & MeasurementBU	Vincent Chen	0	0	0	0
Vice President, Technical Service Division, Test & MeasurementBU	Tony Yang	0	0	0	0
Vice President, R&D Division, Test &MeasurementBU	Vincent Wu	(5,000)	0	0	0
Vice President, R&D Division, Integrated System BU	Lance Ouyang	2,000	0	0	0
Vice President, Marketing Division,IntegratedSystem BU	Jeff Lee	0	0	0	0

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Position title	Name	2022	2022	Ended April 11,2023	Ended April 11,2023
		Increase (decrease) in the number of shares held	Increase (decrease) in the number of shares pledged	Increase (decrease) in the number of shares held	Increase (decrease) in the number of shares pledged
Vice President, Product Planning Division, Test & Measurement BU	Kenny Wang	0	0	0	0
Vice President, Turnkey Solution Sales & Marketing Division, Test & Measurement BU	Cindy Tai	(6,000)	0		0
Vice President, Product Planning Division, Test & Measurement BU	Galen Chou	0	0	0	0
Vice President, Marketing Division, Intelligent Manufacturing System BU	Arno Wu	0	0	0	0
Vice President, Product Planning Office, Optical Inspection Solution BU	Alex Zheng	0	0	0	0
Vice President, Product Planning Office, Semiconductor Test EquipmentBU	Eugene Lin	0	0	0	0
Corporate governance officer	Amy Huang	0	0	0	0

Note 1: Retired on December 31, 2022.

Where the counterparty for equity transfer is a related party: None.
Where the counterparty of equity pledged is a related party: None.
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IX. Information on the ten largest shareholders who are related parties or each other’s spouses and relatives within the second degree of kinship

Relationship information between the 10 largest shareholders

Name (Note)	Shares held by the person	Shares held by the person	Shares held by a spouse or minor children	Shares held by a spouse or minor children	Shares held in the name of other persons	Shares held in the name of other persons	Title or name and relationships of the 10 largest shareholders where they are related parties, spouses, or relatives within the second degree of kinship.	Title or name and relationships of the 10 largest shareholders where they are related parties, spouses, or relatives within the second degree of kinship.
	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Name	Relations
Leo Huang	20,859,897	4.90%	9,294,362	2.18%	0	0	Shu-Chuan Chen	Spouse
Chun-Sheng Chen	15,113,308	3.55%	11,074,646	2.60%	0	0	Yu-Mei Hsueh	Spouse
JPMorgan Chase Bank N.A., Taipei Branch in custody for Stichting Depositary APG Emerging Markets Equity Pool	13,059,000	3.07%	0	0	0	0	None	None
JPMorgan Chase Bank N.A., Taipei Branch in custody for Schroder International Selection Fund-Asian Absolute Return	11,368,000	2.67%	0	0	0	0	None	None
Yu-Mei Hsueh	11,074,646	2.60%	15,113,308	3.55%	0	0	Chun-Sheng Chen	Spouse
Shu-Chuan Chen	9,294,362	2.18%	20,859,897	4.90%	0	0	Leo Huang	Spouse
JPMorgan Chase Bank N.A., Taipei Branch in custody for Schroder International Selection Fund-Global Climate Change Equity	8,905,000	2.09%	0	0	0	0	None	None
Citibank Taiwan was commissioned to manage the investor account of Noregs Bank	7,292,424	1.71%	0	0	0	0	None	None
Standard Chartered Bank (Taiwan) Limited, Sales Department commissioned to manage the investor account of Next Generation Vehicle Owners Fund (Cayman) Limited Partnership	5,826,913	1.37%	0	0	0	0	None	None
HSBC was commissioned to manage the investment account of BNP Paribas Funds’ Green Tiger	5,703,000	1.34%	0	0	0	0	None	None

Note: The 10 largest shareholders shall be listed. For corporate shareholders, the title of the corporate shareholder as well as the name of the representative shall be indicated.

54 -
X. Number of shares held by the Company, and the directors and managerial officers of the Company, and companies directly or indirectly controlled by the Company in a single company invested in, and the comprehensive shareholding percentage calculated on a consolidated basis.

Consolidated shareholding percentage

	Unit: thousand shares/thousand units of foreign currenc	Unit: thousand shares/thousand units of foreign currenc	Unit: thousand shares/thousand units of foreign currenc	Unit: thousand shares/thousand units of foreign currenc	Unit: thousand shares/thousand units of foreign currenc	Unit: thousand shares/thousand units of foreign currenc
Other corporations invested by the Corporation (Note 1)	Investments by the Company		Investments of Directors and managers and directly or indirectly controlled businesses		Total investments
	Number of shares	Shareholding ratio (%)	Number of shares	Shareholding ratio (%)	Number of shares	Shareholding ratio (%)
NeworldElectronicsLimited	64,013	100.0	0	0	64,013	100.0
ADLINK TechnologyInc.	14,417	6.6	12	0	14,429	6.6
ChromaInvestment Co.,Ltd.	14,000	100.0	0	0	14,000	100.0
DynaScan Technology Corp.	9,841	27.3	4,640	12.9	14,481	40.2
SENSATIONAL HOLDINGSLTD.	1,200	100.0	0	0	1,200	100.0
CHROMA ATE EUROPE B.V.	1	100.0	0	0	1	100.0
CHROMA ATE INC.	1,000	100.0	0	0	1,000	100.0
CHROMA SYSTEMS SOLUTIONS, INC. (Note2)	120	25.0	240	50.0	360	75.0
CHENHWA TECHNOLOGY INC.	3,085	100.0	0	0	3,085	100.0
CHI INCORPORATIONLTD.	3,830	100.0	0	0	3,830	100.0
SAN EAGLE DEVELOPMENT CORP	2,050	100.0	0	0	2,050	100.0
Testar Electronic Corporation	20,160	67.2	5,064	16.9	25,224	84.1
MAS Automation Corp.	10,000	100.0	0	0	10,000	100.0
DeepRed HoldingCo.,Ltd.	215	100.0	0	0	215	100.0
Chroma Japan Corp.	10	100.0	0	0	10	100.0
Chih Ho Shun Development Co.,Ltd.	1,750	35.0	0	0	1,750	35.0
Adivic TechnologyCo. Ltd.	12,590	74.1	0	0	12,590	74.1
EVT TechnologyCo.,Ltd.	9,412	85.6	89	0.8	9,501	86.4
QUANTEL PRIVATE LTD.	1,914	60.0	0	0	1,914	60.0
Innovative Nanotech Incorporated	14,214	67.2	800	3.8	15,014	71.0
Touch Cloud Inc.	11,046	83.1	0	0	11,046	83.1
Camtek Ltd.	7,817	17.6	0	0	7,817	17.6
Environmental Stress Systems,Inc.	1	100.0	0	0	1	100.0
Wei KuangMech. Eng. Inc.	0	0	4,475	100.0	4,475	100.0
Quantel Technologies India Private Ltd.	0	0	65	100.0	65	100.0
Quantel Global Vietnam Co.,Ltd.(Note 3)	0	0	US$200	100.0	US$200	100.0
Quantel Global Sdn. Bhd.	0	0	600	100.0	600	100.0
QuantelGlobal Philippines Corporation	0	0	99	100.0	99	100.0
QuantelGlobalCompanyLimited	0	0	174	99.9	174	99.9
Chroma GermanyGmbH	0	0	30	100.0	30	100.0
Sajet System Technology (Suzhou) Co., Ltd.(Note 3)	0	0	RMB$8,374	100.0	RMB$8,374	100.0
Chroma Electronics (Shenzhen) Co., Ltd. (Note 3)	0	0	HK$30,000	100.0	HK$30,000	100.0
Chroma Electronics (Shanghai) Co., Ltd. (Note 3)	0	0	US$3,000	100.0	US$3,000	100.0
Chroma (Shanghai) Trading Co., Ltd. (Note 3)	0	0	US$2,700	100.0	US$2,700	100.0
Chroma ATE(Suzhou)Co.,Ltd.(Note 3)	0	0	US$3,800	100.0	US$3,800	100.0
Wei Kuang Automatic Equipment (Nanjin) Co.,Ltd.(Note 3)	0	0	RMB$11,871	100.0	RMB$11,871	100.0
Wei Kuang Automatic Equipment (Xiamen)Co., Ltd.(Note 3)	0	0	RMB$11,417	100.0	RMB$11,417	100.0

Note 1: The equity method was employed for the Company’s investments.

Note 2: Consolidated shareholding percentage of the Company and its subsidiary Chroma ATE Inc. was 75%.

Note 3: These investee companies have yet to issue any share. Therefore, only the amount and percentage of capital contribution are indicated.

55 -

Chapter 4 Capital Raising

Chapter 4 Capital Raising	Chapter 4 Capital Raising	Chapter 4 Capital Raising	Chapter 4 Capital Raising	Chapter 4 Capital Raising	Chapter 4 Capital Raising	Chapter 4 Capital Raising	Chapter 4 Capital Raising
I. Capital and shares (I) Source of shares
Year and month	Issuing price	Authorized capital		Paid-in capital		Remark
		Number of shares (In thousands of shares)	Amount (NT$ thousands)	Number of shares (In thousands of shares)	Amount (NT$ thousands)	Source of capital	Equity contributions made in the form of assets other than cash	Others
1996.08	10	70,000	700,000	54,365	543,650	Recapitalization of retained earnings	None	Note 1
1997.08	10	100,000	1,000,000	79,300	793,000	Recapitalization of retained earnings: NT$149,350,000 Cash capital increase by NT$100,000,000	None	Note 2
1998.06	10	150,000	1,500,000	115,200	1,152,000	Recapitalization of retained earnings: NT$259,000,000 Cash capital increase by NT$100,000,000	None	Note 3
1999.05	10	200,000	2,000,000	152,160	1,521,600	Recapitalization of retained earnings: NT$312,000,000 Recapitalization of capital reserve: NT$57,600,000	None	Note 4
2000.06	10	250,000	2,500,000	201,300	2,013,000	Recapitalization of retained earnings: NT$415,320,000 Recapitalization of capital reserve: NT$76,080,000	None	Note 5
2001.01	10	250,000	2,500,000	208,358	2,083,588	Capital increase in connection with merger: NT$70,580,000	None	Note 6
2001.03	10	250,000	2,500,000	201,358	2,013,588	Treasury stock extinguished: NT$70,000,000	None	Note 7
2001.07	10	320,000	3,200,000	234,300	2,343,000	Recapitalization of retained earnings: NT$269,000,000 Recapitalization of capital surplus: NT$60,400,000	None	Note 8
2002.07	10	320,000	3,200,000	252,690	2,526,900	Recapitalization of retained earnings: NT$19,890,000 Recapitalization of capital reserve: NT$164,010,000	None	Note 9
2003.07	10	360,000	3,600,000	272,289	2,722,892	Recapitalization of retained earnings: NT$195,990,000	None	Note 10
2004.03	10	360,000	3,600,000	252,579	2,525,787	Treasury stock extinguished: NT$200,000,000 Stocks converted from stock options: NT$2,890,000	None	Note 11
2004.07	10	360,000	3,600,000	262,705	2,627,052	Recapitalization of capital reserve: NT$96,520,000 Stocks converted from stock options: NT$4,750,000	None	Note 12
2004.10	10	360,000	3,600,000	263,405	2,634,047	Stocks converted from stock options: NT$7,000,000	None	Note 13
2005.01	10	360,000	3,600,000	263,882	2,638,819	Stocks converted from stock options: NT$4,770,000	None	Note 13
2005.03	10	360,000	3,600,000	264,171	2,641,709	Stocks converted from stock options: NT$2,890,000	None	Note 13
2005.07	10	360,000	3,600,000	272,374	2,723,744	Recapitalization of retained earnings: NT$75,130,000 Stocks converted from stock options: NT$6,910,000	None	Note 14
2005.10	10	360,000	3,600,000	272,693	2,726,929	Stocks converted from stock options: NT$3,190,000	None	Note 15
2006.01	10	360,000	3,600,000	274,258	2,742,584	Stocks converted from stock options: NT$15,660,000	None	Note 15
2006.03	10	360,000	3,600,000	274,932	2,749,317	Stocks converted from stock options: NT$6,730,000	None	Note 15

56 -

Year and month	Issuing price	Authorized capital	Authorized capital	Paid-in capital	Paid-in capital	Remark	Remark
		Number of shares (In thousands of shares)	Amount (NT$ thousands)	Number of shares (In thousands of shares)	Amount (NT$ thousands)	Source of capital	Equity contributions made in the form of assets other than cash	Others
2006.06	10	360,000	3,600,000	284,344	2,843,442	Recapitalization of retained earnings: NT$81,370,000 Stocks converted from stock options: NT$12,760,000	None	Note 16
2006.10	10	360,000	3,600,000	285,154	2,851,542	Stocks converted from stock options: NT$8,100,000	None	Note 15
2007.01	10	360,000	3,600,000	286,378	2,863,779	Stocks converted from stock options: NT$12,240,000	None	Note 15
2007.03	10	360,000	3,600,000	287,410	2,874,099	Stocks converted from stock options: NT$10,320,000	None	Note 15
2007.08	10	400,000	4,000,000	302,311	3,023,114	Recapitalization of retained earnings: NT$142,490,000 Stocks converted from stock options: NT$6,520,000	None	Note 17
2007.10	10	400,000	4,000,000	302,713	3,027,134	Stocks converted from stock options: NT$4,020,000	None	Note 15
2008.01	10	400,000	4,000,000	304,244	3,042,441	Stocks converted from stock options: NT$15,310,000	None	Note 15
2008.03	10	400,000	4,000,000	305,058	3,050,581	Stocks converted from stock options: NT$8,140,000	None	Note 15
2008.08	10	400,000	4,000,000	329,542	3,295,419	Recapitalization of retained earnings: NT$234,820,000 Stocks converted from stock options: NT$10,020,000	None	Note 18
2008.10	10	400,000	4,000,000	329,664	3,296,644	Stocks converted from stock options: NT$1,230,000	None	Note 15
2009.01	10	400,000	4,000,000	329,915	3,299,151	Stocks converted from stock options: NT$2,510,000	None	Note 15
2009.03	10	400,000	4,000,000	331,600	3,316,004	Stocks converted from stock options: NT$16,850,000	None	Note 15
2009.07	10	450,000	4,500,000	348,909	3,489,089	Recapitalization of retained earnings: NT$166,100,000 Stocks converted from stock options: NT$6,990,000	None	Note 19
2009.10	10	450,000	4,500,000	349,598	3,495,984	Stocks converted from stock options: NT$6,900,000	None	Note 15
2010.01	10	450,000	4,500,000	349,767	3,497,674	Stocks converted from stock options: NT$1,690,000	None	Note 15
2010.03	10	450,000	4,500,000	350,076	3,500,756	Stocks converted from stock options: NT$3,080,000	None	Note 15
2010.07	10	450,000	4,500,000	362,077	3,620,771	Recapitalization of retained earnings: NT$105,500,000 Stocks converted from stock options: NT$14,520,000	None	Note 20
2010.10	10	450,000	4,500,000	362,144	3,621,441	Stocks converted from stock options: NT$670,000	None	Note 15
2011.01	10	450,000	4,500,000	362,269	3,622,691	Stocks converted from stock options: NT$1,250,000	None	Note 15
2011.07	10	450,000	4,500,000	376,760	3,767,599	Recapitalization of retained earnings: NT$144,910,000	None	Note 21
2014.12	10	450,000	4,500,000	378,086	3,780,862	Stocks converted from convertible corporate bonds: NT$13,260,000	None	Note 22
2015.01	10	450,000	4,500,000	378,782	3,787,821	Stocks converted from convertible corporate bonds: NT$6,960,000	None	Note 22
2015.05	10	450,000	4,500,000	378,786	3,787,862	Stocks converted from convertible corporate bonds: NT$40,000	None	Note 22
2015.11	10	450,000	4,500,000	379,030	3,790,300	Stocks converted from stock options: NT$2,440,000	None	Note 23
2016.01	10	450,000	4,500,000	379,170	3,791,698	Stocks converted from stock options: NT$1,400,000	None	Note 23
2016.05	10	450,000	4,500,000	379,693	3,796,934	Stocks convertedfromconvertible	None	Notes

57 -

Year and month	Issuing price	Authorized capital	Authorized capital	Paid-in capital	Paid-in capital	Remark	Remark
		Number of shares (In thousands of shares)	Amount (NT$ thousands)	Number of shares (In thousands of shares)	Amount (NT$ thousands)	Source of capital	Equity contributions made in the form of assets other than cash	Others
						corporate bonds: NT$2,890,000 Stocks converted from stock options: NT$2,350,000		22~23
2016.07	10	450,000	4,500,000	383,373	3,833,732	Stocks converted from convertible corporate bonds: NT$4,620,000 Stocks converted from stock options: NT$1,180,000 New restricted employee shares: NT$31,000,000	None	Notes 22~24
2016.12	10	450,000	4,500,000	387,158	3,871,576	Stocks converted from convertible corporate bonds: NT$28,500,000 Stocks converted from stock options: NT$9,350,000	None	Notes 22~23
2017.01	10	450,000	4,500,000	389,887	3,898,872	Stocks converted from convertible corporate bonds: NT$23,820,000 Stocks converted from stock options: NT$3,470,000	None	Notes 22~23
2017.05	10	450,000	4,500,000	405,090	4,050,904	Stocks converted from convertible corporate bonds: NT$149,580,000 Stocks converted from stock options: NT$2,450,000	None	Notes 22~23
2017.06	10	450,000	4,500,000	405,275	4,052,754	New employee restricted stocks: NT$1,850,000	None	Note 24
2017.07	10	450,000	4,500,000	405,263	4,052,631	Write-off NT$120,000 of new employee restricted stock	None	Note 24
2017.08	10	450,000	4,500,000	408,051	4,080,513	Stocks converted from convertible corporate bonds: NT$27,220,000 Stocks converted from stock options: NT$670,000	None	Notes 22~23
2017.11	10	450,000	4,500,000	409,410	4,094,101	Stocks converted from convertible corporate bonds: NT$4,300,000 Stocks converted from stock options: NT$9,290,000	None	Notes 22~23
2018.01	10	450,000	4,500,000	411,894	4,118,942	Stocks converted from convertible corporate bonds: NT$20,420,000 Stocks converted from stock options: NT$4,430,000	None	Notes 22~23
2018.05	10	450,000	4,500,000	412,953	4,129,532	Stocks converted from convertible corporate bonds: NT$220,000 Stocks converted from stock options: NT$10,910,000 Write-off NT$540,000 of new employee restricted stock	None	Notes 22~25
2018.09	10	450,000	4,500,000	414,359	4,143,594	Stocks converted from convertible corporate bonds: NT$80,000 Stocks converted from stock options: NT$14,070,000 Write-off NT$90,000 of new employee restricted stock	None	Notes 22~25
2018.11	10	450,000	4,500,000	416,443	4,164,431	Stocks converted from convertible corporate bonds: NT$14,940,000 Stocks converted from stock options: NT$6,100,000 Write-off NT$210,000 of new employeerestricted stock	None	Notes 22~25
2019.01	10	450,000	4,500,000	416,779	4,167,794	Stocks converted from convertible corporate bonds: NT$900,000 Stocks converted from stock options: NT$2,460,000	None	Notes 22~ 23, and 25
2019.03	10	450,000	4,500,000	416,717	4,167,174	Write-off NT$620,000 of new employeerestricted stock	None	Note 24

58 -

Year and month	Issuing price	Authorized capital	Authorized capital	Paid-in capital	Paid-in capital	Remark	Remark
		Number of shares (In thousands of shares)	Amount (NT$ thousands)	Number of shares (In thousands of shares)	Amount (NT$ thousands)	Source of capital	Equity contributions made in the form of assets other than cash	Others
2019.05	10	450,000	4,500,000	417,394	4,173,942	Stocks converted from stock options: NT$ 6,770,000	None	Notes 23 & 25
2019.07	10	500,000	5,000,000	417,382	4,173,823	Write-off NT$120,000 of new employeerestricted stock	None	Note 24
2019.08	10	500,000	5,000,000	419,093	4,190,926	Stocks converted from stock options: NT$17,370,000 Write-off NT$270,000 of new employeerestricted stock	None	Notes 23~25
2019.11	10	500,000	5,000,000	419,296	4,192,961	Stocks converted from stock options: NT$ 2,040,000	None	Note 25
2020.03	10	500,000	5,000,000	419,526	4,195,256	Stocks converted from stock options: NT$ 2,300,000	None	Note 25
2020.05	10	500,000	5,000,000	419,821	4,198,212	Stocks converted from stock options: NT$3,080,000 Write-off NT$120,000 of new employee restricted stock	None	Notes 24~25
2020.08	10	500,000	5,000,000	420,748	4,207,484	Stocks converted from stock options: NT$10,330,000 Write-off NT$1,060,000 of new employee restricted stocks	None	Notes 24~25
2020.11	10	500,000	5,000,000	421,094	4,210,944	Stocks converted from stock options: NT$3,520,000 Write-off NT$60,000 of new restricted shares for employee	None	Notes 24~25
2021.01	10	500,000	5,000,000	421,295	4,212,945	Stocks converted from stock options: NT$2,000,000	None	Note 25
2021.05	10	500,000	5,000,000	421,632	4,216,315	Stocks converted from stock options: NT$3,370,000	None	Note 25
2021.11	10	500,000	5,000,000	421,742	4,217,415	Stocks converted from stock options: NT$1,100,000	None	Note 25
2022.01	10	500,000	5,000,000	421,875	4,218,745	Stocks converted from stock options: NT$1,330,000	None	Note 25
2022.05	10	500,000	5,000,000	422,487	4,224,870	Stocks converted from stock options: NT$6,130,000	None	Note 25
2022.07	10	500,000	5,000,000	425,447	4,254,470	New restricted employee shares: NT$29,600,000	None	Note 26
2023.03	10	500,000	5,000,000	425,397	4,253,970	Write-off NT$500,000 of new restricted shares for employee	None	Note 26

Note 1: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. (85) Taiwan-Finance-Securities (I) 41514 on July 8, 1996.
Note 2: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. (86) Taiwan-Finance-Securities (I) 45915 on June 25, 1997.
Note 3: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. (87) Taiwan-Finance-Securities (I) 46094 on June 8 ,1998.
Note 4: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. (88) Taiwan-Finance-Securities (I) 48548 on May 24, 1999.
Note 5: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. (89) Taiwan-Finance-Securities (I) 49542 on June 8, 2000.
Note 6: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. (89) Taiwan-Finance-Securities (I) 83405 on December 18, 2000.
Note 7: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. (89) Taiwan-Finance-Securities (III)102418 on December 22 ,2000.
Note 8: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. (90) Taiwan-Finance-Securities (I) 137773 on June 13, 2001.
Note 9: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. Taiwan-Finance-Securities (I) 0910132477 on June 14, 2002.
Note 10: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letter with Ref. No. Taiwan-Finance-Securities (I) 0920125022 on June 9, 2003.
Note 11: Approved by the Securities and Exchange Commission, Ministry of Finance as per the letters with Ref. No. Taiwan-Finance-Securities (III) 0920162383 on January 2, 2004 and (90) Taiwan-Finance-Securities (I) 143348 on July 16, 2001.
Note 12: Approved by the Securities and Exchange Commission, Ministry of Finance as per letters with Ref. No. (90) Taiwan-Finance-Securities (I) 143348 on July 16, 2001 and Taiwan-Finance-Securities (I) 0930128437 on June 28, 2004.
Note 13: Approved by the Securities and Exchange Commission, Ministry of Finance as per letters with Ref. No. (90) Taiwan-Finance-Securities (I) 143348 on July 16, 2001 and Taiwan-Finance-Securities (I) 0910132478 on June 14, 2002.
59 -
Note 14: Approved by the Financial Supervisory Commission, Executive Yuan as per the letter with Ref. No. Financial-Supervisory-Securities (1) 0940122455 on June 3, 2005.
Note 15: Approved by the Securities and Exchange Commission, Ministry of Finance as per letters with Ref. No. (90) No Taiwan-Finance-Securities (I) 143348 on July 16, 2001, Taiwan-Finance-Securities (I) 0910132478 on June 14, 2002, and Taiwan-Finance-Securities (I) 0920127281 on June 19, 2003.
Note 16: Approved by the Financial Supervisory Commission, Executive Yuan as per the letter with Ref. No. Financial-Supervisory-Securities (1) 0950122451 on June 2, 2006.
Note 17: Approved by the Financial Supervisory Commission, Executive Yuan as per letter with Ref. No. Financial-Supervisory-Securities (1) 0960030405 on June 14, 2007.
Note 18: Approved by the Financial Supervisory Commission, Executive Yuan as per the letter with Ref. No. Financial-Supervisory-Securities (1) 0970031743 on June 25, 2008.
Note 19: Approved by the Financial Supervisory Commission, Executive Yuan as per the letter with Ref. No. Financial-Supervisory-SecuritiesCorporate-0980027677 on June 5, 2009.
Note 20: Approved by the Financial Supervisory Commission, Executive Yuan as per letter with Ref. No. Financial-Supervisory-Securities-Corporate0990029749 on June 9, 2010.
Note 21: Approved by the Financial Supervisory Commission, Executive Yuan as per the letter with Ref. No. Financial-Supervisory-SecuritiesCorporate-1000028222 dated June 20, 2011
Note 22: Approved by the Financial Supervisory Commission as per letter with Ref. No. Financial-Supervisory-Securities-Corporate-1030012130 dated April 17, 2014.
Note 23: Approved by the Financial Supervisory Commission as per letter with Ref. No. Financial-Supervisory-Securities-Corporate-1010042558 dated September 17, 2012
Note 24: Approved by the Financial Supervisory Commission as per letter with Ref. No. Financial-Supervisory-Securities-Corporate-1050024281 dated June 27, 2016.
Note 25. Approved by the Financial Supervisory Commission per letter Ref. No. Financial-Supervisory-Securities-Corporate-1040036382 of September 7, 2015.
Note 26: Approved by the Financial Supervisory Commission as per the letter with Ref. No. Financial-Supervisory-Securities-Corporate-1110346852 dated June 20, 2022.

dated June 20, 2022.
	Unit: Share- April 11,2023
Type of shares	Authorized capital			Remark
	Outstanding shares (listed)	Unissued shares	Total
Common shares	425,397,037	74,602,963	500,000,000	30,000,000 shares were reserved for employee purchase of stock options.

Information on the shelf registration system: None.

(II) Shareholder structure

(II) Shareholder structure	(II) Shareholder structure
		April 11,2023
Shareholder structure Quantity	Government agencies	Financial institutions	Other legal persons	Individuals	Foreign institutions and individuals	Total
Number of people	2	49	77	10,337	585	11,050
Number of shares held	1,022,000	27,834,243	18,358,611	95,722,062	282,460,121	425,397,037
Shareholding percentage	0.24%	6.54%	4.32%	22.50%	66.40%	100.00%

60 -

(III) Distribution of equity ownership

1. Common shares

1. Common shares
			April 11,2023
Shareholdingrange	Number of shareholders	Number of shares held	Shareholdingratio
1 to 999	4,578	767,297	0.18%
1,000 to 5,000	4,959	9,267,728	2.18%
5,001 to 10,000	488	3,682,857	0.87%
10,001 to 15,000	209	2,649,051	0.62%
15,001 to 20,000	108	1,952,770	0.46%
20,001 to 30,000	111	2,749,660	0.65%
30,001 to 40,000	60	2,109,742	0.50%
40,001 to 50,000	44	2,007,892	0.47%
50,001 to 100,000	112	8,120,467	1.91%
100,001 to 200,000	122	17,269,183	4.06%
200,001 to 400,000	93	26,434,446	6.21%
400,001 to 600,000	33	16,139,570	3.79%
600,001 to 800,000	29	19,915,624	4.68%
800,001 to 1,000,000	9	7,983,637	1.88%
> 1,000,001	95	304,347,113	71.54%
Total	11,050	425,397,037	100.00%

2. Preferred shares: None.

(IV) List of major shareholders

Name, number of shares held, and shareholding percentage of shareholders who hold more than 5% of the shares or the 10 largest shareholders:

Total 11,050 425,397,037 100.00% 2. Preferred shares: None. (IV) List of major shareholders Name, number of shares held, and shareholding percentage of shareholders who hold more than 5% of the shares or the 10 largest shareholders:	Total 11,050 425,397,037 100.00% 2. Preferred shares: None. (IV) List of major shareholders Name, number of shares held, and shareholding percentage of shareholders who hold more than 5% of the shares or the 10 largest shareholders:	Total 11,050 425,397,037 100.00% 2. Preferred shares: None. (IV) List of major shareholders Name, number of shares held, and shareholding percentage of shareholders who hold more than 5% of the shares or the 10 largest shareholders:
April 11,2023
Shares Name of major shareholder	Number of shares held	Shareholding percentage
Leo Huang	20,859,897	4.90%
Chun-Sheng Chen	15,113,308	3.55%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Stichting Depositary APG Emerging Markets Equity Pool	13,059,000	3.07%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Schroder International Selection Fund-Asian Absolute Return	11,368,000	2.67%
Yu-Mei Hsueh	11,074,646	2.60%
Shu-Chuan Chen	9,294,362	2.18%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Schroder International Selection Fund-Global Climate Change Equity	8,905,000	2.09%
Citibank Taiwan commissioned to manage the investor account of Noregs Bank.	7,292,424	1.71%
Standard Chartered Bank (Taiwan) Limited, Sales Department commissioned to manage the investor account of Next Generation Vehicle Owners Fund (Cayman) Limited Partnership	5,826,913	1.37%
HSBC was commissioned to manage the investment account of BNP Paribas Funds’Green Tiger	5,703,000	1.34%

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(V) Prices, net asset value per share (NAVPS), earnings per share (EPS), and dividends per share (DPS), and related information of the 2 most recent years.

Item	Year	Year	2021	2022	Ended March 31, 2023
Market price per share	Highest		230.00	238.00	200.00
	Lowest		161.00	135.00	161.50
	Average		194.17	184.93	180.68
Net worth per share	Before distribution		44.07	50.41	-
	Afterdistribution		37.00	42.38	-
Earnings per share (EPS)	Weighted average		419,789,625	420,517,667	-
	Earningsper share(EPS)		9.96	12.14	-
Dividend per share (DPS)	Cashdividend		6.98089243	8.0 (Note)	-
	Bonus shares	Stock dividends from earnings	-	-	-
		Dividends from capital reserve	-	-	-
	Cumulative unpaid dividends		-	-	-
Analysis of return on investment	Price to earningsratio		19.49	15.23	-
	Price/dividendratio		27.81	23.12	-
	Cash dividendyield ratio		3.60	4.33	-

Note: The 2022 earnings distribution proposal was approved by the Board of Directors on February 23, 2023. The total cash dividend was NT$3,403,176,296. If buyback of RSAs, if any, or other reasons, affect the number of outstanding shares and result in the change of payout ratio, the Chairman is authorized to deal with it with full power.

(VI) Dividend policy of the Corporation and its implementation

Dividend policy defined under the Company’s Article of Incorporation Where the annual accounting close indicates a surplus, the said surplus shall be first used to pay taxes and cumulated losses (dues), and shall then set aside 10% of the said surplus as legal reserve. Where such legal reserve amounts to the total authorized capital, this provision shall not apply. The corporation may review business requirements or refer to statutory regulations to set aside or reversed the surplus as special reserves. Any remaining surplus shall then be combined with the cumulated undistributed earnings of the previous year and the Board of Directors shall formulate a plan for distributing the earnings. The plan shall then be provided to the Board of Shareholders to resolve on the distribution of this sum. Share dividends and bonuses shall not be allotted if the Company has no surplus.

The Board is authorized to make a special resolution to distribute and report to the Shareholders’ Meeting if the distribution of earnings as mentioned in the preceding paragraph shall be in the form of cash dividends.

When the Company has no loss, it may distribute new shares or cash out of the statutory surplus reserve and all or part of the capital reserve that meets the requirements of the Companies Act, to the extent of 25% of the excess of the statutory surplus reserve over the paid-in capital.

Subject to the provisions of the preceding paragraph, the Board of Directors shall be authorized, by special resolution, to distribute cash out of the statutory surplus reserve and the whole or part of the capital surplus which complies with the requirements of the Companies Act, and to report such distribution at the next shareholders’ meeting.

Dividend payouts shall be implemented according to the business condition of the

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Company and consider both future capital budgets and capital requirements of future development plans of the Company, as well as the shareholders’ interests. The Board of Directors shall formulate the category and sum of dividend payouts which shall, by principle, be no less than 60% of the net income after tax (NIAT) of the year. The Company’s 2022 and 2021 payout ratios were approximately 67% and 71%, respectively.

Since the Company is still in the growing phase, capital requirements of future development plans of the Company shall be considered. Cash dividend distributed each year shall be no less than 20% of the total cash and stock dividends distributed for the year.

Dividend payout plans proposed during the most recent shareholder’s meeting According to Article 34-1 of the Company’s Articles of Incorporation, the

earnings distribution proposal is based on cash dividends, and the Board of Directors is authorized to distribute by a special resolution and report to the shareholders’ meeting. The Company’s 2022 earnings distribution proposal was approved by the Board of Directors on February 23, 2023, to distribute shareholders cash dividends of NT$3,403,176,296, with a distribution of about NT$8 per share. This distribution plan will be reported to the 2023 annual general meeting and the Board of Directors authorizes the Chairman to decide the base date for the distribution separately. If buyback of RSAs, if any, or other reasons, affect the number of outstanding shares and result in the change of payout ratio, the Chairman is authorized to deal with it with full power.

(VII) Impact of bonus shares proposed by the Shareholders’ Meeting on the Corporation’s business performance and earnings per share (EPS): Not applicable.
(VIII) Remuneration to employees and directors
Percentage or range of remuneration to employees and directors as stipulated in the Company’s Articles of Incorporation.

If the Company records a profit, 5% to 20% of the said profit shall be set aside for employee rewards. The Board of Directors shall determine whether to issue rewards in the form of stocks or cash. Recipients of the said rewards shall include employees at the Company who satisfy specific criteria. The Company permits the Board of Directors to set aside no more than 1.5% of the aforementioned profit as directors’ rewards. Proposals for the distribution of employee rewards as well as directors’ rewards shall be submitted to the Shareholder’s Meeting.

Accounting treatment for the basis of estimating the amount of employee rewards and directors’ rewards, the basis of calculating the number of shares to be distributed as employee rewards, and for any discrepancy between the actual amount distributed and the estimated figures.
(1) The possible amount is estimated based on the Company’s Articles of Incorporation and past experience. The estimated amounts of the 2022 employee remuneration and director remuneration are NT$734,952,500 and NT$12,000,000, respectively. It is estimated at 11.06% and 0.18% of the profit before tax (amount before deduction of the employee remuneration and director remuneration), which is in line with the figures set in the Articles of Incorporation.
(2) Number of shares issued for employee remuneration: 0.
(3) Accounting treatment for any discrepancy between the actual amount distributed and the estimated figures: Where the Board of Directors resolved to enact major changes to the sum issued before the approval and issuance of the financial report, the said change shall be adjusted as annual expenses listed for the year. Where changes were still made to the said sum after approval and
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issuance of the financial report, the changes shall be treated as changes to accounting estimates, and be adjusted and entered into the accounts for the following year.

Status of compensation distribution as approved by the Board of Directors
(1) Where the value of the employee remuneration as well as director remuneration distributed in the form of cash or shares exhibits discrepancies with the recognized expenses and annual estimates, the sum, cause, and treatment of such discrepancies shall be disclosed:
- On February 23, 2023, the Company’s Board of Directors approved a cash
- distribution of NT$734,952,500 for employee remuneration and NT$12,000,000 for director remuneration, which is the same as the estimated annual amount of recognized expenses.
(2) The amount of remuneration distributed in the form of stock to employees as a percentage of the net income referred to in the parent company-only financial statements and total employee remuneration in the current period: 0.
Actual distribution of remuneration to employees and directors in the previous year (including the number of shares, the amount distributed, and the stock price) and differences (if any) between the distributed amounts and the recognized amounts of remuneration to employees and directors, and such differences and the reason and treatment therefor shall be specified:

The Company’s FY2021 employee remuneration in cash was NT$415,047,000 and director remuneration was NT$9,600,000. There was no difference between the actual distribution amount and the recognized amount.

(IX) Repurchase of the Company’s own shares: None.

II. Corporate Bonds: None.

III. Preferred shares: None.

Ⅳ. Overseas depositary receipt: None.
V. Employee stock warrant: None.
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March 31, 2023

VI. New restricted employee shares

(I) RSAs that have not yet reached all vesting conditions

	March 31, 2023
Type of new restricted employee share	2022 RSAs
Date of effective registration and total number of shares	June 20, 2022: 30,000,000 shares
Issue date	July 1, 2022
Number of Restricted employee shares Issued	2,960,000 shares
Number of RSAs to be issued	40,000 shares
Issuing price	NT$40
Ratio of Restricted employee shares Issuedto Total Shares Issued (%)	0.6958%
Vesting conditions for new restricted employee shares	An employee must be employed for a period of one year after subscribing to the new restricted employee shares and at the maturation of every vesting period. The employee must also fulfill the overall financial performance of the Corporation and personal performance assessment indicators. The proportion of shares that may be issued according to the fulfillment of respective vesting conditions shall be distributed according to regulations for the issuance of new restricted employee shares. The following provides the proportion of shares to be issued for various vesting conditions: Expired for one year: 10% Expired for two years: 20% Expired for three years: 30% Expired for four years: 40%
Restrictions and privileges for receiving new restricted employee equities	1. An employee may not sell, pledge, transfer, provide as a gift to another party, set up, or use other means to dispose of the new restricted employee shares. 2. New restricted employee shares may partake in dividend payouts and cash capital increase subscriptions. Dividend payout that may be acquired is not subject to vesting period restrictions. Dividend payout to be issued shall be remitted from a trust account to a personal bank account of the employee on the date of issuance without any surcharge. 3. For an employee who has yet to meet the vesting conditions, attendance, proposal, speech, voting rights, and other matters related to shareholder equity in the Shareholders’ Meeting shall be commissioned to a trusted custodian shall be commissioned to exercise matters related to attendance, proposal, speech, voting rights, as well as other matters related to shareholder equityinthe Shareholders’ Meeting onbehalfofthe employee.

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Safekeeping of new
restricted employee
shares

1. Once issued, the RSAs shall be submitted to a trust for custody.
Before meeting the vesting conditions, an employee may not,
for any reason or by any means, ask the custodian to return the
said shares.
2. When the RSAs are placed in a trust, the Company shall act on
behalf of the employees with full power, and shall authorize the
Chairman to negotiate with the trustee for (including but not
limited to) negotiation, execution, amendment, renewal,
cancellation, and termination of the trust contract, and the
instruction on delivery, utilization, and disposal of the trust
property.

Actions for handling
allotments or
subscription to new
equities by employees
who have yet to attain
the prerequisite
conditions

1. Before meeting the vesting conditions, the Company may buy
back the RSAs that were issued at the price of the original
issuance pursuant to laws, and extinguish the shares
accordingly.
2. If the employee, before the vesting conditions are met,
terminates or cancels the Company’s agency in violation of
Paragraph 8 of Article 5 of the Regulations, the Company buys
back the shares from the employee at the original issue price,
and then cancels the same.
In any of the following circumstances, the RSAs which have not
yet met the vesting conditions shall be handled in the following
manners:
1. Voluntary resignation:
The employee shall be deemed waiving the vested right since
the date of resignation, if the RSAs have not yet acquired the
vested right. The Company may buy back his/her shares which
have not yet met the vesting conditions in the current year at the
original issue price pursuant to laws, and then cancel the same.
The same shall apply to an employee who takes leave without
pay, or is dismissed.
2. Retirement:
If an employee who subscribes for the RSAs pursuant to the
Regulations applied for retirement subsequently, and fails to
meet the vesting conditions referred to in Paragraph 3 of Article
5 of the Regulation on the effective date of retirement, the
Company will buy back the shares subscribed to by the
employee pursuant to the Regulations at the original issue price
pursuant to laws, and then cancel the same, since the effective
date of retirement.
3. Disability or death due to occupational accidents:
If any employee is unable to continue performing duty due to
physical disability or death resulting from occupational
accidents, the RSAs which have not yet been vested as
subscribed to by the employee may be vested in the employee
in whole as of the effective date of resignation or death. The
heir of the deceased may apply for collection of the shares they
are entitled to inherit or the disposed rights upon completion of
the statutory procedures and presentation of related certificates.
When the shares which have not yet been vested on the date of
death shall be released is subject to the Company’s notice and

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	handled in the manner referred to in the Part of Succession in the Civil Code and “Regulations Governing the Administration of Shareholder Services of Public Companies”. 4. Layoff: The vested rights shall be deemed expired from the date of the layoff, if the RSAs have not yet acquired the vested rights. The Company may buy back the shares which have not yet met the vesting conditions in the current year at the original issue price pursuant to laws, and then cancel the same. 5. Transfer: If an employee applies to transfer to an affiliated company or subsidiary, the Company may buy back his/her RSAs at the original issue price pursuant to laws, and then cancel the same. Notwithstanding, if the employee is transferred to an affiliated company or subsidiary of the Company to satisfy the Company’s business needs per the Company’s instruction, the RSAs allotted to him/her shall remain unaffected by the transfer, provided that the vesting conditions of performance shall also take into account the performance standards applied after transfer to the affiliated company or subsidiary. 6. If the employee violates the labor contract or work rules materially or applies with the Company in writing for voluntarily waiver of the RSAs, after being granted the RSAs, the Company shall be entitled to buy back his/her RSAs which have not yet met the vesting conditions at the original issue price, and then cancel the same.
Quantity of new restricted employee equities that have been recovered or repurchased	80,000 shares
Quantity of new restricted equities that were extinguished	0 shares
Quantity of new restricted equities not yet extinguished	2,880,000 shares
Proportion of RSAs remaining restricted as part of total shares issued (%)	0.6770%
Influence on shareholders’ equity	The potential dilution of the Company’s earnings per share was considered limited. Therefore, no significant impact was posed to the shareholders’equity.

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(II)Name of managerial officers and top 10 employees with the highest number of new employee restricted stocks, and status of acquisition

									March 31, 2023	March 31, 2023	March 31, 2023	March 31, 2023
	Title (Note 1)	Name	New employee restricted stocks acquired (In thousands of shares)	Ratio of new restricted shares for employees to the total shares issued (Note 3)	Restricted shares extinguished				Restricted shares yet to be extinguished
					Number of shares with restrictions lifted (thousand shares)	Issue price (NT$)	Amount issued (NT$ thousand)	Ratio of shares with restriction lifted to the total shares issued (Note 3)	Number of shares without restrictions lifted (thousand shares)	Issue price (NT$)	Amount issued (NT$ thousand)	Ratio of shares without restriction lifted to total shares issued (Note 3)
Manager	BU President	David Yang	1,290	0.3032%	0	40	0	0	1,240	40	49,600	0.2915%
	BU President	I-Shih Tseng
	BU President	George Chang
	BU President	Joe Lin (Note 1)
	Senior Vice President	Steven Liu
	Senior Vice President	Paul Ying
	Senior Vice President	Benjamin Huang
	Vice President	Vincent Wu
	Vice President	Vincent Chen
	Vice President	Tony Yang
	Vice President	Kenny Wang
	Vice President	Bobby Tseng
	Vice President	Cindy Tai
	Vice President	Galen Chou
	Vice President	Herbert Tsai
	Vice President	Lance Ouyang
	Vice President	Jeff Lee
	Vice President	Arno Wu
	Vice President	Eugene Lin
	Vice President	Alex Zheng
	Corporate governance officer	Amy Huang
Employee (Note 2)	Employee	David Huang	710	0.1669%	0	40	0	0	710	40	28,400	0.1669%
	Employee	Lawrence Wu
	Employee	Ray Chi
	Employee	Bill Shiau
	Employee	Jennifer Chien
	Employee	Cf Huang
	Employee	Kevin Weng
	Employee	Addin Chang
	Employee	Kk Hung
	Employee	Andy Lu
	Employee	Vincent Chen
	Employee	Glen Yang
	Employee	Elia Huang
	Employee	Davidc Chen
	Employee	CMing Chen

Note 1: Includes managerial officers and employees (special notes shall be provided to those who have resigned or deceased). Individual names and job positions shall be displayed. A summary sheet may be used to disclose the means of receiving an allocation or subscription.

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Joe Lin retired on December 31, 2022.

Note 2: Refers to a non-managerial employee in the top-10 employees for new employee restricted stocks

Note 3: The total number of shares issued refers to the number of shares listed in the Ministry of Economic Affairs’ change registration data. (On March 8, 2023, the number of shares listed in the Ministry of Economic Affairs’ change registration data was 425,397,037 shares.)
VII. Issuance of new shares in connection with the merger or acquisition of other companies: None.

VIII. Implementation of capital utilization plan: None.

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Chapter 5 Operation summary

I. Business content

(I) Scope of business
Major contents of the businesses engaged in

The Company and its subsidiaries mainly engage in the design, assembly, manufacturing, trading, repair, maintenance, calibration, and distribution of computer and peripheral equipment hardware and software, computer-automated test systems, electronic test equipment, signal generators, power supplies, and communication power supply equipment, and the design, manufacture, and installation of automated equipment. The Company’s current product lines include: 1.test instrument equipment. 2. automated equipment.

Proportion of various businesses

Consolidated operating revenue:

2. automated equipment. 2. Proportion of various businesses Consolidated operating revenue:	2. automated equipment. 2. Proportion of various businesses Consolidated operating revenue:	2. automated equipment. 2. Proportion of various businesses Consolidated operating revenue:	2. automated equipment. 2. Proportion of various businesses Consolidated operating revenue:	2. automated equipment. 2. Proportion of various businesses Consolidated operating revenue:
Unit: In thousands of NT$
Year Product category	2021		2022
	Amount	Proportion of revenue (%)	Amount	Proportion of revenue (%)
Test equipment	13,555,365	77.09	20,269,180	91.85
Special materials (Note)	2,804,306	15.95	635,186	2.88
Automated equipment	780,206	4.44	829,479	3.76
Others	444,146	2.52	333,397	1.51
Total net operatingrevenue	17,584,023	100.00	22,067,242	100.00

Note: The Company has terminated the business for sale of special materials in 2022.

Current products of the Company
Power electronics test solutions
1. DC electrical load
2. AC electrical load
3. Regenerative AC load
4. AC power source
5. DC power source
6. Digital power meter
7. Switching power supply automated test system
8. Battery simulator
9. Soft panel
Electric vehicle test solutions
1. Automated test system for power electronic components
2. Battery simulator
3. Battery test system
4. Electric propulsion system
5. DC power source
6. Electronic load
7. Motor test
8. Automated transformer test system/automatic component analyzer
Battery test and automation solution
1. Battery pack/battery module automated test system
2. Battery testing and formation system
3. Battery pack manufacture test solution
4. Battery pack after service test system
70 -
Electrical safety test solution
Automated optical inspection system
Passive component test solutions
LCR meter/auto transformer test system
Electrolytic capacitor tester
High-frequency AC tester
Component test scanner
Insulation tester
Milliohm tester
Passive component automated test system
Electrical safety test solution
Partial discharge tester
Lead-acid battery cell tester
Electrical safety test solution
High potential tester/safety tester
Ground bond tester
Electrical safety test scanner
Impulse winding tester
Calibrator
Automated test system
Motor test solution
Video and color test solutions
Video signal image generator
Color analyzer
Automated test system
PCBA image analyzer
Signal module
Flat panel display test solutions
Flat panel display tester
OLED test system
SHV 8K test solution
LED & driver test solution
LED total power test system
ESD test system
LED power source test solution
Cooling chip controller
Temperature recorder
Photonics Test Solution
Wafer-level testing
Packaging level testing
Automated optical inspection solutions
Automated optical test system
Solar cell AOI system
71 -
- Photovoltaic/inverter test & automation solutions
  1. Automated optical test system
  2. Thermoelectric cooling chip controller
  3. Thermal data logger
  4. PV inverter test solution
- Semiconductor/IC test solutions
  1. SoC test system
  2. VLSI test system
  3. IC test handler
  4. Metrology system
- RF and wireless measurement and test solutions
  1. Wireless test solutions
  2. RF recorder/player
  3. GPS simulator
- PXI test & measurement solutions
  1. PXI SMU/power supply instrument
  2. PXI semiconductor/IC test system
  3. High-precision power measurement unit
- Smart manufacturing system solutions
  1. Intelligent manufacturing system
- Turnkey test & automation solution
  1. Production line automation assembly and testing
- Biomedical Instruments
  - 1.Molecular Diagnostic Instruments
- Other solutions
  1. Reliability test solution
  2. Universal test solution
New products under development
- EV/EVSE AC and DC charging test system
- High performance Battery cell series charge Formation System
- Next generation laboratory-level high-precision vehicle power battery test system
- Fuel batter power test system
- High performance Electrical Motor Emulator
- Next Generation High-Speed Dual-Axle Dynamometer
- Next Generation Power HIL Testbed for EV Key components Testing Power HIL Testbed for EV key-component testing
- Energy recycling battery module charge and discharge tester-direction charger for battery module/Pack testing
- New generation automotive display video test generator
- Energy recycling and high power density DC load
- Next generation power energy product key parts micro-defect variation detection system
- 1U 3-channels high power density DC Source Next generation bi-direction and high power density DC Source
- Bi-directional high power density DC Source Next generation bi-direction and high power density DC Source
- Partial discharge detector for key parts of electric vehicles
- GHz LCR tester
(II) Industry overview
Current state and development of the industry
72 -

In 2022, the global economy experienced a strong recovery as the COVID-19 epidemic slowed down and the US Federal Reserve adopted a policy of Quantitative Easing (QE). However, inflation also increased accordingly. In the second half of the year, the Fed raised interest rates rapidly in order to suppress inflation, causing high volatility in the economy. The information electronics industry also experienced overexpansion of production capacity due to labor and material shortages in the previous year, resulting in excessive inventory. This overstock prompted inventory adjustments in 2H 2022. Fortunately, emerging technologies such as charging stations for electric vehicles and new energy continued to drive growth in the industry.

Power electronics test solutions

Power supplies represent a basic and core component of electronic equipment, and are widely utilized in various electronic products such as PCs, servers, rechargers, displays, and industrial power supplies.

In recent years, the electric vehicle-related automotive electronic components, batteries, and charging station industries have flourished. The automotive electronics industry places a strong emphasis on safety and durability, and the issue of climate change has led to measures to reduce carbon emissions and promote new energy sources, such as solar and wind power, which have also driven demand for these products. Due to the strict quality requirements, the demands placed upon test equipment are becoming increasingly complex and extensive. Improving the quality and speed of testing is a key issue for the development of the test instrument industry. The Company and its subsidiaries’ power supply test equipment is being developed towards test automation and capability to address complex and multi-tasking test requirements. To maintain the competitive advantage of this product line and keep up with the production automation trend, the Company has also developed its own power supply automated test system, supported by a powerful software platform with a wide range of test items for various industries.

Video and color test solutions

The display market continues to develop towards higher resolutions and has upgraded to 8K SHV (Super HI-Vision) high-resolution displays. Along with the increase of high-resolution applications, video interfaces have also improved. For example, the HDMI 2.1 specification has introduced a single HDMI signal capable of transmitting 8K video signal images. Video and color test solutions have been introduced to meet the panel and display industries’ demand for 8K Super-Hi Vision (SHV, 7680x4320 / 8192x4320) test solutions. A modular architecture design must be adopted so that the solution can flexibly combine different signal and power modules to satisfy the required test conditions. High flexibility, strong scalability, and the ability to support a variety of mainstream industry communication interfaces enable this solution to keep pace with the development of the industry.

Test solutions for passive components and regulatory testing

In 2022, the epidemic continued to catalyze remote business opportunities and stimulate the continued growth of the information electronics industry, boosting the demand for passive components. Passive component manufacturers expanded their production capacity, further driving market demand. In response, we developed new automated testing technology for passive components and safety standard testing. Multiple testers are consolidated into one. Ensuring that power semiconductor components do not have continuous partial discharge under normal operating conditions is a key focus of testing to ensure long-term working quality.

Semiconductor/IC test solutions

In 2022, due to the expansion of the electric vehicle market, the demand for HPC and AI markets kept growing, and the semiconductor market scale increased

73 -

significantly. Various countries included semiconductor fabs into the arms race, thus urging manufacturers to engage in plant expansion projects. As a result, the demand for equipment also grew significantly. Therefore, we developed a variety of test programs capable of carrying out the parallel tests that will increase the amount of output per unit of time, which is a trend in test equipment manufacturer R&D. Customized test equipment capable of directly satisfying specific user requirements can replace ex pensive general-purpose testers, achieving a significant reduction in costs.

Battery test and automation solution

In 2022, the global battery industry experienced a significant boost due to the rise of the electric vehicle market. The improvement of battery life has proven crucial to the growth of the electric vehicle market, and the battery industry has flourished in turn. The increased demand for batteries has made battery safety an ever more important issue. The Company has long been committed to the new energy field and has continuously strived to improve the testing automation and efficiency of the battery industry. We provide customers with power battery cells, modules, packs as well as battery system performance, environmental reliability, and safety testing and certification services. The evolution of electric vehicles largely depends on the advancement of battery functions. Battery reliability is becoming increasingly important, as battery quality not only affects the driving range of electric vehicles but also ensures their safety. Therefore, battery automation testing is a crucial link in the development of electric vehicles."

Correlation with upstream, midstream, and downstream sections of the industry
A. Measurement instruments and equipment

These instruments and equipment belong to the test instrument sector in the information electronics industry. The Company primarily purchases parts and components from upstream suppliers, and assembles them to produce the test instrument and equipment, which are marketed and sold to customers under the Company’s brand name. The Corporation and its subsidiaries offer an extensive selection of solutions for product testing and validation purposes to customers from many fields such as video surveillance, passive components., LCD modules, LED, semiconductor, photovoltaics (PV), and electric vehicle industries. The following diagram describes the relationship between the upstream, midstream, and downstream sectors in this industry:

Upstream Boxes and cases Printed circuit Boards (PCB) IC Other components	Midstream Assembly Testing Sales	Downstream
Boxes and cases Printed circuit Boards (PCB) IC Other components	Assembly Testing Sales	Video surveillance, power supply, passive components., IC design, IC testing, LED, PV and solar power cells, and electric vehicle industries

B. Automated transportation and construction equipment

With the combination of metrology equipment, automation systems, and MES software capabilities to provide customers with automation solutions (Turnkey Solution). The various main products of MAS, a subsidiary corporation, are photovoltaic (PV) automated production and system integration, TFT-LCD automated production and system integration, battery module ATS and cleanroom equipment planning and system integration.

Development trends and competition for various products
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A. Development trends of various products
Power electronics testing industry

The following describes the current product development trends for power supply test solutions in response to the aforementioned production, R&D, and quality requirements:

Low voltage load characteristics and high current switching technology in response to the point-of-load converter power supply and fast switching properties.
Input distortion simulations and electrical grid distortion simulations in response to regulatory requirements for testing of power supplies.
Discontinuous, low-power measurements in response to energy-saving requirements of power supplies under standby mode.
DC power supplies covering high voltage and current levels are able to reduce the required number of DC power supplies with DC/DC converter input, thus reducing testing costs.
High voltage, high frequency testing technology, and low parasitic capacitance testing jigs for LCD Inverter testing can greatly improve testing speed and stability.
Network data capture functions enable manufacturers to establish real-time production capacity controls and perform quality statistical analysis.
Video testing industry

The display industry is developing towards high resolution, officially entering the 8K era with 8K (Super-Hi Vision) ultra-high-definition resolution images. This application drives the improvement of the video interface and the USB TYPE-C integration for image transmission, bidirectional power supply, and data transmission functions, with lightweight and uni-directional convenience. The Video Electronics Association of America (VESA) has defined the Embedded Display Port video interface, which has been widely used because of its high bandwidth and low system power consumption characteristics. Therefore, the corresponding test specifications are also the focus of industry development. Product development has adopted modular architecture design, with flexible pairing of different signal and power modules to meet the required test conditions. It also has high versatility, strong expandability, and supports multiple mainstream industry communication interfaces, providing 8K ultra high definition (7680x4320/8192x4320) test solutions to meet the display industry’s current and future needs.

Passive components. testing

Electronic products are becoming lighter, thinner, and smaller. As a result, the manufacturing, R&D, and quality of passive components within these products also focus on high efficiency and precision levels. The following describes the trends for developing testing equipment for passive components:

High speed precision measuring, integrating equipment automation to improve production efficiency while reducing human mistakes to boost reliability.
Integrated testing of multiple parameters to reduce the number of production equipment and decrease the number of labor hours required, thereby lowering production costs.
Providing comprehensive test solutions for specific applications that help users establish systems quickly to fulfill their test requirements, and receive comprehensive technical support.
Providing network data capture functions so that manufacturers can establish real-time production capacity controls and perform quality statistical analysis.
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Electric vehicle/battery test equipment

The most important components of mobile devices and electric vehicles are battery modules. The reliability of battery modules is closely related to safety issues, which makes battery reliability testing very important. As battery production is extremely energy-consuming, providing highly efficient, stable and safe automated test instruments has become an important trend in the development of the instrument industry.

Semiconductor/IC test solutions

Since 5G, smart manufacturing, autonomous vehicles, HPC, and AI applications are increasing, the semiconductor industry is becoming more and more important, with the development of high-precision testing being an especially key issue in the development of semiconductors and the combination of integrated test instruments, and automation has become a hot competition in the instrument industry. To respond to the development of the trend, the Company and its subsidiaries have been actively integrating combined technologies in multiple fields such as electronics, electrical machinery, machinery, software, information, and communications. It provides a full range of test solutions for different semiconductor products in the production and manufacturing process, including semiconductor material nanoparticle monitoring, multimedia wafer testing, PXIe test platforms, RF radio frequency chip testing, and other 5G solutions.

- Photonics Test Solution

Since Apple amazed the technology community by incorporating the facial recognition function into iPhone X, its key laser diode has become an important element for 3D sensing. This technology has recently been widely used, especially in face recognition, autonomous vehicles and existing fiber-optic communications. With the increase in demand for laser diodes, the quality and reliability of laser diodes become relatively important. Thus, the need for various related test instruments is in the ascendant. The photonics test solution mainly includes the chip segment of the laser diode and the packaging sector of optical communication active components.

B. Product competition

As the Company and its subsidiaries have been developing the instruments and automation industry for many years, there are high barriers to entry in terms of product technology, and each product technology can maintain its leading position. However, as new products continue to introduce and the Company has to maintain its competitiveness, it shall continue to expand its product base and technical product capability, collaborate with tier-one manufacturers, and improve its R&D technical skills and invest in companies with unique testing technology to support its product advantages. In addition, with rampant counterfeiting in the Greater China region due to the relocation of industries in recent years, products of the Company and its subsidiaries also suffer from price competition involving counterfeit products. Hence, in order to maintain the competitive advantage of its products, the Company, and its subsidiaries invested a considerable amount of manpower to apply for patents and safeguard the brand value. As production processes become increasingly automated, integrated testers and automated equipment will provide instrumentation industries with high levels of competitive advantage.

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(III) Technologies and recent R&D efforts

R&D expenses invested in the two most recent years

	Unit: In thousands of NT$	Unit: In thousands of NT$
Item\Year	2021	2022
R&D expenses	1,511,465	1,917,411
Net operating revenue	17,584,023	22,067,242
Proportion of R&D expenses to net operating revenue
	9%	9%

Major R&D outcomes

◎2238 Video signal image generator

◎2918 Flat panel display tester

◎7505-05 Multi-Functional Optical Measuring System

◎61509 Programmable AC Source

◎63000 Programmable DC Load

◎62000L Programmable DC

◎ 66205 Digital power meter

◎61809/61812/61815 Recyclable power grid simulation power supply

◎62000D Series Programmable Two-Way DC

◎62000LE Programmable DC

◎1870D Inductor Test & Packing Machine

◎1871 Inductor Layer Short Automatic Test System

◎11210Battery Cell Insulation Tester

◎11050 HF LCR meter

◎11090 11090 HF LCR meter

◎19501-K Partial Discharge Tester

◎19311Battery Cell Surge Tester

◎33010 PXIe PE Card

◎3680 Advanced SoC Test System

◎3160C Tri-Temp Quad-Site Handler

◎3660C Tri-Temp System Board Handler

◎31000R series temperature control system

◎7940 Wafer Chip Inspection System

◎7925 TO-CAN Inspection System

◎7940 Wafer Chip Inspection System

◎58620Laser Diode Characterization System

◎58625 Photoelectric component module multi-functional testing system

◎58604 Laser Diode Burn-in and Reliability Test System

◎58606 Photodiode burn-in and reliability testing system

◎7505-k006 Cylindrical Battery Cell Automated Optical Inspection System

◎7505-k007Thin Film Thickness Automated Optical Metrology System

◎3730-E Solar Cell Inspection Test/Sorting System

◎3760Solar Cell Inspection Test/Sorting System

◎17010H Battery reliability test systems

◎17011 Battery Charge and Discharge Test System

◎17040 Regenerative Battery Pack Test System

◎8000 Electric vehicle AC and DC charging station ATS

◎8000 Electric vehicle charger/DC-DC converter ATS

◎8610 Battery pack power-level hardware in environmental test bench systems

◎8620 Electric vehicle charger/DC-DC converter power-level hardware in

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environmental test bench systems

◎8630 Battery management system power-level hardware in environmental test bench systems
◎87001 16 Channel Cell Simulator

3. Future R&D plans

In recent years, the main development trends of the IT industry have been toward 3D applications and 5G. The use of wireless communications to carry various devices has entered the era of electric vehicles, unmanned vehicles, and smart cities. While the use of various power sources has become increasingly important, the Company continues to develop towards high-power power supplies.

Therefore, the Company’s research and development plan has also evolved with various industries, promoting related automation equipment of Industry 4.0 and the development and integration of Turnkey Solution products, and the establishment of Industry 4.0 smart manufacturing related solutions. In response to the trend of IoT, electric vehicle-related equipment and test equipment, battery test equipment, wireless communication test equipment, as well as test equipment that meets VR and AR requirements are developed. The Company and its subsidiaries are also committed to the R&D of products related to clean technology, with the aim of developing relevant automated 5G test equipment.

(IV) Long-term and short-term business development plans

Short-term development plans
(1) Actively and properly address the impact of labor and material shortages to meet customer needs

The various restrictions on the electronics industry imposed by the Sino-US Trade War have boosted the position of Taiwan’s electronics industry in the world. Besides, as the electronics products may be applied extensively, the demand thereof has boomed significantly. The crisis arising from the short supply of labor and materials in 2021 caused over-expansion and overstock problems for manufacturers, in turn prompting inventory adjustments initiated in 2022. Notwithstanding, the Company still developed advanced technologies to expand its market scale.

(2) Accelerate the development of Test Turnkey Solutions needed by the advanced semiconductor front-office/back-office processes

The investment in advanced semiconductor process equipment is getting bigger and bigger, and many equipment vendors are coveting a place, but the barrier to entry is very high, so the development of equipment in the semiconductor field has been an important plan for the Company’s product development. HPC and 5G will also lead to large-scale applications in recent years, and the active development of related equipment has been an important development goal for the equipment industry in recent years.

(3) Strive to increase the world-class customers in 1st Tier

The 1st Tier customers are pioneers of the industry technology, so we aim to break through technical bottlenecks to meet the test quality needs of customers, in order to promote the company’s technological advancements and expand the product market.

2. Long-term development plans

The long-term goal of the Corporation is to “develop world-class products and become a world-class enterprise” and it is the vision for the corporation’s growth. World-class products are “precise, reliable and unique”, providing customers with more valuable test solutions to various electronic technology industries, while world-class corporations are advancing toward the three major principles of “innovative technologies, private brand, and internationalization”. Thus, the Company invests a lot

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in R&D each year and invests in companies with unique technologies to ensure that the Company maintains its lead with its core technologies and highly integrated capabilities in optics, machinery, electronics, temperature control, and software, in order to maintain its competitive advantage and growth, thereby achieving the goal of sustainable development.

(1) Marketing plans

With the rise of work specialization at an international level, manufacturing bases for the IT industry have started expanding outward. In order to provide customers with services of the highest quality, the Corporation and its subsidiaries have also established a sales network composed of overseas subsidiaries, as well as sales agents and dealers. With Taiwanese companies heading to Southeast Asia for investment purposes in recent years, the Company has also formulated plans to set up sales and marketing locations in Southeast Asia through its subsidiary in Singapore. Besides, the parent company provides support to various activities, in hopes of increasing revenue in this region to sell to the whole world under its own brand name.

(2) Human resource plans

The Company and its subsidiaries have been developing niche products for its business development objectives and can thus be considered a technically-intensive business. Efforts have been invested to strengthen employee training and establish a knowledge management platform and learning database, sharing resources to help employees quickly gain competence in the professional and technological field, improve human resources, and reduce learning time. Regular performance appraisals and employee interviews are conducted to help employees develop their career and life appropriately and to steadily cultivate the human resource base.

(3) Product development plans

Innovation is the DNA of the Company. Innovative technology provides customers with higher added value and services to meet their needs. It is the Company’s product development strategy and is aligned with the development of the industry. In the future, in addition to investing in semiconductor, HPC, and 5G communication industrial development-related test products, the Company will also invest in modular instruments, systematic integration, and various automated customized products. With rising labor costs and an aging population, intelligent networks, industrial automation, and health care industries are becoming increasingly important. The Corporation’s long-term product development plans will therefore focus upon the development of test equipment related to products in intelligent network systems in order to develop equipment related to industrial automation and health care. The Corporation will also be aggressively integrating the upstream and downstream industries, and utilize the merger and acquisition strategy to create opportunities for expanding relevant 5G product lines.

II. Market, production, and sales summary

(I) Market analysis
Major products by sales area

Unit: In thousands of NT$

Area		2021	2021			2022	2022	2022
		Amount		% of net operating revenue		Amount	% of net operating revenue
Domestic sales Export sales Total		$ 4,889,619 12,694,404 $17,584,023		28% 72% 100%		$ 2,935,668 19,131,574 $22,067,242		13% 87% 100%

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State of the market

In 2022, the epidemic waned and various countries successively lifted their lockdown policies. The market was open again, and the Fed’s QE policy stimulated economic recovery. However, at the beginning of 2022, Russia dispatched troops to attack Ukraine, causing a major geopolitical upheaval. The United States was disturbed by China’s technological development so much that it adopted more control policies. A series of issues resulted in increasing inflation. The Fed immediately adopted a policy of raising interest rates in an attempt to suppress this inflation.

The information electronics industry initiated inventory adjustments in 2022 after going through competition in its production capacity expansion in 2021. Notwithstanding, emerging applications, such as HPC, 5G, new energy, and AI applications still keep developing.

State and growth of market supply and demand
At the beginning of 2023, given the rapidly rising rates, inflation has been
mitigated slightly. Yet, the inventory adjustment continued, and the Russia-Ukraine War is still ongoing. The economy was full of uncertain factors. As a result, major IT manufacturers successively laid off employees in order to deal with the risk of economic downturn. However, the market for HPC, AI, and electric vehicles is still expanding and driving more opportunities for equipment manufacturers. Research, development, and manufacturing of the equipment required by these and other future industries is an important issue for the existing R&D investment projects.
Competitive niches, and positive and negative factors to the development outlook, and responsive measures
(A) Competitive niches and positive factors:
The Company has long invested in the research and development of critical technologies and products with unparalleled reliability. In the early stage, the Company cooperated with the world’s first-tier manufacturers to gain trust and experience so that the Company can keep abreast of industry trends and timely introduce new measurement equipment in response to the mass production requirements in the market. The Corporation accumulated a variety of key technologies over the years and developed a number of technologically advanced products, allowing the Corporation and its subsidiaries to stay ahead of the test market. Competitive niches of the Company and its subsidiaries include effective control over sales channels and acquisition of the latest information about the industry. The business group has ample resources in the sectors of testing, automation, and factory management systems to provide customers with Turnkey Solutions required, providing the Company and its subsidiaries with various advantages to maintain market competitiveness.
(B) Negative factors:
Instrument products are typically produced in small amounts and wide varieties, making mass production difficult. Production processes are often complicated and difficult to manage. Other unfavorable factors include the complexity of test instruments, the diverse range of material types required, and the risk of shortage of parts and components resulting in long lead times and high warehousing costs.
(C) Responsive measures

Since products are offered in many models and required in small quantities, the Corporation and its subsidiaries adopted modular designs during product research and development (R&D) phases. Differences in specifications were concentrated in a single module during the production process. Shared characteristics and designs were adopted into general modules in order to improve production volume for general modules while reducing the materials required for the unique parts. Besides,

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in order to strengthen production and inventory management, the IMS BU and the Information Center at the Corporation and its subsidiaries have also built a complete information management system according to the nature of industries to which they belong, intending to enhance management efficiency.

In response to the crisis of material shortage, the Company is actively seeking alternative materials for immediate delivery to meet customers’ demand.

(II) Major uses and production process of primary products
Major uses of the primary products
- Power electronics test solutions

In addition to its applications in industries such as information, communications, aerospace, and defense, power electronics testing solutions have also been applied to energy-saving products that have been actively developed in recent years, such as electric vehicles, charging stations, solar energy, and fuel cells. Chroma ATE's proficient technology in the field of power supply testing has been utilized to introduce customized test solutions for these industries.

The Company provides various test equipment for programmable AC power supply, programmable DC power source, DC electronic load, AC electronic load, digital power meter, and frequency-response analyzer, offering regulatory tests for both input and output terminals as well as satisfying the requirements of dynamic simulations. Soft Panel (proprietary graphical operating software) and NI Labview drivers were also provided to help users conveniently employ these solutions.

The Corporation and its subsidiaries independently developed an automated test system which would include a software platform that comes with powerful inbuilt functions and general tests which can then be integrated with the desired hardware instrument to independently edit the test items and to acquire and analyze vast amounts of test data. Analysis results could then be used as a basis for R&D or quality assurance (QA) to make changes to the product or improvements to factory processes. In addition to recent applications for PC/servo/telecom power sources, adapters, and chargers, other areas such as backlight inverters, LED drivers, ballast for energysaving lamps, UPS, PV inverters, and even electric vehicle supply equipment (EVSE) were included within the scope of applications. Also, the Company and its subsidiaries have a global technical applications support team, and can provide customized plans for automation systems as well as production of testing jigs.

Video and color test solutions

LCD modules are provided with different signal transforming panels. Once assembled, the final product could be adapted to different signal outputs in various products. These complex outputs and input interfaces require a video pattern generator which would provide various international standard signal test screens for testing purposes to analyze the performance of the display in processing video signals. Precision would be a key requirement since the output signals of the video pattern generator would be the standard source.

Color analyzers employ advanced digital signal processors and photoelectric conversion technology and combine them with precision optical components and circuit design to accurately measure the energy, calibrated color, brightness, and white balance of the light projected by the display to meet international standards and specifications.

For large-sized monitors and projectors, the optical color analysis probe could be used to achieve simultaneous measurements of multiple points. This can then be integrated with the video pattern generator as well as a software operation interface for video signal analysis. All programmed tests could be carried out quickly using single button operations, making it the most competitive video and color test solution

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available.

Test solutions for passive components and regulatory testing

Test equipment for passive components includes tests for capacitors, inductors, resistors, and other basic passives as well as tests conducted for various electronic components that were assembled using these components (such as wound components, communication and power source filters) or have similar properties (such as switches, connectors, conducting wires, metallic materials, dielectric materials, magnetic materials, and semiconductor components). Tests could be used to analyze the properties of the tested objects and provide design optimization for integrated applications such as automated production inspection, incoming/outgoing inspection, QA verification, and R&D analysis in order to satisfy the customer’s requirements for cost reduction and achieving better efficiency.

Electrical regulatory test equipment is widely employed in various types of electronic components, electrical products, or health care products. Major tests include AC/DC withstand voltage and insulation resistance testing for electronic components as well as ground bond and grounding leakage current tests for electrical products or medical electronics. In addition to verifying product compliance with various safety specifications such as those from UL (United States), CE (Europe), and TUV (Germany), the primary purpose of testing is to ensure personal safety of the users, as well as long-term reliability of the products. To create an international sales channel, safety regulations must be regarded as a major topic.

Universal test equipment includes multi-function calibrators, resistance and capacitance meters, etc. In addition to standalone operation, these solutions can also be connected and used with other testers for R&D, design verification, and QA testing purposes. These test solutions are capable of fulfilling basic testing requirements of different units.

Flat panel display test solutions

Liquid crystal module test solutions can adopt a shorting-bar signal during the assembly phase to test for various defects of the panel and implement laser correction. After module assembly, different panel dimensions and backlight sources (CCFL or LED BLU) are referenced before using video signal sources and programmable power sources together with an ergonomic operation interface on PC platforms for complete voltage, current, and power testing. Both software and hardware are used to analyze image bright spots, defective spots, color, and resolution. Automated conveyor belt production line designs and system-based controls will also provide integrated network-based management functions for data analysis.

Semiconductor/IC test solutions

The Corporation has established a strong foundation in the field of semiconductor wafer testing for many years, and thus has a large number of product lines. Equipment required from the R&D to mass production stages such as ATE large-scale test system, IC sorter, and PXI/PXIe miniaturization test platform are all complete. Corresponding products provide customers with the most suitable choice. Semiconductor solutions cover different wafer test applications such as: consumer wafers (microprocessors, audio chips, peripherals for computers/mobile devices, etc.), power management chips (linear regulators, DC converters, AC converters, LEDs Drivers, etc.), RF chips (wireless networks, Bluetooth, mobile communications, etc.), and specific areas of testing (image sensors, radio frequency identification, etc.). Handlers used in backend production of ICs could also work with different IC packaging types and sort out defective products from conforming ones. After IC packaging and testing, automated system function testers could be used to rapidly screen the completed IC packages, replacing simulated test environments

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with actual usage environments for product testing to provide low cost and high coverage tests that will greatly improve the quality of the delivered product. - Solar cell test solutions

The solar cell test solution focuses on the inspection needs of the solar cell and module process, and develops various testing machines and inspection equipment. The I-V tester measures the conversion efficiency of the cells and differentiates them according to different conversion efficiencies, then determines the cell color and printing defects on the front and back sides through automatic optical inspection, and finally sorts them through the solar cell sorting machine. When assembling PV systems, system inverters would convert DC into AC currents while controlling the direction of current flow and calculate the reverse current delivered. Chroma ATE’s AC/DC power supplies and electronic loads can be used to simulate and measure the output power to ensure its quality.

－ Battery test and automation solution

The Company’s battery testing and automation solutions cover a wide range of products, including dynamic charge and discharge, energy recovery battery module test systems for real-world current simulation applications, battery discharge energy recovery and reuse, power saving, environmental protection, and low thermal output. Save electricity and air conditioning costs, reduce production costs. The applicable industry scope includes electric vehicle manufacturers, energy storage system vendors, and battery module plants, which are suitable for battery management system testing, battery pack endurance testing, product shipment inspection, design verification research, and battery pack production line capacity learning and DC internal group testing and other purposes.

Photonics Test Solution

The photonics test solutions mainly include the chip sector of laser diodes and the packaging sector of optical communication active components. Chroma's excellent power electronics and optical measurement technology, combined with mechanical integration and temperature control, enable burn-in aging and characteristics testing of optical components at different environmental temperatures. The semiconductor laser characteristics test system is designed specifically for laser diodes and features an all-in-one design concept for automated characteristics testing with different test items. With a high-capacity carrier design, it can perform mass testing of multiple laser chips at the chip level. In addition, Automated Optical Inspection (AOI) increases the speed and reliability of automated inspections. The design of a highly stable temperature control platform enables the R&D engineers to accurately understand the relationship between laser diode characteristics and temperature.

Manufacturing execution system (MES)

This is a production information collection and integration system for manufacturing sites. It makes use of various automated electronic devices to intelligently collect and process on-site production information in the most real-time manner, integrating the data required for various operations of each unit on the factory floor (such as materials, production, manufacturing, quality control, and warehousing). This allows each unit to quickly obtain the information needed for their operations, thereby improving production efficiency.

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Production process

==> picture [415 x 173] intentionally omitted <==

(III) Supply of primary raw materials

The Company and its subsidiaries manufacture a large variety of product types in small quantities. This requires a large quantity of raw materials, with primary materials including: programmable logic gate array IC, converter IC, memory, relays, structural materials, and PCB. The following describes the state of materials supply:

Primary raw materials category	Main supplier	State of supply
Programmable logic gate array IC	Macnica Galaxy, Weikeng Industrial and ANSTEK	The Company maintains more than three suppliers, acting as agents for the products of world-renowned manufacturers, for long-term cooperation. Both quality and supply are stable.
Power converter IC	ANSTEK, Morrihan,and Texas Instruments	The Company maintains more than three suppliers, acting as agents for the products of world-renowned manufacturers, for long-term cooperation. Both quality and supply are stable.
Memory IC	Weikeng Industrial, Transcend, and Arrow Electronics	The Company maintains more than three suppliers, acting as agents for the products of world-renowned manufacturers, for long-term cooperation. Both quality and supply are stable.
Relay	SUMCHIP, IC-Hi Technology, Bright Toward Industry	The Company maintains more than three suppliers, acting as agents for the products of world-renowned manufacturers, for long-term cooperation. Both quality and supply are stable.
Structural materials	Giga solution Tech, Chia Cherne Industry, Motaccc	It is supplied by more than three suppliers, and its manufacturing quality and supply are very stable. The company maintains a good long- term cooperation relationship.
PCB	Shin Puu, Speedy Circuits, and Tai Moon	It is supplied by more than three suppliers, and its manufacturing quality and supply are very stable. The company maintains a good long- termcooperation relationship.

Given the large variety of raw materials and components needed by the Company and its subsidiaries to manufacture precision instruments, all local and overseas purchases were handled by a single purchasing unit. Where possible, 2 or more suppliers were selected to ensure supplier replaceability, acquire competitive pricing, distribute purchasing risks, achieve reasonable cost reductions, and provide better services. The

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purchasing unit shall regularly review quotations offered by the supplier. QC and purchasing personnel shall conduct audits at the supplier end to ensure the stability of product quality while assessing the production capability of the supplier.

(IV)List of suppliers and customers accounting for 10 percent or more of the Company’s total purchases (sales) of goods in either of the two most recent years, amount and percentage of total purchases (sales) of goods, and reason for changes in these figures.
List of suppliers accounting for 10 percent or more of the Corporation’s total purchases of goods in either of the two most recent years

Information on major suppliers in the two most recent years

Unit: In thousands of NT$

					Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$
Item	2021				2022
	Name	Amount	Proportion to net purchases of goods for the entire year (%)	Relationship with the issuer	Name	Amount	Proportion to net purchases of goods for the entire year (%)	Relationship with the issuer
1	NMC (Japan)	1,671,326	18.66	None	Changzhou Jingce New Energy	1,255,329	13.34	None
2	NMC (Philippines)	1,019,827	11.39	None	Others	8,151,448	86.66	-
	Others	6,264,871	69.95	-
	Netpurchase	8,956,024	100.00		Netpurchase	9,406,777	100.00

Explanation for any changes:

NMC (Japan) and NMC (the Philippines) were the main suppliers of the Company’s subsidiary, Chroma New Materials Corporation. Notwithstanding, as Chroma New Materials Corporation has wound up in 2022, the amount of purchasing from the two suppliers decreased accordingly. Changzhou Jingce New Energy Company was the main supplier of the Company’s subsidiary, Chroma ATE (Suzhou) Co., Ltd. Due to the increase in the amount of sale projects in 2022, the amount of purchasing from it increased relatively.

2.List of customers accounting for 10 percent or more of the Corporation’s total sales of goods in either of the two most recent years

Information on major customers for the two most recent years

Unit: In thousands of NT$

					Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$
	2021				2022
Item	Name	Amount	Proportion to net sales of goods for the entire year(%)	Relationship with the issuer	Name	Amount	Proportion to net sales of goods for the entire year(%)	Relationship with the issuer
1	Others	17,584,023	100.00	-	TOA Optronics Corporation	3,700,137	16.77	None
					Others	18,367,105	83.23	-
	Net sales	17,584,023	100.00		Net sales	22,067,242	100.00

Explanation on the changes:

Primarily because the market demand for new energy vehicles in China has increased significantly, the customers expanded their production lines and thereby drove the increase in the demand for testing equipment.

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(V) Production volume in the most recent two years

Unit: Unit, Set, In thousands of NT$

				Unit: Unit,Set,In thousands of NT$	Unit: Unit,Set,In thousands of NT$	Unit: Unit,Set,In thousands of NT$
Year Production volume and value Primary product	2021			2022
	Production capacity (Note)	Production volume	Production value	Production capacity (Note)	Production volume	Production value
Test equipment	-	167,443	4,632,836	-	180,545	5,541,388
Automated equipment	-	101	508,505	-	244	2,016,261
Others	-	-	424	-	-	-
Total	-	167,544	5,141,765	-	180,789	7,557,649

Note: The Company and its subsidiaries adopted a production model of producing many product types for limited quantities instead of mass production using automated production lines. No single product has an exclusive product line. Hence, general assessments for capacity utilization rates cannot be used for such production models. Production processes were based upon the processes required and the work hours provided by the testers. Machinery and equipment were then used to assemble a flexible manufacturing work station. Production volume and capacity for various products shall be sequenced according to the product market or purchase order requirements. Expected production volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate.

(VI) Sales volume in the two most recent years

volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years	volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years	volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years	volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years	volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years	volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years	volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years	volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years	volume was used to flexibly adjust production capacity in order to achieve maximum benefits using limited economic resources. Hence, all primary products listed above were capable of maintaining stable capacity utilization rate. Products that proved to be competitive in the market could also utilize the most flexible production plan to achieve optimal capacity utilization rate. I) Sales volume in the two most recent years
Unit: KM,M,feet, g,units,sets,thousand NT$
Year Sales Volume/ Value Primary product	2021				2022
	Domestic sales		Export sales		Domestic sales		Export sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Test equipment	43,934	1,665,708	189,662	11,889,657	46,569	1,888,737	898,369	18,380,443
Special material	3,688,924,107	2,759,909	69	44,397	769,268,284	599,901	36	35,285
Automated equipment	82	244,513	19	535,693	97	292,186	147	537,293
Others	-	219,489	-	224,657	-	154,844	-	178,553
Total	3,688,968,123	4,889,619	189,750	12,694,404	769,314,950	2,935,668	898,552	19,131,574

III. Employee information in the two most recent years up to the publication date of this annual report

	Year	2021	2022	2023 up to February 28
Number of employees	Administration and sales staff	1,420	1,506	1,525
	Production staff	875	971	940
	R&D personnel	876	903	907
	Total	3,171	3,380	3,372
Average age		38.39	38.00	38.13
Average work tenure		7.39	7.47	7.51
Proportion for the distribution of academic backgrounds	Doctor	1.01%	0.90%	0.87%
	Master	21.75%	20.01%	20.14%
	University or college	68.82%	71.21%	71.06%
	Senior high school	7.18%	6.78%	6.81%
	Below high school	1.24%	1.10%	1.12%

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IV. Environmental protection expenditure

(I) Total losses and fines from environmental pollution from the most recent year up to the publication date of this annual report:
In 2022 and until the date of publication of the annual report, the Company had no
case that caused environmental pollution and was not punished by the competent authority.
(II) Future response strategies
(1)Compliance with laws and regulations: Obtain, identify, follow, and comply with regulations and other requirements that can apply to Chroma ATE due to the environmental impact of products, activities, and services, and communicate relevant information to employees.
(2)Continuous improvement: Promote environmental policies, aim at pollution prevention, formulate supervision and measurement methods for the control operations and activities related to significant environmental considerations, and evaluate the effectiveness of the environmental management system as the basis for performance evaluation for continuous improvement.
(3) Reduce impact: To effectively control environmental impact, provide appropriate protective facilities and equipment or formulate operating standards for related activities to prevent environmental impacts caused by hazardous substances, wastewater, and waste management.
(4) Consultation and communication: To strengthen the interaction with employees, the public, suppliers, and stakeholders, establish channels for communicating environmental policies and related information, and provide appropriate responses.

V. Labor relations

(I) Various employee welfare measures, continuing education and training, retirement systems, and their implementation, as well as various labor-management agreements and measures for safeguarding employee rights and interests.
Employee welfare measures

The Corporation has established an Occupational Welfare Committee in charge of coordinating and managing employee benefit funds, organizing employee social clubs and tours, ball games, social activities, and gifts for public holidays for fellow employees. The plan also includes subsidies for employee marriage, passing of immediate family, and other celebrations and festivals, subsidies for employee tours, labor, health insurance, and group insurances, establishing employee restaurants, employee dormitories and recreation centers, providing a diverse selection of recreational and entertainment facilities for employees, and preparing employees’ parking spaces.

Continuing education and training

To promote the employees’ competence, knowledge, and management skills required of their duties, the Company stipulated the Education and Training Management Regulations. The Company’s business objectives and results of departmental surveys were compiled to formulate the annual training plan. Newly hired staff were provided with work orientation training. On-job training, specialization training, or professional external training were provided every now and then for employees to train professional and talented personnel, improve business performance, and achieve effective utilization of human resources.

2022 training implementation was as follows:

mployees to train professional and talented personnel, d achieve effective utilization of human resources. 22 trainingimplementation was as follows:	improve business performan
Numberofemployees trained	Training costs
182 participants in external training, 10,641 in internal training,totaling10,823	NT$1,603,000

The content of education and training is based on the overall business strategy, job

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requirements, and multiple considerations and designs from the perspective of employees, including professional, management, and general education courses, etc, and are implemented per employees’ personal development plans, such as communication skills, innovation ability, leadership ability, projectability, sales ability, etc, to provide employees with a complete training plan.

Retirement system

Following the Labor Standards Act, the Company has formulated the “Labor Retirement Rules” and made the 4% monthly contributions for the retirement reserve funds to the Trust Department of Bank of Taiwan. Since the implementation of the Labor Pension Act in July 1, 2005, 6% of the gross proceeds of labor pension shall be allocated to the individual account of their labor pension monthly to be in line with the new system. For those who voluntarily contribute to their pension funds, the voluntary contribution shall be withheld from their monthly salary and deposited to the individual pension account set up by the Bureau of Labor Insurance.

The provisions applicable to employee retirement are as follows:

(1) Voluntary retirement:
An employee may voluntarily apply for retirement in any of the following situations:
a. Those who have served for more than 15 years and are over 55 years old.
b. Having served FST for more than 25 years. c. Aged 60 or above and having completed at least 10 years of service.
(2) Forced retirement:

Unless any one of the following circumstances is met, the Company shall not force an employee to retire:

a. Having reached the age of 65
b. Those with mental disorders or physical disabilities that prevent them from working.

The Company may request the central competent authority to adjust the age prescribed above if the specific job entails risk, requires substantial physical strength, or otherwise. However, the age criteria must be no less than 55.

(3) Pension standards:
a. Employees who have service seniority accumulated before or after the application of the Labor Standards Act, and choose to be applicable to the Labor Standards Act in accordance with Labor Pension Act or service seniority preserved before the application of the Labor Pension Act, shall have their retirement benefit paid in accordance with Article 55 and Article 84-2 of the Labor Standards Act.
b. Employees who have service seniority calculated according to the preceding pension payment standard and are forced to retire in accordance with Subparagraph 2 of Paragraph 1 of Article 54 of the Labor Standards Act, an additional 20% on top of the amount calculated according to the preceding pension payment standard shall be given to the worker forced to retire due to disability incurred from the execution of their duties, as set forth in Subparagraph 2 of Paragraph 1 of Article 55.
c. The length of service, the receipt, and calculation of pensions under the Labor Pension Act shall follow per Articles 23 to 28 of the Labor Pension Act.
(4) Pension benefits:

Pensions under the Labor Standards Act are payable within 30 days from the date of employee retirement.

Employee-employer agreement

The Company and its subsidiaries place great importance on employee welfare and

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established a harmonious employee-employer relationship. In addition to complying with Labour Standards Act and relevant laws, welfare measures considered superior to statutory regulations were also enacted. Additionally, to promote the efficiency for internal communication and encourage fellow employees to propose various recommendations. In addition to regular internal communication meetings between various units, communication channels for employee relations were also established. Any employee inquiry or recommendations could be communicated using Employee Communication Helpline, Employee Communication Email, were offered to prevent any possible employee-employer disputes.

Measures for safeguarding employees’ rights

To safeguard the employees’ rights and improve the living standards of fellow employees, additional labor-management communication channels have been established. The Company has also established the Employee Welfare Committee to plan the allocation, payment, preservation, and utilization of the employee welfare fund and to provide laws specified by relevant laws. Protection of employees’ rights and implementation of welfare systems shall comply with the relevant laws and regulations.

(II) Any loss suffered due to labor disputes, estimated loss for current or future incidents that may occur, and response measures from the most recent year up to the publication date of this annual report, and reasons why a reasonable estimate cannot be made: None.

VI. Cyber security management

(I) Describe the risk management framework for cyber security, cyber security policies, specific management plans and resources devoted to cyber security management, etc. 1. Risk management framework of cyber security

In order to protect the related information security of customers and core information business, as well as satisfy the customers’ requirements and legal information security requirements, the Company has received the ISO27001 information security management system certification in January 2022.

In February 2023, the Company established the Information Security Management Office to take charge of the overall planning for promotion of information security policies and allocation of resources, for planning and monitoring of information security systems and execution of information security management operations. The Information Security Management Office consists of the information security audit team, the information security management team, the information security emergency response team, and the information security management contact persons from various business units.

The Information Security Management Office is responsible for promoting the information security management system and executing various information security management operations. It convenes an information security meeting once per month to analyze and verify its information security environment and threats. It convenes the management review meeting at least once per year to review the status of issues reviewed in the past regularly, and discuss the internal and external issues related to the information security management system to practice them in the management system.

Information Security Policy

To protect the security of our important information assets (including software and hardware facilities, operation information systems, R&D results, intellectual property, etc.) and customer data, we have established the following information security management policies.

To ensure the confidentiality of the Company’s business-related information assets and to protect the Company’s confidential information and customer
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assets.

To ensure the integrity of the Company’s business-related information assets and to improve administrative efficiency and data accuracy.
To ensure the availability of information assets related to the Company’s business and to enhance business continuity and information security responses.
To cooperate with the promotion of policies and laws of customers and authorities, and to improve policy compliance and protection requirements.
To effectively manage organizational information risks to achieve business continuity goals.
Information security indicators: According to the nature of the business, management indicators are formulated in terms of confidentiality, integrity, availability, and customer policy compliance, and approved by the head of the operation management center, and the management of quantitative indicators is used to implement this policy.
Specific management plan and resources invested in cyber security management Upon evaluation, the Company has decided not to maintain its information

security insurance for the time being. Notwithstanding, the Company has taken related actions in response to the information security. The information security management practices are stated as follows:

Network Security: Implement advanced detection technology to perform the network monitoring, block malicious cyber attacks, and collect intelligence about information security threats to prevent computer viruses from spreading.
Device security: Improve the endpoint anti-virus and scanning mechanism to prevent ransomware viruses and malware.
The mail system enhances the detection of malware, Trojan horse program attachments, and phishing emails.
Detect the Internet behaviors and block high-risk malicious websites and malicious links or file downloads.
App security: Set the targets for inspection, evaluation standards, and improvement on App development procedure security.
Continue to enhance the security control mechanism in the Apps and fix possible bugs.
Data protection: Define the user password management mechanism and separation of network security areas, in order to maintain access control and data security.
Staff account management and education & training: Formulate the password principles and request regular updates, and conduct the employees’ information security awareness education, training, and tests regularly.
Information security incident management: Monitor and compile information security protection operation records from time to time, collect and analyze intelligence about information security, and establish the information security incident reporting and response procedures.

Under the ISO27001 framework, the Company completed the information asset inventory taking and risk assessment, business impact analysis, and internal audit on information security in 2022. Meanwhile, the Company convened an information security management review meeting in October in the same year to review the status of the previous proposals, internal and external information security-related issues, risk assessment and risk improvement status, and prepare the 2023 information security management plan. It reports the information security management plan and implementation status thereof to the Board of Directors once

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per year. The implementation status in 2022:

One drill for computer room infrastructure backup functions, including information/communication infrastructure equipment.
Execute the annual business continuity drill plan consisting of 15 major indicators, including the important information system host backup functions for routine operation, or system backup and restoration mechanism.
Completed the backup data restoration verification 58 times to ensure the availability of backup data.
Completed the scanning on internal and external system vulnerability twice and 2 social engineering drills.
The information staff have completed the information security education and training six times (for 28 hours in total), including the general employees’ information security awareness education and training once (for 2 hours), and information security policy publicity and information security awareness test once per month, in order to improve the employees’ response and vigilance to the information security risks.
(II) Any loss suffered due major cyber security incidents from the most recent year up to the publication date of this annual report, possible impact, countermeasures and reasons why a reasonable estimate cannot be made if it cannot be reasonably estimated

The review on the implementation of information security by various units shows that no incident that would endanger the Company’s information security arose in the most recent year and until the date of publication of the annual report.

VII. Important contracts

Nature of contract	Party involved	Starting and final date of the contract	Major contents	Restrictive terms
Overseas Investment and loan contracts	The Export–	June 17, 2019~June 17, 2026	Investment in the shares of Camtek Ltd., Israel	None
	Import Bank of
	the Republic of
	China
Joint construction contract	Fuyu Construction Co., Ltd.	September 25, 2019~ September 25, 2023	The Company provided two pieces of land with No. 61 and No. 61-1 in Lejie Section, Guishan District, Taoyuan, covering an area of 15,608.13 square meters (approximately 4,721.46 pings). It cooperated with Fuyu Construction for a residential building. The distribution ratio of joint construction is 47% for the Company and 53%for Fuyu Construction.	None
Property lease contract	ADLINK Technology Inc.	April 1, 2021~March 31, 2026	After the Company sold the old plant in Huaya Park and handover to ADLINK, we rented 4,004 pings from ADLINK. The monthly rent is NT$2,902,900. The lease term is5 years.	None
Construction Procurement Contract	Best Giving Construction Corporation	December 28, 2022, to the project acceptance date.	The Company’s 2nd-phase factory and office premises construction contract was awarded to Best Giving Construction Corporation. The total contract amount is NT$2,042,250,000 (after tax), and the construction period is estimated as 1135 calendar days.	None

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Chapter 6 Financial summary

I. Condensed balance sheet and statement of comprehensive income in the five most recent years

1. Condensed consolidated balance sheet and statement of comprehensive income – IFRS

Unit: In thousands of NT$

Year Item	Year Item	Financial information of the 5 most recent years	Financial information of the 5 most recent years	Financial information of the 5 most recent years	Financial information of the 5 most recent years	Financial information of the 5 most recent years	Financial information of the 5 most recent years	Financial information of the 5 most recent years	Financial information of the 5 most recent years	Financial information of the 5 most recent years	Financial information of the 5 most recent years
		2018		2019		2020		2021		2022
Current assets		13,231,273		12,612,242		13,527,839		14,542,591		17,768,376
Property, plant, and equipment		3,389,889		3,221,431		3,156,634		6,096,436		7,018,188
Intangible assets		274,095		268,601		283,580		323,108		311,131
Otherassets		6,307,207		9,334,798		11,160,830		8,583,982		8,731,125
Totalassets		23,202,464		25,437,072		28,128,883		29,546,117		33,828,820
Current liabilities	Before distribution	5,972,513		7,474,187		8,424,952		7,879,488		9,284,067
	Afterdistribution	7,723,085		8,739,187		10,322,127		10,849,488		12,687,243
Non-current liabilities		2,539,602		3,177,425		3,315,238		2,719,171		2,672,072
Total liabilities	Before distribution	8,512,115		10,651,612		11,740,190		10,598,659		11,956,139
	Afterdistribution	10,262,687		11,916,612		13,637,365		13,568,659		15,359,315
Equity attributable to shareholders of the parent company		14,410,020		14,488,761		16,063,223		18,513,911		21,360,708
Capitalstock		4,167,794		4,192,961		4,212,945		4,218,745		4,253,970
Capitalsurplus		3,469,637		3,629,471		4,036,875		4,087,223		4,502,473
Retained earnings	Before distribution	6,795,059		6,875,970		7,929,190		10,166,996		12,295,670
	Afterdistribution	5,044,487		5,610,970		6,032,015		7,196,996		8,892,494
Otherequity		13,244		(187,651)		(82,101)		74,633		339,463
Treasury stock		(35,714)		(35,714)		(33,686)		(33,686)		(30,868)
Non-controlling-interest		280,329		296,699		325,470		433,547		511,973
Equity Total	Before distribution	14,690,349		14,785,460		16,388,693		18,947,458		21,872,681
	After distribution	12,939,777		13,520,460		14,491,518		15,977,458		18,469,505

Item	Year		Financial information of the 5 most recent years
			2018		2019		2020		2021		2022
Operatingincome			16,931,128		13,909,634		15,532,543		17,584,023		22,067,242
Operatingmargin(Note1)			7,458,293		6,580,690		7,544,220		8,450,153		11,357,155
Operating profit andloss			3,039,633		2,059,459		2,797,401		3,074,993		5,039,256
Non-operatingincome and expenses			268,457		279,147		231,606		2,208,853		1,402,212
Profit beforeincome tax			3,308,090		2,338,606		3,029,007		5,283,846		6,441,468
Net income of continuing operations during this period			2,547,179		1,889,476		2,380,957		4,305,315		5,221,558
Loss ofdiscontinued operations			─		─		─		─		─
Net profit (loss)forthe period			2,547,179		1,889,476		2,380,957		4,305,315		5,221,558
Other comprehensive income of the current period (net aftertax)			3,487		(249,805)		78,137		106,234		489,772
Totalcomprehensiveincomeforthe period			2,550,666		1,639,671		2,459,094		4,411,549		5,711,330
Net profit attributable to shareholders of the parent company			2,546,275		1,854,481		2,323,776		4,179,232		5,105,824
Net profit attributable to uncontrolled equity			904		34,995		57,181		126,083		115,734
Total comprehensive income attributable to shareholders ofthe parent company			2,546,584		1,608,601		2,412,798		4,294,625		5,563,563
Total comprehensive income or loss attributable to uncontrolled equity			4,082		31,070		46,296		116,924		147,767
Earningsper share(NT$)			6.22		4.48		5.56		9.96		12.14

Note 1: It is presented based on the net realized operating gross profit after deducting the unrealized operating gross profit. Note 2: On February 23, 2022, the Board of Directors proposed the earnings distribution plan and cash dividend for the shareholders for FY2021 of NT$2,970,000,000

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2. Individual balance sheet and comprehensive income or loss sheet - International Financial Reporting Standards

Unit: In thousands of NT$

		Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$	Unit: In thousands of NT$
okYear Item		Financial information of the 5 most recentyears
		2018	2019	2020	2021	2022
Current assets		6,640,159	6,544,302	6,852,858	7,471,189	10,034,843
Property, plant, and equipment		2,493,620	2,406,545	2,352,493	5,325,381	6,172,221
Intangible assets		94,424	94,424	113,588	149,251	133,978
Otherassets		10,098,682	12,757,869	15,087,123	12,422,739	12,891,835
Totalassets		19,326,885	21,803,140	24,406,062	25,368,560	29,232,877
Current liabilities	Before distribution	2,551,737	4,347,102	5,286,457	4,511,048	5,619,320
	Afterdistribution	4,302,633	5,612,102	7,183,632	7,481,048	9,022,496
Non-currentliabilities		2,365,128	2,967,277	3,056,382	2,343,601	2,252,849
Total liabilities	Before distribution	4,916,865	7,314,379	8,342,839	6,854,649	7,872,169
	Afterdistribution	6,667,761	8,579,379	10,240,014	9,824,649	11,275,345
Equity attributable to shareholders of the parent company		14,410,020	14,488,761	16,063,223	18,513,911	21,360,708
Capitalstock		4,167,794	4,192,961	4,212,945	4,218,745	4,253,970
Capitalsurplus		3,469,637	3,629,471	4,036,875	4,087,223	4,502,473
Retained earnings	Before distribution	6,795,059	6,875,970	7,929,190	10,166,996	12,295,670
	Afterdistribution	5,044,163	5,610,970	6,032,015	7,196,996	8,892,494
Otherequity		13,244	(187,651)	(82,101)	74,633	339,463
Treasury stock		(35,714)	(35,714)	(33,686)	(33,686)	(30,868)
Non-controlling-interest		─	─	─	─	─
Equity Total	Before distribution	14,410,020	14,488,761	16,063,223	18,513,911	21,360,708
	After distribution	12,659,124	13,223,761	14,166,048	15,543,911	17,957,532

Year Item	Financial informationofthemostrecentfive years	Financial informationofthemostrecentfive years	Financial informationofthemostrecentfive years	Financial informationofthemostrecentfive years	Financial informationofthemostrecentfive years
	2018	2019	2020	2021	2022
Operatingincome	7,546,840	8,111,033	9,180,240	10,308,453	13,461,024
Operatingmargin(Note1)	3,916,720	4,092,554	4,866,948	5,418,461	6,992,935
Operating profit andloss	1,514,112	1,690,390	2,260,437	2,446,302	3,341,036
Non-operatingincome and expenses	1,414,496	459,985	534,543	2,499,108	2,559,337
Profit beforeincome tax	2,928,608	2,150,375	2,794,980	4,945,410	5,900,373
Net income of continuing operations during this period	2,546,275	1,854,481	2,323,776	4,179,232	5,105,824
Loss ofdiscontinued operations	─	─	─	─	─
Net profit ofthis period	2,546,275	1,854,481	2,323,776	4,179,232	5,105,824
Other comprehensive income or loss (net value aftertax)inthis period	309	(245,880)	89,022	115,393	457,739
Totalcomprehensiveincomeforthe period	2,546,584	1,608,601	2,412,798	4,294,625	5,563,563
Net profit attributable to shareholders of the parent company	2,546,275	1,854,481	2,323,776	4,179,232	5,105,824
Net profit attributable to uncontrolled equity	─	─	─	─	─
Total comprehensive income attributable to shareholders ofthe parent company	2,546,584	1,608,601	2,412,798	4,294,625	5,563,563
Total comprehensive income or loss attributable to uncontrolled equity	─	─	─	─	─
Earningsper share(NT$)	6.22	4.48	5.56	9.96	12.14

Note 1: It is presented as the realized operating gross profit after deducting the unrealized interests of subsidiaries and associates.

Note 2: On February 23, 2023, the Board of Directors proposed the earnings distribution plan and cash dividend for the shareholders for FY2022 of NT$3,403,176,296.

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Names of the CPAs and audit opinions for the past five years

(1) Name of the attesting CPAs for the 5 most recent years and audit opinions

Year	Accountingfirm	Name of the CPA	Audit opinions
2018	Deloitte & Touche	Cheng-Ming Lee, Wen- Chi Kuo	Unqualified opinion
2019	Deloitte & Touche	Cheng-Ming Lee, Wen- Chi Kuo	Unqualified opinion
2020	Deloitte & Touche	Cheng-Ming Lee, Wen- Chi Kuo	Unqualified opinion
2021	Deloitte & Touche	Wen-Chin Lin, Chien- LiangLiu	Unqualified opinion
2022	Deloitte & Touche	Wen-Chin Lin, Chien- LiangLiu	Unqualified opinion

(2) Accounting firms, former and successor CPAs, and reasons for the replacement for any replacement of CPAs in the 5 most recent years
①Reasons for replacing the CPAs in 2021
a. Names of former and successor CPAs:
- Predecessors: CPA Cheng-Ming Lee and CPA Wen-Chi Kuo Successors: CPA Wen-Chin Lin and CPA Chien-Liang Liu
b. Reason for change: To meet the needs of internal adjustment of Deloitte Taiwan
c. Date of occurrence of the fact: April 28, 2021
d. Any disagreement relating to accounting principles or auditing items between the former and successor CPAs: None.
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II. Financial analysis in the five most recent years

1.Consolidated financial analysis - International Financial and Accounting Reporting Standards

Year Item analyzed (Note 2)	Year Item analyzed (Note 2)	Financial analysis for the five most recent years	Financial analysis for the five most recent years	Financial analysis for the five most recent years	Financial analysis for the five most recent years	Financial analysis for the five most recent years
		2018	2019	2020	2021	2022
Financial structure (%)	Liabilityto asset ratio	36.69	41.87	41.74	35.87	35.34
	Long-term capital to property, plant, and equipmentratio	508.27	557.61	624.21	355.40	349.73
Solvency (%)	Current ratio	221.54	168.74	160.57	186.87	191.39
	Quick ratio(%)	163.98	129.77	122.28	133.86	137.28
	Interest coverage ratio	105.13	44.29	52.50	119.11	117.97
Operating ability	Receivables turnover ratio(times)	3.72	2.80	3.17	3.49	4.13
	Average collection days	98	130	115	105	88
	Inventoryturnover rate(times)	2.95	2.59	2.51	2.38	2.28
	Payables turnover ratio(times)	3.45	2.82	3.00	3.18	3.57
	Average sales days	124	141	145	153	160
	Property, plant, and equipment turnover ratio (times)	5.59	4.21	4.87	3.80	3.37
	Total asset turnover ratio(times)	0.75	0.57	0.58	0.61	0.70
Profitability	Return on assets(%)	11.37	7.80	8.85	14.62	16.25
	Return on equity (%)	18.42	12.83	15.21	24.17	25.61
	Ratio of net income before tax to paid-incapital(%)	79.37	55.77	71.90	125.25	151.42
	Profit margin(%)	15.04	13.33	14.96	23.77	23.14
	Earningsper share(NT$)	6.22	4.48	5.56	9.96	12.14
Cash flow	Cash flow ratio(%)	21.19	18.26	32.19	32.89	57.05
	Allowable cash flow ratio(%)	77.28	68.13	65.50	62.77	69.15
	Cash reinvestment ratio(%)	(Note 1)	(Note 1)	9.09	3.39	9.70
Degree of leverages	Degree of operatingleverage(DOL)	1.10	1.22	1.16	1.19	1.14
	Degree of financial leverage(DFL)	1.01	1.03	1.02	1.01	1.01
Please explain the reasons for changes in various financial ratios in the last two years. (analysis is not required if the change is within 20%). The following describes the reason for changes to financial ratios that exceed 20% in the two most recent years: 1. Increase in the ratio of pre-tax profit to paid-in capital was mainly due to an increase in consolidated operation revenue in 2022 by 25% from the same period of 2021 and an increase in the income before tax. 2. Increase in earnings per share: mainly due to the significant growth of consolidated operating revenue in 2022, plus the disposal of investee income and increase in profit for the current period. 3. Increase in cash flow ratio and cash reinvestment ratio: mainly due to an increase in profit before tax and increase in net cash flow from operatingactivities in 2022.

Please explain the reasons for changes in various financial ratios in the last two years. (analysis is not required if the change is within 20%).

The following describes the reason for changes to financial ratios that exceed 20% in the two most recent years: 1. Increase in the ratio of pre-tax profit to paid-in capital was mainly due to an increase in consolidated operation revenue in 2022 by 25% from the same period of 2021 and an increase in the income before tax.

Note 1: Net cash flow from operating activities – since cash dividends are negative, the relevant ratio does not apply.

Note 2: The following lists the formulas used for performing the financial analysis:

Capital structure
(1) Liability to asset ratio = Total liabilities/total assets
(2) Proportion of long-term capital in property, plant, and equipment = (Total equities + non-current liabilities) / (Total net value of property, plant, and equipment).
Solvency
(1) Current ratio = Current assets/Current liabilities.
(2) Quick ratio = (Current asset - inventories)/Current liabilities
(3) Interest coverage ratio = Earnings before interests and taxes (EBIT)/Interest expenses over this period.
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Operating ability
- (1) Receivable (including accounts receivable and notes receivable from business operations) turnover rate = net sales / balance of average accounts receivable for various periods (including accounts receivable and notes receivable from business operations).
- (2) Average collection days = 365/Receivables turnover ratio.
- (3) Inventory turnover rate = Cost of sales / Average inventory value
- (4) Payable turnover rate (including bills payable resulting from accounts payable and business operations) = Cost of goods sold/Average accounts payable in various periods (including bills payable resulting from accounts payable and business operations).
- (5) Average sales days = 365/Inventory turnover ratio.
- (6) Property, plant, and equipment (PP&E) turnover ratio = Net sales / Average value of PP&E
- (7) Total inventory turnover rate = Net sales / Average total asset value.
Profitability
- (1) Return on assets ＝ [Net income after taxes + Interest expense (1– Tax rate)]/Average total assets.
- (2) Return on equity = Net income after taxes/Average total equity.
- (3) Net profit rate = Gain (loss) after tax / Net sales
- (4) Earnings per share = (Net profit (loss) attributable to the owners of the parent company – Preferred dividends) / Weighted average number of shares outstanding.
Cash flow
- (1) Cash flow ratio = Net cash flow of business activities / Current liabilities.
- (2) Net cash flow adequacy ratio = Net cash flow from operating activities for the five most recent years/(Capital expenditure + Inventory increase + Cash dividend) for the most recent five years.
- (3) Cash reinvestment ratio = (Net cash flow from operating activities – Cash dividend)/Gross value of PP&E + Long-term investments + Other non-current assets + Working capital).
Degree of leverages
- (1) Operating leverage = (Net operating revenue - Change in operating costs and operating expenses)/Operating income.
- (2) Degree of financial leverage = Operating income/(Operating income - Interest expenses).
Note 3: The formula listed above for calculating EPS shall take special reminders of the following matters during calculations:
Calculation is made based upon the weighted average of common shares and not the number of issued shares at the end of the year.
Where cash capital increase or transaction of treasury stock is involved, weighted average number of shares shall be calculated by taking into consideration circulation period.
Where recapitalization of retained earnings or recapitalization of Capital surplus is involved, retrospective adjustment shall be made according to the proportion of recapitalization when calculating annual and semiannual earnings per share. There is no need to consider the period of issuance for the said recapitalization.
If the preferred share cannot be converted into cumulative preferred shares, then the dividend of the year (whether it has been issued or not) shall be deducted from net income after tax (NIAT), or included as a net loss after tax. If the preferred share is non-cumulative, dividends for the preferred share shall be deducted from any NIAT resulting from this period. No readjustments would be required for losses.
Note 4: The following items shall be taken note of during cash flow analysis:
Net cash flow of business activities shall refer to the amount of net cash inflow for business activities indicated in the cash flow statement.
Capital expenditure shall refer to cash outflow for annual capital investments.
Inventory increase is only included in the calculation when the ending balance is greater than the beginning balance. Inventory decrease at the end of the year shall be calculated as zero.
Cash dividends include those for common shares as well as preferred shares.
Gross value of property, plants, and equipment (PP&E) refers to the total value of PP&E before deducting accumulated depreciation.
Note 5: The issuer shall categorize operating costs and operating expenses as fixed and variable based on the nature of these items. Where estimates or subjective judgments must be made, care must be taken to ensure their validity and consistency.
Note 6: Where the share of the Corporation has no par value or its par value is not NT$10 per share, the abovementioned ratio of income before tax to paid-in capital shall be replaced with the ratio of income before tax to equity attributable to the owner of the parent company listed in the balance sheet.
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2. Parent company-only financial analysis

Year Itemanalyzed	Year Itemanalyzed	Financial analysis for the five most recentyears	Financial analysis for the five most recentyears	Financial analysis for the five most recentyears	Financial analysis for the five most recentyears	Financial analysis for the five most recentyears
		2018	2019	2020	2021	2022
Financial Structure (%)	Liabilityto asset ratio	25.44	33.55	34.18	27.02	26.93
	Long-term capital to property, plant, and equipmentratio	672.72	725.36	812.74	391.66	382.58
Solvency (%)	Current ratio	260.22	150.54	129.63	165.62	178.58
	Quick ratio (%)	184.01	100.28	84.28	97.54	116.77
	Interest coverage ratio	135.59	61.27	81.22	220.72	200.05
Operating ability	Receivables turnover ratio (times)	2.58	2.69	2.87	3.60	4.38
	Average collection days	141	136	127	101	83
	Inventoryturnover rate (times)	1.75	1.82	1.79	1.63	1.78
	Payables turnover ratio (times)	3.01	3.54	3.83	3.76	4.06
	Average sales days	209	201	204	224	205
	Property, plant, and equipment turnover ratio(times)	3.52	3.31	3.86	2.69	2.34
	Total asset turnover ratio (times)	0.40	0.39	0.40	0.41	0.49
Profitability	Return on assets (%)	13.53	9.16	10.18	16.86	18.79
	Return on equity(%)	18.42	12.83	15.21	24.17	25.61
	Ratio of net income before tax topaid-in capital(%)	70.27	51.29	66.34	117.22	138.70
	Profit margin (%)	33.74	22.86	25.31	40.54	37.93
	Earningsper share (NT$)	6.22	4.48	5.56	9.96	12.14
Cash flow	Cash flow ratio (%)	71.13	35.36	38.75	45.01	63.90
	Allowable cash flow ratio (%)	63.58	59.71	57.38	52.29	64.33
	Cash reinvestment ratio (%)	(Note)	(Note)	5.44	0.73	2.81
Degree of leverages	Degree of operating leverage (DOL)	1.12	1.16	1.08	1.19	1.24
	Degree of financial leverage (DFL)	1.01	1.02	1.02	1.01	1.01
Please explain the reasons for changes in various financial ratios in the last two years. (analysis is not required if the change is within 20%). The following describes the reason for changes to financial ratios that exceed 20% in the most recent two years: 1. Increase in quick ratio: Mainly due to the increase in cash of current assets and the increase accounts receivable. 2. Increase in receivables turnover ratio (times): Mainly due to the year-over-year growth in operating revenue in 2022 and good collection results. 3. The increase in total asset turnover ratio: mainly due to the increase in operating revenue in 2022. 4. Increase in earnings per share: mainly due to the significant growth of operating revenue in 2022, plus the disposal of investee income and increase in profit for the current period. 5. Increase in cash flow ratio, cash flow adequacy ratio, and cash reinvestment ratio: mainly due to the increase in net cash inflow from operatingactivities.

Note: Net cash flow from operating activities - since cash dividends are negative, the relevant ratio does not apply.

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III. Audit Committee’s audit report on financial statements in the most recent year

CHROMA ATE INC

Audit Committee’s Audit Report

The Board of Directors has prepared the Company’s 2022 Business Report, consolidated and parent company-only financial statements,

and proposal for allocation of earnings. The CPAs, Wen-Chin Lin and Chien-Liang Liu, of Deloitte Taiwan have audited the consolidated and parent company-only financial statements and have issued an audit report relating thereto. The list of all books opened was reviewed by the Audit Committee and it was considered that there were no discrepancies. The Audit Committee submitted the report in accordance with Article 14-4 of the Securities and Exchange Act and

Article 219 of the Company Act accordingly.

To CHROMA ATE INC 2023 Annual General Meeting

Audit committee convener: Steven Wu

March 1, 2023

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IV. Financial statements in the most recent year: Please refer to Page 116~189 of this report.
V. The Company’s parent company-only financial statements audited and attested by the CPA in the most recent year: Please refer to Page 190~255 of this report.
VI. Any financial difficulties experienced by the Company and its affiliated companies during the most recent year up to the publication date of this annual report as well as the impact of the said difficulties on the financial condition of the Company: None.
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Chapter 7 Review, analysis, and risks of financial position and performance

I. Financial condition

Comparative analysis of financial conditions

Financial condition Comparative analysis of	financial conditions

Year			Difference
	December 31, 2022	December 31, 2021
Item			Amount	%

Current assets	17,768,376	14,542,591	3,225,785	22%
Property, plant, and
	7,018,188	6,096,436	921,752	15%
equipment

Investmentproperty	2,478,333	3,137,187	(658,854)	(21%)
Intangible assets	311,131	323,108	(11,977)	(4%)
Other assets	6,252,792	5,446,795	805,997	15%
Total assets	33,828,820	29,546,117	4,282,703	14%
Current liabilities	9,284,067	7,879,488	1,404,579	18%
Non-current liabilities	2,672,072	2,719,171	(47,099)	(2%)
Total liabilities	11,956,139	10,598,659	1,357,480	13%
Capital stock	4,253,970	4,218,745	35,225	1%
Capital surplus	4,502,473	4,087,223	415,250	10%
Retained earnings	12,295,670	10,166,996	2,128,674	21%
Other equity	339,463	74,633	264,830	355%
Treasurystock	(30,868)	(33,686)	2,818	(8%)
Non-controlling-
	511,973	433,547	78,426	18%
interest

Total stockholders’
	21,872,681	18,947,458	2,925,223	15%
equity

1. Major reasons and impact of any material change to the Corporation’s assets, liabilities, or equity in the two most recent years: (analysis of changes whose percentage exceeds 20%, and whose amount reaches NT$10 million shall be provided) (1) Increase in current assets: mainly due to the increase in cash and inventory in 2022. (2) Decrease in investment property: mainly due to the defined investment property transferred into property, plants, and equipment in 2022. (3) Increase in retained earnings: mainly due to the growth of operating revenue and increase in earnings in 2022. (4) Increase in other equity: mainly due to the increase in unrealized gain or loss on translation of foreign financial statements. 2. Future response plan: These changes were considered part of normal business operations, and would not lead to severe negative impacts upon the overall financial operations of the Companyand its subsidiaries.

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II. Financial performance

Financial performance analysis

II. Financial performance Financial performance analysis
			Units: Thousand NT$;%
Year Item	2022	2021	Amount of changes	Proportion of changes (%)
Operating income	22,067,242	17,584,023	4,483,219	25%
Operating gross profit (note)	11,357,155	8,450,153	2,907,002	34%
Net operating profit	5,039,256	3,074,993	1,964,263	64%
Non-operating income and expenses	1,402,212	2,208,853	(806,641)	(37%)
Profit before income tax	6,441,468	5,283,846	1,157,622	22%
Net profit of this period	5,221,558	4,305,315	916,243	21%
Other comprehensive income (loss) for the year	489,772	106,234	383,538	361%
Total comprehensive income for the period	5,711,330	4,411,549	1,299,781	29%
Net profit attributable to shareholders of the parent company	5,105,824	4,179,232	926,592	22%
Total comprehensive income attributable to shareholders ofthe parent company	5,563,563	4,294,625	1,268,938	30%
1. Major reasons and impact of any material change to the Company’s			operating revenue, operating
profit, and earnings before tax (EBT) in the two most recent years: (analysis of changes whose
percentage exceeds 20%, and whose amount reaches NT$10 million shall be provided)

(1) Increase in operating revenue, gross profit, and net operating profit: The operating revenue amounted to NT$22.067 billion, a YoY 25% increase, in 2022, mainly due to the growth of the sales of semiconductor testing and automated testing equipment, and significant increase in gross profit and net operating profit.
(2) Decrease in non-operating revenue and expenses: mainly due to the sale of the Huaya plant in 2021, for which the proceeds from disposal were recognized, thereby resulting in a significant increase in non-operating revenue.
(3) Increase in net profit before tax, net profit for the period, total comprehensive income for the period, net profit attributable to the owners of the parent company, and total comprehensive income attributable to the owners of the parent company: Mainly due to the growth of operating revenue in 2022, for which the proceeds from disposal were recognized, thereby resulting in a significant increase in current profit.
(4) Increase in other comprehensive income for the period: mainly due to the increase in the share of other comprehensive income of affiliates and joint ventures accounted for using the equity method and the increase in gains or losses on translation of foreign financial statements.
1. Expected sales volume and relevant data, possible impact on the Company’s financial operations, and response plans: Looking forward to 2023, the global epidemic is becoming sluggish, but the consumer market downturn remains. Manufacturers need time to process and adjust their inventory. Given this, the Company takes appropriate actions to respond to the short supply of materials proactively and prepares sufficient production capacity to satisfy customers needs. Meanwhile, the Company accelerates the development of Test Turnkey Solutions needed by the advanced semiconductor front-office/back-office processes and also strives to increase its world-class customers in the 1st Tier, hoping to seize the business opportunity derived from the economic recovery and continue to create growth in operating revenue.

Note: It is presented on the basis of realized net operating gross profit.

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III. Cash flow

Cash liquidity analysis

(I) Analysis and explanations of changes in cash flow in the most recent year

Unit: In thousands of NT$

Opening cash balance	Net cash inflow resulting from business activities throughout the year	Total net cash inflow (outflow) from investing and financing activities in the year (Note)	Cash surplus (shortfall)	Remedial measures for cash inadequacy	Remedial measures for cash inadequacy
				Investment plan	Financing plan
3,088,158	5,296,701	(2,443,347)	5,941,512	─	─
Note:Including net cash inflow from investing activities of NT$901,614,000, net cash outflow from financing activities of NT$3,471,076,000 and exchange rate effects of NT$126,115,000. 1. Analysis of changes in cash flow in the most recent year: (1) Operating activities: Net cash inflow from operating activities in 2022 was NT$5,296,701,000, mainly from operating profit. (2) Investing activities: The net cash inflow from investing activities in 2022 was NT$901,614,000, which was mainly due to the cash inflow from disposal of the financial assets measured at amortized cost and cash inflow from investments accounted for using equity method. (3) Financing activities: The net cash outflow from financing activities in 2022 was NT$3,471,076,000, which was mainly due to the cash outflow from payment of cash dividends. 2. Remedial measures and liquidityanalysis for cash inadequacy: Not applicable.

(II) Analysis of cash liquidity for the following year

(II) Analysis of cash liquidity for the following year	(II) Analysis of cash liquidity for the following year	(II) Analysis of cash liquidity for the following year	(II) Analysis of cash liquidity for the following year
				Unit: In thousands of NT$
Opening cash balance	Expected net cash inflow resulting from business activities throughout the year	Expected total net cash inflow (outflow) from investment and capitalization activities throughout theyear	Expected sum of cash surplus (inadequacy)	Remedial measures for expected cash inadequacy
				Investment plan	Financing plan
5,941,512	3,674,514	(4,843,347)	4,772,679	─	─
1. Analysis of changes to cash flow in the most recent year (1) Operating activities: It mainly refers to cash inflow generated by business profits. (2) Investing activities: Cash outflow from the payment for the second phase of new construction and equity investment. (3) Financing activities: mainly the cash outflow of expected cash dividends and the cash inflow of bank borrowings. 2. Remedial measures and liquidityanalysis for expected cash shortfall: Not applicable.

IV. Impact of material expenditures on the Corporation’s finances and operations in the most recent year

In response to the expiration of the lease of the Huaya plant in March 2026, the need for relocation of the Huaya plant occupying an area of 4500 pings, and the demand for future growth, the Company’s Board of Directors resolved on October 31, 2022 to construct the A7 Plant 2 by engaging others to build on its own land. The project is scheduled to be completed in December 2025.

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V. Investment policies in other companies, the main reasons for profit/losses, improvement plan, and investment plans for the upcoming year

(I) Investment policy: reinvestment in accordance with the Company’s operational needs and consideration of future development strategies and other factors.
(II) The profit from investment recognized under the equity method in 2022 was NT$1,728,947,000. The Company’s investments under the equity method were all for the purpose of long-term strategic investment.
(III) Investment plan for the coming year: To increase capital in the existing investment business and to invest in companies with unique technology to ensure the leading key technology and to maintain the company’s competitive advantage and growth.

VI. Risk analysis and assessment of the most recent year up to the publication date of this annual report

(I) Changes to interest rates, currency exchange fluctuations, and inflation and how these may impact the Corporation penetrate loss as well as future response measures
Changes to interest rates and the resulting impact on the Corporation’s gain or loss as well as future response measures
- (1) Changes to interest rates and impact on the gain or loss of the Corporation and its subsidiaries

Unit: In thousands of NT$

Item/Year	2021	2022
Interest expense	44,738	55,068
Net operatingrevenue	17,584,023	22,067,242
Operating profit	3,074,993	5,039,256
Interest expense/Operatingrevenue (%)	0.25	0.25
Interest expense/Operating profit(%)	1.45	1.09

The Company and its subsidiaries’ 2021 and 2022 interest expenses were NT$44,738,000 and NT$55,068,000, respectively. Their interest expenditures accounted for 1.45% and 1.09% of operating profit, respectively. The changes have a co-related impact on the Company’s and subsidiaries’ profit and loss.

(2) Future countermeasures
- The Corporation and its subsidiaries have been carrying out capital planning based on the principle of stability and conservativeness, and focus primarily on safety and liquidity. Finance personnel of the Group maintains close contact with its financial institutions, pays attention to the trends and changes in market interest rates at all times, negotiates interest rates with various banks, and actively reduces the cost of working capital to reduce the impact of interest rate fluctuations on the Company’s profitability.
Currency exchange fluctuations and the resulting impact on the Corporation’s gain or loss as well as future response measures
(1) Currency exchange fluctuations and the resulting impact on the gain or loss of the Company and its subsidiaries

Unit: In thousands of NT$

Item/Year	2021	2022
Netprofit(loss)on exchange	(54,773)	263,216
Net operatingrevenue	17,584,023	22,067,242
Operating profit	3,074,993	5,039,256
Profit before income tax	5,283,846	6,441,468
Ratio of net profit (loss) on exchange net to operating revenue(%)	(0.31)	1.19

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Item/Year	2021	2022
Ratio of net profit (loss) on exchange to operating profit (%)	(1.78)	5.22
Ratio of net profit (loss) on exchange to earnings before tax(EBT) (%)	(1.04)	4.09

The Company and its subsidiaries have accounts receivable and accounts payable denominated in USD, therefore, changes in USD exchange rates are correlated with changes in foreign exchange gains and losses of the Company and its subsidiaries. For 2021 and 2022, the exchange gain (loss) amounted to NT$(54,773,000) and NT$263,216,000, respectively, and the ratio of exchange loss to net profit before tax was (1.04)% and 4.09%, respectively.

(2) Future countermeasures

In response to the risk of exchange rate changes, the Company and its subsidiaries directly offset foreign currency payables and foreign currency short-term bank borrowings arising from purchases of increased foreign currency receivables directly through U.S. dollar transactions to achieve the effect of natural hedging; also, financial units and financial institutions maintain close contact, collect exchange rate information daily, grasp exchange rate trends and changes, and adjust foreign currency positions promptly to reduce the impact of exchange rate fluctuations on the Company’s profit and loss.

Inflation and its impact on this Corporation’s gain or loss as well as future response measures
(1) Inflation and its impact on the gain or loss of the Company and its subsidiaries

The Company and its subsidiaries have not been affected by inflation severe enough to result in a major impact on the gains or losses to the Company and its subsidiaries during the period of the most recent year to the publication date of this report.

(2) Future countermeasures

The Company and its subsidiaries are minimally affected by inflation, but will continue to monitor changes in the prices of upstream and downstream products to reduce its impact on their gains or losses as a result of cost changes.

(II) Policies on high risk, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives trading, main reasons for the profits or losses generated thereby, and future response measures to be undertaken.
Main reasons for engaging in high risk, highly leveraged investments and future response measures
- (1) Main reasons for engaging in high risk, highly leveraged investments

The Company and its subsidiaries have not engaged in any high risk, highly leveraged investment from the most recent year to the publication date of this report.

(2) Future countermeasures

The Corporation and its subsidiaries are focused upon specialized businesses and adopt a conservative and stable financial operation by principle. No capital is applied for high risk, highly leveraged investments.

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Loans to other parties, endorsements, and guarantees
(1) Reasons for providing loans to other parties, endorsements, and guarantees

The Company and its subsidiaries are engaged in fund loans and endorsement guarantees based on the principle that there are business contacts or associates. The fund loan and interest rates are higher than the Company and its subsidiaries’ short-term borrowing rates from financial institutions.

(2) Future countermeasures

The Company has stipulated Provision of Financial Loans to Other Parties as well as Endorsement and Guarantee Operations Procedure and refer to the relevant provisions to provide relevant public disclosures.

Policies on derivatives trading, major reasons for profits or losses as well as future response measures
(1) Policies when engaging in derivatives trading and major reasons for profits or losses

All derivatives trading engaged by the Corporation and its subsidiaries include hedging of foreign exchange risks generated by the assets or liabilities. No derivatives trading have been implemented in the most recent fiscal year up to the publication date of this annual report.

(2) Future countermeasures

This Corporation and its subsidiaries shall adopt a conservative business principle and seek stable growth, and shall continue to assess impacts to profits or losses resulting from exchange rate fluctuations. To manage transaction risks, the Corporation and its subsidiaries shall refer to regulations prescribed in the Procedures for Handling Derivatives Trading, activate foreign exchange risk avoidance tools, and avoid improper and high risk transactions.

(III) Future R&D plans and expected R&D investments

R&D plans	Current progress	Expected completion time	Additional investments required
EV/EVSE AC and DC charging test system	Concept planning phase	2023/Q3	NT$10 million
Fuel battery power test system	Concept planning phase	2023/Q2	NT$10 million
Next generation power energy product key parts micro-defect variationdetectionsystem	Design planning phase	2023/Q3	NT$20 million
Partial discharge detector for key parts ofelectric vehicles	Design verification phase	2023/Q4	NT$10 million
GHz LCR tester	Design verification phase	2023/Q4	NT$10 million
Next Laboratory-level high-precision vehicle power battery test system	Design verification phase	2023/Q4	NT$20 million
High performance Electrical Motor Emulator	Design verification phase	2023/Q4	NT$20 million
Next Generation Dual-axle Dynamometer	Design verification phase	2023/Q4	NT$20 million
Next Generation Power HIL Testbed for EVKey componentsTesting	Design verification phase	2023/Q4	NT$20 million
Energy recycling battery module charge and discharge tester	Design verification phase	2023/Q4	NT$20 million
New generation automotive display video test generator	Design planning phase	2023/Q4	NT$12 million

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High performance Battery cell series charge Formation System	Design verification phase	2023/Q4	NT$20 million
Energy Recycling and high power density DC Load	Design verification phase	2023/Q2	NT$10 million
1U 3-channels high power density DC Source Next generation bi- direction and high power density DC Source	Design planning phase	2023/Q4	NT$10 million
Bi-directional high power density DC Source Next generation bi-direction andhighpowerdensityDC Source	Design verification phase	2023/Q3	NT$15 million

(IV) Changes to local and overseas policies and laws that impact the Corporation’s financial operations, and response measures

No changes to local and overseas policies and laws have resulted in major impact to the financial operations of The Company and its subsidiaries.

(V) Changes to technology (including cyber security risks) and industry that impact the Company’s financial operations and response measures

Given the complicated information architecture and application systems, in order to prevent and protect possible vulnerabilities and attacks, and avoid the damage caused by such attacks, the Company will practice the related information security management policy and also continue implementing related enhanced protection technology in the annual plan, in response to the changes in the cyber security risk.

For the industry-related technological changes, the Company will respond to technological changes in the industry by developing testing solutions in the areas of High Performance Computing (HPC) chips, 5G, AIoT, biometric 3D sensors, electric vehicles, green technology, and the AR/VR headset metaverse to seize business opportunities and align with the market pulse to meet future growth and market demands. In order to keep pace with the changes in the product market and the needs of customers, we continue to develop new technologies and effectively use our capital to align with the trend of product development, so as to enhance the ability of advanced technology to maintain the competitiveness of the Company and control the impact on the Company’s finance and operations

(VI) Changes to corporate image that impact the Corporation’s risk management, and response measures

The Company and its subsidiaries enjoy good business images and would not be subject to changes that negatively affect their corporate images.

(VII) Expected benefits and possible risks of mergers and response measures

In consideration of the enhancement to the Company’s product strategy and competitiveness, the Company’s Board of Directors approved a resolution in January 2022 to invest in ENVIRONMENTAL STRESS SYSTEMS, INC., and acquire 100% of the equity. ESS is a supplier of Thermal Platforms, Space Simulation, Cascade Condensers, and Liquid Recirculating Chillers with high power and very low temperature cooling technology to meet the needs of emerging applications. The combination of its technology capabilities and the Company’s products will expand the market for semiconductor test applications such as aerospace, electric/self-driving vehicles, 5G, AIoT, and biomedical testing equipment, which will contribute to future growth.

(VIII) Expected benefits and possible risks of expanding factory buildings and response risks

Factory building expansions allow the Company and its subsidiaries to increase its productivity, gain the ability to receive more purchase orders, improve revenue and profitability, and increase market share. Factory building expansion undertaken by the Company and its subsidiaries have been carefully reviewed to ensure that customers’ requirements are met while achieving optimal use of corporate capital.

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(IX) Risks resulting from the consolidation of purchasing or sales operations and response measures
Purchasing risks

The purchase by the Company and its subsidiaries from Changzhou Precision Test New Energy Company, which was the main supplier of the Company’s subsidiary, Chroma ATE (Suzhou) Co., Ltd., accounted for 13.34% in 2022, primarily due to the increase in the amount of sale projects and relative increase in the amount of purchasing in 2022.

The amount of purchases made from various suppliers by the Corporation and its subsidiaries may increase or decrease in response to changes in profitability of relevant products. Given the large variety of raw materials and components needed by the Corporation and its subsidiaries to produce their products, all local and overseas purchases are handled by a single purchasing unit. Where possible, two or more suppliers are selected to ensure supplier replaceability, acquire competitive pricing, spread purchasing risks, achieve reasonable cost reductions, and provide better services. Also, The Corporation and its subsidiaries have established positive partnerships with external suppliers to eliminate any concerns of material shortage. Material preparation for automated conveying and engineering equipment of The Company and its subsidiaries would only be initiated after receiving a purchase order to establish inventory levels for raw materials. Positive relationships have been established with upstream suppliers to reduce purchasing risks. The Company and its subsidiaries have been cooperating with major suppliers for a long period of time and there is a good understanding of cooperation between the two parties, and no significant abnormalities are found.

Sales risks

The revenue generated by the Company form its largest customer in 2022 accounted for 16.77% of the consolidated company’s total revenue in the same year, primarily because the market demand for new energy vehicles in China has increased significantly, the customers expanded their production lines and thereby drove the increase in the sales.

The Corporation and its subsidiaries offer a large variety of product categories. Product sales were mainly based upon the state of the industry, customer requirements, as well as changes to marketing strategies adopted by The Corporation and its subsidiaries. Hence, The Corporation and its subsidiaries are actively developing new customers to achieve business stability and growth. Currently, most customers were listed corporations or renowned corporations in Taiwan and other countries.

(X) Impacts, risks, and response measures resulting from major equity transfer or replacement of directors, supervisors, or shareholders holding more than 10% of the Company’s shares In 2022 and as of the publication date of the annual report, the company and its
subsidiaries did not have directors, supervisors, or major shareholders holding more than 10% of the shares transferred or replaced in large quantities.
(XI) Impact, risk, and response measures related to any change in governance rights in the Company

The Corporation and its subsidiaries did not undertake any major change to its governance team and did not undertake any major change to business strategies or guidelines. Hence, The Corporation and its subsidiaries did not experience any changes in their governance rights.

(XII) If there has been any substantial impact upon shareholders’ equity or prices for the Company’s securities as a result of any litigation, non-litigious proceeding, or administrative dispute involving the Company that was finalized or remained pending,
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the facts in dispute, amount in dispute, commencement date, main parties involved, and current status of the case up to the publication date of this annual report shall be disclosed

MAS Automation Corp., (MAS), a subsidiary of the Company, entered into an equipment sale and purchase agreement with Linco Technology Co., Ltd., (Linco) in 2017 to manufacture a set of equipment entrusted by MAS. Still, Linco did not deliver a large number of critical parts and refused to cooperate during the installation. MAS, therefore, claimed a default payment of NT$2,503,659,000 (approximately US$83,455,000) against Linco for the delay. On November 12, 2018, MAS filed a lawsuit against NT$440,000,000 and reserved the right to seek future compensation for the remaining amount. In order to protect the rights and interests of MAS Automation, it filed a NT$440,000,000 suit as well as a provisional attachment against Linco. However, Linco claimed that MAS Automation owed the balance of the contract and breached its commitments. On October 30, 2019, it filed a lawsuit against MAS Automation for compensation of NT$255,640,000 (approximately USD 8.24 million) and its interest. The dispute settlement procedure has been carried out, and is in the discovery stage. This case has not yet been closed. Linco also requested that MAS Automation compensate Linco for at least NT$505,521,000 in losses due to the provisional attachment against Linco. The case was heard by the Taichung District Court, Taichung Branch of the Taiwan High Court and Supreme Court. In the end, the courts’ judgment in favor of MAS Automation became final and irrevocable.

(XIII) Other material risks and response measures

Organizational context and risk management
(1) Risk management organization: The highest-ranking officers at various business units and centers are responsible for promoting organizational context and stakeholder needs and expectation analyses, risk identification, and assessment, as well as handling and communicating organizational context and stakeholder needs and expectation analyses.
(2) Information Security Risk Management and Response Measures (On-going Operation Risk Management and Response Measures)

To protect research and development assets and ensure data security, the information security management office is responsible for formulating information security policies and management operations and reporting information security implementation to the management supervisor every month.

The Information Security Management Office plans a high-availability remote backup mechanism based on the risk level of the information system architecture to ensure that important information system services are not interrupted and uses a backup mechanism to store important data in remote locations.

The Information Security Management Office constantly follows the latest security threats. Every year, the Office analyzes organizational context and risk management, carries out design planning, and increases appropriate software and hardware equipment resources based on risk level, in order to improve response measures such as operating procedures.

With regard to abnormal disasters that may happen to equipment and host machines in machine rooms, the Corporation monitors the environment of machine rooms regularly, and conducts various simulation tests and emergency drills in machine rooms in order to ensure the normal operation of various facilities and information systems in machine rooms, to prevent the risks of various disasters or human errors without warning.

VII. Other important matters: None

108 -

Chapter 8 Special Notes

I. Information on affiliated companies

(I) Consolidated business report

As of December 31, 2022

1.Affiliated companies’ organizational chart

Chroma ATE Europe B.V. Shareholding percentage: 100% Chroma Investment Co., Ltd. Shareholding percentage: 100% MAS Automation Corp., shareholding percentage: 100% San Eagle Development Corp., shareholding percentage: 100% Chroma Japan Corp. Shareholding percentage: 100% Chen Hwa Technology Inc. Shareholding percentage: 100% Testar Electronic Corporation Shareholding percentage: 67.2% Sensational Holdings Ltd. Shareholding percentage: 100% CHI Incorporation Ltd. Shareholding percentage: 100% Deep Red Holding Co., Ltd Shareholding percentage: 100% Adivic Technology Co. Shareholding percentage: 74.1% EVT Technology Co., Ltd. Shareholding percentage: 85.6% Chroma Systems Solutions, Inc., Shareholding percentage: 25% Neworld Electronics Limited Shareholding percentage: 100% Chroma ATE Inc. Shareholding percentage: 100% Quantel Private Ltd. Shareholding percentage: 60% Innovative Nanotech Incorporated shareholding percentage: 67.2% Touch Cloud Inc. Shareholding percentage: 83.1% Environmental Stress Systems, Inc., Shareholding percentage: 100%	Neworld Electronics Limited Shareholding percentage: 100%		Sajet System Technology (Suzhou) Co., Ltd., shareholding percentage: 100% Chroma (Shanghai) Trading Co., Ltd., shareholding percentage: 100% Wei Kuang Mech Eng Inc. Shareholding percentage: 100% Chroma ATE (Suzhou) Co., Ltd. Shareholding percentage: 100% Shareholding percentage: 50% Chroma Electronics (Shenzhen) Co., Ltd. shareholding percentage: 100% Chroma Electronics (Shanghai) Co., Ltd., shareholding percentage: 100% Quantel Global Vietnam Co., Ltd., shareholding percentage: 100% Quantel Technologies India Private Limited shareholding percentage: 100% Chroma Germany GmbH Shareholding percentage: 100% Quantel Global Sdn. Bhd. Shareholding percentage: 100% Quantel Global Philippines Corporation shareholding percentage: 100% Shareholding percentage: 15% Quantel Global Company Limited shareholding percentage: 99.9%	Sajet System Technology (Suzhou) Co., Ltd., shareholding percentage: 100% Chroma (Shanghai) Trading Co., Ltd., shareholding percentage: 100% Wei Kuang Mech Eng Inc. Shareholding percentage: 100% Chroma ATE (Suzhou) Co., Ltd. Shareholding percentage: 100% Shareholding percentage: 50% Chroma Electronics (Shenzhen) Co., Ltd. shareholding percentage: 100% Chroma Electronics (Shanghai) Co., Ltd., shareholding percentage: 100% Quantel Global Vietnam Co., Ltd., shareholding percentage: 100% Quantel Technologies India Private Limited shareholding percentage: 100% Chroma Germany GmbH Shareholding percentage: 100% Quantel Global Sdn. Bhd. Shareholding percentage: 100% Quantel Global Philippines Corporation shareholding percentage: 100% Shareholding percentage: 15% Quantel Global Company Limited shareholding percentage: 99.9%	Sajet System Technology (Suzhou) Co., Ltd., shareholding percentage: 100% Chroma (Shanghai) Trading Co., Ltd., shareholding percentage: 100% Wei Kuang Mech Eng Inc. Shareholding percentage: 100% Chroma ATE (Suzhou) Co., Ltd. Shareholding percentage: 100% Shareholding percentage: 50% Chroma Electronics (Shenzhen) Co., Ltd. shareholding percentage: 100% Chroma Electronics (Shanghai) Co., Ltd., shareholding percentage: 100% Quantel Global Vietnam Co., Ltd., shareholding percentage: 100% Quantel Technologies India Private Limited shareholding percentage: 100% Chroma Germany GmbH Shareholding percentage: 100% Quantel Global Sdn. Bhd. Shareholding percentage: 100% Quantel Global Philippines Corporation shareholding percentage: 100% Shareholding percentage: 15% Quantel Global Company Limited shareholding percentage: 99.9%	Wei Kuang Automatic Equipment (Nanjin) Co., Ltd., shareholding percentage: 100% Wei Kuang Automatic Equipment (Xiamen) Co., Ltd., shareholding percentage: 100%
	Chroma ATE Inc. Shareholding percentage: 100%


	Chroma ATE Europe B.V. Shareholding percentage: 100%
	Chroma Investment Co., Ltd. Shareholding percentage: 100%


	Chroma Japan Corp. Shareholding percentage: 100%

	Sensational Holdings Ltd. Shareholding percentage: 100%

	Chroma Systems Solutions, Inc., Shareholding percentage: 25%

	Testar Electronic Corporation Shareholding percentage: 67.2%

	CHI Incorporation Ltd. Shareholding percentage: 100%				Chroma ATE (Suzhou) Co., Ltd. Shareholding percentage: 100%

	San Eagle Development Corp., shareholding percentage: 100%				Wei Kuang Mech Eng Inc. Shareholding percentage: 100%

	EVT Technology Co., Ltd. Shareholding percentage: 85.6%
	Quantel Private Ltd. Shareholding percentage: 60%				Quantel Global Vietnam Co., Ltd., shareholding percentage: 100%

	Innovative Nanotech Incorporated shareholding percentage: 67.2%
	Touch Cloud Inc. Shareholding percentage: 83.1%				Quantel Global Sdn. Bhd. Shareholding percentage: 100%

109 -

2. Basic information of various related corporation

December 31, 2022 (Unit: In thousands of NT$ or foreign currency)

Name of enterprise	Date established	Address	Paid-in capital	Primary business or products
Neworld Electronics Limited	1994.02.17	Unit 606, 6F, Shui Hing Centre, No.13, Sheung Yuet Rd.,Kowloon Bay,Kowloon,H.K.	HK$64,013	Sales and service of electronic measurement instruments,etc.
Chroma Electronics (Shenzhen) Co., Ltd.	1998.03.10	8F, No.4, Nanyou Tian An Industrial Estate, Shenzhen, China	HK$30,000	Sales of computerized automation and peripheral equipment as well as electronic measurement instruments
Chroma Electronics (Shanghai) Co., Ltd.	2000.11.10	3F Building 40, No.333, Qin Jiang Rd., Shanghai, China	US$3,000	Sales of computerized automation and peripheral equipment as well as electronic measurement instruments
Chroma ATE Inc.	1993.02.18	7 Chrysler Irvine CA92618	US$1,000	Sales and service of electronic measurement instruments,etc.
Chroma ATE Europe B.V.	1999.09.17	Morsestraat 32,6716 AH Ede, The Netherlands	EUR$45	Sales and service of electronic measurement instruments,etc.
Chroma Germany GmbH	2017.09.04	Südtiroler Str. 9 86165 Augsburg Germany	EUR$30	Sales and service of electronic measurement instruments,etc.
Chroma Investment Co., Ltd.	1997.01.14	15F, No. 88, Wenmao Rd., Guishan Dist., Taoyuan City,Taiwan	NT$140,000	General Investment
Testar Electronic Corporation	2007.03.09	3F, No. 68, Huaya 1st Road, Guishan District, Taoyuan City	NT$300,000	LED test
Sensational Holdings Ltd.	1997.07.11	Citco Buildings P.O. Box 662, Road Town, Tortola, British Virgin Island	US$1,200	General Investment
Chroma Systems Solutions, Inc.	2001.04.01	19772 Pauling, Foothill Ranch, CA 92610	US$5	Sales and service of electronic measurement instruments,etc.
CHI Incorporation Ltd.	1998.04.03	P.O. Box 957 Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands	US$3,830	Inductance, capacitance, and resistance testing and component trading
Chroma ATE (Suzhou) Co., Ltd.	2006.03.15	Building 7, No.855, Zhujiang Rd., Suzhou New District, Jiang Su, China	US$3,800	Sales of computerized automation and peripheral equipment as well as electronic measurement instruments
Chen Hwa Technology Inc.	1998.04.03	P.O. Box 957 Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands	US$3,085	Inductance, capacitance, and resistance testing and component trading
Chroma (Shanghai) Trading Co., Ltd.	2004.01.05	Rm 1102B, Building 1, No.18, Tai Gu Rd., Waigaoqiao Free Trade Zone, Shanghai	US$2,700	International trade, intermediary trade, simple processing for trade purposes, and trade inquiry services.
San Eagle Development Corp.	2006.07.04	Drake Chambers, Road Town, Tortola, British Virgin Islands	US$2,050	General Investment
Wei Kuang Mech. Eng. Inc.	2002.01.10	608 St. James Court, St. Denis Street Port Louis, Mauritius	US$4,475	General Investment
Wei Kuang Automatic Equipment (Nanjin) Co., Ltd.	2005.06.30	128# Keyuan Road, Jiangning District, Nanjing City, China	RMB$11,871	Assembly, sales, and after-sales service of electronic production equipment system and transport system
Wei Kuang Automatic Equipment (Xiamen) Co., Ltd.	2007.02.01	Unit 101 & 102, No. 20, Jinhui Road, Houxi, Jimei District, Xiamen	RMB$11,417	Assembly, sales, and after-sales service of electronic production equipment system and transport system
MAS Automation Corp.	1975.11.26	No.6, Lane 17, Niupu S Rd., Hsinchu City, Taiwan	NT$100,000	Design, manufacturing, installment, and testing of automated conveyor systems
Chroma Japan Corp.	2008.05.30	888 Nippa-cho, Kouhoku-ku, Yokohama-shi, Kanagawa,223-0057 Japan	JPY$99,500	Sales and service of electronic measurement instruments,etc.
Deep Red Holding Co., Ltd.	2004.04.29	2F, Felix House, 24 Dr. Joseph Riviere Street, Port Louis,Republic of Mauritius	US$215	General Investment
Sajet System Technology	2004.08.24	503-1,4th Floor GenwayLOHASTOWN,88	RMB$8,374	R&D and design of computer

110 -

Name of enterprise	Date established	Address	Paid-in capital	Primary business or products
(Suzhou) Co., Ltd.		Building, 999 Xinghu Road, SIP Suzhou		network safety systems and data management systems
Adivic Technology Co.	2009.04.07	9F, No. 88, Wenmao Rd., Guishan Dist., Taoyuan City,Taiwan	NT$170,000	Sale and research RF device
EVT Technology Co., Ltd.	1999.08.19	6F, No. 88, Wenmao Rd., Guishan Dist., Taoyuan City,Taiwan	NT$110,000	Manufacturing of vehicles the Company parts
Quantel Private Ltd.	1989.02.15	25 Kallang Ave #05-02 Singapore 339416	SG$3,190	Sales of testing and measurement instruments,etc.
Quantel Global Vietnam Co., Ltd	2017.01.03	Floor 10, CIC Tower lane 219 Trung Kinh, Yen Hoa, Cau Giay,Hanoi	VND4,526,506	Sales of testing and measurement instruments,etc.
Quantel Technologies India Private Limited	2016.10.05	326, 3rd Floor MGF Metropolis Sector-28 MG Road gurgaon-122002 India	INR6,500	Sales of testing and measurement instruments,etc.
Quantel Global Sdn. Bhd.	2016.07.20	Unit 802, 8th Flr, Blk A Damansara Intan, No. 1 Jalan SS20/27, 47400, Petaling Jaya, Selangor, Malaysia	MYR600	Sales of testing and measurement instruments, etc.
Quantel Global Philippines Corporation	2017.07.24	Unit 2401-2402 The Orient Square Building, F. Ortigas Jr Rd. Ortigas Centre, Pasig City Manila, Philippines 1605	PHP9,910	Sales of testing and measurement instruments, etc.
Quantel Global Company Limited	2016.10.12	5th Flr, 2170 Bangkok Tower, New Petchburi Road, Bangkapi,Huaykwang,Bangkok 10310	THB15,116	Sales of testing and measurement instruments,etc.
Innovative Nanotech Incorporated	2017.08.09	5F, No. 6-2, Du Sing Rd, East District, Hsinchu City, Taiwan	NT$211,640	Nanoparticles monitoring equipment
Touch Cloud Inc.	2016.02.03	10F-4, No.148, Section 4, Zhongxiao East Road, Da’an District,Taipei City,Taiwan 106	NT$132,995	Cloud platform development and IoT system integration
Environmental Stress Systems, Inc.	1989.08.23	20071 Soulsbyville Road, Soulsbyville, CA 95372	USD10	Sale of thermal platform systems

Information of shareholders with corporate governance power while working in the Corporation: None.
Overall business scope of every related corporation

Overall business scope of every related corporation of the Corporation primarily focuses on specialized manufacturing services for measurement instruments. There is also a small number of related corporations that focus on investments in this scope of business. In general, specialization of work amongst related corporations focuses on mutual support in technology, production capacity, sales, and services to maximize synergy so that the Corporation can keep providing the best manufacturing services for professional measurement instruments to customers throughout the world and ensure the Corporation’s leadership in the global market.

111 -
Directors, supervisors, CEO, and general managers of Chroma ATE Inc. and affiliated companies

			December 31, 2022	December 31, 2022
Name of enterprise	Position title	Name or representative	Shares held
			Number of shares	Shareholding percentage
Neworld Electronics Limited	Director	Chroma (representatives: Leo Huang and Ming Chang)	64,012,815 shares	100%
Chroma Electronics (Shenzhen) Co., Ltd.	Director Director Director President	Neworld (representative: Leo Huang) Vincent Chen Emma Chen Leo Huang	(Note 1) - - -	100% - - -
Chroma Electronics (Shanghai) Co., Ltd.	Director Director Director Supervisor President	Neworld (representative: Leo Huang) Paul Ying Vincent Chen Amy Huang Paul Ying	(Note 1) - - - -	100% - - - -
Chroma ATE Inc.	Director Director Director	I-Shih Tseng Cheng Ying Yi-Shen Wang	Chroma holds 1,000,000 shares	100%
Chroma ATE Europe B.V.	Director	Chroma (representatives: David Yang, Paul Ying, and I-Shih Tseng)	1,000 shares	100%
Chroma Germany GmbH	Director	Chroma ATE Europe BV (representative: Cheng Ying)	(Chroma BV holds 30,000 shares)	100%
Chroma Investment Co., Ltd.	Director Supervisor	Chroma (representative: Leo Huang, Paul Ying, Ming Chang) Chroma (representative: Amy Huang)	14,000,000 shares	100%
Testar Electronic Corporation	Director Supervisor President	Chroma (representatives: Leo Huang, I-Shih Tseng, Paul Ying) Amy Huang Chih-Ming Chen	20,159,600 shares 1,000 shares 36,000 shares	67.2% - 0.1%
Sensational Holdings Ltd.	Director	Chroma (representative: Leo Huang)	1,200,000 shares	100%
Chroma Systems Solutions, Inc.	Director Director Director	Fred Joseph Sabatine Cheng Ying Tai-Wei Yang	120,000 shares Chroma holds 120,000 shares CHROMA USA holds 240,000 share	25% 25% 50%
CHI Incorporation Ltd.	Director	Leo Huang	(Chroma holds 3,830,000 shares)	100%
Chroma ATE (Suzhou) Co., Ltd.	Director Director Director Supervisor President	CHI (representative: Leo Huang) Paul Ying Emma Chen Qin Wang Leo Huang	(Note 1) - - - -	100% - - - -
Chen Hwa Technology Inc.	Director	Leo Huang	(Chroma holds 3,085,000 shares)	100%
Chroma (Shanghai) Trading Co., Ltd.	Director	Chen Hwa (representative: Leo Huang)	(Note 1)	100%
San Eagle Development Corp.	Director	Chroma (representative: Leo Huang)	2,050,000 shares	100%
Wei Kuang Mech. Eng. Inc.	Director	San Eagle (representative: Leo Huang)	4,475,000 shares	100%
Wei Kuang Automatic Equipment (Nanjin) Co., Ltd.	Director Director Director	Wei Kuang (representative: Leo Huang) Cf Huang Amy Huang	(Note 1) - -	100% - -
Wei Kuang Automatic Equipment (Xiamen) Co., Ltd.	Director Director Director	Wei Kuang (representative: Leo Huang) Cf Huang Amy Huang	(Note 1) - -	100% - -
MAS Automation Corp.	Director Supervisor President	Chroma (representative: Leo Huang, Cf Huang, I- Shih Tseng) Chroma (representative: Amy Huang) Cf Huang	10,000,000 shares -	100% -
Chroma JapanCorp.	Director	LeoHuang	(Chromaholds 9,975 shares)	100%
Deep Red Holding Co., Ltd	Director	Leo Huang	(Chroma holds 215,000 shares)	100%
Sajet System Technology (Suzhou) Co., Ltd.	Director Director Director Supervisor President	Deep Red Holding (representative: Arno Wu) Emma Chen Paul Ying Amy Huang Arno Wu	(Note 1) - - - -	100% - - - -
Adivic Technology Co.	Director	Chroma (representative: I-Shih Tseng, Leo	12,590,000 shares	74.1%

112 -

Name of enterprise	Position title	Name or representative	Shares held
			Number of shares	Shareholding percentage
	Director Supervisor	Huang) AIT group (representative: Michael Sheu) Amy Huang	4,410,000 shares -	25.9% -
EVT Technology Co., Ltd.	Director Director Director Supervisor President	Leo Huang Joey Chang Tsun-I Wang Chroma (representative: Paul Ying) Leo Huang	54,023 shares 1,339 shares 34,838 shares 9,412,412 shares 54,023 shares	0.5% - 0.3% 85.6% 0.5%
Quantel Private Ltd.	Director Director	Chroma (representative: Leo Huang, Paul Ying) Yip Hin Lay	1,914,000 shares 1,276,000 shares	60% 40%
Quantel Global Vietnam Co., Ltd	Director Director	Yip Hin Lay PhanSyDung	Quantel Private holds 100%	100%
Quantel Technologies India Private Limited	Director Director Director	Yip Hin Lay Vijay Devaraj Ms.Mitra Gulgulia	Quantel Private holds 64,999 shares	100%
Quantel Global Sdn. Bhd.	Director Director	Yip Hin Lay Teoh Ching Tatt	Quantel Private holds 600,000 shares	100%
Quantel Global Philippines Corporation	Director Director Director	Yip Hin Lay Yeo Hwee Peng Johann Joel Castro Ruiz	Quantel Private holds 99,095 shares	100%
Quantel Global Company Limited	Director Director Director	Yip Hin Lay Yeo Hwee Peng Pruet Latdatyaphon	Quantel Private holds 173,657 shares	99.9%
Innovative Nanotech Incorporated	Director Director Supervisor President	Chroma ATE Inc. (representative: Leo Huang, I- Shih Tseng) Research Industry (representative: Bruce Han) Amy Huang Bo-Ren Wu	14,214,000 shares 1,000,000 shares 100,000 shares 100,000 shares	67.2% 4.7% 0.5% 0.5%
Touch Cloud Inc.	Director Director Director supervisor	Chroma ATE Inc. (representative: Leo Huang) LEADTEK (representative: Lu, Kun-Shan) Cheng-Xun Li AmyHuang	11,045,667 shares 869,019 shares 669,814 shares -	83.1% 6.5% 5.0% -
Environmental Stress Systems, Inc.	Director Director Director	I-Shih Tseng Cheng Ying Yi-ShenWang	(Chroma holds 1,000 shares)	100%

Note 1: Limited liability Corporation

113 -

6. Business operating conditions of Chroma ATE Inc. and its related corporation

December 31, 2022 Unit: In thousands of NT$

Name of enterprise	Paid-in capital	Total assets	Total liabilities	Net worth	Operating revenue for the period	Operating profit for the period	Profit and loss (after tax)	Earnings per share (NT$) (after tax)
Neworld Electronics Limited	252,082	2,499,704	602,996	1,896,708	3,182,768	33,254	219,918	3.44
Chroma Electronics (Shenzhen) Co., Ltd.	118,140	1,857,663	686,725	1,170,938	2,100,701	189,284	149,712	Not applicable
Chroma Electronics (Shanghai) Co., Ltd.	92,130	388,611	57,010	331,601	741,618	55,746	57,824	Not applicable
Chroma ATE Inc.	30,710	1,795,975	1,265,218	530,757	3,504,143	146,648	224,606	224.61
Environmental Stress Systems, Inc.	39	30,435	16,867	13,568	70,055	5,187	3,554	Not applicable
Chroma Systems Solutions, Inc.	147	1,451,523	708,920	742,603	1,749,024	398,976	282,738	Not applicable
Chroma Investment Co., Ltd.	140,000	552,226	1,449	550,777	-	(160)	31,504	2.25
Chroma ATE Europe B.V.	1,485	420,287	193,876	226,411	434,789	2,658	24,612	Not applicable
Chroma Germany GmbH	982	168,729	154,054	14,675	280,775	12,359	12,453	Not applicable
Chroma (Shanghai) Trading Co., Ltd.	82,917	84,488	3,263	81,225	1,199	(4,209)	83	Not applicable
Chroma ATE (Suzhou) Co., Ltd.	116,698	2,212,970	1,703,998	508,972	5,017,540	261,070	214,124	Not applicable
MAS Automation Corp.	100,000	1,059,502	918,089	141,413	565,371	97,454	86,976	8.70
Wei Kuang Automatic Equipment (Nanjin) Co.,Ltd.	52,327	1,165,376	653,505	511,871	1,758,104	267,681	255,512	Not applicable
Wei Kuang Automatic Equipment (Xiamen) Co., Ltd.	50,326	733,654	139,411	594,243	540,041	54,886	61,413	Not applicable
Sajet System Technology (Suzhou) Co., Ltd.	36,913	157,898	10,960	146,938	76,453	(8,374)	(2,711)	Not applicable
Testar Electronic Corporation	300,000	372,120	102,758	269,362	325,334	52,261	58,559	1.95
Chroma Japan Corp.	23,084	373,553	523,439	(149,886)	405,165	(29,719)	(29,695)	Not applicable
Sensational Holdings Ltd.	36,852	55,701	481	55,220	0	(689)	794	0.66
Chen Hwa Technology Inc.	94,740	197,248	26	197,222	0	(138)	12	0.00
CHI Incorporation Ltd.	117,619	508,995	0	508,995	0	(2,927)	211,494	55.22
San Eagle Development Corp.	62,956	1,292,582	26	1,292,556	0	(107)	281,201	137.17
Wei Kuang Mech. Eng. Inc.	137,427	1,285,557	26	1,285,531	0	(100)	281,284	62.86
Deep Red Holding Co., Ltd.	6,603	163,221	26	163,195	0	(201)	(2,329)	(10.83)
Adivic Technology Co., Ltd.	170,000	90,565	25,032	65,533	42,300	(37,777)	(39,282)	(2.31)
EVT Technology Co., Ltd.	110,000	28,776	1,199	27,577	384	(9,241)	(9,142)	(0.83)
Quantel Private Ltd. (Note 1)	72,987	644,206	222,888	421,318	801,982	109,430	100,914	31.63
Innovative Nanotech Incorporated	211,640	331,714	87,145	244,569	163,041	27,503	24,097	1.14
Touch Cloud Inc.	132,995	45,535	2,882	42,653	7,704	(13,782)	(12,788)	(0.96)

Note 1: Expressed per the consolidated financial statement.

Note 2: The following lists the exchange rates for the statement of assets and liabilities:

USD: NTD =1:30.710, HKD: NTD=1:3.938, EUR: NTD=1:32.720, RMB: NTD=1:4.408, JPY: NTD=1:0.232, SGD: NTD=1:22.880

The following lists the exchange rates for the profit and loss statement:

USD: NTD=1:29.805, HKD: NTD=1:3.806, EUR: NTD=1:31.360, RMB: NTD=1:4.422, JPY: NTD=1:0.228, SGD: NTD=1:21.620

114 -
(II) Consolidated financial statements of affiliated companies

For 2022 (from January 1 to December 31, 2022), the Company’s entities that are required to be included in the consolidated financial statements of affiliated enterprises under the “Criteria Governing Preparation of Consolidated Business Reports of Affiliated Enterprises, Consolidated Financial Statements of Affiliated Enterprises, and Affiliation Reports” are the same as those required to be included in the parent-subsidiary consolidated financial statements under the International Financial Reporting Standards 10. Moreover, the related information required to be disclosed for the consolidated financial statements of affiliated enterprises has been fully disclosed in the aforementioned parent-subsidiary consolidated financial statements. Consequently, a separate set of consolidated financial statements of affiliated enterprises is not prepared.

(III) Affiliation report

According to Article 369-12 of the Company Act, separate affiliation reports were not required for subsidiaries of The Company that have not been publicly listed.

II. Private placement of securities in the most recent year up to the publication date of this annual report: None.

III. Holding or disposition of the Company’s shares by subsidiaries in the most recent year up to the publication date of this annual report

					Unit:Thousand NT$; shares; %	Unit:Thousand NT$; shares; %	Unit:Thousand NT$; shares; %	Unit:Thousand NT$; shares; %	Unit:Thousand NT$; shares; %	Unit:Thousand NT$; shares; %	Unit:Thousand NT$; shares; %
Subsidiary Name	Paid-in capital	Capital Source	Shareholding of the Company	Date of acquisition or disposal	Quantity and value of shares acquired	Quantity and value of shares disposed of	Investment Income or loss	Number and amount of shares held as of the publication date of the annual report (Note)	Status of pledge	Value of endorsements and guarantees provided to subsidiaries by the Corporation	Loans provided to subsidiaries by the Company
Chroma Investment Co., Ltd.	NT$140,000 thousands	Self Capital	100%	2022	0	151,000 shares, NT$25,147	NT$22,378	1,654,579shares NT$294,515	None	0	0
				In the current year up till the publication date of this report	0	0	0		None	0	0

Note: The holding amount is calculated based on the closing price of NT$178 on April 11, 2023.

IV. Other supplementary matters: None.

V. Any event that results in substantial impact upon shareholders’ equity or prices of the Corporation’s securities as prescribed by Article 36, Paragraph 3, Subparagraph 2 of the Securities and Exchange Act that have occurred in the most recent year up to the publication date of this annual report: None.
115 -

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The entities required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2022 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

CHROMA ATE INC.

LEO HUANG Chairman

March 1, 2023

116 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Chroma ATE Inc.

Opinion

We have audited the accompanying consolidated financial statements of Chroma ATE Inc. (the “Corporation”) and its subsidiaries (collectively, the “Group”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China.

Basis for Opinion

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

Key Audit Matters

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

117 -

Key audit matter of the consolidated financial statements for the year ended December 31, 2022 is stated as follows:

Occurrence of Sales Revenue from Specific Customers

The Group mainly sells test instruments and other products. In 2022, the revenue from specific customers had changed significantly as compared with last year. Considering that there may be greater risks of fraud in revenue recognition and that the management could be under pressure to meet expected financial goals; therefore, we identified the occurrence of sales revenue from specific customers as a key audit matter.

The main audit procedures we performed for the aforementioned matter are as follows:

We understood and tested the processes of internal controls related to sales cycle and evaluated the effectiveness of design and implementation.
We obtained sales details, selected samples to perform test of details, and validated the documents such as sales order, delivery orders and invoices to confirm the occurrence of sales revenue.
We obtained samples of sales details and tested for any significant difference in customers and amount of the receivables to confirm the occurrence of sales revenue.

Other Matter

We have also audited the parent company only financial statements of Chroma ATE Inc. as of and for the years ended December 31, 2022 and 2021 on which we have issued an unmodified opinion.

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

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

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

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

118 -

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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 auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

119 -

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

The engagement partners on the audits resulting in this independent auditors’ report are Wen-Chin Lin and Chien-Liang Liu.

Deloitte & Touche Taipei, Taiwan Republic of China March 1, 2023

Notice to Readers

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

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

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CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)
ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss (Note 7) Financial assets at amortized cost (Notes 9 and 31) Contract assets (Note 22) Notes receivable (Note 10) Trade receivables (Notes 5 and 10) Trade receivables - related parties (Notes 10 and 30) Inventories (Notes 5 and 11) Prepayments Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Financial assets at amortized cost (Notes 9 and 31) Investments accounted for using the equity method (Note 13) Property, plant and equipment (Notes 14, 30 and 31) Right-of-use assets (Notes 15 and 30) Investment properties (Note 16) Goodwill (Notes 17 and 27) Intangible assets (Note 27) Deferred tax assets (Note 24) Prepayments for equipment Refundable deposits Prepayments for investment Other non-current assets (Note 20) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 18 and 31) Contract liabilities (Note 22) Notes payable Notes payable - related parties (Note 30) Trade payables Trade payables - related parties (Note 30) Other payables (Note 19) Current tax liabilities Lease liabilities (Notes 15 and 30) Current portion of long-term borrowings (Notes 18 and 31) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 18 and 31) Deferred tax liabilities (Note 24) Lease liabilities (Notes 15 and 30) Net defined benefit liabilities (Note 20) Guarantee deposits received Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 21) Ordinary share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS Total equity TOTAL The accompanying notes are an integral part of the consolidated financial statements.		2022 Amount % $ 5,941,512 18 394,823 1 348,304 1 1,084,012 3 315,547 1 4,382,943 13 64,746 - 4,752,967 14 270,143 1 213,379 1 17,768,376 53 4,513 - 1,204,438 4 205,541 1 3,860,769 11 7,018,188 21 359,887 1 2,478,333 7 231,589 1 79,542 - 355,298 1 149,860 - 24,779 - - - 87,707 - 16,060,444 47 $ 33,828,820 100 $ 1,819,080 5 1,656,656 5 39,113 - 2,559 - 2,890,681 8 5,399 - 1,645,259 5 697,668 2 134,237 - 205,260 1 188,155 1 9,284,067 27 1,164,625 3 1,025,287 3 258,447 1 155,619 1 60,923 - 7,171 - 2,672,072 8 11,956,139 35 4,253,970 13 4,502,473 13 3,237,808 10 86,888 - 8,970,974 26 12,295,670 36 339,463 1 (30,868) - 21,360,708 63 511,973 2 21,872,681 65 $ 33,828,820 100		2021
				Amount % $ 3,088,158 10 504,949 2 1,171,949 4 779,547 3 198,853 1 4,292,917 14 33,969 - 3,915,791 13 261,498 1 294,960 1 14,542,591 49 4,793 - 1,166,892 4 181,941 1 3,127,364 11 6,096,436 21 345,318 1 3,137,187 11 225,695 1 97,413 - 345,338 1 118,865 - 20,268 - 55,024 - 80,992 - 15,003,526 51 $ 29,546,117 100 $ 1,901,110 7 746,946 3 31,549 - 2,953 - 3,009,505 10 11,005 - 1,372,698 5 405,049 1 107,604 - 213,053 1 78,016 - 7,879,488 27 1,447,169 5 767,422 3 276,636 1 174,889 - 43,334 - 9,721 - 2,719,171 9 10,598,659 36 4,218,745 14 4,087,223 14 2,824,310 10 86,888 - 7,255,798 25 10,166,996 35 74,633 - (33,686) - 18,513,911 63 433,547 1 18,947,458 64 $ 29,546,117 100

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CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET OPERATING REVENUE (Notes 22 and 30) OPERATING COSTS (Notes 11, 23 and 30) GROSS PROFIT REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 23 and 30) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit impairment losses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Finance costs (Notes 23 and 30) Share of profits of associates and joint ventures (Note 13) Interest income Dividend income Other income Gain on disposal of property, plant and equipment (Notes 14 and 30) Gain on disposal of investment Gain arising from transfer of right in sale and lease-back transaction (Notes 14 and 30) Gain on lease modification Foreign exchange gain (loss) (Note 34) Gain (loss) on financial assets at fair value through profit or loss Other expenses Impairment loss (Note 17) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 24) NET PROFIT FOR THE YEAR		2022 Amount % $ 22,067,242 100 10,710,148 48 11,357,094 52 61 - 11,357,155 52 2,947,968 13 1,445,580 7 1,917,411 9 6,940 - 6,317,899 29 5,039,256 23 (55,068) - 493,445 2 35,643 - 55,705 - 128,186 1 94,952 - 396,685 2 - - 702 - 263,216 1 8,509 - (8,026) - (11,737) - 1,402,212 6 6,441,468 29 1,219,910 5 5,221,558 24		2021
				Amount %
				$ 17,584,023 100 9,133,871 52 8,450,152 48 1 - 8,450,153 48 2,307,707 13 1,264,956 7 1,511,465 9 291,032 2 5,375,160 31 3,074,993 17 (44,738) - 304,129 2 24,391 - 71,755 - 175,111 1 1,585,428 9 2,684 - 154,510 1 671 - (54,773) - (2,211) - (8,104) - - - 2,208,853 13 5,283,846 30 978,531 6 4,305,315 24 (Continued)

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CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 20) Unrealized gain or loss on investments in equity investments designated as at fair value through other comprehensive income Share of the other comprehensive income (loss) of associates and joint ventures accounted for using equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Share of the other comprehensive income (loss) of associates and joint ventures accounted for using equity method Total other comprehensive income TOTAL COMPREHENSIVE INCOME NET PROFIT ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (NT$; Note 25) Basic Diluted		2022 Amount % $ (8,432) - (51,766) - 4,351 - 222,069 1 323,550 1 489,772 2 $ 5,711,330 26 $ 5,105,824 23 115,734 1 $ 5,221,558 24 $ 5,563,563 25 147,767 1 $ 5,711,330 26 $ 12.14 $ 12.00		2021
				Amount % $ (40,175) - 298,132 2 (4,327) - (76,832) (1) (70,564) - 106,234 1 $ 4,411,549 25 $ 4,179,232 24 126,083 - $ 4,305,315 24 $ 4,294,625 24 116,924 1 $ 4,411,549 25 $ 9.96 $ 9.89

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

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CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

	Equity Attributable to O	Equity Attributable to O	wners of the Corporation	wners of the Corporation
Ordinary Share Capital Capital Surplus $ 4,212,945 $ 4,036,875 - - - - - - - 13,428 - - - - - - - 8,124 - - 5,800 27,906 - 890 - - - - 4,218,745 4,087,223 - - - - - 53,511 - - - - - - - 22,345 - 11,551 - (22,860 ) 6,125 28,971 29,100 340,498 - (18,766 ) - - - - - - $ 4,253,970 $ 4,502,473	Retained Earnings	Total $ 7,929,190 - - (1,897,175 ) - 4,179,232 (40,780) 4,138,452 - (3,462 ) - - (9 ) - 10,166,996 - (2,970,000 ) - 5,105,824 (6,455) 5,099,369 - - - - - - (695 ) - - $ 12,295,670	Other Equity		Total Treasury Shares $ (82,101 ) $ (33,686 ) - - - - - - - - - - 156,173 - 156,173 - - - - - - - 552 - 9 - - - 74,633 (33,686 ) - - - - - - - - 464,194 - 464,194 - - 2,818 - - - - - - (253,198 ) - 53,139 - 695 - - - - - $ 339,463 $ (30,868)
			Exchange Unrealized Gain Differences on (Loss) on Financial Translating the Assets at Fair Value Financial Statements through Other of Foreign Comprehensive Un Operations Income $ (466,042 ) $ 384,493 - - - - - - - - - - (137,999) 294,172 (137,999) 294,172 - - - - - - - - - 9 - - (604,041 ) 678,674 - - - - - - - - 513,692 (49,498) 513,692 (49,498) - - - - - - - - - - - - - 695 - - - - $ (90,349) $ 629,871	earned Employee Benefit $ (552 ) - - - - - - - - - - 552 - - - - - - - - - - - - - (253,198 ) 53,139 - - - $ (200,059)
	Unappropriated Legal Reserve Special Reserve Earnings $ 2,592,487 $ 176,128 $ 5,160,575 231,823 - (231,823 ) - (89,240 ) 89,240 - - (1,897,175 ) - - - - - 4,179,232 - - (40,780) - - 4,138,452 - - - - - (3,462 ) - - - - - - - - (9 ) - - - 2,824,310 86,888 7,255,798 413,498 - (413,498 ) - - (2,970,000 ) - - - - - 5,105,824 - - (6,455) - - 5,099,369 - - - - - - - - - - - - - - - - - - - - (695 ) - - - - - - $ 3,237,808 $ 86,888 $ 8,970,974

The accompanying notes are an integral part of the consolidated financial statements.

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CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
Expected credit loss recognized on trade receivables
(Gain) loss on financial assets at fair value through profit or
loss
Finance costs
Interest income
Dividend income
Compensation costs of share-based payments
Share of profit of associates and joint ventures accounted for
using equity method
Gain on disposal of property, plant and equipment
Loss from liquidation of subsidiary
Gain on disposal of investments accounted for using equity
method
(Reversal) write-downs of inventories
Impairment loss
Realized gain on transactions with associates
Net (gain) loss on foreign currency exchange
Gain on sale and leaseback transactions
Gain on lease modification
Net changes in operating assets and liabilities
Contract assets
Notes receivable
Trade receivables
Inventories
Prepayments
Other current assets
Contract liabilities
Notes payable
Trade payables
Other payables
Other current liabilities
Net defined benefit liabilities

Cash generated from operations

Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire financial assets at fair value through other
comprehensive income
Proceeds from capital reduction of financial assets at fair value
through other comprehensive income

2022
2021
$ 6,441,468
$ 5,283,846
654,433
572,034
29,267
22,035
6,940
291,032
(8,509)
2,211
55,068
44,738
(35,643)
(24,391)
(55,705)
(71,755)
61,152
1,415
(493,445)
(304,129)
(94,952) (1,585,428)
17,883
-
(414,568)
(2,684)
(12,925)
11,835
11,737
-
(61)
(1)
(34,865)
89,008
-
(154,510)
(702)
(671)
(304,465)
183,958
(116,694)
(71,811)
21,391
(440,983)
(960,170) (1,059,965)
14,647
(37,294)
83,372
(100,528)
909,710
(18,736)
7,170
(6,001)
(169,601)
700,694
280,900
180,730
109,828
(75,301)
(27,702)

(21,566)
5,974,959
3,407,782
(678,258)

(815,995)
5,296,701
2,591,787
(89,033)
(15,750)
585
9,660
(Continued)

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CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

Increase in financial assets at amortized cost Decrease in financial assets at amortized cost Payments to acquire financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Net cash inflow on disposal of investments accounted for using equity method Increase in prepayments for investments Net cash inflow on acquisition of subsidiaries Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Payments to acquire intangible assets Increase in other non-current assets Increase in prepayments for equipment Interest received Dividends received Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Increase in guarantee deposits Repayment of lease principal Decrease in other non-current liabilities Cash dividends paid Exercise of employee share options Acquisition of additional interests in subsidiaries Interest paid Proceeds from issuance of employee restricted shares Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2022 $ (363,780) 1,187,759 (777,879) 906,419 608,622 - 5,147 (119,990) 21,537 (4,511) (6,675) (2,050) (569,370) 34,963 69,870 901,614 6,927,471 (7,021,286) 216 (312,629) 17,589 (131,666) (2,550) (3,039,348) 35,096 - (60,369) 116,400 (3,471,076) 126,115 2,853,354 3,088,158 $ 5,941,512	2021 $ (380,584) 57,987 (860,548) 861,217 3,955 (55,024) - (110,760) 3,107,338 (6,575) (28,976) (2,682) (972,547) 24,828 106,089 1,737,628 - (648,950) 77,411 (1,449,124) 2,448 (121,042) (4,904) (1,927,668) 33,706 18,184 (51,290) - (4,071,229) (66,673) 191,513 2,896,645 $ 3,088,158

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

CHROMA ATE INC. AND SUBSIDIARIES

1. GENERAL INFORMATION

Chroma ATE Inc. (the “Corporation”) was incorporated in the Republic of China (ROC) in November 1984. The Corporation mainly designs, assembles, calibrates, manufactures, sells, repairs and maintains software/hardware for computers and peripherals, computerized automatic test systems, electronic test instruments, signal generators, power supplies, telecom power supplies, etc. as well as serves as an agent to sell these products. The Corporation’s shares have been listed on the Taiwan Stock Exchange since December 21, 1996.

The consolidated financial statements of the Corporation and its subsidiaries are presented in the Corporation’s functional currency, the New Taiwan dollar (NT$).

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Corporation’s board of directors on February 23, 2023.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies.

b. The IFRSs endorsed by the FSC for application starting from 2023

Effective Date New, Amended and Revised Standards and Interpretations Announced by IASB Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 1) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 2) Amendments to IAS 12 “Deferred Tax Related to Assets and January 1, 2023 (Note 3) Liabilities arising from a Single Transaction”

Note 1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 2: The amendments will be applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
127 -
Note 3: Except for deferred taxes that were recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments were applied prospectively to transactions that occur on or after January 1, 2022.
- As of the date the consolidated financial statements were authorized for issue, the Group has assessed that the application of above standards and interpretations will not have a material impact on the Group’s financial position and financial performance.
c. The IFRSs in issue but not yet endorsed and issued into effect by the FSC

New, Amended and Revised 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 “Leases Liability in a Sale and
Leaseback”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IFRS 17 “Initial Application of IFRS 9 and
IFRS 17 - 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
Announced by IASB (Note
1)

To be determined by IASB
January 1, 2024 (Note 2)
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2024
January 1, 2024

Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impacts when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.
b. Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for financial instruments measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
128 -
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.
c. Classification of current and noncurrent assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Corporation and the entities controlled by the Corporation (its subsidiaries). Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Corporation and to the non-controlling interests.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Corporation.

Refer to Note 12, Table 8 and Table 9 for the detailed information of subsidiaries, including the percentage of ownership and main business.

e.

Foreign currencies

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

129 -

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value is determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

For the purpose of presenting consolidated financial statements, the financial statements of the Corporation’s foreign operations (including subsidiaries, associates, joint ventures and branches in other countries) that are prepared using functional currencies which are different from the currency of the Corporation are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Corporation and non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Corporation’s entire interest in a foreign operation, or a disposal involving the loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Corporation are reclassified to profit or loss.

In a partial disposal of a subsidiary that does not result in the Corporation losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to noncontrolling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

f. Inventories

Inventories consist of raw materials, work-in-process, semi-finished goods, finished goods and inventory in transit, which are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at standard cost and make timely adjustments to ensure that they approximate to weighted-average cost.

g. Investments in associates and joint ventures

The Group uses the equity method to account for its investments in associates and joint ventures. Under the equity method, investment is initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture. The Group also recognizes the changes in the Group’s share of the equity of associates and joint ventures attributable to the Group.

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Group and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable

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assets and liabilities of an associate and a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized.

When the Group subscribes for additional new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate and joint venture. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Group’s ownership interest is reduced due to its additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When a group entity transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Corporation’s financial statements only to the extent that interests in the associate and the joint venture are not related to the Corporation.

h. Property, plant and equipment

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

Property, plant and equipment in the course of construction are measured at cost. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

i. Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties include properties under construction that meet the definition of investment properties. Investment properties also include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation. Depreciation is recognized using the straight-line method.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

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j. Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as “cash-generating units”) that are expected to benefit from the synergies of the combination.

k. Financial instruments

Financial assets and financial liabilities are recognized when an entity in the Group becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

For those financial assets which are measured at fair value, its fair value is determined in the manner described in Note 29.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

a) Financial assets at FVTPL

The Group’s financial assets mandatorily classified as at FVTPL are investments in equity instruments which are not designated as at FVTOCI, it was measured at fair value, and any dividends or interest earned on such financial assets are recognized in other income and interest income, respectively; any remeasurement gains or losses on such financial assets are recognized in other gains or losses.

b) Financial assets at amortized cost

If the financial assets, which are invested by the Group, are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are subsequently measured at amortized cost.

Subsequent to initial recognition, financial assets are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss. On derecognition, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset.

Cash equivalents include time deposits with original maturities within 3 months from the date

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of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

c) Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

2) Equity instruments

Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Group’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Group’s own equity instruments.

3) Financial liabilities

Financial liabilities are measured at amortized cost using the effective interest method. When derecognition of financial liabilities, the difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

l. Assessment of assets impairment
1) Property, plant and equipment, right-of-use asset, investment properties and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of above assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

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When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset, cash-generating unit or assets related to contract costs is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset, cash-generating unit or assets related to contract costs in prior years. A reversal of an impairment loss is recognized in profit or loss.

2) Investments accounted for using equity method

The entire carrying amount of an investment in associates (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

3) Goodwill

A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently whenever there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. Any impairment loss recognized for goodwill is not reversed in subsequent periods.

4) Financial assets and contract assets

The Group assesses the impairment loss of financial assets at amortized cost (including trade receivables) and contract assets by expected credit losses on each balance sheet date.

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables and contract assets. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If the credit risk on a financial instrument has not increased significantly, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

For internal credit risk management purposes, the Group considers the following situations as indication that a financial asset is in default:

a) Internal or external information shows that the debtor is unlikely to pay its creditors.
b) Financial asset is more than 120 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

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m. Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

1) Revenue from the sale of goods

Revenue from sale of goods comes from sales of test instruments and other products. Revenue is recognized when the goods are delivered to the customer’s specific location or the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and bears the risks of obsolescence. Trade receivables are recognized concurrently. The transaction price received is recognized as a contract liability until the goods are delivered to the customer.

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

2) Revenue from the rendering of services

Revenue from the rendering of services comes from wafer level test and development of cloud platform. The Group acquires enforceable right to payment for services rendered in accordance with customer contracts only upon completion of the services; thus, the Group recognizes revenue from rendering of services upon completion of the contract.

3) Construction contract revenue

For construction contracts to build customized production line, the Group recognizes revenue over time. The Group measures the progress on the basis of costs incurred relative to the total expected costs as there is a direct relationship between the costs incurred and the progress of satisfying the performance obligations. Contract assets are recognized during the construction and are reclassified to trade receivables at the point at which the customer is invoiced. If the milestone payments exceed the revenue recognized to date, then the Group recognizes contract liabilities for the difference. Certain payment retained by the customer as specified in the contract is intended to ensure that the Group adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Group satisfies its performance obligations.

n. Leases

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1) The Group as lessor

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms. Right-of-use assets and lease liabilities are presented on a separate line in the balance sheets.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities. Right-of-use assets are subsequently measured at cost less accumulated depreciation and adjusted for any remeasurement of the lease liabilities.

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Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or others, the Group remeasures the lease liabilities with a corresponding adjustment to the right-ofuse-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss.

For sale and leaseback transactions, if the transfer of an asset satisfies the requirements of IFRS 15 to be accounted for as a sale, the Group recognizes only the amount of any gain or loss which relates to the rights transferred to the buyer-lessor, and adjusts the off-market terms to measure the sale proceeds at fair value. If the transfer does not satisfy the requirements of IFRS 15 to be accounted for as a sale, it is accounted for as a financing transaction.

o. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liability are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability represents the actual deficit in the Group’s defined benefit plan.

p. Share-based payment arrangements

Employee share options and restricted shares for employees granted to employee and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value at the grant date of the employee share options and restricted shares for employees is expensed on a straight-line basis over the vesting period, based on the Group's best estimate of the number of the shares or options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options and other equity - unearned employee benefits. The expense is recognized in full at the grant date if the grants are vested immediately.

136 -

When restricted shares for employees are issued, other equity - unearned employee benefits is recognized on the grant date, with a corresponding increase in capital surplus - restricted shares for employees. If restricted shares for employees are granted for consideration and should be returned once the employee resigns, they are recognized as payables. Dividends paid to employees on restricted shares that do not need to be returned if employees resign in the vesting period are recognized as expenses when the dividends are declared with a corresponding adjustment in retained earnings and capital surplus - restricted shares for employees.

At the end of each reporting period, the Group revises its estimate of the number of employee share options and restricted shares for employees expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - employee share options and capital surplus - restricted shares for employees.

q.

Taxation

Current and deferred taxes are recognized in profit or loss as income tax expense, except when they relate to items that are recognized in other comprehensive income; in which case, the current and deferred taxes are also recognized in other comprehensive income.

1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates and interests in joint venture, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

137 -

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences based on the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION

UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimations and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revisions affect both current and future periods.

a. Estimated impairment of trade receivables

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s past defaults experience and current financial position as well as forward looking estimates as of the end of each reporting period. For details of the key assumptions and inputs used, see Note 10. Where the actual future cash flows are less than expected, a material impairment loss may arise.

b. Write-down of inventories

The net realizable value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and disposal. The estimation of net realizable value is based on current market conditions and the historical experience with product sales of a similar nature. Changes in market conditions may have a material impact on the estimation of net realizable value.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents - time deposits		December 31	December 31
		2022 $ 3,883 4,719,129 1,218,500 $ 5,941,512	2021 $ 3,916 3,037,842 46,400 $ 3,088,158

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7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Mandatorily at FVTPL-current Domestic listed shares Domestic unlisted shares Open-end beneficiary certificates Mandatorily at FVTPL-non-current Open-end beneficiary certificates		December 31	December 31
		2022 $ 4,083 117,952 272,788 $ 394,823 $ 4,513	2021 $ 6,643 53,224 445,082 $ 504,949 $ 4,793

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments-non-current Domestic listed ordinary shares and emerging market shares Domestic unlisted ordinary shares Foreign unlisted ordinary shares		December 31	December 31
		2022 $ 835,800 227,944 140,694 $ 1,204,438	2021 $ 1,013,265 136,548 17,079 $ 1,166,892

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Refer to Table 3 for the detailed information. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

9. FINANCIAL ASSETS MEASURED AT AMORTIZED COST

FINANCIAL ASSETS MEASURED AT AMORTIZED COST
Current Time deposits with original maturities of more than 3 months Pledged deposits (Note 31) Non-current Time deposits with original maturities of more than 3 months Pledged deposits (Note 31) Restricted accounts		December 31
		2022 $ 196,179 152,125 $ 348,304 $ 194,505 7,060 3,976 $ 205,541	2021 $ 392,845 779,104 $ 1,171,949 $ 180,731 1,210 - $ 181,941

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10. NOTES RECEIVABLE AND TRADE RECEIVABLES

Gross carrying amount at amortized cost - unrelated parties Less: Allowance for impairment loss Gross carrying amount at amortized cost - related parties		December 31	December 31
		2022 $ 5,384,753 (686,263) 4,698,490 64,746 $ 4,763,236	2021 $ 5,204,804 (713,034) 4,491,770 33,969 $ 4,525,739

The average credit period for sales of goods is 60 to 120 days from the date when the goods were inspected and accepted by customers. Before accepting any new customer, the Group uses bank’s credit investigation or external credit scoring system to assess the potential customer’s credit quality and defines credit limits by customer. Management will review the credit limit and rating of customers as needed.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated by reference to the past default experience and the financial position, in which the debtors operate. As the Group’s historical credit loss experience does not show other factors that matter significantly, the expected credit loss rate is based on the past due status of trade receivables.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The aging schedule of notes receivable and trade receivables based on the past due days was as follows:

Not past due Past due 1-60 days Past due 61-180 days Past due 181-365 days Past due over 365 days		December 31	December 31
		2022 $ 3,182,547 992,411 336,716 182,590 690,489 $ 5,384,753	2021 $ 3,600,204 494,169 191,751 164,772 753,908 $ 5,204,804

The movements of the loss allowance of notes receivable and trade receivables were as follows:

Balance at January 1 Add: Impairment loss Less: Amounts written off Foreign exchange gains and losses Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 713,034 6,940 (36,581) 2,870 $ 686,263	2021 $ 433,133 291,032 (9,766) (1,365) $ 713,034

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11. INVENTORIES

Finished goods Semi-finished products Work in process Raw materials Inventory in transit		December 31	December 31
		2022 $ 1,219,721 562,994 1,248,002 1,676,336 45,914 $ 4,752,967	2021 $ 992,643 520,193 937,215 1,465,740 - $ 3,915,791

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2022 and 2021 was $8,478,748 thousand and $8,127,064 thousand, respectively. The cost of goods sold included the reversal of inventory write-downs of $12,925 thousand and the inventory write-down of $11,835 thousand, respectively.

12. SUBSIDIARIES

Subsidiaries included in the consolidated financial statements:

Investor
Investee
Business
The Corporation
Neworld Electronics Limited
Sale and maintenance of electronic test
instruments, etc.
Chroma New Material Corp.
Processing and sale of gold wire
Mas Automation Corp.
Design, manufacturing, installment and testing of
automated factory conveyor systems
Chroma ATE Inc.
Sale and maintenance of electronic test
instruments, etc.
Chroma Systems Solutions, Inc.
Sale and maintenance of electronic test
instruments, etc.
Chroma ATE Europe B.V.
Sale and maintenance of electronic test
instruments, etc.
Chroma Japan Corp.
Sale and maintenance of electronic test
instruments, etc.
CHI Incorporation Ltd.
Test of inductance, capacitance and resistance
equipment and sale of parts
Chen Hwa Technology Inc.
Test of inductance, capacitance and resistance
equipment and sale of parts
San Eagle Development Corp.
Investment
Sensational Holdings Ltd.
Investment
Deep Red Holding Co., Ltd.
Investment
Testar Electronics Corporation
Testing of LED
Adivic Technology Co., Ltd.
Sale and research of RF device
Chroma Investment Co., Ltd.
Investment
Quantel Private Ltd.
Sale and maintenance of test instruments, etc.
EVT Technology Co., Ltd.
Manufacturing of motorcycles and its parts
Innovative Nanotech Incorporated
Monitoring instruments of nanoparticles
Touch Cloud Inc.
Development of cloud platform and Internet of
Things systems
Environmental Stress Systems, Inc.
Sale of thermal platform systems
Neworld Electronics Limited Chroma Electronics (Shenzhen) Co.,
Ltd.
Sale of computerized automatic test systems,
peripherals and electronic test instruments
Chroma Electronics (Shanghai) Co.,
Ltd.
Sale of computerized automatic test systems,
peripherals and electronic test instruments
Chroma ATE Inc.
Chroma Systems Solutions, Inc.
Sale and maintenance of electronic test
instruments, etc.
Chen Hwa Technology Inc.
Chroma (Shanghai) Trading Co., Ltd.
International and transit trading, simple
commercial processing, commercial
consulting services, etc.
CHI Incorporation Ltd.
Chroma ATE (Suzhou) Co., Ltd.
Sale of computerized automatic test systems,
peripherals and electronic test instruments
San Eagle Development
Corp.
Wei Kuang Mech. Eng. Inc.
Investment

Percentage of
Ownership as of
December 31
2022
2021
Remark
100.0
100.0
-
100.0
Note 1
100.0
100.0
100.0
100.0
25.0
25.0
Note 2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
67.2
67.2
74.1
74.1
100.0
100.0
60.0
60.0
Note 3
85.6
85.6
67.2
67.2
Note 4
83.1
83.1
Note 5
100.0
-
Note 6
100.0
100.0
100.0
100.0
50.0
50.0
Note 2
100.0
100.0
100.0
100.0
100.0
100.0

(Continued)

141 -

Investor
Investee
Business
Wei Kuang Mech. Eng. Inc. Mou Kuan Technologies (Nanjing)
Co., Ltd.
Assembly, sale and maintenance of factory
conveyors and related systems and rendering
after-sales services
Wei Kuang Automatic Equipment
(Nanjing) Co., Ltd.
Sale and maintenance of electronic equipment
and factory conveyor systems
Wei Kuang Automatic Equipment
(Xiamen) Co., Ltd.
Sale and maintenance of electronic equipment
and factory conveyor systems
Deep Red Holdings Co., Ltd. Saject System Technology (Suzhou)
Co., Ltd.
Research, development and design of computer
network security systems and information
management
Adivic Technology Co., Ltd. Adivic Holding Corporation
Sale and research of RF device
Quantel Private Ltd.
Quantel Technologies India Private
Ltd.
Sale and maintenance of test instruments, etc.
Quantel Global Vietnam Co., Ltd.
Sale and maintenance of test instruments, etc.
Quantel Global Sdn. Bhd.
Sale and maintenance of test instruments, etc.
Quantel Global Philippines
Corporation
Sale and maintenance of test instruments, etc.
Quantel Global Company Limited
Sale and maintenance of test instruments, etc.
Chroma ATE Europe B.V.
Chroma Germany GmbH
Sale and maintenance of electronic test
instruments, etc.
Chroma Investment Co., Ltd. Testar Electronics Corporation
Testing of LED

Percentage of
Ownership as of
December 31
2022
2021
Remark
-
100.0
Note 7
100.0
100.0
100.0
100.0
100.0
100.0
-
100.0
Note 8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.9
99.9
Note 3
100.0
100.0
15.0
15.0
(Concluded)

Note 1: The Corporation’s subsidiary, Chroma New Material Corp, was liquidated in December 2022.
Note 2: The Corporation and the Corporation’s subsidiary, Chroma ATE Inc., jointly held 75% equity interest in Chroma Systems Solutions, Inc.
Note 3: To expand its sales network in Southeast Asia, the Corporation’s subsidiary Quantel Private Ltd. resolved to set up Quantel Global Company Limited in 2021, which engaged in the sale of test instruments.
Note 4: To meet business needs, the Corporation’s subsidiary, Innovative Nanotech Incorporated, increased its capital reserved for employees by $11,640 thousand in April 2021. The Corporation did not participate in the capital injection and its equity interest in Innovative Nanotech Incorporated decreased to 67.2%.
Note 5: For operational needs, the Corporation’s subsidiary, Touch Cloud Inc., increased its working capital by $60,000 thousand in May 2021. The Corporation’s board of directors resolved to participate in the capital injection and its equity interest in Touch Cloud Inc. increased from 78.1% to 83.1% after the cash injection.
Note 6: Considering the future strategy of products and the improvement of product competitiveness, the Corporation acquired a subsidiary, Environmental Stress Systems, Inc., which engaged in the sale of thermal platform systems in January 2022.
Note 7: The Corporation’s subsidiary, Mou Kuan Technologies (Nanjing) Co., Ltd., was liquidated in January 2022.
Note 8: The Corporation’s subsidiary, Adivic Holding Corporation, was liquidated in December 2022.
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13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates Investments in joint ventures		December 31	December 31
		2022 $ 3,845,861 14,908 $ 3,860,769	2021 $ 3,111,361 16,003 $ 3,127,364

a. Investments in associates

December 31 2022 2021 Amount Percentage of Equity Interest (%) Amount Percentage of Equity Interest (%) Adlink Technology Inc. $ 244,736 6.6 $ 284,189 11.2 Dynascan Technology Corp. 204,120 27.3 152,662 27.3 Camtek Ltd. 3,397,005 17.6 2,674,510 17.8 $ 3,845,861 $ 3,111,361 For the Year Ended December 31 2022 2021 The Group’s share of: Net profit $ 494,540 $ 305,017 Other comprehensive income (loss) 327,901 (74,891) Total comprehensive income (loss) for the year $ 822,441 $ 230,126		December 31	December 31	December 31	December 31	December 31	December 31
						2021
				2022 $ 494,540 327,901 $ 822,441			2021 $ 305,017 (74,891) $ 230,126

Fair values (Level 1) of investments in associates with available published price quotations are summarized as follows:

Name of Associate Adlink Technology Inc. Camtek Ltd.		December 31	December 31
		2022 $ 775,648 $ 5,272,016	2021 $ 1,583,210 $ 9,962,445

The Group disposed 10,015 thousand shares of Adlink Technology Inc. The proceeds from disposal of those shares were $608,622 thousand and recognized gain from disposal was $414,568 thousand for the year ended December 31, 2022.

The Group is able to exercise significant influence over Adlink Technology Inc. although the percentage of shares held is less than 20%. Therefore, the Group accounted for Adlink Technology Inc. as an associate.

Although the Group’s equity interest in Camtek Ltd. is less than 20%, after assessing the Corporation’s number of seats in the board of directors of Camtek Ltd., it still has a significant influence; therefore, Camtek Ltd. is accounted for as an associate.

Refer to Table 8, for the nature of activities, principal place of business and country of incorporation of the associates.

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Except for Adlink Technology Inc., the Investment accounted for using equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on financial statements which have been audited. Management believes there is no material impact on the equity method accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements of Adlink Technology Inc., which have not been audited.

b. Investments in joint ventures

Chih Ho Shun Development Co., Ltd.		December 31	December 31	December 31
		2022 Amount Percentage of Equity Interest (%) $ 14,908 35.0		2021
				Amount Percentage of Equity Interest (%) $ 16,003 35.0

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Net loss Other comprehensive income (loss) Total comprehensive income (loss) for the year	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ (1,095) - $ (1,095)	2021 $ (888) - $ (888)

For the investment and development plan, “The Action Plan for Developing Land Surrounding the MRT Airport Station to Improve Civilians’ Life,” the board of directors resolved to invest jointly with Dynapack International Corporation and Heran Co., Ltd. to set up Chih Ho Shun Development Co., Ltd. (“Chih Ho Shun”) on February 2012. The Corporation invested for a 35% entity interest in Chih Ho Shun but did not have control over this investee.

Refer to Table 8, for the nature of activities, principal place of business and country of incorporation of the joint ventures.

The investments in joint ventures accounted for using equity method and the share of profit or loss and other comprehensive income of the investment for the years ended December 31, 2022 and 2021 was based on the joint ventures’ financial statements which have been audited.

14. PROPERTY, PLANT AND EQUIPMENT

Cost Balance, January 1, 2021 Additions Disposals Reclassification Exchange differences Balance, December 31, 2021	Land $ 1,206,995 - (425,072) 2,519 (3,450) $ 780,992	Buildings $ 2,581,375 3,926 (1,603,593) 4,067,304 (15,650) $ 5,033,362	Machinery $ 800,328 27,886 (82,288) 73,166 (2,566) $ 816,526	Office Equipment Total $ 1,876,098 $ 6,464,796 78,948 110,760 (199,003) (2,309,956) 2,373 4,145,362 (17,554) (39,220) $ 1,740,862 $ 8,371,742 (Continued)

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Accumulated depreciation Balance, January 1, 2021 Depreciation Disposals Reclassification Exchange differences Balance, December 31, 2021 Carrying value at December 31, 2021 Cost Balance, January 1, 2022 Additions Disposals Reclassification Exchange differences Acquisitions through business combinations Balance, December 31, 2022 Accumulated depreciation Balance, January 1, 2022 Depreciation Disposals Reclassification Exchange differences Acquisitions through business combinations Balance, December 31, 2022 Carrying value at December 31, 2022	Land $ - - - - - $ - $ 780,992 $ 780,992 - - 968,440 5,079 - $ 1,754,511 $ - - - - - - $ - $ 1,754,511	Buildings $ 1,337,539 195,336 (940,419) 18,602 (2,908) $ 608,150 $ 4,425,212 $ 5,033,362 7,139 (2,145) 137,609 27,977 1,685 $ 5,205,627 $ 608,150 248,911 (2,015) - 7,490 1,628 $ 864,164 $ 4,341,463	Machinery $ 662,424 65,668 (76,090) (2,558) (2,011) $ 647,433 $ 169,093 $ 816,526 54,956 (121,406) 80,769 11,002 9,253 $ 851,100 $ 647,433 76,189 (120,086) (1,184) 7,317 8,658 $ 618,327 $ 232,773	Office Equipment Total $ 1,308,199 $ 3,308,162 194,555 455,559 (186,872) (1,203,381) (285,682) (269,638) (10,477) (15,396) $ 1,019,723 $ 2,275,306 $ 721,139 $ 6,096,436 $ 1,740,862 $ 8,371,742 57,895 119,990 (75,169) (198,720) 74,910 1,261,728 13,705 57,763 2,448 13,386 $ 1,814,651 $ 9,625,889 $ 1,019,723 $ 2,275,306 204,421 529,521 (60,762) (182,863) (49,081) (50,265) 8,763 23,570 2,146 12,432 $ 1,125,210 $ 2,607,701 $ 689,441 $ 7,018,188 (Concluded)

The Corporation’s board of directors resolved to sell the land and plant in Hwa Ya Technology Park to its related party, Adlink Technology, in July 2020. The transaction price, which amounted to $3,080,000 thousand, was determined with reference to the appraisal results of independent real estate appraisers. The transaction was settled on the first quarter of 2021. In addition, the Corporation sold and leased back a portion of assets for 5 years for operational needs. The transaction resulted in a total acquisitions of right-of-use assets of $180,053 thousand and lease liabilities of $221,956 thousand, refer to Note 30 for related information.

The Corporation completed the relocation of its A7 office building in the first quarter of 2021, which was constructed by the Corporation and transferred the related buildings from prepaid land and equipment to property, plant and equipment.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

estimated useful lives as follows:
Buildings
Primary buildings	15-51 years
Mechanical and electrical equipment	5-20 years
Clean room equipment	3-11 years
Others	1-50 years
Machinery	1-12 years
Office equipment	1-10 years

145 -

Refer to Note 31 for property, plant and equipment that have been pledged to secure borrowings of the Group.

15. LEASE ARRANGEMENTS

The Group’s important lease projects include lease land from other companies and government department for the use of the plants, warehouses and parking spaces, as well as leases of information systems cloud services, etc. The lease terms are from 2 to 10 years. The Group does not have bargain purchase options to acquire lease items at the end of lease terms.

For the years ended December 31, 2022 and 2021, the right-of-use assets increased by $151,415 thousand and $351,636 thousand, the depreciation expense was $124,911 thousand and $116,475 thousand, and the total cash outflow for leases was $230,524 thousand and $284,620 thousand, respectively. Refer to the consolidated balance sheets for the balance of right-of-use assets and lease liabilities.

16. INVESTMENT PROPERTIES

Land		December 31	December 31
		2022 $ 2,478,333	2021 $ 3,137,187

The Group acquired the land ownership certificates of the investment and development plan, “The Action Plan of Developing Land Surrounding the Airport MRT Station to Improve Civilian’s Life” in the third quarter of 2018, part of the land was co-constructed with Fu Yu Construction to build a joint building project, and part of it has not yet been decided, both of the above land were classified as investment properties.

Except for reclassificated from property, plant and equipment, the Group did not recognize significant additions, disposals or impairment loss of investment properties in 2022.

The determination of fair value was performed by independent qualified professional valuers, and the fair value was measured by using Level 3 inputs. The valuation was arrived at by reference to market evidence of transaction prices for similar properties. The significant unobservable inputs used include discount rates and the fair value as appraised.

Fair value		December 31	December 31
		2022 $ 9,450,053	2021 $ 11,830,879

In the third quarter of 2019, the Group entered into a joint building contract with Fu Yu Construction Co., Ltd. (Fu Yu Construction) to jointly build a building located at Project No 61-0 and Project No 611 projects, Lejie section, Guishan District, Taoyuan City. The construction project adopts a jointly constructed manner. The Group provided the lands and Fu Yu Construction provided fund to construct. The area will be distributed to the Group and Fu Yu Construction for 47% and 53%, respectively. According to the joint building contract, Fu Yu Construction should pay $20,000 thousand (recognized as guarantee deposit received) and two guaranteed notes with a denomination of $120,000 thousand to the Group when signing the contract. Additional $20,000 thousand guarantee deposit should be paid within five business days after the building construction registration is approved and within five business days after the approval of underground bottom plate inspection. The joint building project started in the fourth quarter of 2020.

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17. GOODWILL

GOODWILL
Cost Balance, beginning of the year Additional amounts recognized from business combinations that occurred during the year (Note 27) Derecognized on disposal of a subsidiary Impairment loss Net effect of exchange differences Balance, end of the year	For the Year Ended December 31
		2022 $ 225,695 41,250 (28,986) (11,737) 5,367 $ 231,589	2021 $ 228,002 - - - (2,307) $ 225,695

For assessing goodwill for impairment at the end of reporting period, the Group took value in use as basis for calculating the recoverable amount of goodwill. The Group used the cash flows of a five-year financial forecast as the basis for calculating value in use to reflect the specific risk of cash-generating units.

The amount of derecognition on disposal of a subsidiary generated from the liquidation of Mou Kuan Technologies (Nanjing) Co., Ltd. this year.

18. BORROWINGS

a. Short-term borrowings

Secured bank loans (Note 31) Unsecured bank loans		December 31	December 31
		2022 $ 212,580 1,606,500 $ 1,819,080	2021 $ 391,210 1,509,900 $ 1,901,110

As of December 31, 2022 and 2021, the interest rate on the bank loans was 1.08%-2.05% and 0.52%1.93% per annum, respectively.

b. Long-term borrowings

Long-term borrowings
Secured bank loans (1) (Note 31) Unsecured bank loans (2) Less: Current portions Long-term borrowings		December 31
		2022 $ 219,885 1,150,000 1,369,885 205,260 $ 1,164,625	2021 $ 210,222 1,450,000 1,660,222 213,053 $ 1,447,169

1) Secured by the Group’s financial assets at amortized cost and property, plant and equipment. The final repayment period of those bank loans will be due in April 2025 to June 2031. As of December 31, 2022 and 2021, the effective interest rates on the bank loans were 2.25%-7.25% and 2.25%-3.50% per annum, respectively.
2) The bank loans are for the purpose of general operation with due date in June 2026. As of December 31, 2022 and 2021, the interest rates on the bank loans were 1.64%-1.85% and 0.68%0.83% per annum, respectively.
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19. OTHER PAYABLES

Salaries and bonus Compensation of employee Remuneration of directors Others		December 31	December 31
		2022 $ 628,862 788,598 13,000 214,799 $ 1,645,259	2021 $ 533,300 463,925 11,460 364,013 $ 1,372,698

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Corporation and its subsidiaries in the ROC adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

Employees of the Group’s subsidiaries in the foreign are under the retirement benefit plans operated by their respective local governments. Subsidiaries have to contribute amounts at certain percentages of salaries to the retirement benefit plans to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

b. Defined benefit plans

The defined benefit plans adopted by the Corporation and its subsidiaries, Chroma New Material Corp. and Adivic Technology Co., Ltd. in accordance with the Labor Standard Law is operated by the government of the ROC. Pension benefits are calculated on the basis of length of service and average monthly salaries of the 6 months before retirement. The Corporation and its subsidiaries mentioned above contribute amount equal to 4% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of year, the Corporation and its subsidiaries assess the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Corporation and its subsidiaries are required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit assets (recognized in other non-current assets) Net defined benefit liabilities		December 31	December 31
		2022 $ 568,088 (413,959) 154,129 1,490 $ 155,619	2021 $ 538,051 (364,082) 173,969 920 $ 174,889

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Movements in net defined benefit liabilities were as follows:

	Present Value	Present Value
	of the Defined		Fair Value of		Net Defined
	Benefit		the Plan		Benefit
	Obligation			Assets	Liabilities
Balance at January 1, 2021	$	496,002	$(339,722)		$	156,280
Current service cost		3,381		-		3,381
Net interest expense (income)		2,454		(1,741)		713
Recognized in profit or loss		5,835		(1,741)		4,094
Remeasurement
Return on plan assets (excluding
amounts included in net interest)		-		(4,327)		(4,327)
Actuarial loss
Changes in demographic assumptions		15,272		-		15,272
Experience adjustments		29,230		-		29,230
Recognized in other comprehensive
income		44,502		(4,327)		40,175
Contributions from employer		-		(26,580)		(26,580)
Benefits paid		(8,288)		8,288		-
Balance at December 31, 2021		538,051	(364,082)			173,969
Current service cost	$	3,304	$	-	$	3,304
Net interest expense (income)		2,642		(1,898)		744
Recognized in profit or loss		5,946		(1,898)		4,048
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-		(28,232)		(28,232)
Actuarial loss
Changes in financial assumptions		5,266		-		5,266
Experience adjustments		31,398		-		31,398
Recognized in other comprehensive
income		36,664		(28,232)		8,432
Contributions from employer		-		(30,588)		(30,588)
Benefits paid		(10,841)		10,841		-
Liabilities extinguished on settlement		(1,732)		-		(1,732)
Balance at December 31, 2022	$	568,088	$(413,959)		$	154,129

(Concluded)

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
149 -
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase	December 31
	2022 2021 1.13%-1.38% 0.38%-0.50% 2.50%-3.50% 1.50%-2.50%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		December	31
		2022 $(14,129) $ 14,648 $ 14,119 $(13,695)	2021 $(14,093) $ 14,640 $ 14,124 $(13,673)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plan for the next year Average duration of the defined benefit obligation		December	31
	2022 2021 $ 30,154 $ 31,035 7.3-10.6 years 8.15-12.7 years

21. EQUITY

a. Ordinary share capital

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2022 500,000 $ 5,000,000 425,397 $ 4,253,970	2021 500,000 $ 5,000,000 421,875 $ 4,218,745

The authorized shares include 30,000 thousand shares allocated for the exercise of employee share options. The change in the Corporation’s share capital is mainly due to the exercise of employee share options and issuance of employee restricted shares.

150 -

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Additional paid-in capital Treasury share transactions Consolidation excess May be used to offset a deficit only Share of changes in capital surplus of associates or joint ventures May not be used for any purpose Employee share options Employee restricted shares		December 31
		2022 2021 $ 3,504,911 $ 3,372,101 252,213 218,317 146,976 146,976 $ 371,947 $ 341,296 - 8,533 226,426 - $ 4,502,473 $ 4,087,223 (Concluded)

Note: Such capital surplus may be used to offset a deficit; in addition, when the Corporation has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Corporation’s capital surplus and once a year).

c. Retained earnings and dividend policy

Under the dividend policy as set forth in the Corporation’s Articles of Incorporation (the “Articles”), where the Corporation made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Corporation’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders. For the abovementioned distribution of earnings, the board of directors was authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders’ meeting. For the policies on distribution of employees’ compensation and remuneration to directors, refer to d. employees’ compensation and remuneration of directors in Note 23 (d).

Taking into account future capital expenditure requirements and its cash position, the total of cash dividends paid in any given year may not be less than 20% of total dividends distributed in that year. The final amount, type and percentage of the cash dividends and stock dividends are subject to actual earnings and capital requirements of the Corporation in a particular year.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Corporation’s paid-in capital. The legal reserve may be used to offset deficits. If the Corporation has no deficits and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

When a special reserve is appropriated for cumulative net debit balance reserves from prior period, the special reserve is only appropriated from the prior unappropriated earnings.

151 -

The appropriations of earnings for 2021 and 2020 have been approved in the annual shareholders’ meeting on June 9, 2022 and August 18, 2021, respectively, were as follows:

Legal reserve Reversal of special reserve Cash dividends	Appropriation of Earnings For Fiscal Year 2021 For Fiscal Year 2020 $ 413,498 $ 231,823 - (89,240) 2,970,000 1,897,175	Dividend Per Share (NT$)
		For Fiscal Year 2021 For Fiscal Year 2020 $ 7.0 $ 4.5

The appropriations of earnings for 2022 had been proposed by the Corporation’s board of directors on February 23, 2023. The appropriations and dividends per share were as follows:

	Appropriation	Dividends Per
	of Earnings	Share (NT$)
Legal reserve	$ 509,867
Cash dividends	3,403,176	$ 8.0

The aforementioned cash dividends had been resolved by the Corporation’s board of directors, and the rest is subject to the resolution of the shareholders in their meeting to be held on June 9, 2023.

d. Special reserves

If a special reserve appropriated on the first-time adoption of IFRSs relates to exchange differences on translation of the financial statements of foreign operations (including the subsidiaries of the Corporation), special reserve of $86,888 thousand will be reversed on a proportionate basis according to the Corporation’s disposal of foreign operations; on the Corporation’s loss of significant influence, however, the entire special reserve will be reversed. Additional special reserve should be appropriated for the amount equal to the difference between net debit balance reserves and the special reserve appropriated on the first-time adoption of IFRSs. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and, thereafter, distributed.

e. Other equity items

Other equity items
	Exchange	Unrealized
	Differences on	Gain (Loss) on
	Translating	Financial	Unearned
	Foreign	Assets at	Employee
	Operations	FVTOCI	Benefit
For the year ended December 31, 2022
Balance at January 1, 2022	$(604,041)	$ 678,674	$	-
Exchange differences on translating
foreign operations	190,142	-		-
Unrealized loss arising from equity
investment	-	(133,562)		-
Share of other comprehensive gain of
associates accounted for using equity
method	317,061	84,064		-
Disposal of investments accounted for
using equity method	6,489	695		-
Issue share-based payment	-	-	(253,198)
Share-based payment transaction	-	-		53,139
Balance at December 31, 2022	$ (90,349)	$ 629,871	$(200,059)
			(Continued)

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	Exchange	Unrealized
	Differences on	Gain (Loss) on
	Translating	Financial	Unearned
	Foreign	Assets at	Employee
	Operations	FVTOCI	Benefit
For the year ended December 31, 2021
Balance at January 1, 2021	$(466,042)	$ 384,493	$	(552)
Exchange differences on translating
foreign operations	(67,435)	-			-
Unrealized gain arising from equity
investment	-	258,571			-
Share of other comprehensive loss of
associates accounted for using equity
method	(70,628)	35,601			-
Disposal of investments accounted for
using equity method	64	9			-
Share-based payment transaction	-	-		552
Balance at December 31, 2021	$(604,041)	$ 678,674	$		-
			(Concluded)

f. Non-controlling interests

Balance, beginning of the year Share of non-controlling interests Net profit Exchange difference on translating the financial statements of foreign entities Remeasurement on defined benefit plans Cash dividends distributed by subsidiaries Change in equity from issuance of ordinary shares by subsidiaries Share-based transaction payment by subsidiary Balance, end of the year g. Treasury shares	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 433,547 115,734 31,927 106 (69,348) - 7 $ 511,973	2021 $ 325,470 126,083 (9,397) 238 (30,493) 21,646 - $ 433,547

The Corporation’s shares held by its subsidiary, Chroma Investment Co., Ltd., at the end of the reporting periods were as follows:

Number of shares held (in thousands of shares) Carrying amount Market price		December 31	December 31
		2022 1,655 $ 30,868 $ 299,479	2021 1,806 $ 33,686 $ 361,116

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Under the Securities and Exchange Act, the Corporation shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as the rights to dividends and to vote. The subsidiaries holding treasury shares, however, retain shareholders’ rights, except the rights to participate in any share issuance for cash and to vote.

22. REVENUE

Revenue from contracts with customers Revenue from sale of goods Construction contract revenue Other revenue	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 20,904,366 829,479 333,397 $ 22,067,242	2021 $ 16,359,671 780,206 444,146 $ 17,584,023

a. Contract balances

Contract assets - construction contract Contract liabilities - sale of goods Contract liabilities - construction contract		December 31	December 31
		2022 $ 1,084,012 $ 1,651,972 4,684 $ 1,656,656	2021 $ 779,547 $ 731,744 15,202 $ 746,946

The changes in the balance of contract liabilities primarily result from the timing difference between the Group’s performance and respective customer’s payment.

b. Disaggregation of revenue

Refer to Note 36 for the information on disaggregation of revenue.

23. ADDITIONAL INFORMATION ON EXPENSES

a. Finance costs

Interest on borrowings Interest on lease liabilities	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 48,466 6,602 $ 55,068	2021 $ 38,522 6,216 $ 44,738

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b. Depreciation and amortization

An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 230,330 424,103 $ 654,433 $ 6,004 23,263 $ 29,267	2021 $ 114,977 457,057 $ 572,034 $ 85 21,950 $ 22,035

c. Employee benefits expense

Short-term benefits Share-based payments (Note 26) Post-employment benefits Defined contribution plans Defined benefit plans (Note 20) Other employee benefits An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 4,848,244 61,152 103,491 4,048 90,543 $ 5,107,478 $ 784,834 4,322,644 $ 5,107,478	2021 $ 3,862,080 1,415 100,444 4,094 78,052 $ 4,046,085 $ 646,588 3,399,497 $ 4,046,085

d. Compensation of employee and remuneration of directors

According to the Company’s Articles, the Corporation accrues compensation of employee and remuneration of directors at the rates of 5%-20% and no higher than 1.5%, respectively, of net profit before income tax, compensation of employee, and remuneration of directors. The compensation of employee and remuneration of directors for the years ended December 31, 2022 and 2021, which were approved by the Corporation’s board of directors on February 23, 2023 and February 23, 2022, respectively, are as follows:

Compensation of employee Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2022 Amount Rate % $ 734,953 11.06 12,000 0.18	2021
		Amount Rate % $ 415,047 7.73 9,600 0.18

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If there is a change in the amounts after the annual consolidated financial statements were authorized for issue, the differences are recorded as a change in accounting estimate.

There is no difference between the actual amounts of the compensation of employee and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2021 and 2020.

Information on the compensation of employee and remuneration of directors resolved by the Corporation’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

24. INCOME TAXES

a. Major components of income tax expense recognized in profit or loss

Current tax In respect of the current year Land value incremental tax Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 1,048,909 - 37,816 (120,194) 966,531 253,379 $ 1,219,910	2021 $ 637,807 200,196 15,982 10,384 864,369 114,162 $ 978,531

A reconciliation of accounting profit and income tax expense is as follows:

Profit before tax Income tax expense calculated at the statutory rate Adjustment items in determining taxable income Tax-exempt income Others Land value incremental tax Income tax on unappropriated earnings Difference on basic tax payable Unrecognized deductible differences Loss carryforward Deductible temporary differences Investment credits Adjustments for prior years’ tax Others Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 6,441,468 $ 1,617,223 (141,502) (41,459) - 37,816 1,329 5,530 - (140,169) (120,194) 1,336 $ 1,219,910	2021 $ 5,283,846 $ 1,206,760 (350,591) (9,437) 200,196 15,982 - (23,256) 46,654 (119,301) 10,384 1,140 $ 978,531

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b. Deferred tax assets and liabilities

For the year ended December 31, 2022

Deferred Tax Assets Opening Balance Unrealized intercompany gain $ 128,582 Loss carry forwards 69,916 Inventory reserve 60,267 Allowance for impaired receivables 32,711 Tax credit 32,507 Unrealized exchange loss 8,897 Gain on disposal of assets 3,853 Others 8,605 $ 345,338 Deferred Tax Liabilities Opening Balance Unappropriated earnings of foreign subsidiaries $ 701,238 Goodwill 48,827 Others 17,357 $ 767,422 For the year ended December 31, 2021 Deferred Tax Assets Opening Balance Unrealized intercompany gain $ 112,022 Loss carry forwards 63,876 Inventory reserve 59,507 Allowance for impaired receivables 27,067 Tax credit 29,186 Unrealized exchange loss 11,645 Gain on disposal of assets - Net defined benefit liability 3,775 Others 7,909 $ 314,987	Recognized in Profit or Loss $ 64,528 (47,864) (367) (1,402) 950 (7,062) (3,853) (3,768) $ 1,162 Recognized in Profit or Loss $ 242,034 2,606 9,901 $ 254,541 Recognized in Profit or Loss $ 16,560 7,607 760 5,650 4,190 (2,748) 3,853 (3,775) 762 $ 32,859	Exchange Differences and Other $ - 4,965 5 28 3,588 4 - 208 $ 8,798 Exchange Differences and Other $ - 1,424 1,900 $ 3,324 Exchange Differences and Other $ - (1,567) - (6) (869) - - - (66) $ (2,508)	Closing Balance $ 193,110 27,017 59,905 31,337 37,045 1,839 - 5,045 $ 355,298 Closing Balance $ 943,272 52,857 29,158 $ 1,025,287 Closing Balance $ 128,582 69,916 60,267 32,711 32,507 8,897 3,853 - 8,605 $ 345,338
Deferred Tax Assets Unrealized intercompany gain Loss carry forwards Inventory reserve Allowance for impaired receivables Tax credit Unrealized exchange loss Gain on disposal of assets Net defined benefit liability Others

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Deferred Tax Liabilities Unappropriated earnings of foreign subsidiaries Goodwill Net defined benefit liability	Opening Balance $ 566,002 46,598 8,511 $ 621,111	Recognized in Profit or Loss $ 135,236 2,606 9,179 $ 147,021	Exchange Differences and Other $ - (377) (333) $ (710)	Closing Balance $ 701,238 48,827 17,357 $ 767,422

c. Information on unused loss carryforwards of subsidiaries

As of December 31, 2022, investment tax credits comprised:

Unrecognized as deferred tax assets Due in 2032 Recognized as deferred tax assets Due in 2040		December 31	December 31
		2022 $ 654,907 131,141 $ 786,048	2021 $ 629,112 318,355 $ 947,467

d. Income tax assessments

The Corporation’s income tax returns through 2020 have been assessed by the tax authorities.

The income tax returns through 2020 of the Corporation’s subsidiaries - Touch Cloud Inc., Testar Electronics Corporation, Chroma Investment Co., Ltd., Adivic Technology Co., Ltd., Innovative Nanotech Inc., EVT Technology Co., Ltd., and Mas Automation Corp. have been assessed by the tax authorities.

25. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share were as follows:

Net Profit for the Year

Earnings used in the computation of basic and diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 5,105,824	2021 $ 4,179,232

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Shares

(In Thousands of Shares) For the Year Ended December

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Compensation of employees Employee share options Employee restricted shares Weighted average number of ordinary shares used in the computation of diluted earnings per share		31
		2022 420,518 4,264 61 617 425,460	2021 419,790 2,250 621 - 422,661

If the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

26. SHARE-BASED PAYMENT ARRANGEMENTS

a. Employee share option plan of the Corporation

Information on employee share options was as follows:

Balance at January 1 Options exercised Options forfeited Balance at December 31 Options exercisable, end of the year	For the Year Ended December 31	For the Year Ended December 31
	2022 Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) 658 $ 57.3 (613) 57.3 (45) 57.3 - - -	2021
		Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) 1,238 $ 58.7 (580) 58.1 - - 658 57.3 658

Information on outstanding options as of December 31, 2022 and 2021 is as follows:

December 31

	2022	2021
	Weighted-Average	Weighted-Average
	Remained		Remained
Range of Exercise	Contractual Life	Range of Exercise	Contractual Life
Price (NT$)	(Years)	Price (NT$)	(Years)
$ -	-	$ 57.3	0.24
Compensation cost recognized was $8,006 thousand		for the year ended December	31, 2022.

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b. Employee share option plan of subsidiaries

Adivic Technology Co., Ltd. granted its employees share options of 1,360 thousand units on March 12, 2014, with each option eligible to subscribe for one common share of Adivic Technology Co., Ltd. when exercised. The options are valid for 8 years and exercisable at certain percentages subsequent to the second year of the grant date.

Balance at January 1 Options forfeited Balance at December 31 Options exercisable, end of the year	For the Year Ended December 31	For the Year Ended December 31
	2022 Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) 625 $ 10.00 (625) 10.00 - - -	2021
		Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) 625 $ 10.00 - - 625 10.00 625

The qualified employees of Touch Cloud Inc. were granted 470 thousand units of share options in April 2020, each option entitled the holders to subscribe for one common share of Touch Cloud Inc. upon exercised. The options granted are valid for 5 years and exercisable at certain percentages from the second anniversary of the grant date. The exercise price is $10 per share according to the terms of the employee stock option plan.

Balance at January 1 Options forfeited Balance at December 31 Options exercisable, end of the year	For the Year Ended December 31	For the Year Ended December 31
	2022 Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) 338 $ 10.00 (18) 10.00 320 10.00 128	2021
		Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) 470 $ 10.00 (132) 10.00 338 10.00 -

Compensation cost recognized was $7 thousand for the year ended December 31, 2022.

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c. Restricted shares for employees

In the shareholders’ meeting on June 9, 2022, the shareholders approved a Restricted Share Unit Plan (“RSU” Plan) for employees with a total amount of $30,000 thousand, consisting of 3,000 thousand shares with issuance price of $40 dollars per share. It can be issued at one time or several times depending on the circumstances. The RSU Plan was approved under Rule No. 1110346852 issued by the FSC on June 20, 2022. The Group issued 2,960 thousand shares on July 1, 2022, the subscription date. The details of RSU Plan are as follows:

1) Employees who are granted RSUs, upon meeting the Corporation’s financial performance and personal performance indicators, are eligible to be vested 10, 20, 30 and 40 percent of the RSUs granted after 1, 2, 3 and 4 years of tenure after the subscription date, respectively.
2) The restrictions on the rights of the employees who are granted RSUs but have not met the vesting conditions are as follows:
a) The employees are not eligible to sell, pledge, transfer, donate or to dispose any RSUs in any form.
b) The employees holding RSUs are entitled to receive dividends and similar purchasing rights to ordinary shares during capital increase. Dividends from RSUs are not restricted during the vesting period and are appropriated to the employees’ personal account from trust account after the dividend distribution date.
c) Before the restricted shares are vested to the employees, the right of attendance, proposal, speech, voting and other rights of shareholders are acted by the custodian.
d) The RSUs should be delivered to trust custodians upon grant date. The employees cannot request for return in any manner before vesting conditions are met.
e) Restrictions on employee rights during delivery of new shares to the Trust, the Corporation shall act as the exclusive agent of the employees and authorize the chairman of the board (including but not limited) in negotiating, signing, amending, extending, cancelling and terminating the Trust Deed and the delivery, use and disposal instructions of the Trust Property with the Stock Trust.
3) If an employee fails to meet the vesting conditions, the Corporation will recall or buy back and cancel the restricted shares at issued price. If an employee voluntarily resigns, retires, disabled or decease due to occupational hazards, dismissed, be transferred to another post, violates labor contracts or working protocols substantially or abandons restricted shares, related guidelines of RSU Plan will be followed accordingly.

Information on outstanding employee restricted shares was as follows:

Balance at January 1 Shares issue Shares vested Shares canceled Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 - 2,960 - (50) 2,910	2021 52 - (52) - -

Compensations costs recognized were $53,139 thousand and $1,415 thousand for the years ended December 31, 2022 and 2021, respectively.

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27. BUSINESS COMBINATIONS

a. Subsidiaries acquired

The Group obtained 100% equity interest of Environmental Stress Systems, Inc. (ESS) in January 2022 and acquired control over it; the subsidiary is included in the consolidated financial statements since the date the Group acquired control over it.

b. Assets acquired and liabilities assumed at the date of acquisition

Assets acquired and liabilities assumed at the date of acquisition
	Environmental
	Stress Systems,
	Inc.
Current assets
Cash and cash equivalents	$ 5,147
Trade receivables	10,007
Inventory	5,094
Non-current assets
Property, plant and equipment, net (Note 14)	954
Current liabilities
Account payable	(4,749)
Other payables	(3,089)
Current tax liability	(4,117)
Other current liabilities	(311)
	$ 8,936
Intangible assets recognized on acquisitions
	Environmental
	Stress Systems,
	Inc.
Consideration transferred	$ 54,985
Less: Fair value of identifiable net assets acquired	(8,936)
Intangible assets recognized on acquisitions	$ 46,049
Goodwill (Note 17)	$ 41,250
Production facilities (included in intangible assets)	4,799
	$ 46,049
Net cash inflow (outflow)on the acquisition of subsidiaries
	Environmental
	Stress Systems,
	Inc.
Consideration paid in cash	$(54,985)
Less: Cash and cash equivalent balances acquired	5,147
Cash outflow on the merger	(49,838)
Plus: Prepaid investment at beginning	54,985
Net cash inflow	$ 5,147

c. Intangible assets recognized on acquisitions
d. Net cash inflow (outflow)on the acquisition of subsidiaries
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e. Impact of acquisitions on the results of the Group

The financial results of the acquirees since the acquisition dates on January 1, 2022, which are included in the consolidated statements of comprehensive income were as follows:

	For the Year
	Ended 2022
Revenue	$ 70,055
Profit	$ 3,554

28. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group’s capital management aims to maintain the sufficiency of financial resources and the soundness of operating strategies to meet the needs for operating capital, capital expenditure, R&D expenses, debt handling, dividend disbursement, etc.

29. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments not measured at fair value

Management believes the carrying amounts of financial assets and financial liabilities not measured at fair value recognized in the consolidated financial statements approximates their fair values.

b. Fair value of financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2022 Financial assets at FVTPL Domestic listed equity securities Domestic unlisted equity securities Open-end beneficiary certificates	Level 1 $ 4,083 - 272,788 $ 276,871	Level 2 $ - - - $ -	Level 3 Total $ - $ 4,083 117,952 117,952 4,513 277,301 $ 122,465 $ 399,336 (Continued)	Total $ 4,083 117,952 277,301
				$ 399,336

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Level 1 Level 2 Level 3 Total

Financial assets at FVTOCI Domestic listed ordinary shares and emerging markets shares Domestic unlisted equity securities Foreign unlisted equity securities December 31, 2021 Financial assets at FVTPL Domestic listed equity securities Domestic unlisted equity securities Open-end beneficiary certificates Financial assets at FVTOCI Domestic listed ordinary shares and emerging markets shares Domestic unlisted equity securities Foreign unlisted equity securities	$ 395,455 - - $ 395,455 $ 6,643 - 445,082 $ 451,725 $ 511,180 - - $ 511,180	$ - - - $ - $ - - - $ - $ - - - $ -	$ 440,345 $ 835,800 227,944 227,944 140,694 140,694 $ 808,983 $ 1,204,438 $ - $ 6,643 53,224 53,224 4,793 449,875 $ 58,017 $ 509,742 $ 502,085 $ 1,013,265 136,548 136,548 17,079 17,079 $ 655,712 $ 1,166,892 (Concluded)

There were no transfers between Levels 1 and 2 for the years ended December 31, 2022 and 2021.

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2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2022

Financial Assets Balance at January 1, 2022 Purchase Reduction of capital cash return Recognized in profit or loss (included in valuation gains and losses) Recognized in other comprehensive income (included in unrealized gain on financial assets at FVTOCI) Balance at December 31, 2022 For the year ended December 31, 2021 Financial Assets Balance at January 1, 2021 Purchase Reduction of capital cash return Recognized in profit or loss (included in valuation gains and losses) Recognized in other comprehensive income (included in unrealized gain on financial assets at FVTOCI) Balance at December 31, 2021	Financial Assets at FVTPL Open-end Beneficiary Certificates $ 58,017 42,120 22,328 - $ 122,465 Financial Assets at FVTPL Open-end Beneficiary Certificates $ 63,476 - - (5,459) - $ 58,017	Financial Assets at FVTOCI Equity Instruments $ 655,712 89,033 (585) 64,823 $ 808,983 Financial Assets at FVTOCI Equity Instruments $ 486,399 15,750 (9,660) - 163,223 $ 655,712	Total $ 713,729 131,153 (585) 22,328 64,823 $ 931,448 Total $ 549,875 15,750 (9,660) (5,459) 163,223 $ 713,729

3) Valuation techniques and inputs applied for Level 3 fair value measurement

The fair values of unlisted and domestic emerging market equity securities and open-end beneficiary certificates are determined by using the asset approach and the market approach. Asset approach evaluates the total market value of individual asset and liability of the evaluated target, taking into account the risk factors (lack of marketability, etc.) to estimate the fair value. Market approach refers to the transaction prices in active market of the listed companies engaging in similar business, related price multiplier, transaction and information implied by the transaction price, to arrive at the fair value.

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c. Categories of financial instruments

Financial assets Financial assets at FVTPL Mandatorily at FVTPL Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at amortized cost (2)	December 31
	2022 2021 $ 399,336 $ 509,742 11,386,937 9,154,450 1,204,438 1,166,892 7,832,899 8,032,376

1) The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, financial assets measured at amortized cost, notes receivable, trade receivables, other receivables (classified as other current assets) and refundable deposits.
2) The balances included financial liabilities measured at amortized cost, which comprise shortterm loans, notes payable, trade payables, other payables, long-term loans (including current portion of long-term borrowings) and guarantee deposits received.
d. Financial risk management objectives and policies

The Group’s major financial instruments consist of equity investments, cash and cash equivalents, receivables, long-term and short-term borrowings and trade payables. The Group’s financial risk management pertains to financial risks relating to the operations of the Group, including currency risk, interest rate risk, credit risk and liquidity risk. The Group seeks to identify, evaluate and hedge against market uncertainties to lower the effect of market changes on the Group’s financial performance.

The Group manages foreign exchange risk through setting up of foreign currency deposit bank accounts and through the use of foreign currency directly received from sale to pay for purchases in foreign currency to reduce the impact of foreign exchange fluctuation and to achieve a natural hedge effect. The Group actively observes the exchange rate information to fully control the foreign currency hedge.

1) Market risk

The Group’s activities expose it primarily to the financial risks of changes in exchange rates (see Item (a) below), interest rates (see Item (b) below) and price (see Item (c) below).

There has been no change to the Group’s exposure to market risks or the manner in which these risks are managed and measured.

a) Foreign currency risk

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period are set out in Note 34.

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Sensitivity analysis

The Group was mainly exposed to USD and RMB.

Had the NTD strengthened by 5% against the relevant currency, the pre-tax profit would have decreased by $238,242 thousand and $153,958 thousand for the years ended December 31, 2022 and 2021, respectively. The 5% sensitivity rate is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency - denominated monetary items and their translation at periodend is adjusted for a 5% change in foreign-currency rates.

b) Interest rate risk

The Group is exposed to interest rate risk because entities in the Group borrow funds both at fixed and floated interest rates. The Group evaluates hedging activities regularly to align with interest rate views and defined risk appetite and ensures that the most cost-effective hedging strategies are applied.

The carrying amounts of the financial assets and liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2022 2021 $ 1,772,345 $ 1,400,290 1,096,849 690,793 4,314,602 2,909,610 2,484,800 3,254,779

Sensitivity analysis

The sensitivity analysis below has been determined on the basis of the exposure to interest rates for non-derivative instruments at balance sheet dates. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the balance sheet dates was outstanding for the whole year. A 50-basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2022 and 2021 would increase by $9,149 thousand and decrease by $1,726 thousand, respectively, which was mainly attributable to the Group’s exposure to interest rates on its variable rate deposits and bank loans.

c) Price risk

The Group is exposed to equity price risks mainly arising from the followings:

i. Investments in financial assets at FVTOCI (mainly investment in domestic and foreign stocks), which are held for strategic rather than trading purposes. The Group does not actively trade these investments.
167 -
ii. Financial assets at FVTPL (mainly investment in domestic and foreign open-ended beneficiary certificates and listed stocks in Taiwan).

The Group manages risk through holding various investment portfolios and having each equity investment to get prior approval from the Group’s management.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% higher, the pre-tax profit for the years ended December 31, 2022 and 2021 would have increased by $19,967 thousand and $25,487 thousand, respectively, as a result of the changes in fair values of financial assets at FVTPL, and the pre-tax other comprehensive income for the years ended December 31, 2022 and 2021 would have increased by $60,222 thousand and $58,345 thousand, respectively, as a result of the changes in fair values of financial assets at FVTOCI.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligation, could arise from:

a) The carrying amount of trade receivables from operating activities; and
b) The amount of bank deposits, fixed-income and other financial instruments from investing activities.

The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade receivables involve a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of trade receivables, including the evaluation of internal credits, historical transaction records, present economic circumstances, etc. which affect the customers’ payment ability.

The credit risk of the Group’s trade receivables is mainly concentrated on specific customers in mainland China. The Group had properly assessed the expected credit loss of relevant trade receivables. As of December 31, 2022 and 2021, the above trade receivables both accounted for 12% of the total trade receivables.

The credit risk of bank deposits, fixed-income financial instruments and other financial instruments are evaluated, managed and controlled by the Group’s financial department. The Group’s exposure to credit risk was limited because the Group adopted a policy of only dealing with creditworthy counterparties.

3) Liquidity risk

The Group manages liquidity risk by managing and maintaining sufficient cash and cash equivalents to supply the Group’s demand and mitigate the effects of fluctuations in cash flow. The Group continuously monitors the use of credit lines and conformity to loan terms.

The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2022 and 2021, the Group’s available unutilized bank loan facilities were $4,802,820 thousand and $4,563,738 thousand, respectively.

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Liquidity and interest risk tables for non-derivative financial liabilities

The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay.

Bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other nonderivative financial liabilities were based on the agreed repayment dates.

Non-derivative financial liabilities Non-interest bearing Fixed interest rate instruments Floating interest rate instruments Lease liabilities Non-derivative financial liabilities Non-interest bearing Fixed interest rate instruments Floating interest rate instruments Lease liabilities	December 31, 2022	December 31, 2022
	Within 1 Year 1-5 Years More Than 5 Years $ 4,583,011 $ - $ - 502,851 161,324 105,177 1,566,376 966,820 - 143,614 262,068 7,502 $ 6,795,852 $ 1,390,212 $ 112,679 December 31, 2021
	Within 1 Year $ 4,427,710 208,228 1,927,042 120,292 $ 6,683,272	1-5 Years More Than 5 Years $ - $ - 33,104 92,348 1,288,896 80,730 270,495 16,552 $ 1,592,495 $ 189,630

After considering the financial position of the Group, management does not expect the banks will execute their rights of requiring the Group to repay the bank loans immediately. In addition, management believes the operating funds of the Corporation and subsidiaries are sufficient to meet cash flow demand; thus, liquidity risk is not considered significant.

The Group’s operating funds are sufficient to meet its cash flow demand, as a result, the Group does not use its overdraft limit.

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30. TRANSACTIONS WITH RELATED PARTIES

a. The related parties and relationships with the Group were as follows:

Related Party Relationship with the Group Adlink Technology Inc. (“Adlink”) Associate Dynascan Technology Corp. (“Dynascan Technology”) Associate DynaScan Technology Inc. (“Dynascan USA”) Other related party (associate’s subsidiary) Mou Kuan Technology Co., Ltd. (“Mou Kuan”) Other related party Tian Zheng International Precision Machinery Co., Ltd. Other related party Tian Zheng International Precision Machinery Co., Ltd. Other related party (associate’s (Dongguan) subsidiary) Taiwan Advanced Nanotech Inc. (“TAN Bead”) Other related party Quantel Co., Ltd. (“Quantel Thailand”) Other related party Quantel Electronics (India) Private Limited (Quantel Other related party India)

Balances and transactions between the Corporation and its subsidiaries, which are related parties of the Corporation, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and its related parties are disclosed below.

The related-party transactions were conducted under normal terms unless specified otherwise.

b. Sales

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
2022 2021 $ 35,691 $ 24,245 56,267 41,465 $ 91,958 $ 65,710 For the Year Ended December 31
	$	2022 2021 15,074 $ 22,414 28,646 22,985 43,720 $ 45,399 December 31
	$
		2022 $ 8,717 56,029 $ 64,746	2021 $ 11,796 22,173 $ 33,969

c. Purchases
d. Receivables from related parties (excluding loans to related parties)

Outstanding trade receivables from related parties are unsecured.

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e. Payables to related parties (excluding loans from related parties)

Line Item Related Party Categories/Name Notes payable - related Other related parties parties Trade payables - related Associates parties Other related parties f. Acquisition of property, plant and equipment For Related Party Categories/Name Associates $ g. Disposal of property, plant and equipment Proceeds Related Party Category/Name 2022 2021 Associates Adlink Technology Inc.$ - $ 3,080,000	Line Item Related Party Categories/Name Notes payable - related Other related parties parties Trade payables - related Associates parties Other related parties f. Acquisition of property, plant and equipment For Related Party Categories/Name Associates $ g. Disposal of property, plant and equipment Proceeds Related Party Category/Name 2022 2021 Associates Adlink Technology Inc.$ - $ 3,080,000			December 31	December 31	December 31
				2022 2021 $ 2,559 $ 2,953 $ 2,974 $ 3,877 2,425 7,128 $ 5,399 $ 11,005 Purchase Price
		For		the Year Ended December 31
			$		2022 2021 4,509 $ 24,182 Gain on Disposal

2022 $ -	2021 $ 3,080,000				2022 $ -	2021 $ 1,575,072

The gain on transfer of rights recognized as a result of sale and leaseback transactions amounted to $154,510 thousand for the year ended December 31, 2021. Refer to Note 14 for the detailed information.

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
$	2022 2021 - $ 180,053 December 31

	2022 $ 142,891 23,657 $ 166,548	2021 $ 189,258 - $ 189,258

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For the Year Ended December 31

Line Item Related Party Categories/Name Interest expense Associates Other related parties Depreciation expense Associates Other related parties	2022 $ 1,403 1,815 $ 3,218 $ 35,265 11,481 $ 46,746	2021 $ 1,317 - $ 1,317 $ 27,008 - $ 27,008

Refer to Note 14 for the related transaction.

i. Others

Line Item Related Party Categories/Name Administration expense Associates Other related parties Compensation of key management personnel Short-term employee benefits Post-employment benefits Share-based payments	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2022 2021 $ 20,187 $ 12,791 8,722 2,785 $ 28,909 $ 15,576 For the Year Ended December 31
		2022 $ 176,341 3,033 22,261 $ 201,635	2021 $ 179,017 2,765 - $ 181,782

j. Compensation of key management personnel

The remuneration of directors and key executives is determined by the remuneration committee based on the performance of individuals and market trends.

31. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The assets pledged as collaterals for bank loans, product warranties and court deposit guarantees were as follows:

Property, plant and equipment, net Pledged deposits (classified as financial assets measured at amortized cost)		December 31	December 31
		2022 $ 198,189 159,185 $ 357,374	2021 $ 189,129 780,314 $ 969,443

172 -

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Chroma’s subsidiary, MAS Automation Corporation (“MAS”), entered into an equipment purchase agreement (the “Agreement”) with LINCO Technology Co., Ltd. (“LINCO”) in 2017, in which MAS entrusted LINCO to manufacture automation equipment. However, LINCO failed to deliver a considerable number of important parts of the equipment to MAS; furthermore, LINCO rejected to perform its installation services under the Agreement. Hence, MAS claimed for a delay penalty of $2,503,659 thousand (around US$83,455 thousand) against LINCO, of which MAS filed a civil lawsuit on November 12, 2018 for $440,000 thousand, and the remaining penalty was reserved for the right to claim in the future. In addition, MAS submitted a petition to the court for provisional attachment against LINCO to secure its right, and offered a deposit in an amount of $440,000 thousand to the court.

Whereas, LINCO conversely alleged that MAS breached its payment obligation under the Agreement. LINCO raised a counterclaim against MAS in the Taiwan Taoyuan District Court on October 30, 2019, claiming for the payment of $255,640 thousand (around US$8,240 thousand) along with the interest. As of December 31, 2022, the lawsuit has yet to be settled and the outcome of the judgment in the Taiwan Taoyuan District Court cannot be reliably estimated.

On the other hand, LINCO asserted that it suffered from a provisional attachment order which was submitted by MAS, and brought another civil lawsuit against MAS in the Taiwan Supreme Court, claiming for the damage compensation of $505,521 thousand. The case had been pronounced by the court on May 24, 2022. The court rejected the compensatory damage and the request for claim of provisional execution by LINCO and the conviction affirmed by the Supreme Court.

33. SIGNIFICANT EVENTS

Considering the future strategy of products and the enhancement of product competitiveness, the Group’s subsidiary invested RMB1,000 thousand to set up Chroma ATE Inc. (Dongguan) which engage in the sale of computerized automatic test systems, peripherals and electronic test instruments in January 2023.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2022

December 31, 2022
	Foreign		Carrying
	Currencies	Exchange Rate	Amount
Financial assets
Monetary items
USD	$ 104,606	30.710 (USD:NTD)	$ 3,212,456
USD	16,472	7.798 (USD:HKD)	505,869
USD	8,290	6.967 (USD:RMB)	254,601
RMB	262,110	4.408 (RMB:NTD)	1,155,380
RMB	109,134	1.119 (RMB:HKD)	481,065
RMB	39,843	0.144 (RMB:USD)	175,628
			$ 5,784,999
			(Continued)

173 -

		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Non-monetary items
Investments accounted for using
equity method
USD	$	110,616	30.710 (USD:NTD)	$ 3,397,005
Financial liabilities
Monetary items
USD		15,100	30.710 (USD:NTD)	$ 463,715
USD		8,873	7.798 (USD:HKD)	272,489
RMB		64,417	1.119 (RMB:HKD)	283,950
				$ 1,020,154
				(Concluded)
ember 31, 2021
		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	96,108	27.680 (USD:NTD)	$ 2,660,272
USD		11,417	7.799 (USD:HKD)	316,019
USD		10,329	6.372 (USD:RMB)	285,894
USD		8,816	1.353 (USD:SGD)	244,031
RMB		136,085	4.344 (RMB:NTD)	591,153
RMB		91,770	1.224 (RMB:HKD)	398,647
RMB		35,246	0.157 (RMB:USD)	153,109
				$ 4,649,125
Non-monetary items
Investments accounted for using
equity method
USD		96,622	27.680 (USD:NTD)	$ 2,674,510
Financial liabilities
Monetary items
USD		42,691	27.680 (USD:NTD)	$ 1,181,688
USD		9,241	7.799 (USD:HKD)	255,798
RMB		30,495	1.224 (RMB:HKD)	132,472
				$ 1,569,958

December 31, 2021

For the years ended December 31, 2022 and 2021, realized and unrealized net foreign exchange gains (losses) were $263,216 thousand and $(54,773) thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions of the entities in the Group.

174 -

35. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees:
1) Financing provided to others: Table 1
2) Endorsements/guarantees provided: Table 2
3) Marketable securities held (excluding investment in subsidiaries, associates and joint ventures): Table 3
4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: Table 4
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 5
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 6
9) Trading in derivative instruments: None.
10) Others: Intercompany relationships and significant intercompany transactions: Table 7
11) Information on investees: Table 8
b. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: Table 9
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: Table 5
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: Table 5
- c) The amount of property transactions and the amount of the resultant gains or losses: None.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: Table 2
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: Table 1
175 -
f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receiving of services: None.
c. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder: None.

36. SEGMENT INFORMATION

Information reported to the Group’s chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on types of products delivered or services provided. The Group’s reportable segments are as follows:

a. Special materials department.
b. Test instrument department.
c. Automatic equipment department.
d. Other
1) Segment revenues and results

For the year ended December 31, 2022 Revenue from external customers Inter-segment revenue Segment revenue Consolidated revenue Segment income Non-operating income and expenses Profit before tax For the year ended December 31, 2021 Revenue from external customers Inter-segment revenue Segment revenue Consolidated revenue Segment income Non-operating income and expenses Profit before tax	Special Materials Department $ 635,186 - $ 635,186 $ 44,354 $ 2,804,306 15 $ 2,804,321 $ 59,995	Test Instrument Department $ 20,269,180 11,763,765 $ 32,032,945 $ 4,498,092 $ 13,555,365 8,763,991 $ 22,319,356 $ 3,050,270	Automatic Equipment Department $ 829,479 2,034,037 $ 2,863,516 $ 420,020 $ 780,206 370,736 $ 1,150,942 $ (179,022)	Other $ 333,397 25 $ 333,422 $ 29,927 $ 444,146 49 $ 444,195 $ 107,028	Elimination $ - (13,797,827) $ (13,797,827) $ 46,863 $ - (9,134,791) $ (9,134,791) $ 36,722	Total $ 22,067,242 -
						22,067,242
						$ 22,067,242
						$ 5,039,256 1,402,212
						$ 6,441,468
						$ 17,584,023 -
						17,584,023
						$ 17,584,023
						$ 3,074,993 2,208,853
						$ 5,283,846

The sales between segments are based on fair value.

The above revenues were generated through transactions with external customers and among segments. The inter-segment revenues for the years ended December 31, 2022 and 2021 had been adjusted and eliminated from the consolidated financial statements.

Segment profit represents the profit before tax earned by each segment without allocation of central administration costs, and remuneration of directors, non-operating revenue and expenses. This was the measure reported to the Group’s chief operating decision maker to allocate resources to each segment and evaluate its performance.

176 -

2) Segment assets and liabilities

The assets and liabilities of the Group have not been provided to the operating decision maker; hence, the valuation amounts of assets and liabilities are not disclosed.

3) Geographical information

The Group’s primary operating areas are Taiwan, Republic of China, America, and others.

The Group’s revenue from external customers by location of operations and information about its non-current assets by geographical location are detailed below.

Revenue from External Customers For the Year Ended December 31 2022 2021 $ 5,166,873 $ 6,893,918 9,665,802 5,784,661 5,072,458 2,848,020 2,162,109 2,057,424 $ 22,067,242 $ 17,584,023	Non-current Assets	Non-current Assets

	December 31
2022 $ 5,166,873 9,665,802 5,072,458 2,162,109 $ 22,067,242	2022 $ 9,062,374 341,293 506,303 519,915 $ 10,429,885	2021 $ 8,943,752 369,790 385,677 422,955 $ 10,122,174

Note: Including all area amount of non-significant subsidiaries.

Non-current assets exclude non-current assets classified as financial instruments, investments accounted for using the equity method, and deferred tax assets.

4) Information about major customers

Included in revenue of $22,067,242 thousand and $17,584,023 thousand in 2022 and 2021, respectively, is revenue of approximately $3,700,137 thousand and $472,740 thousand which arose from sales to the Group’s largest customer.

177 -

TABLE 1

CHROMA ATE INC. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limit
													Item	Value
0	The Corporation	Chroma Japan Corp. Chroma Systems Solutions, Inc.	Other receivables Other receivables	Y Y	$ 132,036 110,757	$ 132,036 75,617	$ 118,146 75,617	1.42% 3.25%- 4.00%	a a	$ 292,374 759,428	- -	$ - -	- -	$ - -	$ 2,136,071 (Note 1) 2,136,071 (Note 1)	$ 4,272,142 (Note 2) 4,272,142 (Note 2)
1	Wei Kuang Mech. Eng. Inc.	Wei Kuang Automatic Equipment (Nanjing) Co., Ltd.	Other receivables	Y	132,667	132,667	-	2.50%	b	-	Purchase material, working capital turnover	-	-	-	640,203 (Note 3)	896,284 (Note 4)

Note 1: Based on 10% of the net value of the Corporation.

Note 2: Based on 20% of the net value of the Corporation.

Note 3: Based on 50% of the net value of Wei Kuang Mech. Eng. Inc.

Note 4: Based on 70% of the net value of Wei Kuang Mech. Eng. Inc.

Note 5: The amounts listed in the table were translated into the New Taiwan dollars at the exchange rate of US$1=NT$30.710, JPY1=NT$0.232 and RMB1=NT$4.408 as of December 31, 2022.

Note 6: Financing provided:
a. For transactions.
b. For short-term financing.
178 -

TABLE 2

CHROMA ATE INC. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/ Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement /Guarantee Given on Behalf of Each Party (Note 1)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement /Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement /Guarantee to Net Equity in Latest Financial Statements	Aggregate Endorsement Guarantee Limit (Note 2)	Endorsement /Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement /Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement /Guarantee Given on Behalf of Companies in Mainland China
		Name	Relationship
0	The Corporation	Chroma ATE Inc. Chroma Japan Corp. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE Europe B.V. Chroma Electronics (Shanghai) Co., Ltd. Saject System Technology (Suzhou) Co., Ltd. Mas Automation Corp.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	$ 3,204,106 3,204,106 3,204,106 3,204,106 3,204,106 3,204,106 3,204,106	$ 245,680 46,400 1,578,064 49,080 44,080 22,040 300,000	$ 245,680 46,400 1,578,064 49,080 44,080 22,040 300,000	$ 61,420 34,800 97,607 16,360 10,293 - 100,000	$ - - - - - - -	1.15% 0.22% 7.39% 0.23% 0.21% 0.10% 1.40%	$ 6,408,212 6,408,212 6,408,212 6,408,212 6,408,212 6,408,212 6,408,212	Y Y Y Y Y Y Y	- - - - - - -	- - Y - Y Y -

Note 1: According to Regulation of the “Procedures for Endorsement/Guarantee and lending of Funds”, the Corporation limits the endorsement/guarantee amount on each entity to within 15% of the net value of the Corporation and the capital issued of the entity endorsed/guaranteed, but 100% held subsidiary is not limited by the regulation.

Note 2: According to Regulation of the “Procedures for Endorsement/Guarantee and Lending of Funds”, the Corporation limits the endorsement/guarantee amount within the 30% of the net value of the Corporation.

Note 3: The amounts listed in columns were translated into the New Taiwan dollars at the exchange rate of US$1=NT$30.710, JPY1=NT$0.232, RMB1=NT$4.408, EUR1=NT$32.720, as of December 31, 2022.

179 -

TABLE 3

CHROMA ATE INC. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

(EXCLUDING INVESTMENT IN SUBSIDIARIES, ASSOCIATES AND JOINTLY CONTROLLED ENTITIES) DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December	31, 2022		Note
				Shares/Units (In Thousands)	Carrying Amount	Percentage of Ownership	Fair Value
The Corporation Chroma Systems Solutions Inc. Chroma Investment Co., Ltd.	Fund WI Harper INC Fund VII LP Stocks DynaColor, Inc. Chunghwa Telecom Co., Ltd. China Communications Media Group Co., Ltd. Tian Zheng International Precision Machinery Co., Ltd. Twoway Catv Service Inc. Taiwan Advanced Nanotech Inc. WK Technology Fund IX Ltd. TFBS Bioscience Inc. Gaius Automotive Inc. Enteligent Inc. Fund Franklin California Tax Free Income FD Inc. Fund Hua Nan Kirin Money Market Fund Stocks Greatek Electronics Inc. Hephas Energy Co., Ltd. Chroma ATE Inc. Taiwan Advanced Nanotech Inc. Cosmactive Broadband Networks Co., Ltd. Prance Systems Technology Corporation	- - - - - - - - - - - - - - - The Corporation - - -	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - current `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - non-current `〃` `〃` `〃`	- 6,050 412 10 2,681 3,561 3,475 4,614 2,572 1,486 875 439 1,073 85 1,574 1,655 790 4 111	$ 4,513 220,534 46,599 187 128,135 49,172 318,734 52,378 147,825 27,741 29,600 90,871 13,043 4,083 117,952 299,479 72,439 - -	- 6.1 - - 7.3 4.4 11.5 4.6 7.8 2.1 6.9 - - - 6.8 0.4 2.6 0.6 5.1	$ 4,513 220,534 46,599 187 128,135 49,172 318,734 52,378 147,825 27,741 29,600 90,871 13,043 4,083 117,952 299,479 72,439 - -	- - - - - - - - - - - - - - - - - - -
							(Continued)

180 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2022	December 31, 2022		Note
				Shares/Units (In Thousands)	Carrying Amount	Percentage of Ownership	Fair Value
Chen Hwa Technology Inc. Innovative Nanotech Incorporated EVT Technology Co., Ltd. Testar Electronics Corporation	Stocks Hangzhou New Material Chroma Co., Ltd. Fund Mega Diamond Money Market Fund Fund Mega Diamond Money Market Fund Fund Mega Diamond Money Market Fund	- - - -	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current `〃` `〃`	- 4,724 1,044 7,481	$ 111,094 60,214 13,311 95,349	19.0 - - -	$ 111,094 60,214 13,311 95,349	- - - -

Note: The fair value of open-end beneficiary certificates and listed market securities was calculated based on the net asset value and closing price as of balance sheet date.

(Concluded)

181 -

TABLE 4

CHROMA ATE INC. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending	Balance
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal	Number of Shares	Amount
Chroma ATE Inc.	Stocks Adlink Technology Inc.	Investments accounted for using equity method	-	-	24,432	$ 284,189	-	$ -	10,015	$ 608,622	$ 120,800	$ 414,568	14,417	$ 244,736

Note: The amounts included capital surplus derecognized and other comprehensive income transferred in.

182 -

TABLE 5

CHROMA ATE INC. AND SUBSIDIARIES

TOTAL PURCHASE FROM OR SALE TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase (Sale)	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Corporation Chroma ATE Inc. Chroma ATE Europe B.V. Neworld Electronics Limited Mas Automation Corp. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd.	Neworld Electronics Limited Chroma Electronics (Shanghai) Co., Ltd. Chroma Electronics (Shenzhen) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma Japan Corp. Chroma ATE Inc. Chroma Systems Solutions, Inc. Chroma ATE Europe B.V. Quantel Private Ltd. The Corporation Chroma Germany GmbH Chroma Electronics (Shenzhen) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Parent company Subsidiary Subsidiary Subsidiary Same parent company Same parent company Same parent company Same parent company	(Sale) (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) Purchase (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) (Sale)	$(2,851,056) (374,097) (361,322) (1,171,648) (292,374) (2,603,148) (759,428) (328,924) (408,150) 151,847 (147,913) (1,265,332) (109,530) (191,737) (163,314) (195,925) (1,590,573)	(21) (3) (3) (9) (2) (19) (6) (2) (3) 3 (34) (40) (3) (6) (29) (36) (90)	Note Note Note Note Note Note Net 90 days after delivery Note Net 90 days after delivery Net 90 days after delivery Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration	- - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - -	$ 539,791 13,720 81,755 692,629 329,807 - 243,804 119,390 108,941 (2,745) 76,983 379,976 6,018 73,943 - 75,766 425,801	16 - 2 20 10 - 7 4 3 - 53 42 1 8 - 56 90	- - - - - - - - - - - - - - - - -

Note: The actual credit period is longer than other customers, the recovery of receivables depends on the related parties’ financial position.

183 -

TABLE 6

CHROMA ATE INC. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period (Note)	Allowance for Impairment Loss
					Amount	Action Taken
The Corporation Neworld Electronics Limited Wei Kuang Automatic Equipment (Nanjing) Co., Ltd.	Neworld Electronics Limited Chroma ATE (Suzhou) Co., Ltd. Chroma Japan Corp. Chroma Systems Solutions, Inc. Chroma ATE Europe B.V. Quantel Private Ltd. Chroma Japan Corp. Chroma Electronics (Shenzhen) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Same parent company	Trade receivables $ 539,791 Trade receivables 692,629 Trade receivables 329,807 Trade receivables 243,804 Trade receivables 119,390 Trade receivables 108,941 Other receivables - financing provided 118,146 Trade receivables 379,976 Trade receivables 425,801	5.97 2.61 0.87 4.10 3.43 5.86 - 4.14 7.47	$ - - - - - - - - -	- - - - - - - - -	$ 314,434 - 37,479 92,014 20,288 32,321 - 121,056 71,712	$ - - - - - - - - -

Note: As of February 10, 2023.

184 -

TABLE 7

CHROMA ATE INC. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Company Name	Counterparty	Flow of Transactions (Note 1)	Transaction Details	Transaction Details		Percentage to Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
0	The Corporation	Neworld Electronics Limited Neworld Electronics Limited Chroma Electronics (Shenzhen) Co, Ltd. Chroma Electronics (Shenzhen) Co, Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Mas Automation Corp. Chroma ATE Inc. Chroma ATE Inc. Chroma ATE Inc. Chroma ATE Inc. Chroma Systems Solutions, Inc. Chroma Systems Solutions, Inc. Chroma Systems Solutions, Inc. Chroma ATE Europe B.V. Chroma ATE Europe B.V. Chroma Germany GmbH Chroma Germany GmbH Chroma Japan Corp. Chroma Japan Corp. Chroma Japan Corp. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Testar Electronics Corporation Testar Electronics Corporation Adivic Technology Co., Ltd. Quantel Private Ltd. Quantel Private Ltd. Quantel Private Ltd. Quantel Private Ltd. Innovative Nanotech Incorporated	a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a	Operating revenue Trade receivables Operating revenue Trade receivables Operating revenue Commissions expense Trade receivables Accrued expense Operating expense Operating revenue Purchase Operating expense Temporary receipts Operating revenue Trade receivables Other receivables - financing provided Operating revenue Trade receivables Operating revenue Trade receivables Operating revenue Trade receivables Other receivables - financing provided Operating revenue Commissions expense Trade receivables Operating revenue Trade receivables Purchase Operating revenue Commissions expense Trade receivables Accrued expense Operating revenue	$ 2,851,056 539,791 361,322 81,755 374,097 29,237 13,720 17,572 14,331 2,603,148 151,847 11,470 397,387 759,428 243,804 75,617 328,924 119,390 55,521 33,261 292,374 329,807 118,146 1,171,648 13,065 692,629 59,909 17,659 28,636 408,150 32,547 108,941 21,363 10,780	Note 2 Based on regular terms Note 2 Based on regular terms Note 2 Based on regular terms Based on regular terms Based on regular terms Based on regular terms Note 2 Based on regular terms Based on regular terms Based on regular terms Note 2 Based on regular terms Based on regular terms Note 2 Based on regular terms Note 2 Based on regular terms Note 2 Based on regular terms Based on regular terms Note 2 Based on regular terms Based on regular terms Note 2 Note 3 Based on regular terms Note 2 Based on regular terms Based on regular terms Based on regular terms Note 2	13 2 2 - 2 - - - - 12 1 - 1 3 1 - 1 - - - 1 1 - 5 - 2 - - - 2 - - - -
							(Continued)

185 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)	Transaction Details	Transaction Details		Percentage to Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
1	Neworld Electronics Limited	Chroma Electronics (Shenzhen) Co, Ltd. Chroma Electronics (Shenzhen) Co, Ltd. Chroma Electronics (Shenzhen) Co, Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd.	a a a a a b b b	Operating revenue Commissions expense Trade receivables Operating revenue Commissions expense Operating revenue Commissions expense Trade receivables	$ 1,265,332 83,489 379,976 109,530 36,683 191,737 19,747 73,943	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	6 - 1 - - 1 - -
2	Chroma Electronics (Shenzhen) Co., Ltd.	Chroma Electronics (Shanghai) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Saject System Technology (Suzhou) Co., Ltd.	b b b b b	Operating revenue Operating revenue Purchase Trade receivables Trade receivables	19,598 61,717 16,589 12,306 10,002	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - -
3	Mas Automation Corp.	Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd.	b b b	Operating revenue Other revenue Operating revenue	163,314 10,935 33,195	Based on regular terms Based on regular terms Based on regular terms	1 - -
4	Chroma ATE Inc.	Quantel Private Ltd. Environmental Stress Systems, Inc.	b b	Purchase Purchase	10,137 57,373	Based on regular terms Based on regular terms	- -
5	Chroma ATE Europe B.V.	Chroma Germany GmbH Chroma Germany GmbH Chroma Germany GmbH	a a a	Operating revenue Trade receivables Other receivable	147,913 76,983 11,626	Based on regular terms Based on regular terms Based on regular terms	1 - -
6	Chroma ATE (Suzhou) Co., Ltd.	Saject System Technology (Suzhou) Co., Ltd.	b	Purchase	15,299	Based on regular terms	-
7	Wei Kuang Automatic Equipment (Nanjing) Co., Ltd.	Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd.	b b	Operating revenue Trade receivables	1,590,573 425,801	Based on regular terms Based on regular terms	7 1
8	Wei Kuang Automatic Equipment (Xiamen) Co., Ltd.	Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd.	b b b b	Operating revenue Trade receivables Operating revenue Trade receivables	195,925 75,766 22,717 12,587	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	1 - - -
9	Quantel Private Ltd.	Quantel Global Vietnam Co., Ltd. Quantel Global Vietnam Co., Ltd. Quantel Global Sdn. Bhd. Quantel Global Philippines Corporation	a a a a	Operating revenue Trade receivables Operating revenue Operating expense	45,029 10,080 24,266 11,595	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - -

Note 1: a. From parent to subsidiary.

b. Between subsidiaries.

Note 2: The prices were determined after taking the selling and post-sale service expenses into consideration.

Note 3: The collection periods of about 12 months were longer than those for third parties.

(Concluded)

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TABLE 8

CHROMA ATE INC. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance	as of December 31, 2022	as of December 31, 2022	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2022	December 31, 2021	Shares (Thousands)	Percentage of Ownership	Carrying Amount
The Corporation Chroma ATE Inc. Chroma ATE Europe B.V. San Eagle Development Corp. Adivic Technology Co., Ltd. Quantel Private Ltd. Chroma Investment Co., Ltd.	Neworld Electronics Limited Chroma New Material Corporation Mas Automation Corp. Chroma ATE Inc. Chroma Systems Solutions, Inc. Chroma ATE Europe B.V. Chroma Japan Corp. CHI Incorporation Ltd. Chen Hwa Technology Inc. San Eagle Development Corp. Sensational Holdings Ltd. Deep Red Holding Co., Ltd. Testar Electronics Corporation Adivic Technology Co., Ltd. Chroma Investment Co., Ltd. Quantel Private Ltd. EVT Technology Co., Ltd. Innovative Nanotech Incorporated Touch Cloud Inc. Environmental Stress Systems, Inc. Adlink Technology Inc. DynaScan Technology Corp. Camtek Ltd. Chih Ho Shun Development Co., Ltd. Chroma Systems Solutions, Inc. Chroma Germany GmbH Wei Kuang Mech. Eng. Inc. Adivic Holding Corporation Quantel Technologies India Private Ltd. Quantel Global Vietnam Co., Ltd. Quantel Global Sdn. Bhd. Quantel Global Philippines Corporation Quantel Global Company Limited Testar Electronics Corporation	Hong Kong Taoyuan, Taiwan Hsinchu, Taiwan USA USA The Netherlands Japan British Virgin Islands British Virgin Islands British Virgin Islands British Virgin Islands Mauritius Taoyuan, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Singapore Taoyuan, Taiwan Hsinchu, Taiwan Taipei, Taiwan USA Taoyuan, Taiwan Taoyuan, Taiwan Israel Taoyuan, Taiwan USA Germany Mauritius Samoa India Vietnam Malaysia Philippines Thailand Taoyuan, Taiwan	Sale and maintenance of electronic test instruments, etc. Sale and processing of gold wire Design, manufacturing, installment and testing of automated factory conveyor systems Sale and maintenance of electronic test instruments, etc. Sale and maintenance of electronic test instruments, etc. Sale and maintenance of electronic test instruments, etc. Sale and maintenance of electronic test instruments, etc. Test of inductance, capacitance and resistance, and sale of parts Test of inductance, capacitance and resistance, and sale of parts Investment Investment Investment Testing of LED Sale and research of RF device Investment Sale and maintenance of test instruments, etc. Manufacturing of motorcycles and its parts Monitoring instruments of nanoparticles Development of cloud platform and Internet of Things systems Sale of thermal platform systems Manufacturing, processing and retailing of software/hardware of computers and peripherals Research and manufacture of LED generators Automatic optical inspection equipment Construction and development of residence, buildings and specialized field; construction and investment of public works Sale and maintenance of electronic test instruments, etc. Sale and maintenance of electronic test instruments, etc. Investment Sale and research of RF device Sale and maintenance of test instruments, etc. Sale and maintenance of test instruments, etc. Sale and maintenance of test instruments, etc. Sale and maintenance of test instruments, etc. Sale and maintenance of test instruments, etc. Testing of LED	$ 271,873 - 533,000 29,895 29,628 54,026 201,750 122,884 98,217 186,514 38,301 12,217 247,096 273,800 80,000 112,328 117,311 142,140 110,457 54,985 95,778 238,746 2,342,340 17,500 64 1,073 185,686 - 3,056 6,219 4,199 610 13,138 11,250	$ 271,873 480,715 533,000 29,895 29,628 54,026 201,750 122,884 98,217 186,514 38,301 12,217 247,096 273,800 80,000 112,328 117,311 142,140 110,457 - 162,311 238,746 2,342,340 17,500 64 1,073 185,686 42,245 3,056 6,219 4,199 610 675 11,250	64,012,815 - 10,000,000 1,000,000 120,000 1,000 9,975 3,830,000 3,085,000 2,050,000 1,200,000 215,000 20,159,600 12,590,000 14,000,000 1,914,000 9,412,412 14,214,000 11,045,667 1,000 14,417,253 9,841,112 7,817,440 1,750,000 240,000 30,000 4,475,000 - 64,999 - 600,000 99,095 173,657 4,500,000	100.0 - 100.0 100.0 25.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 67.2 74.1 100.0 60.0 85.6 67.2 83.1 100.0 6.6 27.3 17.6 35.0 50.0 100.0 100.0 - 100.0 100.0 100.0 100.0 99.9 15.0	$ 1,548,322 - 141,413 482,094 19,675 135,031 (166,436) 285,539 197,222 1,208,965 55,220 163,195 143,647 27,662 251,298 259,323 23,588 163,349 35,405 58,656 244,736 204,120 3,397,005 14,908 371,301 14,676 1,285,531 - 5,692 15,344 16,826 9,662 12,751 40,404	$ 219,918 48,785 86,976 224,606 282,738 24,612 (29,695) 211,494 12 281,201 794 (2,329) 58,559 (39,282) 31,504 100,914 (9,142) 24,097 (12,788) 3,554 807,541 214,374 2,382,880 (3,129) 282,738 12,453 281,284 (40) 110 548 (367) 2,404 (141) 58,559	$ 219,918 48,785 86,976 224,509 70,684 24,597 (29,745) 211,494 12 280,465 794 (2,329) 39,335 (32,372) 31,504 60,548 (7,826) 16,185 (10,626) 2,594 51,745 58,524 384,271 (1,095) NA NA NA NA NA NA NA NA NA NA	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Associate Associate Joint venture Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Note: For amounts that were translated from foreign currencies, the amount of the original investment was translated into New Taiwan dollars at the historical exchange rate, while the amount of net income (loss) of the investee and investment gain (loss) were translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2022. Other amounts were translated into New Taiwan dollars at the spot exchange rate on December 31, 2022.

187 -

TABLE 9

CHROMA ATE INC. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars or Foreign Currency, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital (Note 2)	Method of Investment (Note 1)	Method of Investment (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2022 (Note 3)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2022 (Note 3)	Net Income (Loss) of the Investee	Percentage of Ownership in Investment	Investment Gain (Loss) (Notes 4 and 5)	Carrying Amount as of December 31, 2022 (Note 2)	Accumulated Inward Remittance of Earnings as of December 31, 2022
							Outward	Inward
Chroma Electronics (Shenzhen) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma (Shanghai) Trading Co., Ltd. Hangzhou New Material Chroma Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Mou Kuan Technologies (Nanjing) Co., Ltd. Sajet System Technology (Suzhou) Co., Ltd.	Sale of computerized automatic test systems, peripherals and electronic test instruments Sale of computerized automatic test systems, peripherals and electronic test instruments International and transit trading, commercial simple processing and commercial consulting service and etc. Production and sale of semiconductor connecting materials Sale of computerized automatic test systems, peripherals and electronic test instruments Sale and maintenance of electronic equipment and factory conveyor systems Sale and maintenance of electronic equipment and factory conveyor systems Assembly, sale and maintenance of factory conveyors and related systems and renders related after-sales services Research, development and design of computer network security systems and information management		$ 118,140 (HK$ 30,000) 92,130 (US$ 3,000 ) 82,917 (US$ 2,700) 46,065 (US$ 1,500) 116,698 (US$ 3,800) 52,327 (RMB 11,871) 50,326 (RMB 11,417) (Note 10) 36,913 (RMB 8,374)	b. Subsidiary of Neworld Electronics Limited b. Subsidiary of Neworld Electronics Limited b. Subsidiary of Chen Hwa Technology Inc. b. Subsidiary of Chen Hwa Technology Inc. b. Subsidiary of CHI Incorporation Ltd. b. Subsidiary of Wei Kuang Mech. Eng. Inc. b. Subsidiary of Wei Kuang Mech. Eng. Inc. b. Subsidiary of Wei Kuang Mech. Eng. Inc. b. Subsidiary of Deep Red Holding Co., Ltd.		$ 132,178 (HK$ 1,200 US$ 3,853) 101,993 (US$ 3,000) 84,988 (US$ 2,700) 9,091 (US$ 285) 121,115 (US$ 3,800) 43,751 (US$ 1,338) 49,935 (US$ 1,500) 92,000 (US$ 2,836) (Note 9)	$ - - - - - - - - -	$ - - - - - - - - -	$ 132,178 (HK$ 1,200 US$ 3,853) 101,993 (US$ 3,000) 84,988 (US$ 2,700) 9,091 (US$ 285) 121,115 (US$ 3,800) 43,751 (US$ 1,338) 49,935 (US$ 1,500) 92,000 (US$ 2,836) (Note 9)	$ 149,712 57,824 83 42,875 214,124 255,512 61,413 - (2,711)	100 100 100 19 100 100 100 - 100	$ 149,712 57,824 83 - 214,124 255,512 61,413 - (2,711)	$ 1,170,938 331,601 81,225 111,094 508,972 511,871 594,243 - 146,938	$ 159,544 (RMB 36,858) 47,801 (RMB 10,852) - 34,048 (US$ 1,075) 28,932 (US$ 943) - - 47,504 (US$ 1,552) -

Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2022		Investment Amounts Authorized by the Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$635,051 (HK$1,200, US$19,312)		$725,060 (HK$1,400, US$22,076) (Note 6)			$12,816,425 (Note 7)

(Continued)

188 -

Note 1: Methods of investment have following type:

a. Direct investment in mainland China.

b. Indirect investment in mainland China through an existing company in a third region. c. Other.

Note 2: The amounts of paid-in capital and carrying value as of balance sheet date were translated into the New Taiwan dollars at the rates of HK$1=NT$3.938, US$1=NT$30.710, RMB1=NT$4.408 prevailing on December 31, 2022.

Note 3: The amounts of accumulated outflow of investment from Taiwan as of January 1, 2022 and December 31, 2022 were translated into the New Taiwan dollar on the original outflow day.

Note 4: Based on audited financial statements.

Note 5: Investment income (loss) was translated into the New Taiwan dollar at the average rate of HK$1=NT$3.806, US$1=NT$29.805, RMB1=NT$4.422 for the year ended December 31, 2022.

Note 6:

	Approval Letter		Approved Amount	Approved Amount	Approved Amount
a.	Letter (1998) II-87710585 of Investment Commission of MOEA	NT$	5,852	(HK$	1,400)
b.	Letter (2000) II-89014726 and 89037430 of Investment Commission of MOEA	NT$	63,180	(US$	2,000)
c.	Letter (2001) II-89037430 of Investment Commission of MOEA	NT$	33,160	(US$	1,000)
d.	Letter II-91048640 of Investment Commission of MOEA	NT$	63,984	(US$	1,853) (Note 8)
e.	Letter II-90025170 of Investment Commission of MOEA	NT$	60,240	(US$	1,750)
f.	Letter II-092020235 of Investment Commission of MOEA	NT$	19,230	(US$	560)
g.	Letter II-092043358 of Investment Commission of MOEA	NT$	6,748	(US$	200)
h.	Letter II-093004076 of Investment Commission of MOEA	NT$	3,158	(US$	95)
i.	Letter II-094006092 of Investment Commission of MOEA	NT$	6,896	(US$	219)
j.	Letter II-09500052120 of Investment Commission of MOEA	NT$	81,528	(US$	2,500)
k.	Letter II-09600175700 of Investment Commission of MOEA	NT$	120,000	(US$	3,699) (Note 10)
l.	Letter II-09600006020 of Investment Commission of MOEA	NT$	66,580	(US$	2,000)
m.	Letter II-09600310110 of Investment Commission of MOEA	NT$	33,160	(US$	1,000)
n.	Letter II-09700186010 of Investment Commission of MOEA	NT$	46,110	(US$	1,500)
o.	Letter II-09700403210 of Investment Commission of MOEA	NT$	7,096	(US$	210) (Note 9)
p.	Letter II-10400042770 of Investment Commission of MOEA	NT$	78,240	(US$	2,500)
q.	Letter II-10600164500 of Investment Commission of MOEA	NT$	29,898	(US$	990)

Note 7: The upper limit on investment was calculated in accordance with the regulations of the Investment Commission of the Ministry of Economic Affairs for 60% of the net equity or consolidated net equity.

Note 8: The Corporation invested accounts receivable amounting to US$853 thousand in Chroma Electronics (Shenzhen) Co., Ltd. through Neworld Electronics Limited.

Note 9: The investment in Sajet Technology Inc. (liquidated on September 15, 2008) was authorized by the Investment Commission in 2004.

Note 10: Liquidated in 2022, settlement payment is not remitted to Taiwan.

(Concluded)

189 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Chroma ATE Inc.

Opinion

We have audited the financial statements of Chroma ATE Inc. (the “Corporation”), which comprise the balance sheets as of December 31, 2022 and 2021, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Key Audit Matters

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

Key audit matter of the financial statements for the year ended December 31, 2022 is described as follows:

Investments Accounted for Using the Equity Method -

Occurrence of Sales Revenue of Some Subsidiaries

The Corporation’s subsidiaries mainly sell test instruments and other products. In 2022, the revenue from specific customers had changed significantly as compared with last year. Considering that there may be greater risks of fraud in revenue recognition and the management could be under pressure to meet expected financial goals; therefore, we identified the occurrence of sales revenue from specific customers as a key audit matter.

190 -

The main audit procedures we performed for the aforementioned matter are as follows:

We understood and tested the processes of internal controls related to sales cycle and evaluated the effectiveness of design and implementation.
We obtained sales details, selected samples to perform test of details, and validated the documents such as sales order, delivery orders and invoices to confirm the occurrence of sales revenue.
We obtained samples of sales details and tested for any significant difference in customers and amount of the receivables to confirm the occurrence of sales revenue.

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

Management is responsible for the preparation and fair presentation of the 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 financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Corporation’s internal control.
191 -
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation’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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Corporation to express an opinion on the 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 were of most significance in the audit of the 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.

192 -

The engagement partners on the audits resulting in this independent auditors’ report are Wen-Chin Lin and Chien-Liang Liu.

Deloitte & Touche Taipei, Taiwan Republic of China March 1, 2023

Notice to Readers

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

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

193 -

CHROMA ATE INC.

BALANCE SHEETS DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at amortized cost (Notes 9 and 29) Notes receivable (Note 10) Trade receivables (Notes 5 and 10) Trade receivables - related parties (Notes 10 and 28) Other receivables - related parties (Note 28) Inventories (Notes 5 and 11) Prepayments Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Investments accounted for using equity method (Note 12) Property, plant and equipment (Notes 13 and 28) Right-of-use assets (Note 14) Investment properties (Note 15) Goodwill (Note 16) Intangible assets Deferred tax assets (Note 23) Prepayments for equipment Refundable deposits Prepayments for investments Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 17) Contract liabilities (Note 21) Trade payables Trade payables - related parties (Note 28) Other payables (Note 18) Current tax liabilities (Note 23) Lease liabilities (Note 14) Current portion of long-term borrowings (Note 17) Other current liabilities (Note 28) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 17) Deferred tax liabilities (Note 23) Lease liabilities (Note 14) Net defined benefit liabilities (Note 19) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 20) Ordinary share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity TOTAL		2022 Amount % $ 2,928,946 10 - - 7,621 - 1,193,642 4 2,196,021 7 193,764 1 3,370,295 12 102,895 - 41,659 - 10,034,843 34 4,513 - 1,020,905 4 8,893,937 31 6,172,221 21 115,834 - 2,478,333 9 94,424 - 39,554 - 251,055 1 116,605 - 10,653 - - - 19,198,034 66 $ 29,232,877 100 $ 1,300,000 4 158,868 1 1,478,714 5 16,013 - 1,462,903 5 515,344 2 45,402 - 200,000 1 442,076 1 5,619,320 19 950,000 3 987,512 4 98,891 - 155,619 1 60,827 - 2,252,849 8 7,872,169 27 4,253,970 15 4,502,473 15 3,237,808 11 86,888 - 8,970,974 31 12,295,670 42 339,463 1 (30,868) - 21,360,708 73 $ 29,232,877 100		2021
				Amount % $ 994,158 4 279,778 1 5,147 - 982,111 4 1,666,038 6 420,055 2 2,988,756 12 82,156 - 52,990 - 7,471,189 29 4,793 - 1,066,019 4 7,678,993 30 5,325,381 21 149,239 1 3,137,187 12 94,424 1 54,827 - 202,240 1 118,866 1 10,378 - 55,024 - 17,897,371 71 $ 25,368,560 100 $ 1,200,000 5 51,033 - 1,501,200 6 33,599 - 1,109,817 5 344,351 1 46,133 - 200,000 1 24,915 - 4,511,048 18 1,250,000 5 737,596 3 139,600 - 173,158 1 43,247 - 2,343,601 9 6,854,649 27 4,218,745 17 4,087,223 16 2,824,310 11 86,888 - 7,255,798 29 10,166,996 40 74,633 - (33,686) - 18,513,911 73 $ 25,368,560 100

The accompanying notes are an integral part of the financial statements.

194 -

CHROMA ATE INC.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 21 and 28) Sales Less: Sales returns Sales allowances Net operating revenue OPERATING COSTS (Notes 11, 22 and 28) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 22 and 28) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain) Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Finance costs (Note 22) Share of profit of subsidiaries, associates and joint ventures (Note 12) Interest income (Note 28) Rental income Dividend income Other income Gain on disposal of property, plant and equipment (Notes 13 and 28) Gain on disposal of investment Gains arising from transfer of right in sale and lease-back transaction (Notes 13 and 28) Gain on lease modification Net foreign exchange gain (loss) (Note 31) Other expenses		2022 Amount % $ 13,464,963 100 (1,719) - (2,220) - 13,461,024 100 6,145,451 46 7,315,573 54 (322,638) (2) 6,992,935 52 1,157,272 9 848,010 6 1,638,617 12 8,000 - 3,651,899 27 3,341,036 25 (29,643) - 1,728,947 13 8,990 - 14,379 - 48,957 - 32,191 - 89,132 1 415,679 3 - - - - 263,422 2 (859) -		2021
				Amount % $ 10,319,433 100 (7,769) - (3,211) - 10,308,453 100 4,807,190 46 5,501,263 54 (82,802) (1) 5,418,461 53 941,579 9 682,951 7 1,350,521 13 (2,892) - 2,972,159 29 2,446,302 24 (22,508) - 752,111 7 4,910 - 15,421 - 55,839 1 47,573 - 1,575,019 15 2,684 - 154,510 2 82 - (85,978) (1) (945) - (Continued)

195 -

CHROMA ATE INC.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

(Loss) gain on financial assets at fair value through profit or loss Impairment loss Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 23) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 19) Unrealized gain or loss on investments in equity investments designated as at fair value through other comprehensive income Share of the other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Share of the other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using equity method Total other comprehensive income TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE (NT$; Note 24) Basic Diluted		2022 Amount % $ (121) - (11,737) - 2,559,337 19 5,900,373 44 794,549 6 5,105,824 38 (8,841) - (133,562) (1) 86,450 - 190,142 2 323,550 2 457,739 3 $ 5,563,563 41 $ 12.14 $ 12.00		2021
				Amount % $ 390 - - - 2,499,108 24 4,945,410 48 766,178 7 4,179,232 41 (42,177) - 258,571 2 36,998 - (67,435) - (70,564) (1) 115,393 1 $ 4,294,625 42 $ 9.96 $ 9.89

The accompanying notes are an integral part of the financial statements.

(Concluded)

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CHROMA ATE INC.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

Ordinary Share Capital Capital Surplus BALANCE AT JANUARY 1, 2021 $ 4,212,945 $ 4,036,875 Appropriation of the 2020 earnings Legal reserve - - Reversal of special reserve - - Cash dividends - NT$4.5 per share - - Change in capital surplus from investments in subsidiaries, associates and joint ventures accounted for using equity method - 13,428 Net profit for the year ended December 31, 2021 - - Other comprehensive income (loss) for the year ended December 31, 2021 - - Total comprehensive income (loss) for the year ended December 31, 2021 - - Adjustment of capital surplus for the Corporation's cash dividends received by subsidiaries - 8,124 Changes in ownership interests in subsidiaries - - Exercise of employee share options 5,800 27,906 Share-based payment transaction - 890 Unrealized gain or loss transferred to retained earnings from disposal of equity instruments designated at fair value through other comprehensive income and investments accounted for using equity method - - BALANCE AT DECEMBER 31, 2021 4,218,745 4,087,223 Appropriation of the 2021 earnings Legal reserve - - Cash dividends - NT$7 per share - - Change in capital surplus from investments in subsidiaries, associates and joint ventures accounted for using equity method - 53,511 Net profit for the year ended December 31, 2022 - - Other comprehensive income (loss) for the year ended December 31, 2022 - - Total comprehensive income (loss) for the year ended December 31, 2022 - - Stocks of the parent company disposed of by the subsidiary and recognized as treasury shares transaction - 22,345 Adjustment of capital surplus for the Corporation's cash dividends received by subsidiaries - 11,551 Disposal of investments accounted for using equity method - (22,860 ) Exercise of employee share options 6,125 28,971 Issuance of employee power restricted stock 29,100 340,498 Share-based payment transaction - (18,766 ) Unrealized gain or loss transferred to retained earnings from disposal of equity instruments designated at fair value through other comprehensive income and investments accounted for using equity method - - BALANCE AT DECEMBER 31, 2022 $ 4,253,970 $ 4,502,473		Retained Earnings	Total $ 7,929,190 - - (1,897,175 ) - 4,179,232 (40,780) 4,138,452 - (3,462 ) - - (9) 10,166,996 - (2,970,000 ) - 5,105,824 (6,455) 5,099,369 - - - - - - (695) $ 12,295,670	Other Equity	Total Treasury Shares $ (82,101 ) $ (33,686 ) - - - - - - - - - - 156,173 - 156,173 - - - - - - - 552 - 9 - 74,633 (33,686 ) - - - - - - - - 464,194 - 464,194 - - 2,818 - - - - - - (253,198 ) - 53,139 - 695 - $ 339,463 $ (30,868)	Total Equity $ 16,063,223 - - (1,897,175 ) 13,428 4,179,232 115,393 4,294,625 8,124 (3,462 ) 33,706 1,442 - 18,513,911 - (2,970,000 ) 53,511 5,105,824 457,739 5,563,563 25,163 11,551 (22,860 ) 35,096 116,400 34,373 - $ 21,360,708
				Unrealized Gain Exchange (Loss) on Differences on Financial Assets at Translating the Fair Value Financial Through Other Statements of Comprehensive Unearned Foreign Operations Income Employee Benefit $ (466,042 ) $ 384,493 $ (552 ) - - - - - - - - - - - - - - - (137,999) 294,172 - (137,999) 294,172 - - - - - - - - - - - - 552 - 9 - (604,041 ) 678,674 - - - - - - - - - - - - - 513,692 (49,498) - 513,692 (49,498) - - - - - - - - - - - - - - - (253,198 ) - - 53,139 - 695 - $ (90,349) $ 629,871 $ (200,059)
		Unappropriated Legal Reserve Special Reserve Earnings $ 2,592,487 $ 176,128 $ 5,160,575 231,823 - (231,823 ) - (89,240 ) 89,240 - - (1,897,175 ) - - - - - 4,179,232 - - (40,780) - - 4,138,452 - - - - - (3,462 ) - - - - - - - - (9) 2,824,310 86,888 7,255,798 413,498 - (413,498 ) - - (2,970,000 ) - - - - - 5,105,824 - - (6,455) - - 5,099,369 - - - - - - - - - - - - - - - - - - - - (695) $ 3,237,808 $ 86,888 $ 8,970,974

The accompanying notes are an integral part of the financial statements.

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CHROMA ATE INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
Expected credit loss (gain) recognized on trade receivables
Loss (gain) on financial assets at fair value through profit or
loss
Finance costs
Interest income
Dividend income
Compensation costs of share-based payments
Share of profit of subsidiaries, associates and joint ventures
accounted for using equity method

Gain on disposal of property, plant and equipment
Gain on disposal of investments accounted for using equity
method
(Reversal) write-downs of inventories
Impairment loss
Unrealized gain on transactions with subsidiaries and
associates
Net (gain) loss on foreign currency exchange
Gain on sale and leaseback transactions
Gain on lease modification
Net changes in operating assets and liabilities
Notes receivable
Trade receivables
Inventories
Prepayments
Other current assets
Contract liabilities
Trade payables
Other payables
Other current liabilities
Net defined benefit liabilities

Cash generated from operations

Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire financial assets at fair value through other
comprehensive income
Proceeds from capital reduction of financial assets at fair value
through other comprehensive income
Decrease in financial assets at amortized cost

2022
2021
$ 5,900,373
$ 4,945,410
446,460
359,674
19,683
13,964
8,000
(2,892)
121
(390)
29,643
22,508
(8,990)
(4,910)
(48,957)
(55,839)
61,145
1,415
(1,728,947)
(752,111)
(89,132) (1,575,019)
(415,679)
(2,684)
(19,384)
3,000
11,737
-
322,638
82,802
(184,956)
97,541
-
(154,510)
-
(82)
(2,474)
65,856
(610,387)
166,790
(444,403)
(790,330)
7,749
11,219
11,804
31,382
107,835
(508,688)
(80,494)
526,090
328,938
129,470
417,161
774
(26,380)

(21,468)
4,013,104
2,588,972
(422,455)

(558,765)
3,590,649
2,030,207
(89,033)
(15,750)
585
9,660
279,778
-
(Continued)

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CHROMA ATE INC.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

2022
Payments to acquire financial assets at fair value through profit
or loss
$ (300,000)
Proceeds from disposal of financial assets at fair value through
profit or loss
300,159
Net cash inflow on disposal of investments accounted for using
equity method
608,622
Increase in prepayments for investments
-
Net cash inflow on disposal of subsidiaries
459,119
Payments for property, plant and equipment
-

Increase in refundable deposits
(275)
Increase in other receivables - related parties
236,895
Payments to acquire intangible assets
(4,360)
Increase in prepayments for equipment
(537,846)
Interest received
8,549
Dividends received

388,581

Net cash generated from investing activities
1,350,774

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
100,000
Decrease in short-term borrowings
-
Repayments of long-term borrowings
(300,000)
Increase in guarantee deposits
17,580
Repayment of the principal portion of lease liabilities
(47,400)
Dividends paid by cash
(2,970,000)
Exercise of employee share options
35,096
Acquisition of additional interests in subsidiaries
-
Interest paid
(28,365)
Proceeds from issuance of employee restricted shares

116,400

Net cash used in financing activities
(3,076,689)

EFFECTS OF EXCHANGE RATE CHANGES ON THE
BALANCE OF CASH HELD IN FOREIGN CURRENCIES

70,054

NET INCREASE IN CASH AND CASH EQUIVALENTS
1,934,788
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF
THE YEAR

994,158

CASH AND CASH EQUIVALENTS AT THE END OF THE
YEAR
$ 2,928,946

The accompanying notes are an integral part of the financial statements.
(Concluded)

2021
$ (600,188)
600,431
3,955
(55,024)
-
3,080,000

(5,063)
63,258

(23,433)

(972,549)
5,347
236,428
2,327,072
-
(600,000)
(1,400,000)
2,360

(39,117)
(1,897,175)
33,706
(53,457)

(23,336)
-
(3,977,019)
(8,312)
371,948
622,210
$ 994,158

199 -

CHROMA ATE INC.

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Chroma ATE Inc. (the “Corporation”) was incorporated in the Republic of China (“ROC”) in November 1984. The Corporation mainly designs, assembles, calibrates, manufactures, sells, repairs and maintains software/hardware for computers and peripherals, computerized automatic test systems, electronic test instruments, signal generators, power supplies, telecom power supplies, etc. as well as serves as an agent to sell these products. The Corporation’s shares have been listed on the Taiwan Stock Exchange since December 21, 1996.

The financial statements are presented in the Corporation’s functional currency, the New Taiwan dollar (NT$).

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Corporation’s board of directors on February 23, 2023.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Corporation’s accounting policies.

b. The IFRSs endorsed by the FSC for application starting from 2023

Note 1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

Note 2: The amendments will be applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

Note 3: Except for deferred taxes that were recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments were applied prospectively to transactions that occur on or after January 1, 2022.

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As of the date the financial statements were authorized for issue, the Corporation has assessed that the application of above standards and interpretations will not have a material impact on the Corporation’s financial position and financial performance.

c. The IFRSs in issue but not yet endorsed and issued into effect by the FSC.

Effective Date Announced by IASB (Note New, Amended and Revised Standards and Interpretations 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by IASB Assets between an Investor and its Associate or Joint Venture” Amendments to IFRS 16 “Leases Liability in a Sale and January 1, 2024 (Note 2) Leaseback” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 9 and January 1, 2023 IFRS 17 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current January 1, 2024 or Non-current” Amendments to IAS 1 “Non-current Liabilities with January 1, 2024 Covenants”

Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

As of the date the financial statements were authorized for issue, the Corporation is continuously assessing the possible impacts that the application of other standards and interpretations will have on the Corporation’s financial position and financial performance, and will disclose the relevant impacts when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of preparation

The financial statements have been prepared on the historical cost basis except for financial instruments measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
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2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.

When preparing these financial statements, the Corporation used the equity method to account for its investment in subsidiaries, associates and joint ventures. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the financial statements to be the same with the amounts attributable to the owner of the Corporation in its financial statements, adjustments arising from the differences in accounting treatment between the basis and the consolidated basis were made to investments accounted for using the equity method, share of profit or loss of subsidiaries, associates and joint ventures, share of other comprehensive income of subsidiaries, associates and joint ventures and related equity items, as appropriate, in these financial statements.

c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period; and
3) Liabilities for which the Corporation does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

d. Foreign currencies

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

Non-monetary items denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

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e. Inventories

Inventories consist of raw materials, work-in-process, semi-finished good, finished goods, which are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at standard cost and make timely adjustments to ensure that they approximate to weighted-average cost.

f. Investments accounted for using the equity method

Investments in subsidiaries, associates and joint ventures are accounted for by equity method.

Under the equity method, investment in a subsidiary, associates and joint ventures are initially recognized at cost and adjusted thereafter to recognize the Corporation's share of the profit or loss and other comprehensive income of the subsidiary, associates and joint ventures. The Corporation recognizes the changes in the Corporation’s share of equity of subsidiaries, associates and joint ventures.

1) Investment in subsidiaries

A subsidiary is an entity that is controlled by the Corporation.

Changes in the Corporation’s ownership interest in a subsidiary that do not result in the Corporation losing control of the subsidiary are equity transactions. The Corporation recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

When the Corporation’s share of losses of a subsidiary equals or exceeds its interest in that subsidiary (which includes any carrying amount of the investment in subsidiary accounted for using the equity method and long-term interests that, in substance, form part of the Corporation’s net investment in the subsidiary), the Corporation continues recognizing its share of further losses.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate and a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized.

When the Corporation loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides, the Corporation accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Corporation had directly disposed of the related assets or liabilities.

Profits and losses resulting from downstream transactions are eliminated in full in the Corporation’s financial statement. Profits and losses resulting from upstream transactions and transactions between subsidiaries are recognized in the Corporation’s financial statements only to the extent of interests in the subsidiaries that are not related to the Corporation.

2) Investments in associates and joint ventures

An associate is an entity over which the Corporation has significant influence and which is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Corporation and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

203 -

When the Corporation subscribes for additional new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Corporation’s proportionate interest in the associate and joint venture. The Corporation records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Corporation’s ownership interest is reduced due to its additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

g. Property, plant and equipment

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

Property, plant and equipment in the course of construction are measured at cost. Cost includes professional fees and borrowing cost eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

h. Investment properties

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

204 -

i. Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Corporation’s cashgenerating units or groups of cash-generating units (referred to as “cash-generating units”) that are expected to benefit from the synergies of the combination.

j. Financial instruments

Financial assets and financial liabilities are recognized when the Corporation becomes a party to the contractual provisions of the instruments.

For those financial assets which are measured at fair value, its fair value is determined in the manner described in Note 27.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. The Corporation derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

The Corporation’s financial assets are classified into the following categories:

a) Financial assets at FVTPL

The Corporation’s financial assets mandatorily classified as at FVTPL are investments in equity instruments which are not designated as at FVTOCI, it was measured at fair value, and any dividends or interest earned on such financial assets are recognized in other income and interest income, respectively; any remeasurement gains or losses on such financial assets are recognized in other gains or losses.

b) Financial assets at amortized cost

If the financial assets, which are invested by the Corporation, are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are subsequently measured at amortized cost.

205 -

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

c) Investments in equity instruments at FVTOCI

On initial recognition, the Corporation may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Dividends on these investments in equity instruments are recognized in profit or loss when the Corporation’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

2) Equity instruments

Equity instruments issued by the Corporation are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Corporation’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Corporation’s own equity instruments.

3) Financial liabilities

Financial liabilities are measured at amortized cost using the effective interest method. On derecognition of financial liabilities, the difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

k. Assessment of asset impairment
1) Property, plant and equipment, right-of-use asset, investment properties and intangible assets

At the end of each reporting period, the Corporation reviews the carrying amounts of above assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Corporation estimates the recoverable amount of the cashgenerating unit to which the asset belongs.

206 -

2) Investments accounted for using the equity method

The Corporation assesses its investment in subsidiaries for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. If the recoverable amount of the investment subsequently increases, the Corporation recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

3) Goodwill

4) Financial assets

The Corporation assesses the impairment loss of financial assets at amortized cost (including trade receivables) by expected credit losses on each balance sheet date.

The Corporation always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Corporation recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If the credit risk on a financial instrument has not increased significantly, the Corporation measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

For internal credit risk management purposes, the Corporation considers the following situations as indication that a financial asset is in default:

a) Internal or external information shows that the debtor is unlikely to pay its creditors.
207 -
b) Financial asset is more than 120 days past due unless the Corporation has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

k. Revenue recognition

The Corporation identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

Revenue from sale of goods comes from sales of test instruments. Revenue is recognized when the goods are delivered to the customer’s specific location or the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and bears the risks of obsolescence. Trade receivables are recognized concurrently. The transaction price received is recognized as a contract liability until the goods are delivered to the customer.

The Corporation does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

l. Leases

At the inception of a contract, the Corporation assesses whether the contract is, or contains, a lease.

1) The Corporation as lessor

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

2) The Corporation as lessee

The Corporation recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms. Right-of-use assets and lease liabilities are presented on a separate line in the balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Corporation uses the lessee’s incremental borrowing rate.

208 -

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or others, the Corporation remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss.

For sale and leaseback transactions, if the transfer of an asset satisfies the requirements of IFRS 15 to be accounted for as a sale, the Corporation recognizes only the amount of any gain or loss which relates to the rights transferred to the buyer-lessor, and adjusts the off-market terms to measure the sale proceeds at fair value. If the transfer does not satisfy the requirements of IFRS 15 to be accounted for as a sale, it is accounted for as a financing transaction.

m. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liabilities are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability represents the actual deficit in the Group’s defined benefit plan.

n. Share-based payment arrangements

Employee share options and restricted shares for employees that are granted to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value at the grant date of the employee share options and restricted shares for employees is expensed on a straight-line basis over the vesting period, based on the Corporation's best estimate of the number of shares or options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options and other equity - unearned employee benefits. The expense is recognized in full at the grant date if the grants are vested immediately.

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At the end of each reporting period, the Corporation revises its estimate of the number of employee share options and restricted shares for employees expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - employee share options and capital surplus - restricted shares for employees.

o. Taxation

1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, except where the Corporation is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences based on the manner in which the Corporation expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

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5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION

UNCERTAINTY

In the application of the Corporation’s accounting policies, management is required to make judgments, estimations and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects only that period, or in the period of the revision and future periods if the revisions affect both current and future periods.

a. Estimated impairment of trade receivables

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Corporation uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s past defaults experience and current financial position, as well as forward looking estimates as of the end of each reporting period. For details of the key assumptions and inputs used, see Note 10. Where the actual future cash flows are less than expected, a material impairment loss may arise.

b. Write-down of inventories

6. CASH

Cash on hand Checking accounts and demand deposits Cash equivalents - time deposits		December 31	December 31
		2022 $ 2,448 1,840,900 1,085,598 $ 2,928,946	2021 $ 1,900 992,258 - $ 994,158

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets mandatorily at FVTPL-non-current Open-end beneficiary certificates		December	31
		2022 $ 4,513	2021 $ 4,793

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8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments-non-current Domestic listed ordinary shares and emerging market shares Domestic unlisted ordinary shares Foreign unlisted ordinary shares		December 31	December 31
		2022 $ 763,361 227,944 29,600 $ 1,020,905	2021 $ 929,471 136,548 - $ 1,066,019

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Refer to Table 3 for the detailed information. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Corporation’s strategy of holding these investments for long-term purposes.

9. FINANCIAL ASSETS AT AMORTIZED COST

Pledged deposits (Note 29)		December 31	December 31
		2022 $ -	2021 $ 279,778

10. NOTES RECEIVABLE AND TRADE RECEIVABLES

Gross carrying amount at amortized cost - unrelated parties Less: Allowance for impairment loss Gross carrying amount at amortized cost - related parties		December 31	December 31
		2022 $ 1,254,740 (53,477) 1,201,263 2,196,021 $ 3,397,284	2021 $ 1,032,735 (45,477) 987,258 1,666,038 $ 2,653,296

The average credit period for sales of goods is 60 to 120 days from the date when the goods were inspected and accepted by customers. Before accepting any new customer, the Corporation uses bank’s credit investigation or external credit scoring system to assess the potential customer’s credit quality and defines credit limits by customer. Management will review the credit limit and rating of customers as needed.

The Corporation measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated by reference to past default experience and current financial position in which the debtors operate. As the Corporation’s historical credit loss experience does not show other factors that matter significantly, the expected credit loss rate is based on past due status of trade receivables.

The Corporation writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Corporation continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

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The aging schedule of notes receivable and trade receivables based on the past due days was as follows:

Not past due Past due 1-60 days Past due 61-180 days Past due 181-365 days Past due over 365 days		December 31	December 31
		2022 $ 928,011 141,722 97,913 10,430 76,664 $ 1,254,740	2021 $ 747,338 99,082 81,613 74,679 30,023 $ 1,032,735

The movements of the loss allowance of notes receivable and trade receivables were as follows:

Balance at January 1 Add: Impairment loss Less: Reversal of impairment loss Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 45,477 8,000 - $ 53,477	2021 $ 48,369 - (2,892) $ 45,477

11. INVENTORIES

Finished goods Semi-finished products Work in process Raw materials		December 31	December 31
		2022 $ 409,624 531,792 1,026,662 1,402,217 $ 3,370,295	2021 $ 361,753 506,484 902,739 1,217,780 $ 2,988,756

The cost of goods sold for the years ended December 31, 2022 and 2021 included the reversal of inventory write-downs of $19,384 thousand and the inventory write-downs of $3,000 thousand, respectively.

12. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments in subsidiaries Investments in associates Investments in joint venture		December 31	December 31
		2022 $ 5,033,168 3,845,861 14,908 $ 8,893,937	2021 $ 4,551,629 3,111,361 16,003 $ 7,678,993

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a. Investments in subsidiaries

Investments in subsidiaries
Unlisted company Neworld Electronics Limited Chroma New Material Corp. Mas Automation Corp. Chroma ATE Inc. Chroma Systems Solutions, Inc. Chroma ATE Europe B.V. Chroma Japan Corp. CHI Incorporation Ltd. Chen Hwa Technology Inc. San Eagle Development Corp. Sensational Holdings Ltd. Deep Red Holding Co., Ltd. Testar Electronics Corporation Adivic Technology Co., Ltd. Chroma Investment Co., Ltd. Quantel Private Ltd. EVT Technology Co., Ltd. Innovative Nanotech Incorporated Touch Cloud Inc. Environmental Stress Systems, Inc.	December 31
	2022 Amount Percentage of Equity Interest (%) $ 1,548,322 100.0 - - 141,413 100.0 482,094 100.0 19,675 25.0 135,031 100.0 (166,436) 100.0 285,539 100.0 197,222 100.0 1,208,965 100.0 55,220 100.0 163,195 100.0 143,647 67.2 27,662 74.1 251,298 100.0 259,323 60.0 23,588 85.6 163,349 67.2 35,405 83.1 58,656 100.0 $ 5,033,168	2021
		Amount Percentage of Equity Interest (%) $ 1,457,155 100.0 452,823 100.0 54,437 100.0 240,654 100.0 28,328 25.0 121,610 100.0 (137,987) 100.0 240,238 100.0 120,885 100.0 903,070 100.0 49,035 100.0 161,366 100.0 117,453 67.2 60,382 74.1 224,435 100.0 206,174 60.0 31,423 85.6 162,380 67.2 57,768 83.1 - - $ 4,551,629

The Corporation’s subsidiary, Chroma New Material Corp., was liquidated in December 2022.

The Corporation’s subsidiary, Chroma ATE Inc., jointly held 75% equity interest in Chroma Systems Solutions, Inc.

To expand its sales network in Southeast Asia, the Corporation’s subsidiary Quantel Private Ltd. resolved to set up Quantel Global Company Limited in 2021, which engaged in the sale of test instruments.

To meet business needs, the Corporation’s subsidiary, Innovative Nanotech Incorporated, increased its capital reserved for employees by $11,640 thousand in April 2021. The Corporation did not participate in the capital injection and its equity interest in Innovative Nanotech Incorporated decreased to 67.2%.

For operational needs, the Corporation’s subsidiary, Touch Cloud Inc., increased its working capital by $60,000 thousand in May 2021. The Corporation’s board of directors resolved to participate in the capital injection and its equity interest in Touch Cloud Inc. increased from 78.1% to 83.1% after the cash injection.

Considering the future strategy of products and the improvement of product competitiveness, the Corporation acquired a subsidiary, Environmental Stress Systems, Inc., which engaged in the sale of thermal platform systems in January 2022.

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The Corporation’s subsidiary, Mou Kuan Technologies (Nanjing) Co., Ltd., was liquidated in January, 2022.

The Corporation’s subsidiary, Adivic Holding Corporation, was liquidated in December 2022.

Refer to Note 32 for the detail of the subsidiaries indirectly held by the Corporation.

Refer to Table 7 “Information on Investees” for the Corporations’ share of profit of subsidiaries under equity method.

The investments accounted for using equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2022 and 2021 were calculated based on the financial statements which have been audited.

b. Investments in associates

December 31 2022 2021 Amount Percentage of Equity Interest (%) Amount Percentage of Equity Interest (%) Adlink Technology Inc. $ 244,736 6.6 $ 284,189 11.2 Dynascan Technology Corp. 204,120 27.3 152,662 27.3 Camtek Ltd. 3,397,005 17.6 2,674,510 17.8 $ 3,845,861 $ 3,111,361 For the Year Ended December 31 2022 2021 The Corporation’s share of: Net profit $ 494,540 $ 305,017 Other comprehensive income (loss) 327,902 (74,891) Total comprehensive income (loss) for the year $ 822,442 $ 230,126		December 31	December 31	December 31	December 31	December 31	December 31
						2021
				2022 $ 494,540 327,902 $ 822,442			2021 $ 305,017 (74,891) $ 230,126

Fair values (Level 1) of investments in associates with available published price quotations are summarized as follow:

Name of Associate Adlink Technology Inc. Camtek Ltd.		December 31	December 31
		2022 $ 775,648 $ 5,272,016	2021 $ 1,583,210 $ 9,962,445

The Corporation disposed 10,015 thousand shares of Adlink Technology Inc. The proceeds from disposal of those shares were $608,622 thousand and recognized gain from disposal was $414,568 thousand for the year ended December 31, 2022.

The Corporation is able to exercise significant influence over Adlink Technology Inc. although the percentage of shares held is less than 20%. Therefore, the Corporation accounted for Adlink Technology Inc. as an associate.

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Although the Corporation’s equity interest in Camtek Ltd. is less than 20%, after assessing the Corporation’s number of seats in the board of directors of Camtek Ltd., it still has a significant influence; therefore, Camtek Ltd. is accounted for as an associate.

Refer to Table 7 “Information on Investees” for the nature of activities, principal place of business and country of incorporation of the associates.

Except for Adlink Technology Inc., the investments in associate accounted for using equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on financial statements which have been audited. Management believes there is no material impact on the equity method accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements of Adlink Technology Inc., which have not been audited.

c. Investments in joint ventures

Chih Ho Shun Development Co., Ltd.		December 31	December 31	December 31
		2022 Amount Percentage of Equity Interest (%) $ 14,908 35.0		2021
				Amount Percentage of Equity Interest (%) $ 16,003 35.0

Aggregate information of joint ventures that are not individually material:

The Corporation’s share of: Net loss Other comprehensive income (loss) Total comprehensive income (loss) for the year	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ (1,095) - $ (1,095)	2021 $ (888) - $ (888)

For the investment and development plan, “The Action Plan for Developing Land Surrounding the MRT Airport Station to Improve Civilians’ Life,” the board of directors resolved to invest jointly with Dynapack International Corporation and Heran Co., Ltd. to set up Chih Ho Shun Development Co., Ltd. (“Chih Ho Shun”) on February 21, 2012. The Corporation invested for a 35% entity interest in Chih Ho Shun but did not have control over this investee.

Refer to Table 7 “Information on Investees” for the nature of activities, principal place of business and country of incorporation of joint ventures.

The investments in joint ventures accounted for using the equity method and the share of profit or loss and other comprehensive income of the investment for the years ended December 31, 2022 and 2021 were based on the joint ventures’ financial statements which have been audited.

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13. PROPERTY, PLANT AND EQUIPMENT

Cost Balance, January 1, 2021 Disposals Reclassification Balance, December 31, 2021 Accumulated depreciation Balance, January 1, 2021 Depreciation Disposals Reclassification Balance, December 31, 2021 Carrying amount at December 31, 2021 Cost Balance, January 1, 2022 Disposals Reclassification Balance, December 31, 2022 Accumulated depreciation Balance, January 1, 2022 Depreciation Disposals Reclassification Balance, December 31, 2022 Carrying amount at December 31, 2022	Land $ 1,138,906 (425,072) 2,519 $ 716,353 $ - - - - $ - $ 716,353 $ 716,353 - 968,440 $ 1,684,793 $ - - - - $ - $ 1,684,793	Buildings $ 2,044,014 (1,601,556) 4,035,943 $ 4,478,401 $ 1,194,895 172,262 (938,399) - $ 428,758 $ 4,049,643 $ 4,478,401 - 137,524 $ 4,615,925 $ 428,758 227,959 - - $ 656,717 $ 3,959,208	Machinery Miscellaneous Equipment $ 179,229 $ 1,221,313 (4,786) (147,605) 66,262 32,023 $ 240,705 $ 1,105,731 $ 136,117 $ 899,957 32,615 121,429 (4,787) (146,191) - (252,089) $ 163,945 $ 623,106 $ 76,760 $ 482,625 $ 240,705 $ 1,105,731 (8,943) (14,965) 63,239 39,961 $ 295,001 $ 1,130,727 $ 163,945 $ 623,106 42,209 136,927 (8,943) (14,532) (42) (45,162) $ 197,169 $ 700,339 $ 97,832 $ 430,388	Total $ 4,583,462 (2,179,019) 4,136,747 $ 6,541,190 $ 2,230,969 326,306 (1,089,377) (252,089) $ 1,215,809 $ 5,325,381 $ 6,541,190 (23,908) 1,209,164 $ 7,726,446 $ 1,215,809 407,095 (23,475) (45,204) $ 1,554,225 $ 6,172,221

The Corporation’s board of directors resolved to sell the land and plant in Hwa Ya Technology Park to its related party, Adlink Technology, in July 2020. The transaction price, which amounted to $3,080,000 thousand, was determined with reference to the appraisal results of independent real estate appraisers. The transaction was settled on the first quarter of 2021. In addition, the Corporation sold and leased back a portion of assets for 5 years for operational needs. The transaction resulted in a total acquisitions of right-of-use assets of $128,797 thousand and lease liabilities of $170,699 thousand, refer to Note 28 for related information.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

estimated useful lives as follows:
Buildings
Primary buildings	41-50 years
Mechanical and electrical equipment	8-15 years
Clean room equipment	3-11 years
Others	1-50 years
Machinery	1-10 years
Office equipment	1-9 years

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14. LEASE ARRANGEMENTS

The Corporation’s important lease projects include lease land from other companies and government department for the use of the plants, warehouses and parking spaces, as well as leases of information systems cloud services, etc. The lease terms are from 2 to 10 years. The Corporation does not have bargain purchase options to acquire lease items at the end of lease terms.

The right-of-use assets increases $5,960 thousand and $137,234 thousand, the depreciation expense was $39,365 thousand and $33,368 thousand, and the total cash out flow in lease was $64,606 thousand and $47,376 thousand for the years ended December 31, 2022 and 2021, respectively. Refer to the balance sheets for the right-of-use assets and lease liabilities.

15. INVESTMENT PROPERTIES

Land		December 31	December 31
		2022 $ 2,478,333	2021 $ 3,137,187

The Corporation acquired the land ownership certificates of the investment and development plan, “The Action Plan of Developing Land Surrounding the Airport MRT Station to Improve Civilian’s Life” in the third quarter of 2018, part of the land was co-constructed with Fu Yu Construction to build a joint building project, and part of it has not yet been decided, both of the above land were classified as investment properties.

Except for reclassificated from property, plant and equipment, the Group did not recognize significant additions, disposals or impairment loss of investment properties in 2022.

The determination of fair value was performed by independent qualified professional values, and the fair value was measured by using Level 3 inputs. The valuation was arrived at by reference to market evidence of transaction prices for similar properties. The significant unobservable inputs used include discount rates and the fair value as appraised.

Fair value		December 31	December 31
		2022 $ 9,450,053	2021 $ 11,830,879

In the third quarter of 2019, the Corporation entered into a joint building contract with Fu Yu Construction Co., Ltd. (Fu Yu Construction) to jointly build a building located at Project No 61-0 and Project No 611 projects, Lejie section, Guishan District, Taoyuan City. The construction project adopts a jointly constructed manner. The Corporation provided the lands and Fu Yu Construction provided fund to construct. The area will be distributed to the Corporation and Fu Yu Construction for 47% and 53%, respectively. According to the joint building contract, Fu Yu Construction should pay $20,000 thousand (recognized as guarantee deposit received) and two guaranteed notes with a denomination of $120,000 thousand to the Corporation when signing the contract. Additional $20,000 thousand guarantee deposit should be paid within five business days after the building construction registration is approved and within five business days after the approval of underground bottom plate inspection. The joint building project started in the fourth quarter of 2020.

16. GOODWILL

To reorganize the organization structure, save operating costs and improve the operating efficiency, the Corporation’s board of directors resolved to acquire Silver Town Electronic Co., Ltd. in February 2008. The goodwill was from the premium acquisition. There was no change for the years end December 31, 2022 and 2021.

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The Corporation assessed goodwill there is no signs of impairment. Therefore, the Corporation did not recognize any impairment loss on goodwill for the years ended December 31, 2022 and 2021.

17. BORROWINGS

a. Short-term borrowings

Unsecured bank loans Interest rate (%)		December 31
	2022 2021 $ 1,300,000 $ 1,200,000 1.25%-1.60% 0.52%-0.68%

b. Long-term borrowings

Unsecured bank loans Less: Current portions		December 31	December 31
		2022 $ 1,150,000 200,000 $ 950,000	2021 $ 1,450,000 200,000 $ 1,250,000

The Corporation applied for bank loan for increasing operating budget. As of December 31, 2022 and 2021, the interest rate was 1.64%-1.85% and 0.68%-0.83% per annum on a floating basis. The bank loan will be due in June 2026.

18. OTHER PAYABLES

Salaries and bonus Compensation of employee Remuneration of directors Others		December 31	December 31
		2022 $ 419,188 783,598 12,000 248,117 $ 1,462,903	2021 $ 386,421 448,825 9,600 264,971 $ 1,109,817

19. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Corporation adopted a pension plan under the Labor Pension Act (LPA), which is a statemanaged defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plan adopted by the Corporation in accordance with the Labor Standards Law is operated by the government. Pension benefits are calculated on the basis of length of service and average monthly salaries of the 6 months before retirement. The Corporation contributes amount equal to 4% of total monthly salaries and wages to a pension fund administered by the pension fund

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monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of year, the Corporation assesses the balances in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Corporation is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Corporation has no right to influence the investment policy and strategy.

The amounts included in the balance sheets in respect of the Corporation’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities		December 31	December 31
		2022 $ 562,343 (406,724) $ 155,619	2021 $ 530,677 (357,519) $ 173,158

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Movements in net defined benefit liability were as follows:

	Present Value
	of the Defined	Fair Value of	Net Defined
	Benefit	the Plan	Benefit
	Obligation	Assets	Liabilities
Balance at January 1, 2021	$ 486,736	$(334,287)	$ 152,449
Current service cost	3,381	-	3,381
Net interest expense (income)	2,408	(1,711)	697
Recognized in profit or loss	5,789	(1,711)	4,078
Remeasurement
Return on plan assets (excluding
amounts included in net interest)	-	(4,263)	(4,263)
Actuarial loss
Changes in demographic assumptions	15,086	-	15,086
Experience adjustments	31,354	-	31,354
Recognized in other comprehensive
income	46,440	(4,263)	42,177
Contributions from employer	-	(25,546)	(25,546)
Benefits paid	(8,288)	8,288	-
Balance at December 31, 2021	530,677	(357,519)	173,158
Current service cost	3,304	-	3,304
Net interest expense (income)	2,612	(1,863)	749
Recognized in profit or loss	5,916	(1,863)	4,053
Remeasurement
Return on plan assets (excluding
amounts included in net interest)	-	(27,749)	(27,749)
Actuarial loss
Changes in financial assumptions	5,379	-	5,379
Experience adjustments	31,211	-	31,211
Recognized in other comprehensive
income	36,590	(27,749)	8,841
Contributions from employer	-	(30,433)	(30,433)
Benefits paid	(10,840)	10,840	-
Balance at December 31, 2022	$ 562,343	$(406,724)	$ 155,619

Through the defined benefit plans under the Labor Standards Law, the Corporation is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.
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Discount rate(s) Expected rate(s) of salary increase	December 31
	2022 2021 1.13%-1.38% 0.38%-0.50% 2.50%-3.50% 1.50%-2.50%

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		December	31
		2022 $(14,025) $ 14,541 $ 14,016 $(13,594)	2021 $(13,924) $ 14,466 $ 13,956 $(13,508)

Expected contributions to the plan for the next year Average duration of the defined benefit obligation		December	31
	2022 2021 $ 30,000 $ 30,000 10.6 years 11.1 years

20. EQUITY

a. Ordinary share capital

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2022 500,000 $ 5,000,000 425,397 $ 4,253,970	2021 500,000 $ 5,000,000 421,875 $ 4,218,745

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b. Capital surplus

May be used to offset a deficit, distributed as cash dividends or transferred to share capital (Note) Additional paid-in capital Treasury share transactions Consolidation excess May be used to offset a deficit only Share of changes in capital surplus of associates or joint ventures May not be used for any purpose Employee shares options Employee restricted shares		December 31	December 31
		2022 $ 3,504,911 252,213 146,976 371,947 - 226,426 $ 4,502,473	2021 $ 3,372,101 218,317 146,976 341,296 8,533 - $ 4,087,223

c. Retained earnings and dividends policy

Under the dividends policy as set forth in the Corporation’s Articles of Incorporation (the “Articles”), where the Corporation made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Corporation’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders. For the abovementioned distribution of earnings, the board of directors was authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders’ meeting. For the policies on distribution of employees’ compensation of employees and remuneration to directors, refer to d. employees’ compensation of employees and remuneration of directors in Note 22 (d).

Taking into account future capital expenditure requirements and its cash position, the total of cash dividends paid in any given year may not be less than 20% of total dividends distributed in that year. The final amount, type and percentage of the cash dividends and share dividends are subject to actual earnings and capital requirements of the Corporation in a particular year.

An appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Corporation’s paid-in capital. The legal reserve may be used to offset deficit. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

When a special reserve is appropriated for cumulative net debit balance reserves from prior period, the special reserve is only appropriated from the prior unappropriated earnings.

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The appropriations of earnings for 2021 and 2020, which have been approved in the annual shareholders’ meetings on June 9, 2022 and on August 18, 2021, respectively, were as follows:

Legal reserve Reversal of special reserve Cash dividends	Appropriation of Earnings For Fiscal Year 2021 For Fiscal Year 2020 $ 413,498 $ 231,823 - (89,240) 2,970,000 1,897,175	Dividends Per Share (NT$)
		For Fiscal Year 2021 For Fiscal Year 2020 $ 7.0 $ 4.5

The appropriations of earnings for 2022 had been proposed by the Corporation’s board of directors on February 23, 2023, were as follows:

	Appropriation	Dividends Per
	of Earnings	Share (NT$)
Legal reserve	$ 509,867
Cash dividends	3,403,176	$8.0

d. Special reserves

e. Other equity items

	Exchange	Unrealized
	Differences on	Gain (Loss) on
	Translating	Financial	Unearned
	Foreign	Assets at	Employee
	Operations	FVTOCI	Benefit
For the year ended December 31, 2022
Balance at January 1, 2022	$(604,041)	$ 678,674	$	-
Exchange differences on translating
foreign operations	190,142	-		-
Unrealized gain arising from equity
investments	-	(133,562)		-
Share of other comprehensive gain (loss)
of associates and join ventures
accounted for using equity method	317,061	84,064		-
			(Continued)

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	Exchange	Exchange	Unrealized	Unrealized
	Differences on		Gain (Loss) on
	Translating		Financial		Unearned
	Foreign		Assets at		Employee
	Operations		FVTOCI		Benefit
Disposal of investments accounted for
using equity method	$	6,489	$	695	$		-
Issued shares-based payment		-		-	(253,198)
Share-based payment transaction		-		-		53,139
Balance at December 31, 2022	$	(90,349)	$	629,871	$(200,059)
For the year ended December 31, 2021
Balance at January 1, 2021	$(466,042)		$	384,493	$	(552)
Exchange differences on translating
foreign operations		(67,435)		-			-
Unrealized gain arising from equity
investment		-		258,571			-
Share of other comprehensive gain (loss)
of associates and join ventures
accounted for using equity method		(70,628)		35,601			-
Disposal of investments accounted for
using equity method		64		9			-
Share-based payment transaction		-		-		552
Balance at December 31, 2021	$(604,041)		$	678,674	$		-
					(Concluded)

f. Treasury shares

The Corporation’s shares held by its subsidiary, Chroma Investment Co., Ltd., at the end of the reporting periods were as follows:

Number of shares held (in thousands of shares) Carrying amount Market price		December 31	December 31
		2022 1,655 $ 30,868 $ 299,479	2021 1,806 $ 33,686 $ 361,116

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21. REVENUE

Contract revenue of the Corporation comes from sale of goods.

a. Contract balances

Contract liabilities - sale of goods	December 31
	2022 2021 $ 158,868 $ 51,033

The changes in the balance of contract liabilities primarily result from the timing difference between the Corporation’s performance and respective customer’s payment.

b. Disaggregation of revenue

Refer to Table 7 for the information on disaggregation of revenue.

22. ADDITIONAL INFORMATION ON EXPENSES

a. Finance costs

Interest on borrowings Interest on lease liabilities Depreciation and amortization An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2022 2021 $ 28,198 $ 21,034 1,445 1,474 $ 29,643 $ 22,508 For the Year Ended December 31
		2022 $ 156,039 290,421 $ 446,460 $ 170 19,513 $ 19,683	2021 $ 111,090 248,584 $ 359,674 $ 85 13,879 $ 13,964

b. Depreciation and amortization
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c. Employee benefits expense

For the Year Ended December 31

Short-term benefits Salary expenses Insurance expenses Remuneration of directors Share-based payments Post-employment benefits Defined contribution plans Defined benefit plans Other employee benefits Total employee benefits expense			2022	Total $ 2,597,470 172,467 12,720 2,782,657 61,145 78,810 4,053 82,863 53,691 $ 2,980,356 $			2021
		Operating Costs $ 418,957 43,457 - 462,414 - 12,393 642 13,035 24,983 $ 500,432	Operating Expenses $ 2,178,513 $ 129,010 12,720 2,320,243 61,145 66,417 3,411 69,828 28,708 $ 2,479,924 $			Operating Costs $ 352,274 36,975 - 389,249 - 10,856 592 11,448 19,480 $ 420,177	Operating Expenses $ 1,669,377 $ 116,172 10,230 1,795,779 1,415 61,429 3,486 64,915 23,905 $ 1,886,014 $	Total $ 2,021,651 153,147 10,230 2,185,028 1,415 72,285 4,078 76,363 43,385 $ 2,306,191

1) As of December 31, 2022 and 2021, the Corporation’s average number of employees was 1,922 and 1,831 employees, respectively, among which 5 directors not concurrently holding positions in the Corporation in both years. The basis of above calculations was the same as the basis used in the calculation of employee benefits expense.
2) As of December 31, 2022 and 2021, the average employee benefit expenses were $1,548 thousand and $1,257 thousand, respectively; average salary expenses were $1,355 thousand and $1,107 thousand, respectively. The change in average salary expense was 22.40%.
3) The Corporation set up an audit committee in accordance with Article 14-4 of Securities and Exchange Act and did not set up supervisory duties.
4) The Corporation’s compensation policy is determined by considering the operating performance and future development of the current year and the remuneration of directors and managers and employees are as follows:

Directors

The remuneration paid by the Corporation comprises bonus for directors. When the board of directors is held, the Corporation will also pay the directors’ attendance.

According to Article 34 of the Corporation’s Articles of Incorporation, bonus distributed to directors shall not be greater than 1.5% of the Corporation's net profit before income tax, employees’ compensation, and remuneration of directors.

The fixed amount of directors’ remuneration for 2022 and 2021 were $12,000 thousand and $9,600 thousand which accounts for 0.18% and 0.18% of the net profit before tax for each year, respectively. The director attendance expenses for 2022 and 2021 were $720 thousand and $630 thousand, respectively.

Managers

The Corporation has established the “Regulations Governing Compensation for Senior Executives”, which stipulates that when a manager is appointed, he/she shall be paid a fixed monthly salary based on the pay standards for similar positions in the industry. Any proposal to

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change employee bonus shall be made according to the Corporation's operational performance for the current year and by taking into individual performance appraisal. Such proposal shall first be submitted to the Remuneration Committee for review before it is delivered to the Board of Directors for resolution.

Staff

The Corporation’s remuneration policy takes into account the salary levels of benchmark companies in the market, and provide differentiated and competitive salaries for employees based on the achievement of performance indicators to reflect the ability of employees and to measure salary and bonus levels. The salary composition includes salaries, bonuses and employee remuneration, benefits, etc.; benefits are superior to the legal provisions as prerequisites are designed to improve talent attraction, motivation, and retention effects.

d. Compensation of employees and remuneration of directors

According to the Article of Incorporation of the Corporation, the Corporation accrues compensation of employees and remuneration of directors at the rates of 5%-20% and no higher than 1.5%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and remuneration of directors for the years ended December 31, 2022 and 2021, which have been approved by the Corporation’s board of directors on February 23, 2023 and February 23, 2022, respectively, were as follows:

Compensation of employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2022 Amount Rate (%) $ 734,953 11.06 12,000 0.18	2021
		Amount Rate (%) $ 415,047 7.73 9,600 0.18

If there is a change in the amounts after the annual financial statements were authorized for issue, the differences are recorded as a change in accounting estimate.

There is no difference between the actual amounts of the compensation of employees and remuneration of directors paid and the actual amounts recognized in the financial statements for the years ended December 31, 2021 and 2020.

Information on the compensation of employees and remuneration of directors resolved by the Corporation’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

23. INCOME TAXES

a. Major components of income tax expense recognized in profit or loss

Current tax In respect of the current year Land value incremental tax Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 672,415 - 37,574 (116,541) 593,448 201,101 $ 794,549	2021 $ 433,897 200,196 14,307 - 648,400 117,778 $ 766,178

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A reconciliation of accounting profit and income tax expense is as follows:

b.	Profit before tax Income tax expense calculated at the statutory rate Adjustment items in determining taxable income Tax-exempt income Other Land value incremental tax Unrecognized investment credits Income tax on unappropriated earnings Adjustments for prior years Other Income tax expense recognized in profit or loss Deferred tax assets and liabilities For the year ended December 31, 2022 Opening Balance Deferred tax assets Temporary differences Unrealized intercompany gain $ 128,582 Inventory reserve 56,658 Unrealized exchange loss 8,576 Gain on disposal of assets 3,853 Allowance for impaired receivables 3,698 Others 873 $ 202,240 Deferred tax liabilities Temporary differences Unappropriated earnings of subsidiaries $ 701,238 Goodwill 35,826 Net defined benefit liability 532 $ 737,596	For the Year Ended	For the Year Ended	December 31
			2022 $ 5,900,373 $ 1,180,074 (108,910) (57,593) - (140,172) 37,574 (116,541) 117 $ 794,549 Recognized in Profit or Loss $ 64,528 (3,877) (8,298) (3,853) 96 219 $ 48,815 $ 242,034 2,606 5,276 $ 249,916	2021 $ 4,945,410 $ 989,082 (326,751) 8,645 200,196 (119,301) 14,307 - - $ 766,178 Closing Balance $ 193,110 52,781 278 - 3,794 1,092 $ 251,055 $ 943,272 38,432 5,808 $ 987,512

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For the year ended December 31, 2021

Deferred tax assets Temporary differences Unrealized intercompany gain Inventory reserve Unrealized exchange loss Gain on disposal of assets Allowance for impaired receivables Net defined benefit liability Others Deferred tax liabilities Temporary differences Unappropriated earnings of subsidiaries Goodwill Others	Opening Balance Recognized in Profit or Loss $ 112,022 $ 16,560 56,058 600 5,301 3,275 - 3,853 3,628 70 3,762 (3,762) 873 - $ 181,644 $ 20,596 $ 566,002 $ 135,236 33,220 2,606 - 532 $ 599,222 $ 138,374	Closing Balance $ 128,582 56,658 8,576 3,853 3,698 - 873 $ 202,240 $ 701,238 35,826 532 $ 737,596

c. Income tax assessments

The Corporation’s tax returns through 2020 had been assessed by the tax authorities.

24. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share are as follows:

Net Profit for the Year

Earnings used in the computation of basic and diluted earnings per share	For the Year Ended	For the Year Ended	December 31
		2022 $ 5,105,824	2021 $ 4,179,232

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Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Employee share options Employee restricted shares Weighted average number of ordinary shares used in the computation of diluted earnings per share	(In Thousands of Shares) For the Year Ended December 31	(In Thousands of Shares) For the Year Ended December 31	(In Thousands of Shares) For the Year Ended December 31
		2022 420,518 4,264 61 617 425,460	2021 419,790 2,250 621 - 422,661

If the Corporation offered to settle compensation paid to employees in cash or shares, the Corporation assumed the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

25. SHARE-BASED PAYMENT ARRANGEMENTS

a. Employee share option plan

Information on employee share options is as follows:

Balance at January 1 Options exercised Options forfeited Balance at December 31 Options exercisable, end of the year	For the Year Ended December 31	For the Year Ended December 31
	2022 Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) 658 $ 57.3 (613) 57.3 (45) 57.3 - - -	2021
		Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) 1,238 $ 58.7 (580) 58.1 - - 658 57.3 658

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Information on outstanding options is as follows:

December 31	December 31
2022 Range of Exercise Price (NT$) Weighted-average Remaining Contractual Life (Years) $ - $ -	2021
	Range of Exercise Price (NT$) Weighted-average Remaining Contractual Life (Years) $ 57.3 $ 0.24

Compensation costs recognized was $8,006 thousand for the year ended December 31, 2022.

b. Restricted shares for employees

1) Employees who are granted RSUs, upon meeting the Corporation’s financial performance and personal performance indicators, are eligible to be vested 10, 20, 30 and 40 percent of the RSUs granted after 1, 2, 3 and 4 years of tenure after the subscription date, respectively.
2) The restrictions on the rights of the employees who are granted RSUs but have not met the vesting conditions are as follows:
a) The employees are not eligible to sell, pledge, transfer, donate or to dispose any RSUs in any form.
b) The employees holding RSUs are entitled to receive dividends and similar purchasing rights to ordinary shares during capital increase. Dividends from RSUs are not restricted during the vesting period, and are appropriated to the employees’ personal account from trust account after the dividend distribution date.
c) Before the restricted shares are vested to the employees, the right of attendance, proposal, speech, voting and other rights of shareholders are acted by the custodian.
d) The RSUs should be delivered to trust custodians upon grant date. The employees cannot request for return in any manner before vesting conditions are met.
e) Restrictions on employee rights during delivery of new shares to the Trust, the Corporation shall act as the exclusive agent of the employees and authorize the chairman of the board (including but not limited) in negotiating, signing, amending, extending, cancelling and terminating the Trust Deed and the delivery, use and disposal instructions of the Trust Property with the Stock Trust.
3) If an employee fails to meet the vesting conditions, the Corporation will recall or buy back and cancel the restricted shares at issued price. If an employee voluntarily resigns, retires, disabled or decease due to occupational hazards, dismissed, be transferred to another post, violates labor contracts or working protocols substantially or abandons restricted shares, related guidelines of RSU Plan will be followed accordingly.
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Information relating to outstanding employee restricted shares is as follows:

Information relating to outstanding employee restricted shares is	as follows:	as follows:	as follows:
Balance at January 1 Shares issued Share vested Shares canceled Balance at December 31	For the Year Ended December 31
		2022 - 2,960 - (50) 2,910	2021 52 - (52) - -

Compensation costs of share-based payment arising from the RSU Plan were $53,139 thousand and $1,415 thousand for the years ended December 31, 2022 and 2021, respectively.

26. CAPITAL MANAGEMENT

The Corporation manages its capital to ensure that it will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The Corporation’s capital management aims to maintain the sufficiency of financial resources and the soundness of operating strategies to meet the needs for operating capital, capital expenditure, R&D expenses, debt handling, dividend disbursement, etc.

27. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments not measured at fair value

Management believes the carrying amount of financial assets and financial liabilities not measured at fair value recognized in the financial statements approximates their fair values.

b. Fair value of financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2022 Financial assets at FVTPL Opened beneficiary certificates Financial assets at FVTOCI Domestic listed ordinary shares and emerging markets shares Domestic unlisted equity securities Foreign unlisted equity securities	Level 1 $ - $ 395,455 - - $ 395,455	Level 2 $ - $ - - - $ -	Level 3 Total $ 4,513 $ 4,513 $ 367,906 $ 763,361 227,944 227,944 29,600 29,600 $ 625,450 $ 1,020,905 (Continued)

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Level 1

Level 2 Level 3 Total

December 31, 2021 Financial assets at FVTPL Opened beneficiary certificates Financial assets at FVTOCI Domestic listed ordinary shares and emerging markets shares Domestic unlisted equity securities	$ - $ 511,180 - $ 511,180	$ - $ - - $ -	$ 4,793 $ 4,793 $ 418,291 $ 929,471 136,548 136,548 $ 554,839 $ 1,066,019 (Concluded)

There were no transfers between Levels 1 and 2 for the years ended December 31, 2022 and 2021.

2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2022

Financial Assets Balance at January 1, 2022 Purchases Reduction of capital cash return Recognized in profit or loss (included in valuation gains and losses) Recognized in other comprehensive income (included in unrealized gain on financial assets at FVTOCI) Balance at December 31, 2022	Financial Assets at FVTPL Open-end Beneficiary Certificates $ 4,793 - - (280) - $ 4,513	Financial Assets at FVTOCI Equity Instruments $ 554,839 89,033 (585) - (17,837) $ 625,450	Total $ 559,632 89,033 (585) (280) (17,837) $ 629,963

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For the year ended December 31, 2021

Financial Assets Balance at January 1, 2021 Purchases Reduction of capital cash return Recognized in profit or loss (included in valuation gains and losses) Recognized in other comprehensive income (included in unrealized gain on financial assets at FVTOCI) Balance at December 31, 2021	Financial Assets at FVTPL Open-end Beneficiary Certificates $ 4,646 - - 147 - $ 4,793	Financial Assets at FVTOCI Equity Instruments $ 424,859 15,750 (9,660) - 123,890 $ 554,839	Total $ 429,505 15,750 (9,660) 147 123,890 $ 559,632

3) Valuation techniques and inputs applied for Level 3 fair value measurement

c. Categories of financial instruments

Financial assets Financial assets at FVTPL Mandatorily at FVTPL Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at amortized cost (2)	December 31
	2022 2021 $ 4,513 $ 4,793 6,542,812 4,370,212 1,020,905 1,066,019 5,468,457 5,337,863

1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, financial assets at amortised cost, notes receivable, trade receivables, other receivables (classified as other receivable - related parties and other current assets) and refundable deposits.
2) The balances included financial liabilities measured at amortized cost, which comprise shortterm loans, trade payables, other payables, long-term loans (including current portion of longterm borrowings) and guarantee deposits received.
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d. Financial risk management objectives and policies

The Corporation’s major financial instruments consist of equity investments, cash and cash equivalents, receivables, long-term and short-term borrowings, and trade payables. The Corporation’s financial risk management pertains to financial risks relating to the operations of the Corporation, including currency risk, interest rate risk, credit risk and liquidity risk. The Corporation seeks to identify, evaluate and hedge against market uncertainties to lower the effect of market changes on the Corporation’s financial performance.

The Corporation manages foreign exchange risk through setting up of foreign currency deposit bank accounts and through the use of foreign currency directly received from sale to pay for purchases in foreign currency to reduce the impact of foreign exchange fluctuation and to achieve a natural hedge effect. The Corporation actively observes the exchange rate information to fully control the foreign currency hedge.

1) Market risk

The Corporation’s activities expose it primarily to the financial risks of changes in exchange rates (see item (a) below), interest rates (see item (b) below) and price (see item (c) below).

There has been no change to the Corporation’s exposure to market risks or the manner in which these risks are managed and measured.

a) Foreign currency risk

The carrying amounts of the Corporation’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are set out in Note 31.

Sensitivity analysis

The Corporation was mainly exposed to USD and RMB.

The 5% sensitivity rate is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency-denominated monetary items and their translation at period-end is adjusted for a 5% change in foreign-currency rates. Had the NTD strengthened by 5% against the relevant currency, the pre-tax profit would have decreased by $183,159 thousand and $85,192 thousand for the years ended December 31, 2022 and 2021, respectively.

b) Interest rate risk

The Corporation is exposed to interest rate risk because it borrows funds both at fixed and floated interest rates. The Corporation evaluates hedging activities regularly to align with interest rate views and defined risk appetite and ensures that the most cost-effective hedging strategies are applied. The carrying amounts of the financial assets and liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2022 2021 $ 1,085,598 $ 279,778 144,293 185,733 1,840,900 992,258 2,450,000 2,650,000

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Sensitivity analysis

The sensitivity analysis below was determined on the basis of the exposure to interest rates for non-derivative instruments at balance sheet dates. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the balance sheet dates was outstanding for the whole year. A 50-basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher and all other variables were held constant, the Corporation’s pre-tax profit for the years ended December 31, 2022 and 2021 would have decreased by $3,046 thousand and $8,289 thousand, respectively, which was mainly attributable to the Corporation’s exposure to interest rates on its variable rate deposits and bank loans.

c) Price risk

The Corporation is exposed to equity price risks mainly arising from investment in open-end beneficiary certificates, listed stocks and emerging markets stocks in domestic and foreign, which are held for strategic rather than trading purposes. The Corporation does not actively trade these investments. The Corporation manages the risk through holding various portfolios of investment and having each equity investment to get prior approval from the Corporation’s management.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period.

If marketing prices of fund and common stock equity had been 5% higher, the pre-tax profit for the years ended December 31, 2022 and 2021 would have increased by $226 thousand and $240 thousand, respectively, as a result of the changes in fair values of financial assets at FVTPL, and the pre-tax other comprehensive income for the years ended December 31, 2022 and 2021 would have increased by $51,045 thousand and $53,301 thousand, respectively, as a result of the changes in fair values of financial assets at FVTOCI.

2) Credit risk

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Corporation. As at the end of the reporting period, the Corporation’s maximum exposure to credit risk, which would cause a financial loss to the Corporation due to the failure of the counterparty to discharge its obligation, could arise from:

a) The carrying amount of trade receivables from operating activities; and
b) The amount of bank deposits, fixed-income and other financial instruments from investing activities.

The Corporation adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

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The credit risk of bank deposits, fixed-income financial instruments and other financial instruments are evaluated, managed and controlled by the Corporation’s financial department. The Corporation’s exposure to credit risk was limited because the Corporation adopted a policy of only dealing with creditworthy counterparties.

3) Liquidity risk

The Corporation manages liquidity risk by managing and maintaining sufficient cash and cash equivalents to supply the Corporation’s demand and mitigate the effects of fluctuations in cash flow. The Corporation continuously monitors the use of credit lines and conformity to loan terms.

The Corporation relies on bank borrowings as a significant source of liquidity. As of December 31, 2022 and 2021, the Corporation’s available unutilized bank loan facilities were $4,400,000 thousand and $3,800,000 thousand, respectively.

Liquidity and interest risk tables for non-derivative financial liabilities

The following tables detail the Corporation’s remaining contractual maturity for its nonderivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Corporation can be required to pay. Bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

Non-interest bearing Floating interest rate instruments Lease liabilities Non-interest bearing Floating interest rate instruments Lease liabilities	December 31, 2022	December 31, 2022
	Within 1 Year 1-5 Years $ 2,957,630 $ - 1,531,176 966,820 46,449 97,009 $ 4,535,255 $ 1,063,829 December 31, 2021		More Than 5 Years $ - - 3,047 $ 3,047
	Within 1 Year $ 2,644,616 1,413,814 47,547 $ 4,105,977	1-5 Years $ - 1,262,347 136,956 $ 1,399,303	More Than 5 Years $ - - 4,789 $ 4,789

After considering the financial position of the Corporation, management does not expect the banks will execute their rights of requiring the Corporation to repay the bank loans immediately. In addition, management believes the operating funds of the Corporation are sufficient to meet cash flow demand; thus, liquidity risk is not considered significant.

The Corporation’s operating funds are sufficient to meet its cash flow demand, as a result, the Corporation does not use its overdraft limit.

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28. TRANSACTIONS WITH RELATED PARTIES

a. The related parties and relationships with the Corporation were as follows:

Related Party
Chroma ATE Inc. (“Chroma USA”)

Neworld Electronics Limited (“Neworld”)

Chroma ATE Europe B.V. (“Chroma Europe”)

Chroma Japan Corp. (“Chroma Japan”)

Chroma Systems Solutions, Inc. (“CSS”)

Quantel Private Ltd. (“Quantel”)

Mas Automation Corp. (“Taiwan Wei Kuang”)

Testar Electronics Corporation (“Testar Electronics”)

Adivic Technology Co., Ltd. (“Adivic Tech.”)

Sajet System Technology (Suzhou) Co., Ltd. (“Sajet
Suzhou”)

Chroma Electronics (Shenzhen) Co., Ltd. (“Chroma
Shenzhen”)

Chroma Electronics (Shanghai) Co., Ltd. (“Chroma
Shanghai”)

Chroma ATE (Suzhou) Co., Ltd. (“Chroma Suzhou”)

EVT Technology Co., Ltd. (“EVT”)

Innovative Nanotech Incorporated (“Innovative”)

Chroma Germany GmbH (“Chroma Germany”)

Adlink Technology Inc. (“Adlink”)

DynaScan Technology Corp. (“DynaScan Technology”)

Mou Kuan Technology Co., Ltd. (“Mou Kuan”)

Tian Zheng International Precision Machinery Co., Ltd.
(“Tian Zheng”)

Taiwan Advanced Nanotech Inc. (“TAN Bead”)

Relationship with the
Corporation

Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Associate
Associate
Other related party
Other related party
Other related party

The related-party transactions were conducted under normal terms unless specified otherwise.

The related-party transactions were as follows:

b. Sales

Related Party Category/Name Subsidiaries Neworld Chroma USA Others Associates Other related parties	For the Year Ended	For the Year Ended	December 31
		2022 $ 2,851,056 2,603,148 3,822,495 35,691 974 $ 9,313,364	2021 $ 2,438,399 1,226,840 2,945,225 24,245 18,626 $ 6,653,335

To raise market share and expand its market in the America, Europe and mainland China, the

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Corporation set up Chroma ATE Inc., Chroma ATE Europe B.V. and Neworld Electronics Limited. The selling prices for Chroma ATE Inc., Chroma Systems Solutions, Inc., Chroma ATE Europe B.V., Neworld Electronics Limited, Chroma ATE (Suzhou) Co., Ltd., and Chroma Electronics (Shenzhen) Co., Ltd. were determined after taking the selling and post-sale service expenses into consideration.

c. Purchases

For	the Year Ended	December 31
$	2022 2021 203,093 $ 148,323 12,596 19,795 2,414 8,582 218,103 $ 176,700 December 31
$
	2022 2021 $ 692,629 $ 206,239 539,791 415,016 329,807 344,895 - 310,748 623,214 375,361 8,717 11,796 1,863 1,983 $ 2,196,021 $ 1,666,038 $ - $ 295,000 December 31
	2022 $ 11,759 2,787 1,467 $ 16,013 the Year Ended	2021 $ 25,019 3,803 4,777 $ 33,599 December 31
$	2022 2,031 4,509 6,540	2021 $ 6,248 24,182 $ 30,430
$

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g. Disposal of property, plant and equipment

Related Party Category/Name Associates Adlink Technology Inc.		Proceeds For the Year Ended December 31 2022 2021 $ - $ 3,080,000		Gain on Disposal	Gain on Disposal
				For the Year Ended December 31
		2022 $ -		2022 $ -	2021 $ 1,575,072

Gain arising from transfer of right recognized as a result of sale and leaseback transactions amounted to $154,510 thousand for the year ended December 31, 2021. Refer to Note 13 for the detailed information.

h. Lease arrangements

For	the Year Ended	December 31
$	2022 2021 - $ 128,797 December 31

	2022 $ 111,725	2021 $ 145,525

i. Loans to related parties
1) Loans and interest receivables

Related Party Line Item Categories/Name Other receivable - related party Subsidiaries Chroma Japan CSS Other current assets (interest receivables) Subsidiaries		December 31	December 31
		2022 $ 118,146 75,617 $ 193,763 $ 496	2021 $ 24,949 100,106 $ 125,055 $ 301

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2) Interest revenue

Related Party Categories/Name Subsidiaries CSS Chroma Japan	For the Year Ended	For the Year Ended	December 31
		2022 $ 3,050 983 $ 4,033	2021 $ 3,352 978 $ 4,330

Refer to Table 1 for other information related to financing provided.

j. Endorsement guarantees provided

Refer to Table 2 for other information related to endorsement guarantees provided.

k. Others
1) Commission expense

Related Party Categories/Name Subsidiaries Quantel Chroma Shanghai Chroma Suzhou Others	For the Year Ended	For the Year Ended	December 31
		2022 $ 32,547 29,237 13,065 1,928 $ 76,777	2021 $ 26,796 29,573 16,419 10,966 $ 83,754

Commission expense refers to the disbursements made for business introduction activities.

2) Other current liabilities - temporary credits

Related Party Categories/Name Subsidiaries Chroma USA	For the Year Ended December 31
	2022 2021 $ 397,387 $ -

l. Compensation of key management personnel

Short-term employee benefits Post-employment benefits Share-based payment transaction	For the Year Ended	For the Year Ended	December 31
		2022 $ 169,463 3,033 22,261 $ 194,757	2021 $ 175,876 2,765 - $ 178,641

The remuneration of directors and key executives is determined by the remuneration committee based on the performance of individuals and market trends.

29. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

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The assets pledged as collaterals for bank loans were as follows:

Pledged deposits (classified as financial assets measured at amortized cost)		December 31	December 31
		2022 $ -	2021 $ 279,778

30. SIGNIFICANT EVENTS

Considering the future strategy of products and the enhancement of product competitiveness, the Corporation’s subsidiary invested RMB 1,000 thousand to set up Chroma ATE Inc. (Dongguan) which engage in the sales of computerized automatic test system, peripherals equipment and electronic test instruments in January 2023.

31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Corporation’s significant financial assets and liabilities denominated in foreign currencies were as follows:

December 31, 2022

Foreign Currencies Exchange Rate Financial assets Monetary items USD $ 99,391 30.710 (USD:NTD) RMB 242,224 4.408 (RMB:NTD) Non-monetary items Investments accounted for using equity method USD 206,584 30.710 (USD:NTD) HKD 481,642 3.938 (HKD:NTD) Financial liabilities Monetary items USD 14,876 30.710 (USD:NTD)	Carrying Amount $ 3,052,298 1,067,723 $ 4,120,021 $ 6,319,644 1,896,708 $ 8,216,352 $ 456,842

243 -

December 31, 2021

Foreign Currencies Exchange Rate Financial assets Monetary items USD $ 60,274 27.680 (USD:NTD) RMB 107,879 4.344 (RMB:NTD) Non-monetary items Investments accounted for using equity method USD 170,744 27.680 (USD:NTD) HKD 489,648 3.549 (HKD:NTD) Financial liabilities Monetary items USD 15,649 27.680 (USD:NTD)	Carrying Amount $ 1,668,384 468,626 $ 2,137,010 $ 4,657,421 1,737,760 $ 6,395,181 $ 433,164

For the years ended December 31, 2022 and 2021, (realized and unrealized) net foreign exchange gains (losses) were $263,422 thousand and $(85,978) thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions.

32. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees:
1) Financing provided to others: Table 1
2) Endorsements/guarantees provided: Table 2
3) Marketable securities held (excluding investment in subsidiaries, associates and joint ventures): Table 3
4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: Table4
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 5
244 -
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 6
9) Trading in derivative instruments: None.
10) Information on investees: Table 7
b. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: Table 8
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: Table 5
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: Table 5
- c) The amount of property transactions and the amount of the resultant gains or losses: None.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: Table 2
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: Table 1
- f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receiving of services: None.
c. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder: None.
245 -

TABLE 1

CHROMA ATE INC.

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limit
													Item	Value
0	The Corporation	Chroma Japan Corp. Chroma Systems Solutions, Inc.	Other receivables Other receivables	Y Y	$ 132,036 110,757	$ 132,036 75,617	$ 118,146 75,617	1.42% 3.25%- 4.00%	a a	$ 292,374 759,428	- -	$ - -	- -	$ - -	$ 2,136,071 (Note 1) 2,136,071 (Note 1)	$ 4,272,142 (Note 2) 4,272,142 (Note 2)
1	Wei Kuang Mech. Eng. Inc.	Wei Kuang Automatic Equipment (Nanjing) Co., Ltd.	Other receivables	Y	132,667	132,667	-	2.50%	b	-	Purchase material, working capital turnover	-	-	-	640,203 (Note 3)	896,284 (Note 4)

Note 1: Based on 10% of the net value of the Corporation.

Note 2: Based on 20% of the net value of the Corporation.

Note 3: Based on 50% of the net value of Wei Kuang Mech. Eng. Inc.

Note 4: Based on 70% of the net value of Wei Kuang Mech. Eng. Inc.

Note 5: The amounts listed in the table were translated into the New Taiwan dollars at the exchange rate of US$1=NT$30.710, JPY1=NT$0.232, RMB1=NT$4.408 as of December 31, 2022.

Note 6: Financing provided:

a. For transactions.

b. For short-term financing.
246 -

TABLE 2

CHROMA ATE INC.

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/ Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement /Guarantee Given on Behalf of Each Party (Note 1)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement /Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement /Guarantee to Net Equity in Latest Financial Statements	Aggregate Endorsement Guarantee Limit (Note 2)	Endorsement /Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement /Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement /Guarantee Given on Behalf of Companies in Mainland China
		Name	Relationship
0	The Corporation	Chroma ATE Inc. Chroma Japan Corp. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE Europe B.V. Chroma Electronics (Shanghai) Co., Ltd. Saject System Technology (Suzhou) Co., Ltd. Mas Automation Corp.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	$ 3,204,106 3,204,106 3,204,106 3,204,106 3,204,106 3,204,106 3,204,106	$ 245,680 46,400 1,578,064 49,080 44,080 22,040 300,000	$ 245,680 46,400 1,578,064 49,080 44,080 22,040 300,000	$ 61,420 34,800 97,607 16,360 10,293 - 100,000	$ - - - - - - -	1.15% 0.22% 7.39% 0.23% 0.21% 0.10% 1.40%	$ 6,408,212 6,408,212 6,408,212 6,408,212 6,408,212 6,408,212 6,408,212	Y Y Y Y Y Y Y	- - - - - - -	- - Y - Y Y -

Note 3: The amounts listed in columns were translated into the New Taiwan dollars at the exchange rate of US$1=NT$30.710, JPY1=NT$0.232, RMB1=NT$4.408, EUR1=NT$32.720, as of December 31, 2022.

247 -

TABLE 3

CHROMA ATE INC. MARKETABLE SECURITIES HELD

(EXCLUDING INVESTMENT IN SUBSIDIARIES, ASSOCIATES AND JOINTLY CONTROLLED ENTITIES) DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2022	December 31, 2022		Note
				Shares/Units (In Thousands)	Carrying Amount	Percentage of Ownership	Fair Value
The Corporation Chroma Systems Solutions Inc. Chroma Investment Co., Ltd.	Fund WI Harper INC Fund VII LP Stocks DynaColor, Inc. Chunghwa Telecom Co., Ltd. China Communications Media Group Co., Ltd. Tian Zheng International Precision Machinery Co., Ltd. Twoway Catv Service Inc. Taiwan Advanced Nanotech Inc. WK Technology Fund IX Ltd. TFBS Bioscience Inc. Gaius Automotive Inc. Enteligent Inc. Fund Franklin California Tax Free Income FD Inc. Fund Hua Nan Kirin Money Market Fund Stocks Greatek Electronics Inc. Hephas Energy Co., Ltd. Chroma ATE Inc. Taiwan Advanced Nanotech Inc. Cosmactive Broadband Networks Co., Ltd. Prance Systems Technology Corporation	- - - - - - - - - - - - - - - The Corporation - - -	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - current `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - non-current `〃` `〃` `〃`	- 6,050 412 10 2,681 3,561 3,475 4,614 2,572 1,486 875 439 1,073 85 1,574 1,655 790 4 111	$ 4,513 220,534 46,599 187 128,135 49,172 318,734 52,378 147,825 27,741 29,600 90,871 13,043 4,083 117,952 299,479 72,439 - -	- 6.1 - - 7.3 4.4 11.5 4.6 7.8 2.1 6.9 - - - 6.8 0.4 2.6 0.6 5.1	$ 4,513 220,534 46,599 187 128,135 49,172 318,734 52,378 147,825 27,741 29,600 90,871 13,043 4,083 117,952 299,479 72,439 - -	- - - - - - - - - - - - - - - - - - -
							(Continued)

248 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December	31, 2022		Note
				Shares/Units (In Thousands)	Carrying Amount	Percentage of Ownership	Fair Value
Chen Hwa Technology Inc. Innovative Nanotech Incorporated EVT Technology Co., Ltd. Testar Electronics Corporation	Stocks Hangzhou New Material Chroma Co., Ltd. Fund Mega Diamond Money Market Fund Fund Mega Diamond Money Market Fund Fund Mega Diamond Money Market Fund	- - - -	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current `〃` `〃`	- 4,724 1,044 7,481	$ 111,094 60,214 13,311 95,349	19.0 - - -	$ 111,094 60,214 13,311 95,349	- - - -

Note: The fair value of open-end beneficiary certificates and listed market securities was calculated based on the net asset value and closing price as of balance sheet date.

(Concluded)

249 -

TABLE 4

CHROMA ATE INC. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE NINE MONTHS ENDED December 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending	Balance
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal	Number of Shares	Amount
Chroma ATE Inc.	Stocks Adlink Technology Inc.	Investments accounted for using equity method	-	-	24,432	$ 284,189	-	$ -	10,015	$ 608,622	$ 120,800	$ 414,568	14,417	$ 244,736

Note: The amounts included capital surplus derecognized and other comprehensive income transferred in.

250 -

TABLE 5

CHROMA ATE INC.

TOTAL PURCHASE FROM OR SALE TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase (Sale)	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Corporation Chroma ATE Inc. Chroma ATE Europe B.V. Neworld Electronics Limited Mas Automation Corp. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd.	Neworld Electronics Limited Chroma Electronics (Shanghai) Co., Ltd. Chroma Electronics (Shenzhen) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma Japan Corp. Chroma ATE Inc. Chroma Systems Solutions, Inc. Chroma ATE Europe B.V. Quantel Private Ltd. The Corporation Chroma Germany GmbH Chroma Electronics (Shenzhen) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Parent company Subsidiary Subsidiary Subsidiary Same parent company Same parent company Same parent company Same parent company	(Sale) (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) Purchase (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) (Sale)	$(2,851,056) (374,097) (361,322) (1,171,648) (292,374) (2,603,148) (759,428) (328,924) (408,150) 151,847 (147,913) (1,265,332) (109,530) (191,737) (163,314) (195,925) (1,590,573)	(21) (3) (3) (9) (2) (19) (6) (2) (3) 3 (34) (40) (3) (6) (29) (36) (90)	Note Note Note Note Note Note Net 90 days after delivery Note Net 90 days after delivery Net 90 days after delivery Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration Net 90 days after declaration	- - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - -	$ 539,791 13,720 81,755 692,629 329,807 - 243,804 119,390 108,941 (2,745) 76,983 379,976 6,018 73,943 - 75,766 425,801	16 - 2 20 10 - 7 4 3 - 53 42 1 8 - 56 90	- - - - - - - - - - - - - - - - -

Note: The actual credit period is longer than other customers, the recovery of receivables depends on the related parties’ financial position.

251 -

TABLE 6

CHROMA ATE INC.

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period (Note)	Allowance for Impairment Loss
					Amount	Action Taken
The Corporation Neworld Electronics Limited Wei Kuang Automatic Equipment (Nanjing) Co., Ltd.	Neworld Electronics Limited Chroma ATE (Suzhou) Co., Ltd. Chroma Japan Corp. Chroma Systems Solutions, Inc. Chroma ATE Europe B.V. Quantel Private Ltd. Chroma Japan Corp. Chroma Electronics (Shenzhen) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Same parent company	Trade receivables $ 539,791 Trade receivables 692,629 Trade receivables 329,807 Trade receivables 243,804 Trade receivables 119,390 Trade receivables 108,941 Other receivables - financing provided 118,146 Trade receivables 379,976 Trade receivables 425,801	5.97 2.61 0.87 4.10 3.43 5.86 - 4.14 7.47	$ - - - - - - - - -	- - - - - - - - -	$ 314,434 - 37,479 92,014 20,288 32,321 - 121,056 71,712	$ - - - - - - - - -

Note: As of February 10, 2023.

252 -

TABLE 7

CHROMA ATE INC.

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance	as of December 31, 2022	as of December 31, 2022	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2022	December 31, 2021	Shares (Thousands)	Percentage of Ownership	Carrying Amount
The Corporation Chroma ATE Inc. Chroma ATE Europe B.V. San Eagle Development Corp. Adivic Technology Co., Ltd. Quantel Private Ltd. Chroma Investment Co., Ltd.	Neworld Electronics Limited Chroma New Material Corporation Mas Automation Corp. Chroma ATE Inc. Chroma Systems Solutions, Inc. Chroma ATE Europe B.V. Chroma Japan Corp. CHI Incorporation Ltd. Chen Hwa Technology Inc. San Eagle Development Corp. Sensational Holdings Ltd. Deep Red Holding Co., Ltd. Testar Electronics Corporation Adivic Technology Co., Ltd. Chroma Investment Co., Ltd. Quantel Private Ltd. EVT Technology Co., Ltd. Innovative Nanotech Incorporated Touch Cloud Inc. Environmental Stress Systems, Inc. Adlink Technology Inc. DynaScan Technology Corp. Camtek Ltd. Chih Ho Shun Development Co., Ltd. Chroma Systems Solutions, Inc. Chroma Germany GmbH Wei Kuang Mech. Eng. Inc. Adivic Holding Corporation Quantel Technologies India Private Ltd. Quantel Global Vietnam Co., Ltd. Quantel Global Sdn. Bhd. Quantel Global Philippines Corporation Quantel Global Company Limited Testar Electronics Corporation	Hong Kong Taoyuan, Taiwan Hsinchu, Taiwan USA USA The Netherlands Japan British Virgin Islands British Virgin Islands British Virgin Islands British Virgin Islands Mauritius Taoyuan, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Singapore Taoyuan, Taiwan Hsinchu, Taiwan Taipei, Taiwan USA Taoyuan, Taiwan Taoyuan, Taiwan Israel Taoyuan, Taiwan USA Germany Mauritius Samoa India Vietnam Malaysia Philippines Thailand Taoyuan, Taiwan	Sale and maintenance of electronic test instruments, etc. Sale and processing of gold wire Design, manufacturing, installment and testing of automated factory conveyor systems Sale and maintenance of electronic test instruments, etc. Sale and maintenance of electronic test instruments, etc. Sale and maintenance of electronic test instruments, etc. Sale and maintenance of electronic test instruments, etc. Test of inductance, capacitance and resistance, and sale of parts Test of inductance, capacitance and resistance, and sale of parts Investment Investment Investment Testing of LED Sale and research of RF device Investment Sale and maintenance of test instruments, etc. Manufacturing of motorcycles and its parts Monitoring instruments of nanoparticles Development of cloud platform and Internet of Things systems Sale of thermal platform systems Manufacturing, processing and retailing of software/hardware of computers and peripherals Research and manufacture of LED generators Automatic optical inspection equipment Construction and development of residence, buildings and specialized field; construction and investment of public works Sale and maintenance of electronic test instruments, etc. Sale and maintenance of electronic test instruments, etc. Investment Sale and research of RF device Sale and maintenance of test instruments, etc. Sale and maintenance of test instruments, etc. Sale and maintenance of test instruments, etc. Sale and maintenance of test instruments, etc. Sale and maintenance of test instruments, etc. Testing of LED	$ 271,873 - 533,000 29,895 29,628 54,026 201,750 122,884 98,217 186,514 38,301 12,217 247,096 273,800 80,000 112,328 117,311 142,140 110,457 54,985 95,778 238,746 2,342,340 17,500 64 1,073 185,686 - 3,056 6,219 4,199 610 13,138 11,250	$ 271,873 480,715 533,000 29,895 29,628 54,026 201,750 122,884 98,217 186,514 38,301 12,217 247,096 273,800 80,000 112,328 117,311 142,140 110,457 - 162,311 238,746 2,342,340 17,500 64 1,073 185,686 42,245 3,056 6,219 4,199 610 675 11,250	64,012,815 - 10,000,000 1,000,000 120,000 1,000 9,975 3,830,000 3,085,000 2,050,000 1,200,000 215,000 20,159,600 12,590,000 14,000,000 1,914,000 9,412,412 14,214,000 11,045,667 1,000 14,417,253 9,841,112 7,817,440 1,750,000 240,000 30,000 4,475,000 - 64,999 - 600,000 99,095 173,657 4,500,000	100.0 - 100.0 100.0 25.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 67.2 74.1 100.0 60.0 85.6 67.2 83.1 100.0 6.6 27.3 17.6 35.0 50.0 100.0 100.0 - 100.0 100.0 100.0 100.0 99.9 15.0	$ 1,548,322 - 141,413 482,094 19,675 135,031 (166,436) 285,539 197,222 1,208,965 55,220 163,195 143,647 27,662 251,298 259,323 23,588 163,349 35,405 58,656 244,736 204,120 3,397,005 14,908 371,301 14,676 1,285,531 - 5,692 15,344 16,826 9,662 12,751 40,404	$ 219,918 48,785 86,976 224,606 282,738 24,612 (29,695) 211,494 12 281,201 794 (2,329) 58,559 (39,282) 31,504 100,914 (9,142) 24,097 (12,788) 3,554 807,541 214,374 2,382,880 (3,129) 282,738 12,453 281,284 (40) 110 548 (367) 2,404 (141) 58,559	$ 219,918 48,785 86,976 224,509 70,684 24,597 (29,745) 211,494 12 280,465 794 (2,329) 39,335 (32,372) 31,504 60,548 (7,826) 16,185 (10,626) 2,594 51,745 58,524 384,271 (1,095) NA NA NA NA NA NA NA NA NA NA	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Associate Associate Joint venture Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

253 -

TABLE 8

CHROMA ATE INC.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars or Foreign Currency, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital (Note 2)	Method of Investment (Note 1)	Method of Investment (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2022 (Note 3)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2022 (Note 3)	Net Income (Loss) of the Investee	Percentage of Ownership in Investment	Investment Gain (Loss) (Notes 4 and 5)	Carrying Amount as of December 31, 2022 (Note 2)	Accumulated Inward Remittance of Earnings as of December 31, 2022
							Outward	Inward
Chroma Electronics (Shenzhen) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma (Shanghai) Trading Co., Ltd. Hangzhou New Material Chroma Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Mou Kuan Technologies (Nanjing) Co., Ltd. Sajet System Technology (Suzhou) Co., Ltd.	Sale of computerized automatic test systems, peripherals and electronic test instruments Sale of computerized automatic test systems, peripherals and electronic test instruments International and transit trading, commercial simple processing and commercial consulting service and etc. Production and sale of semiconductor connecting materials Sale of computerized automatic test systems, peripherals and electronic test instruments Sale and maintenance of electronic equipment and factory conveyor systems Sale and maintenance of electronic equipment and factory conveyor systems Assembly, sale and maintenance of factory conveyors and related systems and renders related after-sales services Research, development and design of computer network security systems and information management		$ 118,140 (HK$ 30,000) 92,130 (US$ 3,000 ) 82,917 (US$ 2,700) 46,065 (US$ 1,500) 116,698 (US$ 3,800) 52,327 (RMB 11,871) 50,326 (RMB 11,417) (Note 10) 36,913 (RMB 8,374)	b. Subsidiary of Neworld Electronics Limited b. Subsidiary of Neworld Electronics Limited b. Subsidiary of Chen Hwa Technology Inc. b. Subsidiary of Chen Hwa Technology Inc. b. Subsidiary of CHI Incorporation Ltd. b. Subsidiary of Wei Kuang Mech. Eng. Inc. b. Subsidiary of Wei Kuang Mech. Eng. Inc. b. Subsidiary of Wei Kuang Mech. Eng. Inc. b. Subsidiary of Deep Red Holding Co., Ltd.		$ 132,178 (HK$ 1,200 US$ 3,853) 101,993 (US$ 3,000) 84,988 (US$ 2,700) 9,091 (US$ 285) 121,115 (US$ 3,800) 43,751 (US$ 1,338) 49,935 (US$ 1,500) 92,000 (US$ 2,836) (Note 9)	$ - - - - - - - - -	$ - - - - - - - - -	$ 132,178 (HK$ 1,200 US$ 3,853) 101,993 (US$ 3,000) 84,988 (US$ 2,700) 9,091 (US$ 285) 121,115 (US$ 3,800) 43,751 (US$ 1,338) 49,935 (US$ 1,500) 92,000 (US$ 2,836) (Note 9)	$ 149,712 57,824 83 42,875 214,124 255,512 61,413 - (2,711)	100 100 100 19 100 100 100 - 100	$ 149,712 57,824 83 - 214,124 255,512 61,413 - (2,711)	$ 1,170,938 331,601 81,225 111,094 508,972 511,871 594,243 - 146,938	$ 159,544 (RMB 36,858) 47,801 (RMB 10,852) - 34,048 (US$ 1,075) 28,932 (US$ 943) - - 47,504 (US$ 1,552) -

Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2022		Investment Amounts Authorized by the Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$635,051 (HK$1,200, US$19,312)		$725,060 (HK$1,400, US$22,076) (Note 6)			$12,816,425 (Note 7)

(Continued)

254 -

Note 1: Methods of investment have following types:

a. Direct investment in mainland China.

b. Indirect investment in mainland China through an existing company in a third region. c. Other.

Note 2: The amounts of paid-in capital and carrying value as of balance sheet date were translated into the New Taiwan dollar at the rates of HK$1=NT$3.938, US$1=NT$30.710, RMB1=NT$4.408 prevailing on December 31, 2022.

Note 3: The amounts of accumulated outflow of investment from Taiwan as of January 1, 2022 and December 31, 2022 were translated into the New Taiwan dollar on the original outflow day.

Note 4: Based on audited financial statements.

Note 5: Investment income (loss) was translated into the New Taiwan dollar at the average rate of HK$1=NT$3.806, US$1=NT$29.805, RMB1=NT$4.422 for the year ended December 31, 2022.

Note 6:

	Approval Letter		Approved Amount	Approved Amount	Approved Amount
a.	Letter (1998) II-87710585 of Investment Commission of MOEA	NT$	5,852	(HK$	1,400)
b.	Letter (2000) II-89014726 and 89037430 of Investment Commission of MOEA	NT$	63,180	(US$	2,000)
c.	Letter (2001) II-89037430 of Investment Commission of MOEA	NT$	33,160	(US$	1,000)
d.	Letter II-91048640 of Investment Commission of MOEA	NT$	63,984	(US$	1,853) (Note 8)
e.	Letter II-90025170 of Investment Commission of MOEA	NT$	60,240	(US$	1,750)
f.	Letter II-092020235 of Investment Commission of MOEA	NT$	19,230	(US$	560)
g.	Letter II-092043358 of Investment Commission of MOEA	NT$	6,748	(US$	200)
h.	Letter II-093004076 of Investment Commission of MOEA	NT$	3,158	(US$	95)
i.	Letter II-094006092 of Investment Commission of MOEA	NT$	6,896	(US$	219)
j.	Letter II-09500052120 of Investment Commission of MOEA	NT$	81,528	(US$	2,500)
k.	Letter II-09600175700 of Investment Commission of MOEA	NT$	120,000	(US$	3,699)
l.	Letter II-09600006020 of Investment Commission of MOEA	NT$	66,580	(US$	2,000) (Note 10)
m.	Letter II-09600310110 of Investment Commission of MOEA	NT$	33,160	(US$	1,000)
n.	Letter II-09700186010 of Investment Commission of MOEA	NT$	46,110	(US$	1,500)
o.	Letter II-09700403210 of Investment Commission of MOEA	NT$	7,096	(US$	210) (Note 9)
p.	Letter II-10400042770 of Investment Commission of MOEA	NT$	78,240	(US$	2,500)
q.	Letter II-10600164500 of Investment Commission of MOEA	NT$	29,898	(US$	990)

Note 8: The Corporation invested accounts receivable amounting to US$853 thousand in Chroma Electronics (Shenzhen) Co., Ltd. through Neworld Electronics Limited.

Note 9: The investment in Sajet Technology Inc. (liquidated on September 15, 2008) was authorized by the Investment Commission in 2004.

Note 10: Liquidated in 2022, settlement payment is not remitted to Taiwan.

(Concluded)

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Chroma ATE Inc.

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Chairman Leo Huang

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AI assistant

CHROMA — Annual Report 2022

52029_rns_2023-06-16_3af7a86b-d87d-49f3-b8e3-dd46ce6182ae.pdf

Critical financial indicators (integrated)

Table of Contents

Chapter 1 Reports to Shareholders

Business Report

Chapter 2 Company Introduction

I. Date of founding: November 8, 1984

II. Company overview:

Chapter 3 Corporate Governance Report

I. Organization

(II) Responsibilities and functions of main departments

II. Directors, president, vice presidents, assistant vice presidents, and heads of departments and branches

(I)Director Information

1. Professional qualifications of directors and information on independence of independent directors

(2) Information on the independence of independent directors

2. Diversity policy and independence of the Board of Directors:

III. Total remuneration paid to directors, president, and vice presidents in the most recent year

Table of remuneration ranges

IV. Operation of corporate governance

(I) Operation of Board of Directors

records from directors:

(III) Operation Overview of the Audit Committee:

the competent authority

(V) Composition, duties, and operation of the Remuneration Committee

3. Information on the members of the Nomination Committee and its operation: None.

(VI) Implementation of sustainable development, deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and reasons thereof

(VII) Compliance with ethical corporate management and measures implemented

corporate governance at the Company

CHROMA ATE INC

VI. Replacement of CPAs:

(I) About the predecessor CPAs

(II) About the successor CPAs

VIII. Shareholding transfer and equity pledge changes of directors or managerial officers holding more than ten percent (10%) of Company shares during the most recent year up to the publication date of this annual report

IX. Information on the ten largest shareholders who are related parties or each other’s spouses and relatives within the second degree of kinship

Relationship information between the 10 largest shareholders

Consolidated shareholding percentage

Chapter 4 Capital Raising

(II) Shareholder structure

(III) Distribution of equity ownership

1. Common shares

2. Preferred shares: None.

(IV) List of major shareholders

II. Corporate Bonds: None.

III. Preferred shares: None.

VI. New restricted employee shares

(II)Name of managerial officers and top 10 employees with the highest number of new employee restricted stocks, and status of acquisition

VIII. Implementation of capital utilization plan: None.

Chapter 5 Operation summary

I. Business content

B. Automated transportation and construction equipment

- Photonics Test Solution

B. Product competition

3. Future R&D plans

2. Long-term development plans

II. Market, production, and sales summary

(V) Production volume in the most recent two years

(VI) Sales volume in the two most recent years

III. Employee information in the two most recent years up to the publication date of this annual report

IV. Environmental protection expenditure

V. Labor relations

VI. Cyber security management

Chapter 6 Financial summary

I. Condensed balance sheet and statement of comprehensive income in the five most recent years

1. Condensed consolidated balance sheet and statement of comprehensive income – IFRS

2. Individual balance sheet and comprehensive income or loss sheet - International Financial Reporting Standards

II. Financial analysis in the five most recent years

1.Consolidated financial analysis - International Financial and Accounting Reporting Standards

Note 2: The following lists the formulas used for performing the financial analysis:

2. Parent company-only financial analysis

CHROMA ATE INC

Audit Committee’s Audit Report

Chapter 7 Review, analysis, and risks of financial position and performance

I. Financial condition

II. Financial performance

III. Cash flow

(I) Analysis and explanations of changes in cash flow in the most recent year

IV. Impact of material expenditures on the Corporation’s finances and operations in the most recent year

V. Investment policies in other companies, the main reasons for profit/losses, improvement plan, and investment plans for the upcoming year

CHROMA Annual Report 2022