COSMO — Audit Report / Information 2022

Dec 21, 2022

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT

DECEMBER 31, 2022 AND 2021

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For the convenience of readers and for information purpose only, the 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. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two version, the Chinese-language auditors’ report and consolidated financial statements shall prevail.

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2022, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the companies that are required to be included in the consolidated financial statements of affiliates, are the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standards No.10. If 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, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES

TSAI,NAI CHEN

March 21, 2023

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Independent Auditors’ Report Translated from Chinese

To the Board of Directors and Shareholders of Cosmo Electronics Corporation

Opinion

We have audited the accompanying consolidated financial statements of Cosmo Electronics Corporation and its subsidiaries (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 year 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 year then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed and issued into effect by the Financial Supervisory Commission.

Basis for Opinion

We conducted our audits of the consolidated financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants ,and auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the 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.

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Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. 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.

The key audit matters in relation to the consolidated financial statements for the year ended December 31,2022, are outlined as follows:

Valuation of inventory

Description

Please refer to Note 4(12) for the description of accounting policy on inventory valuation. Please refer to Note 5(2) for accounting estimates and assumption uncertainty in relation to inventory valuation. Please refer to Note 6(4) for details of inventory.

The Group has a higher risk of inventory market value decline since technology evolution affecting the market value and the possibility of inputs for obsolete products. Inventory are stated at the lower of cost or net realizable value. Providing valuation loss for obsolete inventories bases on net realizable value.

As the evaluation of inventory requires critical judgement and the amount of inventory is significant, we consider the valuation of inventory a key audit matter.

How our audit addressed the matter:

We performed the following audit procedures in respect of the above key audit matter:

1. Obtained the policies of inventory valuation and determined whether the policies have been applied consistently.

2. Inspected and performed annual physical count to evaluate whether management identifies and controls obsolete inventories effectively.

3. Validated whether the logic of inventory aging reports used for valuation has been applied adequately in order to ensure the information of consolidated financial statement

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would be align with policies.

1. Evaluated and calculated to supporting documents of inventory losses providing from aging over a certain period, and discussed with management the accuracy.

2. Sampled the sources of market value for recalculation of net realization value.

Assessment the fair value of investment property

Description

Please refer to Note 4(16) for the description of accounting policy on investment property. Please refer to Note 5(2) for accounting estimates and assumption uncertainty in relation to investment property. Please refer to Note 6(7) for details of investment property.

The Group held investment property to (a) earn rent incomes from lease, (b) develop and improve land for future use. The investment property was measured subsequently using the fair value model. The fair value was based on appraisal report issued by external valuers.

As the evaluation of the fair value requires future prediction and the assumptions are unobservable inputs and highly uncertainty as well as the amount of valuation is significant, we consider the valuation of investment property a key audit matter.

How our audit addressed the matter:

We performed the following audit procedures in respect of the above key audit matter:

1. Evaluated whether valuers and appraisal firms were engaged by the Group were qualified and independent.

2. Reviewed the appraisal report issued by the valuer and checked valuation approach to comply with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

3. For the investment property evaluated by the income approach, evaluated the valuer's rationality of the future cash flow of the Group, and compared the rent used in the valuation approach with the lease agreement signed at present.

4. For the investment property evaluated by land development analysis method, examined the prices of various comparison targets used, and compared them with the prices of

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similar assets available from public information.

1. Evaluated the correctness of the model calculation, and confirmed that the recognized amount is consistent with the appraisal report.

Other Matter – Parent Company Only Financial Reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Cosmo Electronics Corporation, as at and for the years ended December 31, 2022 and 2021.

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

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

In preparing the consolidated financial statements, management is responsible for assessing the 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 are responsible for overseeing the Group’s financial reporting process.

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Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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

4. 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

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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.

1. 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.

2. Obtain sufficient appropriate audit evidence regarding the financial information of the 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 a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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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.

Tsai, Yi Tai Liang, Chan Nyu

For and on behalf of PricewaterhouseCoopers, Taiwan March 21, 2023

The accompanying consolidated financial statements are not intended to present to financial position and results of operations and cash flow in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such consolidated financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

For the convenience of readers and for information purpose only, the 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. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two version, the Chinese-language auditors’ report and consolidated financial statements shall prevail.

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31,2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Assets	Notes 6(1) 6(2) 6(3) 6(3) 7 6(4) 7 6(2) and 8 6(5) and 8 6(6) and 8 6(7) and 8 6(8) 6(24) 6(12)	December31,2022 Amount % $ 542,994 12 69,204 2 3,388 - 282,782 7 25,062 1 17,632 - 9,268 - 615,499 14 92,015 2 2,227 - 1,660,071 38 20,315 1 757,718 17 165,894 4 1,615,691 37 12,782 - 63,633 1 11,925 - 13,125 - 24,239 1 23,636 1 2,708,958 62 $ 4,369,029 100	December31,2021	December31,2021
		Amount $ 542,994 69,204 3,388 282,782 25,062 17,632 9,268 615,499 92,015 2,227 1,660,071 20,315 757,718 165,894 1,615,691 12,782 63,633 11,925 13,125 24,239 23,636 2,708,958 $ 4,369,029	Amount $ 586,246 - - 336,289 16,575 18,348 4,941 464,054 50,795 1,736 1,478,984 19,050 740,479 122,369 1,465,874 13,581 55,088 36,485 15,029 18,395 24,210 2,510,560 $ 3,989,544	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets at amortized cost-current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1210 Other receivables from related parties 1220 Current income tax assets 130X Inventories 1410 Prepayments 1479 Other current assets 11XX Total current assets Non-current assets 1535 Financial assets at amortized cost-non current 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1915 Prepayments for equipment 1920 Refundable deposits 1975 Net defined benefit assets-non current 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets				15 - - 8 - 1 - 12 1 -
				37
				1 19 3 37 - 1 1 - - 1
				63
				100

(Continued)

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31,2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity

December31,2022 December31,2021 Notes Amount % Amount % 6(9) $ 396,000 9 $ 480,754 12 6(9) 49,962 1 49,887 1 6(17) 10,237 - 2,943 - 96 - 1,047 - 119,752 3 123,264 3 7 15,671 1 12,907 - 81,700 2 52,395 1 7 3,736 - - - 301 - 1,563 - 15,372 1 6,305 - 6(10)(11) and 7 276,841 6 898,205 23 8,616 - 14,781 1 978,284 23 1,644,051 41 6(10) - - 273,484 7 6(11) and 7 1,258,640 29 174,000 4 6(24) 205,975 5 196,735 5 4,490 - 6,605 - 6(12) 21,467 - 28,096 1 528 - 527 - 1,491,100 34 679,447 17 2,469,384 57 2,323,498 58 6(13) 1,680,883 38 1,616,234 41 6(14) 177,242 4 241,891 6 6(15) 6,819 - 1,203 - 63,024 1 12,484 - 122,417 3 56,156 1 6(16) ( 150,740 ) ( 3 ) ( 261,922) ( 6) 1,899,645 43 1,666,046 42 1,899,645 43 1,666,046 42 9 11 $ 4,369,029 100 $ 3,989,544 100

Current liabilities 2100 Short-term borrowings 2110 Short-term bills payable 2130 Contract liabilities-current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable to related parties 2219 Other payables 2220 Other payables to related parties 2230 Current income tax liabilities 2280 Lease liabilities-current 2320 Long-term liabilities-current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2530 Convertible bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Lease liabilities-non current 2640 Net defined benefit liability-non current 2670 Others non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments Significant subsequent events 3X2X Total liabilities and equity

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

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31,2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items

2022 2021 Notes Amount % Amount % 6(17) and 7 $ 1,390,778 100 $ 1,341,812 100 6(4) and 7 ( 1,053,647)( 76) ( 1,108,883) ( 83) 337,131 24 232,929 17 ( 62,740 ) ( 4) ( 51,738) ( 4) ( 219,598 ) ( 16) ( 174,906) ( 13) ( 4,905 ) - ( 5,614) - ( 10,789)( 1) 54 - ( 298,032)( 21) ( 232,204) ( 17) 39,099 3 725 - 6(18) 3,289 - 1,744 - 6(19) 25,477 2 10,090 1 6(20) 99,777 7 90,492 7 6(21) ( 54,304)( 4) ( 36,660) ( 3) 74,239 5 65,666 5 113,338 8 66,391 5 6(24) ( 3,114) - ( 11,452) ( 1) $ 110,224 8 $ 54,939 4 6(12) $ 15,501 1 $ 1,566 - ( 3,308) - ( 349) - 12,193 1 1,217 - 6(16) 111,182 8 ( 52,750) ( 4) $ 123,375 9 ($ 51,533) ( 4) $ 233,599 17 $ 3,406 -

4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain(loss) 6000 Total operating expenses 6900 Operating profit (loss) Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income(loss) Components of other comprehensive income(loss) that will not be reclassified to profit or loss 8311 Gain on remeasurements of defined benefit plans 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Other comprehensive income(loss) that will not be reclassified to profit or loss Components of other comprehensive income(loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8300 Other comprehensive income(loss) for the year 8500 Total comprehensive income for the year

(Continued)

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31,2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items	Notes	2022	% 8 17 0.66 0.65	2021
		Amount $ 110,224 $ 233,599 $		Amount $ 54,939 $ 3,406 $	%
Profit attributable to: 8610 Owners of the parent Comprehensive income(loss) attributable to : 8710 Owners of the parent Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share					4
					-
					0.33
		$		$	0.33

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

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31,2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

2021 Balance at January 1, 2021 Profit for the year Other comprehensive income(loss) for the year Total comprehensive income(loss) for the year Distribution of 2020 earnings Legal reserve Special reserve Conversion of convertible bonds Issuance of share from capital surplus Balance at December 31, 2021 2022 Balance at January 1, 2022 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Distribution of 2021 earnings Legal reserve Special reserve Issuance of share from capital surplus Balance at December 31, 2022	Notes			Equity attributable to owners ofthe parent	Equity attributable to owners ofthe parent	Equity attributable to owners ofthe parent	Equity attributable to owners ofthe parent	Equity attributable to owners ofthe parent	Equity attributable to owners ofthe parent	Financial statements translation differences of foreignoperations ($209,172 ) - ( 52,750 ) ( 52,750 ) - - - - ($261,922 ) ($261,922 ) - 111,182 111,182 - - - ( $150,740 )	Totalequity
		Share capital- commonstock		Capitalsurplus			Retained earnings
					Legal reserve		Special reserve		Unappropriated retained earnings
	6(16) 6(10) 6(16) 6(15) 6(13)		$1,563,342 - - - - - 5,992 46,900 $1,616,234 $1,616,234 - - - - - 64,649 $1,680,883	$ 272,535 - - - - - 16,256 ( 46,900 ) $ 241,891 $ 241,891 - - - - - ( 64,649 ) $ 177,242		$ 350 - - - 853 - - - $ 1,203 $ 1,203 - - - 5,616 - - $ 6,819		$ 4,810 - - - - 7,674 - - $ 12,484 $ 12,484 - - - - 50,540 - $ 63,024	$ 8,527 54,939 1,217 56,156 ( 853 ) ( 7,674 ) - - $ 56,156 $ 56,156 110,224 12,193 122,417 ( 5,616 ) ( 50,540 ) - $ 122,417		$ 1,640,392 54,939 ( 51,533 ) 3,406 - - 22,248 - $ 1,666,046 $ 1,666,046 110,224 123,375 233,599 - - - $ 1,899,645

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

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31,2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Notes CASH FLOWS FROM OPERATING ACTIVITIES Consolidated profit before tax for the year Adjustments Income and expenses having no effect on cash flows Depreciation 6(5)(6)(22) Amortization 6(8)(22) Expected credit impairment (gains)losses 12 Interest expense 6(21) Interest income 6(18) Gain on fair value changes of investment property 6(20) Provision for inventory and obsolescence 6(4) Gain on disposal of property, plant and equipment Changes in assets and liabilities relating to operating activities Net changes in assets relating to operating activities Notes receivable Accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parties Inventories Prepayments Net defined benefit assets Other current assets Net changes in liabilities relating to operating activities Contract liabilities-current Notes payable Accounts payable Accounts payable to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liability Cash inflow generated from operations Interest received Income taxes paid Net cash flows generated from operating activities (Continued)	2022 $ 113,338 109,990 2,112 10,789 ( 54,304 ( 3,289 ) ( ( 77,537 ) ( 4,366 ( 743 ) ( 3,388 ) 42,665 ( - ( 8,487 ) 716 ( 155,811 ) ( ( 41,220 ) ( 5,844 ) ( ( 491 ) 7,294 ( 951 ) ( 3,512 ) 2,764 ( 26,754 3,736 ( ( 6,165 ) 8,872 ( 80,262 3,289 ( 11,279 ) ( 72,272	2021 $ 66,391 96,920 2,057 54 ) 36,660 1,744 ) 118,207 ) 1,558 - 8,017 16,753 ) 1,955 6,262 231 31,427 ) 8,922 1,576 ) 116 1,504 1,047 38,138 18,964 ) 5,461 103 ) 352 2,787 ) 83,976 1,744 28,979 ) 56,741

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31,2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Notes 2022 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of financial assets at amortized cost ( $ 69,721 ) ( $ Acquisitions of property, plant and equipment 6(5)(26) ( 90,552 ) ( Proceeds from disposal of property, plant and equipment 6(5) 1,085 Decrease in refundable deposits 1,904 Payments for investment properties 6(7) ( 36,371 ) ( Acquisitions of intangible assets 6(8) ( 285 ) ( Acquisitions of right-of-use assets 6(6) ( 31,566 ) Increase in other non-current assets 574 ( Increase in prepayments for equipment ( 14,743 ) ( Net cash flows used in investing activities ( 239,675 ) ( CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings 6(27) 2,067,490 Decrease in short-term borrowings 6(27) ( 2,159,213 ) ( Repayment for long-term borrowings 6(27) ( 886,440 ) ( Proceeds from long-term borrowings 6(27) 1,061,550 Lease principal repayment 6(27) ( 12,678 ) ( Increase in others non-current liabilities - Interest paid ( 50,872 ) ( Net cash flows generated from /(used in) financing activities 19,837 ( Effect due to changes in exchange rate 104,314 ( Net decrease in cash and cash equivalents ( 43,252 ) ( Cash and cash equivalents at beginning of year 586,246 Cash and cash equivalents at end of year $ 542,994 $	Notes 2022 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of financial assets at amortized cost ( $ 69,721 ) ( $ Acquisitions of property, plant and equipment 6(5)(26) ( 90,552 ) ( Proceeds from disposal of property, plant and equipment 6(5) 1,085 Decrease in refundable deposits 1,904 Payments for investment properties 6(7) ( 36,371 ) ( Acquisitions of intangible assets 6(8) ( 285 ) ( Acquisitions of right-of-use assets 6(6) ( 31,566 ) Increase in other non-current assets 574 ( Increase in prepayments for equipment ( 14,743 ) ( Net cash flows used in investing activities ( 239,675 ) ( CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings 6(27) 2,067,490 Decrease in short-term borrowings 6(27) ( 2,159,213 ) ( Repayment for long-term borrowings 6(27) ( 886,440 ) ( Proceeds from long-term borrowings 6(27) 1,061,550 Lease principal repayment 6(27) ( 12,678 ) ( Increase in others non-current liabilities - Interest paid ( 50,872 ) ( Net cash flows generated from /(used in) financing activities 19,837 ( Effect due to changes in exchange rate 104,314 ( Net decrease in cash and cash equivalents ( 43,252 ) ( Cash and cash equivalents at beginning of year 586,246 Cash and cash equivalents at end of year $ 542,994 $	2021
		15,372 ) 229,322 ) 3,278 10,557 79,199 ) 677 ) - 16,923 ) 34,095 ) 361,753 ) 1,817,659 1,740,569 ) 328,200 ) 180,000 9,449 ) 274 33,057 ) 113,342 ) 3,132 ) 421,486 ) 1,007,732 586,246
	$

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

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022 AND 2021

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. History and Organization

Cosmo Electronics Corporation (“The Company”) was established in May 1981. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in manufacture and sales of relays, photocouplers and LEDs, biomass energy and land development business, etc. The Company's shares have been traded on the Taipei Exchange(OTC) since January 15, 2000, and were listed on the Taiwan Stock Exchange(TWSE) on September 17, 2001.

2. The Date of Authorization for Issuance of the Consolidated Financial Statements and Procedures for

Authorization

These consolidated financial statements were authorized for issuance by the Board of Directors on March 21, 2023.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting

Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC effective from 2022 are as follows:

New Standards,Interpretations and Amendments Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts— cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	Effective date by International Accounting Standards Board
	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

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

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(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted

by the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

follows:
New Standards,Interpretations and Amendments Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’	Effective date by International Accounting Standards Board
	January 1, 2023 January 1, 2023 January 1, 2023

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

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

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

IFRSs as endorsed by the FSC are as follows:
New Standards,Interpretations and Amendments Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ Amendment to IFRS 16, ‘Lease liability in a sale and leaseback’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’ Amendments to IAS 1, ‘Classification of liabilities as current or non- current’ Amendments to IAS 1, ‘Non-current liabilities with covenants’	Effective date by International Accounting StandardsBoard
	To be determined by International Accounting Standards Board January 1, 2024 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024

The above standards and interpretations have no significant impact to the Group’s financial

condition and financial performance based on the Group’s assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed and issued into effect by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

  • (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

  • (b) Investment property at fair value.

  • (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRS”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

• (3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

  • (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

  • (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

~19~

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

• B. Subsidiaries included in the consolidated financial statements:

Name of Investor Name of Subsidiary Main Business Activities

Ownership (%) December 31,2022 December 31,2021 Description

Cosmo Electronics Corporation Cosmo Electronics Samoa Investment activities Cosmo Electronics (HK) Company Limited Trading of electronic products Grand Concept Group Limited Investment activities Grandway International Limited. Investment activities PT Cosmo Technology (PT Cosmo) Manufacturing and selling of LED lighting Cosmo Green Power Limited (Cosmo Green) Manufacturing and selling of material of biomass energy

100 100 100 100 100 100 100 100 14 14 Note 1 100 100

~20~

Name of Investor Name of Subsidiary Main Business Activities

Ownership (%) December 31,2022 December 31,2021 Description

Cosmo Electronics Samoa Cosmo Electronics Technology Co., Ltd. Investment activities Cosmo Electronics Technology Co., Ltd. Cosmo Electronics Technology (KunShan) Co., Ltd. Manufacturing and selling of new electronic parts Cosmo Electronics (HK) Company Limited Cosmo Lighting Inc. Selling of LED lighting Cosmo Recycling Inc. Recycling and selling of waste Grand Concept Group Limited True Glory Investments Limited Investment activities and processing and trading of PCBs Real Bonus Limited Selling of LED lighting Grandway International Limited. Truly Top Investments Limited Investment activities Renown Boom Limited Investment activities and processing and selling of routers True Glory Investments Limited PT Cosmo Technology (PT Cosmo) Manufacturing and selling of LED lighting PT Cosmo Green Technology (PT Cosmo Green) Manufacturing and selling of material of biomass energy PT Cijambe Indah (PT Cijambe) Land development PT Cosmo Electronics Indonisia Manufacturing and selling of new electronic parts Truly Top Investments Limited PT Cosmo Technology (PT Cosmo) Manufacturing and selling of LED lighting PT Cosmo Green Technology (PT Cosmo Green) Manufacturing and selling of material of biomass energy Renown Boom Limited Dong Guan Guan Zhen Xing Trading Limited Manufacturing and selling of material of biomass energy PT Cijambe Indah (PT Cijambe) Land development Dong Guan Guan Zhen Xing Trading Limited Shaoguan Woncrown Electronics Technology Co.,Ltd. Developing, manufacturing and selling of electronic products Guizhou Guanwang International Digicrown Electronic Technology Co., Ltd. Developing, manufacturing and selling of electronic products Dongguan Guanwang Electronic Technology Co., Ltd. Developing, manufacturing and selling of electronic products

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 13 13 Note 1 50 50 Note 1 93 88 Note 1 and 2 100 - Note 3 73 73 Note 1 50 50 Note 1 100 100 7 12 Note 1 and 2 100 100 100 100 100 100

Note 1: The total Group's investment in this subsidiary is 100%.

~21~

Note 2: PT Cijambe has increased its capital on August 1, 2022 and September 27, 2022. After the increase in capital, the shareholding percentage of Renown Boom Limited in PT Cijambe has changed since it did not subscribe in proportion to its ownership.

Note 3: The company was established in October 2022.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within other gains and losses.

~22~

• B. Translation of foreign operations

  • (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

    • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

    • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

    • iii. All resulting exchange differences are recognized in other comprehensive income.

  • (b) When the foreign operation partially disposed of or sold is an associate or joint arrangement, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group retains partial interest in the former foreign associate or joint arrangement after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangement, such transactions should be accounted for as disposal of all interest in these foreign operations.

• (5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

  • (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

  • (b) Assets held mainly for trading purposes;

  • (c) Assets that are expected to be realized within twelve months from the balance sheet date;

  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be settled within the normal operating cycle;

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more

~23~

than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(7) Financial assets at amortized cost

• A. Financial assets at amortized cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortized cost are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.

• D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(8) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(9) Impairment of financial assets

For financial assets at amortized cost and accounts receivable that have a significant financing component, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs)

~24~

if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

(10) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

－ (11) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term.

• (12) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(13) Investments accounted for using equity method / associates

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital

~25~

surplus’ in proportion to its ownership.

• D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• E. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• F. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

(14) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and

~26~

useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures	3 ~ 55 years
Machinery	2 ~ 10 years
Transportation equipment	5 ~ 8 years
Office equipment	2 ~ 16 years
Other equipment	2 ~ 16 years

(15) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are fixed payments, less any lease incentives receivable. The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

• (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date;

• (c) Any initial direct costs incurred by the lessee; and

• (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The right-of-use asset is measured subsequently using the cost model and is depreciated from

~27~

the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset and remeasure the lease liability to reflect the partial or full termination of the lease, and recognize the difference in profit or loss.

(16) Investment property

An investment property is stated initially at its cost and measured subsequently using the fair value model. A gain or loss arising from a change in the fair value of investment property is recognized in profit or loss.

(17) Intangible assets

• A. Computer software

Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life of 3 to 5 years.

• B. Patent

Patent is stated at cost and amortized on a straight-line basis over its useful life of 20 years.

(18) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(19) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings and other long-term and short-term loans. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan

~28~

to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.

(20) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Convertible bonds payable

Convertible bonds issued by the Group contain conversion rights (that is, the bondholders have the right to convert the bonds into the Group’s common shares by exchanging a fixed amount of cash for a fixed number of common shares), call options and put options. The Group classifies the convertible bonds upon issuance as a financial asset, a financial liability or an equity instrument in accordance with the contract terms. They are accounted for as follows:

• A. The embedded call options and put options are recognized initially at net fair value as ‘financial assets or financial liabilities at fair value through profit or loss’. They are subsequently remeasured and stated at fair value on each balance sheet date; the gain or loss is recognized as ‘gain or loss on valuation of financial assets or financial liabilities at fair value through profit or loss’.

• B. The host contracts of bonds are initially recognized at fair value. Any difference between the initial recognition and the redemption value is accounted for as the premium or discount on bonds payable and subsequently is amortized in profit or loss as an adjustment to ‘finance costs’ over the period of circulation using the effective interest method.

• C. The embedded conversion options which meet the definition of an equity instrument are initially recognized in ‘capital surplus—share options’ at the residual amount of total issue price less the amount of financial assets or financial liabilities at fair value through profit or loss and bonds payable as stated above. Conversion options are not subsequently remeasured.

• D. Any transaction costs directly attributable to the issuance are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.

• E. When bondholders exercise conversion options, the liability component of the bonds

~29~

(including bonds payable and ‘financial assets or financial liabilities at fair value through profit or loss’) shall be remeasured on the conversion date. The issuance cost of converted common shares is the total book value of the abovementioned liability component and ‘capital surplus—share options’.

(22) Derecognition of financial liabilities

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

(23) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

• ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

~30~

iii.Past service costs are recognized immediately in profit or loss.

C. Termination benefits

• Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognizes expense as it can no longer withdraw an offer of termination benefits or it recognizes relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

• D. Employees’ compensation and directors’ and supervisors’ remuneration Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(24) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from

~31~

initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

• D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

• (25) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(26) Revenue recognition

Sales of goods—wholesale

• A. The Group manufactures and sells a range of electronic products such as photocouplers and relays in the wholesale market. Sales are recognized when control of the products has transferred, being when the products are delivered to the wholesaler, the wholesaler has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

~32~

• B. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(27) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

1. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

None.

(2) Critical accounting estimates and assumptions

• A. Valuation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of inventories with normal consumption, obsolescence or no market value on balance sheet date, and writes down the cost of inventories to the net realizable value. The valuation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the valuation. As of December 31, 2022, the carrying amount of inventories was $615,499.

• B. Assessment the fair value of investment property

• As the investment property is subsequently measured at fair value, the investment property held by the Group is mainly land and buildings, that experts must be entrusted to use their professional judgements and estimates to determine the fair value on the balance sheet date. The Group will adjust the cost to fair value base on the appraisal report issued by the experts.

~33~

The assessment of investment property is mainly based on the reports issued by experts, so the measurement of fair value may be affected by product demand in a specific period in the future, real estate transaction prosperity and changes in experts' judgments and estimates. As of December 31, 2022, the carrying amount of investment property was $1,615,691.

6. Details of Significant Accounts

(1) Cash and cash equivalents

nd cash equivalents
Cash on hand and revolving founds Checking accounts and demand deposits Time deposits	December 31
	2022 $ 5,109 522,530 15,355 $ 542,994	2021
		$ 4,279 469,179 112,788
		$ 586,246

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. Time deposits were pledged as collateral for custom duties of the imported materials and restricted bank accounts for reimbursement of bank loan were classified as financial assets at amortized cost. Details are provided in Note 8.

(2) Financial assets at amortized cost

cial assets at amortized cost
Items Current items: Time deposits Non-current items: Pledged time deposits (Note 8) Restricted bank accounts Corporate bonds-CFE	December 31
	2022 $ 69,204 $ 4,395 9,818 6,102 $ 20,315	2021
		$ -
		$ 3,682 9,802 5,566
		$ 19,050

• A. Amounts recognized in profit or loss in relation to financial assets at amortized cost are listed below:

w:
Interest income	Year ended December 31
	2022 $ 1,626	2021
		$ 43

• B. On November 4, 2021, the Group bought a corporate bond issued by CFE with a coupon rate of 3.875% and a maturity date of July 26, 2033 , at a par value of USD 200 thousand. The

~34~

interest was paid on semi-annual basis.

• C. Information relating to credit risk of financial assets at amortized cost is provided in Note 12. The counterparties of the Group’s investments in certificates of deposits are financial

  • institutions with high credit quality, so the Group expects that the probability of counterparty default is remote.

• (3) Notes and accounts receivable

tes and accounts receivable
Notes receivable Accounts receivable Less: Allowance for uncollectible accounts	December 31
	2022 ($ 3,388 ($ 293,987 ($ 11,205) ($ 282,782	2021
		($-
		340,312 ($ 4,023)
		($ 336,289

• A. The ageing analysis of accounts receivable and notes receivable is as follows:

Not past due 1 to 90 days 91 to 180 days Over 181 days	December 31	December 31	December 31
	2022 Accounts receivable Notes receivable $ 268,204 $ 3,388 3,140 - 11,513 - 11,130 - $ 293,987$ 3,388	2021
	Accounts receivable $ 268,204 3,140 11,513 11,130 $ 293,987	Accounts receivable $ 331,146 4,972 195 3,999 $ 340,312	Notes receivable
			$ - - - -
			$ -

The above ageing analysis was based on past due date.

• B. As of December 31, 2022 and 2021, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2021, the balance of receivables from contracts with customers amounted to $327,490.

• C. As at December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable was $297,375 and $340,312, respectively.

• D. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12.

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(4) Inventories

entories
Raw materials Work in progress Finished goods Merchandise	December 31
	2022 $ 197,853 133,699 280,737 3,210 $ 615,499	2021
		$ 165,692 97,287 192,661 8,414
		$ 464,054

The cost of inventories recognized as expense for the year:

Cost of goods sold Loss on decline in market value Revenue from sale of scraps	Year ended December 31	Year ended December 31
	2022 ($ 1,050,153 4,366 ($ 872) ($ 1,053,647	2021
		($ 1,110,385 1,558 ($3,060)
		($ 1,108,883

The Group wrote down from cost to net realizable value accounted for as cost of goods sold because market price declined.

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(5) Property, plant and equipment

At January 1 Cost Accumulated depreciation and impairment 2022 Opening net book amount Additions Disposals Depreciation Transfers from unfinished construction Net exchange differences Closing net book amount At December 31 Cost Accumulated depreciation and impairment				2022	2022
	Land $ 81,110 - $ 81,110 $ 81,110 - - - 110,841 - $ 191,951 $ 191,951 - $ 191,951	Buildings and structures $ 391,603 ( 187,254) $ 204,349 $ 204,349 5,397 ( 102 ) ( 21,935 ) 45,659 12,470 $ 245,838 $ 469,550 ( 223,712) $ 245,838	Machinery $ 1,208,754 ( 965,364) $ 243,390 $ 243,390 71,273 ( 240 ) ( 56,948 ) - 1,742 $ 259,217 $ 1,220,622 ( 961,405) $ 259,217	Transportation equipment $ 16,563 ( 12,222) $ 4,341 $ 4,341 2,897 - ( 1,301) - 277 $ 6,214 $ 19,373 ( 13,159 ) $ 6,214	Office equipment $ 37,327 ( 32,003) $ 5,324 $ 5,324 3,014 - ( 1,794 ) - 383 $ 6,927 $ 42,371 ( 35,444) $ 6,927	Other equipment $ 257,994 ( 212,529) $ 45,465 $ 45,465 10,527 - ( 8,708 ) - 287 $ 47,571 $ 235,661 ( 188,090) $ 47,571	Unfinished construction $ 156,500 - $ 156,500 $ 156,500 - - - ( 156,500 ) - $ - $ - - $ -	Total
								$ 2,149,851 ( 1,409,372)
								$ 740,479
								$ 740,479 93,108 ( 342 ) ( 90,686 ) - 15,159
								$ 757,718
								$ 2,179,528 ( 1,421,810)
								$ 757,718

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At January 1 Cost Accumulated depreciation and impairment 2022 Opening net book amount Additions Disposals Transfers from prepayment Depreciation Net exchange differences Closing net book amount At December 31 Cost Accumulated depreciation and impairment				2021	2021
	Land $ 58,178 - $ 58,178 $ 58,178 22,932 - - - - $ 81,110 $ 81,110 - $ 81,110	Buildings and structures $ 393,167 ( 172,658) $ 220,509 $ 220,509 6,468 ( 75 ) 38 ( 18,677 ) ( 3,914) $ 204,349 $ 391,603 ( 187,254) $ 204,349	Machinery $ 1,206,086 ( 947,834) $ 258,252 $ 258,252 39,122 ( 1,660 ) 3,925 ( 54,371 ) ( 1,878) $ 243,390 $ 1,208,754 ( 965,364) $ 243,390	Transportation equipment $ 16,777 ( 12,143) $ 4,634 $ 4,634 660 - - ( 858 ) ( 95) $ 4,341 $ 16,563 ( 12,222) $ 4,341	Office equipment $ 36,586 ( 30,906) $ 5,680 $ 5,680 1,257 - - ( 1,516 ) ( 97) $ 5,324 $ 37,327 ( 32,003) $ 5,324	Other equipment $ 313,632 ( 259,708) $ 53,924 $ 53,924 2,574 ( 1,543 ) 80 ( 9,831 ) 261 $ 45,465 $ 257,994 ( 212,529 ) $ 45,465	Unfinished construction $ - - $ - $ - 156,500 - - - - $ 156,500 $ 156,500 - $ 156,500	Total
								$ 2,024,426 ( 1,423,249 )
								$ 601,177
								$ 601,177 229,513 ( 3,278 ) 4,043 ( 85,253 ) ( 5,723)
								$ 740,479
								$ 2,149,851 ( 1,409,372)
								$ 740,479

Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 8.

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－ (6) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings and structures. Rental contracts are typically made for periods of 2 to 55 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less and low-value assets comprise company dormitories and cars.

• C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings and structures Land Buildings and structures	December 31	December 31
	2022 2021 Carryingamount Carryingamount $ 146,174 $ 106,947 19,720 15,422 $ 165,894 $ 122,369 Year ended December 31	2021
		Carryingamount
		$ 106,947 15,422
		$ 122,369
	2022 Depreciation	2021
		Depreciation
	$ 3,927 15,377 $ 19,304	$ 3,210 8,457
		$ 11,667

• D. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were $50,965 and $19,869, respectively.

• E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on lease of low-value assets	Year ended December 31	Year ended December 31
	2022 $ 806 2,736 883	2021
		$ 33 3,654 1,570

• F. For the years ended December 31, 2022 and 2021, the Group’s total cash outflow for leases were $16,297 and $14,673, respectively.

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(7) Investment property

estment property
At January 1 Additions－from acquisitions Additions－from subsequent expenditures Gain on fair value adjustment Net exchange differences At December 31	Year ended December 31
	2022 $ 1,465,874 - 36,371 77,537 35,909 $ 1,615,691	2021
		$ 1,301,016 55,329 23,870 118,207 ( 32,548)
		$ 1,465,874

• A. Rental income from investment property is shown below:

Rental income from investment property	Year ended December 31	Year ended December 31
	2022 $ 4,032	2021
		$ 2,309

• B. Information about the fair value of the investment property is provided in Note 12(3).

• C. Information about the investment property that was pledged to others as collaterals is provided in Note 8.

• D. PT Cosmo Technology, a subsidiary of the Group, signed a land right-of-use transfer contract with PT Cijambe Indah on September 28, 2020. The land is still in the process of transfer registration.

• E. The fair value of the investment property held by the Group was measured on recurring basis. The fair value at December 31, 2022 was based on the valuation carried out on February 22 and March 21, 2023 by the independent qualified professional valuers, Mr. Hsieh , Zong Ting, Certified Real Estate Appraisers in the ROC, from Euro-Asia Real Estate Appraisers Firm and Mr. Chung, Shao Yu and Mr. Hsieh, Kun Lung, both Certified Real Estate Appraisers in the ROC, from Zone Tai Real Estate Appraisers Firm, respectively. The fair value at December 31, 2021 was based on the valuation carried out on March 23, 2022 by the independent qualified professional valuers, Mr. Hsieh , Zong Ting, Certified Real Estate Appraisers in the ROC, from Euro-Asia Real Estate Appraisers Firm and Mr. Chung, Shao Yu and Mr. Hsieh, Kun Lung, both Certified Real Estate Appraisers in the ROC, from Zone Tai Real Estate Appraisers Firm, respectively.

~40~

• F. The fair value of the investment property held by the Group was valued by independent valuers. Valuations were made using the income approach which is categorized within Level 3 in the fair value hierarchy. Unrealized profit or loss from fair value adjustment on investment property in 2022 and 2021 are included in other gains and losses.

• G. The fair value of investment properties, except for undeveloped land, was measured using the income approach. The significant assumptions used are stated as follows. An increase in estimated future net cash inflows or a decrease in discount rates would result in an increase in the fair value.

fair value.
Expected future cash inflows Expected future cash outflows Expected future cash inflows, net Discount rate	December 31
	2022 $ 127,788 7,107 $ 120,681 2.10%-3.25%	2021
		$ 133,349 6,307
		$ 127,042
		2.20%-3.25%

• H. The expected future cash inflows generated by investment properties included rental income and disposal value. The rental income was extrapolated using the Company’s current rental rate, while taking into account the annual rental growth rate. The income analysis covers a 10-year period. The disposal value was determined using the direct capitalization method under the income approach and deducted land value increment taxes and agency fee. The expected future cash outflows incurred by investment properties included expenditures such as land value taxes, house taxes, insurance premiums, maintenance costs, replacement and agency fee for investment inviting. These expenditures were extrapolated on the basis of the current level of expenditures, taking into account future adjustments to the government-announced land value, the tax rate promulgated under the House Tax Act. The market rentals in the area where the investment property is located were between $340 to $880 per ping.

• I. As at December 31, 2022 and 2021, the discount rate was determined using the interest rate for 2-year time deposits, as posted by Chunghwa Post Co., Ltd. plus 0.75% and 1-year time deposit, as posted by People's Bank of China, plus any asset-specific risk premiums between -0.1% to 1.75% and 0.1% to 1.75%, respectively.

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J. The fair value of undeveloped land located in area Indonesia was measured using a land development analysis. The significant assumptions used were as follows:

Estimated total sale price Rate of return Overall capital interest rate	December 31	December 31
	2022 $ 3,039,420 13% 10.43%	2021
		$ 2,749,801
		15%
		11.09%

The total sale price is estimated on the basis of the most effective use of the land or property available for sale after development is completed, while taking into account the related regulations, optimism of domestic macroeconomic prospects, local land use, and market rates.

(8) Intangible assets

angible assets
At January 1 Cost Accumulated amortization and impairment Opening net book amount Additions Amortization Net exchange differences Closing net book amount At December 31 Cost Accumulated amortization and impairment		2022
	Patent $ 16,795 ( 7,164) $ 9,631 $ 9,631 - ( 917) 1,026 $ 9,740 $ 18,609 ( 8,869) $ 9,740	Computer software $ 8,493 ( 4,543) $ 3,950 $ 3,950 285 ( 1,195) 2 $ 3,042 $ 7,753 ( 4,711) $ 3,042	Total
			$ 25,288 ($ 11,707)
			$ 13,581
			$ 13,581 285 ($ 2,112) 1,028
			$ 12,782
			$ 26,362 ($ 13,580)
			$ 12,782

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At January 1 Cost Accumulated amortization and impairment Opening net book amount Additions Amortization Net exchange differences Closing net book amount At December 31 Cost Accumulated amortization and impairment		2021
	Patent $ 17,274 ( 6,489) $ 10,785 $ 10,785 - ( 861) ( 293) $ 9,631 $ 16,795 ( 7,164) $ 9,631	Computer software $ 7,871 ( 3,400) $ 4,471 $ 4,471 677 ( 1,196) ( 2) $ 3,950 $ 8,493 ( 4,543) $ 3,950	Total
			$ 25,145 ($ 9,889)
			$ 15,256
			$ 15,256 677 ($ 2,057) ($ 295)
			$ 13,581
			$ 25,288 ($ 11,707)
			$ 13,581

Details of amortization on intangible assets are as follows:

Selling expenses General and administrative expenses	Year ended December 31	Year ended December 31
	2022 $ 917 1,195 2,112	2021
		$ 861 1,196
		2,057

(9) Short-term borrowings

	Type of borrowings Bank borrowings Unsecured borrowings Secured borrowings Short-term bills payable Commercial paper Less: Unamortized discounts on bills payable	December 31, 2022 $ 287,000 109,000 $ 396,000 $ 50,000 ( 38) $ 49,962	Interest rate range 2.14%~2.65% 2.00%~2.46% 1.84%	Collateral
				None. Property, plant and investment property None.

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	Type of borrowings Bank borrowings Unsecured borrowings Secured borrowings Short-term bills payable Commercial paper Less: Unamortized discounts on bills payable	December 31, 2021 $ 336,090 144,664 $ 480,754 $ 50,000 ( 113) $ 49,887	Interest rate range 1.56%~1.75% 1.54%~2.13% 0.80%	Collateral
				None. Property, plant and investment property None.

As at December 31, 2022, the facility of short-term borrowings of the Group was $456,000.

The chairman of the Company, Tsai, Nai Chen and Tsai, Chi Hu, were the sureties of the above unsecured and secured borrowings agreements in their personal names.

(10) Convertible bonds payable

nvertible bonds payable
Convertible bonds payable Less: Discount on convertible bonds payable Less: Current portion	December 31
	2022 ($ 277,400 ($ 559) ($ 276,841 ($ 276,841) ($ -	2021
		($ 277,400 (3,916)
		($ 273,484 -
		($ 273,484

• A. The issuance of domestic convertible bonds by the Company:

• (a) The terms of the 3rd domestic secured convertible bonds issued by the Company are as follows:

  • i. The regulatory authority has approved the 3rd domestic secured convertible bonds issued by the Company. The total issuance amount is $300,000 with coupon rate of 0%, covering a 3-year period of issuance and a circulation period from February 27,2020 to February 27, 2023. The convertible bonds will be redeemed in cash at face value at the maturity date.

  • ii. The bondholders have the right to ask for conversion of the bonds into ordinary shares of the Company during the period from 3 months after the bonds issuance date to the maturity date, except for the suspended transfer period as specified in the terms of the bonds or the regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding ordinary shares.

  • iii. The conversion price of the bonds is set up based on the pricing model in the terms ~44~

of the bonds, and is subject to adjustments if the condition of the anti-dilution triggered subsequently. Subsequently, on the base date set by the regulations, the conversion price will be re-determined according to the pricing model stipulated by the conversion regulations.

  - iv. the Company may repurchase all the bonds outstanding in cash at the bonds’ face value at any time when the outstanding balance of the bonds is less than 10% of total initial issuance amount during the period from the date after 3 months of the bonds issuance to 40 days before the maturity date.

  - v. Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are retired and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

  - vi. After the issuance of the convertible bonds, in the event of an increase in the number of issued ordinary shares of the Company or the distribution of cash dividends on ordinary shares, or re-issuance or private placement at a conversion or subscription price lower than the current price per share ,or a decrease in ordinary shares due to various securities or capital reduction not due to cancellation of treasury shares, the Company shall adjust the conversion price according to the formula listed in the Issuance Regulations.

• (b) As of December 31, 2022, the bonds totaling $22,600 had been converted into 599 thousand shares of common stock.

• B. Regarding the issuance of convertible bonds, the equity conversion options amounting to $19,287 were separated from the liability component and were recognized in ‘capital surplus—share options’ in accordance with IAS 32. The call options embedded in bonds payable were separated from their host contracts and were recognized in ‘financial assets or liabilities at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts. The effective interest rates of the bonds payable after such separation is 1.227%.

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- (11) Long term borrowings

	Type of borrowings Long-term bank borrowings Revolving unsecured borrowings(i) Revolving unsecured borrowings(ii) Secured borrowings-buildings Loans from related parties Fairsky International Limited Less: Current portion	December 31	December 31
		2022 ($ 689,000 383,875 165,000 1,237,875 20,765 1,258,640 - ($ 1,258,640	2021
			($ 519,000 346,000 174,000
			1,039,000 33,205
			1,072,205 ( 898,205)
			($ 174,000

• A. Revolving unsecured borrowings

• (a) On March 18, 2022, the Company and PT Cosmo entered into a 3-year syndicated loan agreement with bank group , O-Bank as the lead bank and obtained a credit line in the amount of $1,326,000, and the credit period was 3 years from the first drawdown date (March 25, 2022).

The condition of borrowings as follows:

• i. Revolving unsecured borrowings

The borrower was the Company, and the credit line was $926,000 that could be used revolving during the contract period. The period of each use was 3 months or 6 months, but the maximum limit was 6 months and shall not exceed the expiry date of the credit period. The credit line shall be reduced by 10% from the first drawdown date by 18 months; by 10% by the date of full 24 months; by 20% by the date of full 30 months; by 60% by the date of full 36 months. For each use, the expiry date of the credit period was the maturity date. Interest would be paid one month from drawdown date, and the interest rate would be re-negotiated every 3 months. As at December 31, 2022, the interest rate was 3.2318%.

• ii. Revolving unsecured borrowings

The borrower was PT Cosmo, and the credit line was USD 12,500,000 that could be used revolving during the contract period. The period of each use was 3 months or 6 months, but the maximum limit was 6 months and shall not exceed the expiry date of the credit period. Interest would be paid monthly, and the interest rate would be re-negotiated every 3 months. As at December 31, 2022, the interest rate

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was 6.84%.

• (b) On April 10, 2019, the Company and PT Cosmo entered into a 3-year syndicated loan agreement with bank group , Yuanta Bank as the lead bank and obtained a credit line in the amount of $1,250,000, and the credit period was 3 years from the first drawdown date (April 25, 2019).

The condition of borrowings as follows:

• i. Revolving unsecured borrowings

The borrower was the Company, and the credit line was $865,000 that could be used revolving during the contract period. The period of each use was 3 months or 6 months, but the maximum limit was 6 months and shall not exceed the expiry date of the credit period. The credit line shall be reduced by 5% from the first drawdown date by 18 months; by 5% by the date of full 24 months; by 30% by the date of full 30 months; by 60% by the date of full 36 months. For each use, the expiry date of the credit period was the maturity date. Interest would be paid one month from drawdown date, and the interest rate would be re-negotiated every 3 months. As at December 31, 2021, the interest rate was 2.3050%.

• ii. Revolving unsecured borrowings

The borrower was PT Cosmo, and the credit line was USD 12,500,000 that could be used revolving during the contract period. The period of each use was 3 months or 6 months, but the maximum limit was 6 months and shall not exceed the expiry date of the credit period. Interest would be paid monthly, and the interest rate would be re-negotiated every 3 months. As at December 31, 2021, the interest rate was 2.0283%.

• (c) The Company promised to maintain the following financial ratios in the annual and semi-annual consolidated financial statements of the Company before all borrowings were repaid during the duration of the syndicated loan which signed on March 18, 2022.

• i. Current ratio (current assets divided by current liabilities) shall not be lower than 100%.

• ii. Tangible net equity shall not be lower than $1,500,000. Tangible net equity is calculated as shareholders' equity less intangible assets.

• iii. Net financial debt ratio shall not be higher than 100%. Net financial debt ratio is calculated as financial debt less cash and cash equivalent divided by tangible net

~47~

equity. Net financial debt is calculated as the sum of long-term and short-term bank borrowings (including current portion) , short-term bills and domestic and foreign bonds (including convertible bonds).

• iv. The interest coverage ratio shall not be lower than 120% in each first half of the year. The annual ratios shall not be lower than 150% ,180% and 200% in 2022 ,2023 and 2024. The interest coverage ratio is calculated as the ratio of the sum of net profit before tax, finance cost, depreciation and amortization divided by finance cost. The above financial ratios were calculated based on its annual consolidated financial statements audited by independent auditors and semi-annual consolidated financial statements reviewed by independent auditors and reviewed after agreement signed. If it did not meet the above financial ratios, the company shall as soon as possible provides specific improvement plans and related explanations from the date of notification by the management bank. If it did not meet one of the above financial ratios and agreements, only the above financial ratio restrictions were met before next review date, it did not breached of the agreement. Until the date of declaration which is stated the period breaches the financial promise and all financial promise has been met, the interest would be calculated according to the agreed interest rate plus 0.25% by the balance of outstanding principals.

• (d) The Company promised to maintain the following financial ratios in the annual and semi-annual consolidated financial statements of the Company before all borrowings were repaid during the duration of the syndicated loan which entered on April 10, 2019.

• i. Current ratio (current assets divided by current liabilities) shall not be lower than 100%.

• ii. Tangible net equity shall not be lower than $1,500,000. Tangible net equity is calculated as shareholders' equity less intangible assets.

• iii. Net financial debt ratio shall not be higher than 100%. Net financial debt ratio is calculated as financial debt less cash and cash equivalent divided by tangible net equity. Net financial debt is calculated as the sum of long-term and short-term bank borrowings (including current portion) , short-term bills and domestic and foreign bonds (including convertible bonds).

• iv. The interest coverage ratio shall not be lower than 120%. The interest coverage ratio is calculated as the ratio of the sum of net profit before tax, finance cost, depreciation

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and amortization divided by finance cost.

The above financial ratios were calculated based on its annual consolidated financial statements audited by independent auditors and semi-annual consolidated financial statements reviewed by independent auditors . If it did not meet the above financial ratios, there would be an improvement period of half a year from the current period of non-compliance. If the above financial ratio restrictions were met within the improvement period, it did not breached of the agreement; if the Company failed, it shall constitute an event of default in the syndicated loan. Until the day before the improvement of the above ratio, the interest would be calculated according to the agreed interest rate plus 0.25% by the balance of each credit line.

• (e) The chairman of the Company, Tsai, Nai Chen and Tsai, Chi Hu, were the sureties of the above syndicated loan agreements in their personal names.

• B. Secured borrowings

• (a) On April 8, 2021, the Company entered into a 7-year secured loan agreement with KGI Bank and obtained a credit line in the amount of $180,000, and could not be used revolving during the contract period. The credit period was 7 years from the first drawdown date (April 8, 2021).

• (b) The expiry date of the credit period was the maturity date. Interest would be paid monthly from drawdown date, and the interest rate would be re-negotiated every 3 months. As at December 31, 2022, the interest rate was 2.0139% to 2.0284%.

• (c) The Company provided land and buildings as collateral (please refer to Note 8 for pledge details).

• (d) The chairman of the Company, Tsai, Nai Chen, was the surety of the above secured loan agreements in his personal names.

• C. Loans from related parties

The acquisitions of loans from PT Cijambe since PT Cijambe was included in the Group’s consolidated financial statements, related information is provided in Note 7.

(12) Pensions

• A. Defined benefit pension plan

• (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who

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chose to continue to be subject to the pension mechanism under the Labor Standards Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

PT Cosmo and PT Cosmo Green had a defined benefit pension plan.

• (b) The amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit (assets)liability Net defined benefit assets Net defined benefit liability	December 31	December 31
	2022 $ 37,228 ( 40,000) ($ 2,772) $ 24,239 $ 21,467	2021
		$ 45,060 ( 35,359)
		$ 9,701
		$ 18,395
		$ 28,096

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(c) Movements in net defined benefit liabilities are as follows:

At January 1 Current service cost Interest (expense) income Past service cost Remeasurements: Return on plan assets( excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Exchange difference At December 31 At January 1 Current service cost Interest (expense) income Past service cost Remeasurements: Return on plan assets( excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Exchange difference At December 31		2022
	Present value of defined benefit obligations $ 45,060 3,071 1,447 - 49,578 - ( 736) ( 11,925) ( 12,661) - ( 466) 777 $ 37,228	Fair value of plan assets ($ 35,359) - ( 212) - ( 35,571) ( 2,840) - - ( 2,840) ( 1,589) - - ($ 40,000) 2021	Net defined benefit liability
			$ 9,701 3,071 1,235 -
			14,007
			( 2,840) ( 736) ( 11,925)
			( 15,501)
			( 1,589) ( 466) 777
			($ 2,772)
	Present value of defined benefit obligations $ 45,625 3,025 2,077 ( 6,376) 44,351 ( 2) ( 1) 159 ( 1,176) ( 1,020) - ( 3,908) 5,637 $ 45,060	Fair value of plan assets ($ 36,800) - ( 281) - ( 37,081) ( 416) - - - ( 416) ( 1,442) 3,580 - ($ 35,359)	Net defined benefit liability
			$ 8,825 3,025 1,796 ( 6,376)
			7,270
			( 418) ( 1) 159 ( 1,176)
			( 1,436)
			( 1,442) ( 328) 5,637
			$ 9,701

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(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from 2-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2022 and 2021 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

• (e) The principal actuarial assumptions used were as follows:

The principal actuarial assumptions used were	as follows:	as follows:
Discount rate Future salary increases	Year ended December 31
	2022 1.25%~7.5% 2.75%~10%	2021
		0.6%~7.5%
		2.75%~10%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory. Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31,2022 Effect on present value of defined benefit obligation	Discount rate Increase 0.25%~1% Decrease 0.25%~1% ($ 2,509) $ 2,864	Future salaryincreases	Future salaryincreases
	Increase 0.25%~1% ($ 2,509)	Increase 1% $ 3,893	Decrease 1%
			($ 3,437)

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December 31,2021 Effect on present value of defined benefit obligation	Discount rate Increase 0.25%~1% Decrease 0.25%~1% ($ 4,056) $ 4,800	Discount rate Increase 0.25%~1% Decrease 0.25%~1% ($ 4,056) $ 4,800	Future salaryincreases	Future salaryincreases
	Increase 0.25%~1% ($ 4,056)		Increase 1% $ 6,248	Decrease 1%
		$ 4,800		($ 5,336)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analyzing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) Expected contributions to the defined benefit pension plans of the Group for the year ended December 31, 2023 amount to zero.

• (g) As of December 31, 2022, the weighted average duration of the retirement plan is 11 years.

• B. Defined contribution pension plan

(a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The Company’s subsidiaries, Cosmo Electronics Technology (KunShan) Co., Ltd. ,Cosmo Green Power Limited, Dong Guan Guan Zhen Xing Trading Limited., Dongguan Guanwang Electronic Technology Co., Ltd., Shaoguan Woncrown Electronics Technology Co.,Ltd., and Guizhou Guanwang International Digicrown Electronic Technology Co., Ltd. had a defined contribution plan are based on certain percentage of employees’ monthly salaries and wages.

• (b) Other overseas companies, in accordance with the retirement regulations stipulated by the local government, make provision for endowment insurance or retirement benefits based on the wages of local employees. Other than the monthly contributions, the Group has no further obligations.

~53~

  - (c) The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2022 and 2021, were $4,320 and $4,025, respectively.

• (13) Share capital

• A. As of December 31, 2022, the Company’s authorized capital was $2,000,000, consisting of 200,000 thousand shares of ordinary stock, and the paid-in capital was $1,680,883 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

• B. There were 3,000 thousand shares reserved for employee stock options in authorized capital.

• C. The annual stockholders’ meeting on June 6, 2014 had resolved to raise additional cash through private placement. The maximum number of shares to be issued through the private placement is 7,000 thousand shares, and the amount of the private placement was $208,600 which the relevant statutory registration procedures have not been completed as of December 31, 2022.

• D. The annual stockholders’ meeting on July 20, 2021 had resolved that the capital surplus arising from paid-in capital in excess of par value on issuance of ordinary stocks used in the issuance of 4,690,027 ordinary shares, with par value of $10 per share, amounting to $46,900. The shares were issued on October 19, 2021, and the relevant statutory registration procedures have been completed.

• E. The annual stockholders’ meeting on June 24, 2022 had resolved that the capital surplus arising from paid-in capital in excess of par value on issuance of ordinary stocks used in the issuance of 6,464,935 ordinary shares, with par value of $10 per share, amounting to $64,649. The shares were issued on December 30, 2022, and the relevant statutory registration procedures have been completed.

• F. For the years ended December 31, 2022 and 2021, the Company issued 0 shares and 599 thousand shares of ordinary shares because of conversion of convertible bonds.

(14) Capital surplus

• Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of ordinary stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

~54~

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital Issuance of ordinary shares Conversion of bonds Options expired Employee share options May not be used for any purpose Options	December 31	December 31
	2022 $ 132,161 18,467 7,383 1,396 17,835 $ 177,242	2021
		$ 196,810 18,467 7,383 1,396 17,835
		$ 241,891

(15) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The remainder, if any, to be retained or to be appropriated shall be resolved by the stockholders at the stockholders’ meeting.

• B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• D. On June 24, 2022, the stockholders’ meeting resolved that no dividends for the distribution of earnings for the year of 2021.

• E. On July 20, 2021, the stockholders’ meeting resolved that no dividends for the distribution of earnings for the year of 2020.

(16) Other equity items

her equity items
At January 1 Group At December 31	Currencytranslation
	2022 ($ 261,922) 111,182 ($ 150,740)	2021
		($ 209,172) ( 52,750)
		($ 261,922)

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(17) Operating revenue

erating revenue
Revenue from contract with customers Operating revenue	Year ended December 31
	2022 $1,390,778	2021
		$ 1,341,812

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods over time and at a point in time in the following major business. The related information is provided in Note 14.

• B. Contract liabilities

The Group has recognized the following revenue-related contract liabilities:

Contract liabilities	December 31, 2022 $ 10,237	December 31, 2021 $ 2,943	January 1, 2021
			$ 1,439

Revenue recognized that was included in the contract liability balance at the beginning of the period:

eriod:
Revenue recognized that was included in the contract liability balance at the beginning of the period	Year ended December 31
	2022 $ 2,943	2021
		$ 1,439

(18) Interest income

erest income
Bank deposit Financial assets measured at amortized cost Other interest income	Year ended December 31
	2022 $ 1,567 1,626 96 $ 3,289	2021
		$ 1,602 43 99
		$ 1,744

(19) Other income

her income
Rent income Royalty income Other income, others	Year ended December 31
	2022 $ 4,032 - 21,445 $ 25,477	2021
		$ 2,309 5,602 2,179
		$ 10,090

~56~

(20) Other gains and losses

her gains and losses
Gains on disposal of property, plant and equipment Foreign exchange gains(losses) Gain on fair value adjustment of investment property Other losses	Year ended December 31
	2022 $ 743 22,169 77,537 ( 672) $ 99,777	2021
		$ - ( 17,483) 118,207 ( 10,232)
		$ 90,492

(21) Finance costs

Gain on fair value adjustment of investment property Other losses ance costs	77,537 118,207 ( 672) ( 10,232) $ 99,777 $ 90,492	77,537 118,207 ( 672) ( 10,232) $ 99,777 $ 90,492
Bank borrowings Short-term bills payable Lease liabilities Convertible bonds payable Financial expense, others	Year ended December 31
	2022 $ 48,657 485 806 3,357 999 $ 54,304	2021
		$ 31,541 385 33 3,551 1,150
		$ 36,660

(22) Depreciation and amortization

Lease liabilities Convertible bonds payable Financial expense, others preciation and amortization	806 33 3,357 3,551 999 1,150 $ 54,304 $ 36,660	806 33 3,357 3,551 999 1,150 $ 54,304 $ 36,660
Property, plant and equipment Right-of-use assets Other intangible assets Operating costs and operating expenses	Year ended December 31
	2022 $ 90,686 19,304 2,112 $ 112,102	2021
		$ 85,253 11,667 2,057
		$ 98,977

(23) Employee benefit expense

ployee benefit expense
Pension Defined contribution pension plan Defined benefit pension plan Wages and salaries Other personnel expenses An analysis of employee benefit expense by function Operating costs Operating expenses	Year ended December 31
	2022 $ 4,210 4,847 9,057 289,783 50,881 $ 349,721 $ 199,601 150,120 $ 349,721	2021
		$ 4,025 ( 1,555)
		2,470 240,268 53,331
		$ 296,069
		$ 169,473 126,596
		$ 296,069

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• A. According to the Company’s Articles, the Company accrued employees’ compensation and remuneration of directors and supervisors at rates of 5% to 12% and no higher than 3%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors.

• B. For the years ended December 31, 2022 and 2021, employees’ compensation was accrued at $5,805 and $6,378, respectively; while directors’ and supervisors’ remuneration was accrued at $1,161 and $1,276, respectively. The aforementioned amounts were recognized in salary expenses. The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 5% and 1% of distributable profit of current year as of the end of reporting period. On March 21,2023, the employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors consisted with accrual amount, and the employees’ compensation will be distributed in the form of cash. Employees’ compensation and directors’ and supervisors’ remuneration of 2021 as resolved by the Board of Directors were in agreement with those amounts recognized in the 2021 financial statements.

• C. Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(24) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

e tax expense omponents of income tax expense:
Current tax: Current tax on profits for the year Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense	Year ended December 31
	2022 $ 501 - 501 2,613 $ 3,114	2021
		$ 14,070 1,576
		15,646
		( 4,194)
		$ 11,452

• (b) The income tax relating to components of other comprehensive income is as follows:

~58~ Remeasurement of defined benefit obligations	Year ended December 31	Year ended December 31
	2022 ($ 3,308)	2021
		($ 349)

The basis for computing the applicable tax rate is 25% for subsidiaries in China, the basis for computing the applicable tax rate is 22% for subsidiaries in Indonesia, others are the rates applicable in the respective countries where the Group entities operate.

• B. Reconciliation between income tax expense and accounting profit:

econciliation between income tax expense and	accounting profit:	accounting profit:
Tax calculated based on profit before tax and statutory tax rate (Note) Expenses disallowed by tax regulation Taxable loss not recognized as deferred tax assets Change in assessment of realization of deferred tax assets Prior year income tax underestimation Income tax expense	Year ended December 31
	2022 $ 33,700 ( 8,513 ) 6,272 ( 28,345 ) - $ 3,114	2021
		$ 25,461 ( 10,124 ) 2,850 ( 8,311 ) 1,576
		$ 11,452

Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Group entities operate or is the rate applicable in the parent company’s country.

• C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

re as follows:
Deferred tax assets: - Temporary differences: Unrealized losses on investments accounted for using the equity method Defined benefit liabilities Interest expenses on convertible bonds payable Allowance for uncollectible accounts Unrealized inventory losses Others Tax losses		2022
	January1 $ 35,035 6,181 - 83 6,650 809 6,330 $ 55,088	Recognized in profit or loss $ 696 1,029 1,881 - ( 1) ( 590) 8,009 $ 11,024	Recognized in other comprehensive income $ - ( 2,479) - - - - - ($ 2,479)	December 31
				$ 35,731 4,731 1,881 83 6,649 219 14,339
				$ 63,633

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Deferred tax liabilities: Investment property Unrealized gains on investments accounted for using the equity method Defined benefit assets Unrealized gross profit from sales Others Deferred tax assets: - Temporary differences: Unrealized losses on investments accounted for using the equity method Defined benefit liabilities Allowance for uncollectible accounts Unrealized inventory losses Others Tax losses Deferred tax liabilities: Investment property Unrealized gains on investments accounted for using the equity method Defined benefit assets Unrealized gross profit from sales Others		2022	2022
	January1 ($ 44,025) ( 135,994) ( 3,706) ( 500) ( 12,510) ($ 196,735) ($ 141,647)	Recognized in profit or loss Recognized in other comprehensive income $ 278 $ - ( 7,080) - ( 340) ( 829) ( 683) - ( 586) - ($ 8,411) ($ 829) $ 2,613 ($ 3,308) 2021		December 31
				($ 43,747) ( 143,074) ( 4,875) ( 1,183) ( 13,096)
				($ 205,975)
				($ 142,342)
	January1 $ 24,974 6,737 84 8,272 971 44,638 $ 85,676 ($ 92,137) ( 114,117) ( 3,436) ( 294) ( 12,796) ($ 222,780) ($ 137,104)	Recognized in profit or loss $ 10,061 ( 136) ( 1) ( 1,622) ( 162) ( 38,308) ($ 30,168) $ 48,112 ( 21,877) ( 341) ( 206) 286 $ 25,974 ($ 4,194)	Recognized in other comprehensive income $ - ( 420) - - - - ($ 420) $ - - 71 - - $ 71 ($ 349)	December 31
				$ 35,035 6,181 83 6,650 809 6,330
				$ 55,088
				($ 44,025) ( 135,994) ( 3,706) ( 500) ( 12,510)
				($ 196,735)
				($ 141,647)

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• D. Expiration dates of unused taxable loss and amounts of unrecognized deferred tax assets are as follows:

December 31, 2022

as follows:	December 31,2022	December 31,2022
The Company PT Cosmo Cosmo Green PT Cijambe	Year incurred Unused amount 2013 $ 55,033 2014 109,633 2015 80,283 2016 52,729 2017 154,071 2018 35,773 2019 48,676 2020 100,873 $ 637,071 2018 $ 27,867 2021 9,265 2022 2,890 $ 40,022 2018 $ 1,572 2019 1,780 2020 2,083 2021 2,104 $ 7,539 2018 $ 6,256 2020 33,759 2021 6,317 2022 15,565 $ 61,897 December 31,2021		Unrecognized deferred tax assets $ 2,312 109,633 80,283 52,729 154,071 35,773 48,676 100,873 $ 584,350 $ 13,498 9,265 - $ 22,763 $ 1,572 1,780 2,083 2,104 $ 7,539 $ 6,256 33,759 6,317 15,565 $ 61,897	Expiry year
				2023 2024 2025 2026 2027 2028 2029 2030 2023 2026 2027 2023 2024 2025 2026 2023 2025 2026 2027
The Company	Year incurred 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021	Unused amount $ 92,606 55,033 109,633 80,283 52,729 154,071 35,773 61,975 100,873 2,354 $ 745,330	Unrecognized deferred tax assets $ 92,606 55,033 109,633 80,283 52,729 154,071 35,773 61,975 100,873 2,354 $ 745,330	Expiry year
				2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

~61~

December 31, 2021

PT Cosmo Cosmo Green PT Cijambe	Year incurred 2017 2018 2021 2017 2018 2019 2020 2021 2018 2020 2021	Unused amount $ 7,057 27,867 9,265 $ 44,189 $ 2,043 1,572 1,780 2,083 2,104 $ 9,582 $ 6,256 33,759 6,317 $ 46,332	Unrecognized deferred tax assets $ - 13,498 9,265 $ 22,763 $ 2,043 1,572 1,780 2,083 2,104 $ 9,582 $ 6,256 33,759 6,317 $ 46,332	Expiry year
				2022 2023 2026 2022 2023 2024 2025 2026 2023 2025 2026

E. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

(25) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Convertible corporate bonds Employees' compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year ended December 31,2022
	Amount after tax $ 110,224 110,224 3,357 - $ 113,581	Weighted average number of ordinary shares outstanding (share in thousands) 168,088 168,088 7,502 175 175,765	Earnings per share (in dollars)
			$ 0.66
			$ 0.65

~62~

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year ended December 31,2021	Year ended December 31,2021	Year ended December 31,2021
	Amount after tax $ 54,939 54,939 - $ 54,939	Weighted average number of ordinary shares outstanding (share in thousands) 167,495 167,495 174 167,669	Earnings per share (in dollars)
			$ 0.33
			$ 0.33

The weighted average number of ordinary shares outstanding of the company in 2021 have been retroactively adjusted according to the issuance of share from capital surplus on December 13, 2022.

(26) Supplemental cash flow information

Investing activities with partial cash payments:

ng activities with partial cash payments:
Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the year	Year ended December 31
	2022 $ 93,108 1,841 ( 4,397) $ 90,552	2021
		$ 229,513 1,650 ( 1,841)
		$ 229,322

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(27) Changes in liabilities from financing activities

At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31 At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31				2022
	Short-term borrowings $ 480,754 ( 91,723 ) 6,969 - $ 396,000	Short-term billspayable $ 49,887 75 - - $ 49,962	Long-term borrowings $ 1,039,000 187,550 11,325 - $ 1,237,875	Long-term payable to related parties $ 33,205 ( 12,628) 188 - $ 20,765 2021	Lease liabilities $ 12,910 ( 12,678) 231 19,399 $ 19,862	Convertible bonds payable $ 273,484 - - 3,357 $ 276,841	Liabilities from financing activities
							$ 1,889,240 70,596 18,713 22,756
							$ 2,001,305
	Short-term borrowings $ 405,504 77,090 ( 1,840 ) - $ 480,754	Short-term billspayable $ 49,868 - - 19 $ 49,887	Long-term borrowings $ 1,116,000 ( 67,000 ) ( 10,000 ) - $ 1,039,000	Long-term payable to related parties $ 117,669 ( 81,200) ( 3,264) - $ 33,205	Lease liabilities $ 2,506 ( 9,449) ( 49) 19,902 $ 12,910	Convertible bonds payable $ 292,180 - - ( 18,696) $ 273,484	Liabilities from financing activities
							$ 1,983,727 ( 80,559) ( 15,153) 1,225
							$ 1,889,240

7. Related Party Transactions

(1) Names and relationship of related parties

Names of related parties

Ding Wang Electronics Technology Corporation City Orient Limited Ever Merit Trading Limited Evermerit Technology Electronic Co., Ltd. Tinglin Co.,Ltd. Fairsky International Limited Tsai, Nai Chen Tsai, Chi Hu

Relationship with the Group Substantive related parties

Substantive related parties Substantive related parties Substantive related parties Substantive related parties Substantive related parties Chairman of the Company Substantive related parties

~64~

(2) Significant transactions and balances with related parties

• A. Operating revenue

perating revenue
Sales of goods: Associates City Orient Limited Ever Merit Trading Limited	Year ended December 31
	2022 $ 49 118 $ 167	2021
		$ -
		$ -

There is no material difference between the transaction price and payment terms for the sale of goods and those of non-related parties.

• B. Purchases of goods

urchases of goods
Purchases of raw material: City Orient Limited Ever Merit Trading Limited Evermerit Technology Electronic Co., Ltd. Ding Wang Electronics Technology Corporation	Year ended December 31
	2022 $ - 82,031 42 8,680 $ 90,753	2021
		$ 62,900 264,170 - 1,361
		$ 328,431

Raw material and services are purchased from associates and an entity controlled by key management personnel on normal commercial terms and conditions.

• C. Receivables from related parties

eceivables from related parties
Other receivables from related parties Evermerit Technology Electronic Co., Ltd.	December 31
	2022 $ 17,632	2021
		$ 18,348

The receivables from related parties arise mainly from sale transactions and other receivables transactions. Sales transaction payment is due two months after the date of sales. The receivables are unsecured in nature and bear no interest. There are no allowances for uncollectible accounts held against receivables from related parties.

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D. Payables to related parties

ayables to related parties
Accounts payable: City Orient Limited Ever Merit Trading Limited Other payables to related parties: Ding Wang Electronics Technology Corporation Evermerit Technology Electronic Co., Ltd.	December 31
	2022 $ - 15,671 $ 15,671 $ 3,732 4 $ 3,736 $ 19,407	2021
		$ 8,593 4,314
		$ 12,907
		$ - -
		$ -
		$ 12,907

The payables to related parties arise mainly from purchase transactions and are due 2 months after the date of purchase. The payables bear no interest.

E. Prepayments

repayments
Evermerit Technology Electronic Co., Ltd. roperty transactions Acquisition of property, plant and equipment: Ever Merit Trading Limited oans from related parties Fairsky International Limited	December 31
	2022 2021 $ 8,977 $ 8,131 Year ended December 31	2021
		$ 8,131
	2022 2021 $ 101 $ - December 31	2021
		$ -
	2022 $ 20,765	2021
		$ 33,205

• F. Property transactions

• G. Loans from related parties

PT Cijambe began to be included in the Group’s consolidated financial statement from October 1, 2019. Since that date, the Company has acquired its loans which were recognized initially as ‘related party loans’. The maturity date was October 15, 2022, and the interest rate was 0%. The maturity date was extended to October 16, 2025 on October 16, 2022. As at December 31, 2022 and 2021, the loans were expressed in "long-term borrowings" and "long-term liabilities-current portion ", respectively.

• H. Endorsements and guarantees ： Please refer to Notes 6 (9) and 6 (11).

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(3) Key management compensation

ey management compensation
Short-term employee benefits Post-employment benefits	Year ended December 31
	2022 $ 8,747 316 $ 9,063	2021
		$ 6,891 253
		$ 7,144

The remuneration of directors and other key management levels is determined by the

Remuneration Committee in accordance with individual performance and market trends.

8. Pledged Assets

The Group’s assets pledged as collateral are as follows:

Asset item Pledged time deposits (shown as financial assets at amortized cost) Restricted bank accounts(shown as financial assets at amortized cost) Land use right (shown as right-of-use asset) Property, plant and equipment Investment property	Book value December31 2022 2021 $ 4,395 $ 3,682 9,818 9,802 98,052 91,257 430,385 432,854 90,588 85,347 $ 633,238 $ 622,942	Purpose
	2022 $ 4,395 9,818 98,052 430,385 90,588 $ 633,238
		Collateral for import duties Reimbursement account of bank loan Credit facility Credit facility Credit facility

9. Significant Contingent Liabilities And Unrecognized Contract Commitments

None.

10. Significant Casualty Loss

None.

11. Significant Events After The Balance Sheet Date

On March 21,2023, the distribution of earnings for the year of 2022 resolved by the Board of Directors. Information for resolution is provided in Note 6(23).

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the

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gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt. The gearing ratios were as follows:

Total borrowings Less: Cash and cash equivalents Net debt Total equity Total capital Gearing ratio	December 31	December 31
	2022 $ 1,981,443 542,994 1,438,449 1,899,645 $ 3,338,094 43.09%	2021
		$ 1,876,330 586,246
		1,290,084 1,666,046
		$ 2,956,130
		43.64%

(2) Financial instruments

A. Financial instruments by category

Financial instruments by category
Financial assets Financial assets at amortized cost Cash and cash equivalents Financial assets at amortized cost Notes receivable Accounts receivable (including related parties) Other receivables (including related parties) Refundable deposits Financial liabilities Financial liabilities at amortized cost Short-term borrowings Short-term bills payable Notes payable Accounts payable (including related parties) Other payables (including related parties) Long-term borrowings (including current portion and related parties) Convertible bonds payable(including current portion) Lease liabilities	December 31
	2022 2021 $ 542,994 $ 586,246 89,519 19,050 3,388 - 282,782 336,289 42,694 34,923 13,125 15,029 $ 974,502 $ 991,537 December 31	2021
		$ 586,246 19,050 - 336,289 34,923 15,029
		$ 991,537
	2022 $ 396,000 49,962 96 135,423 85,436 1,258,640 276,841 $ 2,202,398 $ 19,862	2021
		$ 480,754 49,887 1,047 136,171 52,395 1,072,205 273,484
		$ 2,065,943
		$ 12,910

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• B. Financial risk management policies

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. Risk management is carried out by the Group treasury under policies approved by the Board of Directors. The Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

• ii. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

Foreign currency amount (in thousands) Financial assets Monetary items USD:NTD $ 5,095 USD:RMB 2,872 USD:IDR 217 USD:VND 270 Financial liabilities Monetary items USD:NTD $ 386 USD:RMB 353 USD:IDR 2		December 31,2022	December 31,2022
		Exchange rate 30.71 6.97 15,510.10 23,806.20 30.71 6.97 15,510.10	Book value (NTD) $ 156,467 88,199 6,664 8,292 $ 11,854 10,841 61	Sensitivityanalysis
				Degree of variation 5% 5% 5% 5% 5% 5% 5%	Effect on profit or loss
					$ 7,823 4,410 333 415 $ 593 542 3

~69~

December 31, 2021

Foreign currency amount (in thousands) Financial assets Monetary items USD:NTD $ 5,119 USD:RMB 377 USD:IDR 214 USD:VND 279 Financial liabilities Monetary items USD:NTD $ 340 USD:RMB 245 USD:IDR 2	Exchange rate 27.68 6.37 13,979.80 23,066.67 27.68 6.37 13,979.80	Book value (NTD) $ 141,694 10,435 5,924 7,723 $ 9,411 6,782 55	Sensitivityanalysis	Sensitivityanalysis
			Degree of variation 5% 5% 5% 5% 5% 5% 5%	Effect on profit or loss
				$ 7,085 522 296 386 $ 471 339 3

• iii. Total exchange gain, including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2022 and 2021 amounted to $22,169 and ($17,483), respectively.

Cash flow and fair value Interest rate risk

• i. The Group’s borrowings are measured at amortized cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• ii. As at December 31, 2022 and 2021, if the interest rate increases or decreases by 50 basis point, with all other variables held constant, profit, net of tax would have decreased or increased by $9,907 and $9,382, respectively. The main factor is that changes in interest expense result from floating rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full accounts receivable ,notes receivable and financial assets at amortized cost, that based on the agreed terms, and the contract cash flows of debt instruments stated at amortized cost.

• ii. The Group for banks and financial institutions, only well rated parties are accepted.

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According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored.

• iii. The Group assume if the contract payments are past due over 180 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. If there is evidence that the counterparty is facing serious financial difficulties and the Group cannot reasonably expect the recoverable amount, for example, the counterparty is in liquidation, the Group will directly write off the relevant accounts receivable, but will continue to pursue activities to recover the recovered amount are recognized in profit or loss.

• iv. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i.) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

• (ii.) The disappearance of an active market for that financial asset because of financial difficulties;

• (iii.) Default or delinquency in interest or principal repayments;

• (iv.) Adverse changes in national or regional economic conditions that are expected to cause a default.

• v. The Group classifies customer's accounts receivable in accordance with geographic area, product types and credit rating of customer. The Group applies the simplified approach using the provision matrix based on the loss rate methodology to estimate expected credit loss.

• vi. The Group uses the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. On December 31, 2022 and 2021, the provision matrix and loss rate methodology is as follows:

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December 31, 2022 Expected loss rate Total book value Loss allowance December 31, 2021 Expected loss rate Total book value Loss allowance	Notpast due 0.02% $ 268,204 ($ 60) 0.01% $ 331,146 ($ 24)	1-90 days past due 0.50% $ 3,140 ($ 15) 0.40% $ 4,972 ($ 20)	90-180 days past due 3.30% $ 11,513 ($ 380) 3.33% $ 195 ($ 6)	Over 180 dayspast due 96.59% $ 11,130 ($ 10,750) 99.34% $ 3,999 ($ 3,973)	Total
					$ 293,987 ($ 11,205 ) $ 340,312 ($ 4,023 )

• vii. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

At January 1 Impairment loss Reversal of impairment loss Write-downs during the year Effect of foreign exchange At December 31	Accounts receivable	Accounts receivable
	2022 $ 4,023 10,789 - ( 3,660) 53 $ 11,205	2021
		$ 9,250 - ( 54) ( 5,196) 23
		$ 4,023

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.

• ii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

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December 31,2022 Non-derivative financial liabilities Short-term borrowings Short-term bills payable Notes payable Accounts payable(including related parties) Other payables(including related parties) Lease liabilities Convertible bonds payable Long-term borrowings (including current portion and related parties) December 31,2021 Non-derivative financial liabilities Short-term borrowings Short-term bills payable Notes payable Accounts payable(including related parties) Other payables(including related parties) Lease liabilities Convertible bonds payable Long-term borrowings (including current portion and related parties)	Less than 1year $ 398,748 50,000 96 135,423 85,436 15,839 277,400 - $ 481,904 50,000 1,047 136,171 52,395 6,918 - 904,185	1 and5 years over5 years $ - $ - - - - - - - - - 4,538 - - - 1,201,989 182,590 $ - $ - - - - - - - - - 6,918 - 277,400 - - 199,240	over5 years

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in beneficiary certificates is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in convertible bonds is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s

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investment in investment property is included in Level 3.

• B. Financial instruments not measured at fair value

• (a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, financial assets at amortized cost, other receivables, short-term borrowings, notes payable, accounts payable, other payables, long-term notes payable and long -term borrowings are approximate to their fair values.

December 31,2022 Financial assets: Financial assets at amortized cost Corporate bonds Financial liabilities: Convertible bonds payable(including current portion) December 31,2021 Financial assets: Financial assets at amortized cost Corporate bonds Financial liabilities: Convertible bonds payable(including current portion)	Bookvalue $ 6,102 $ 276,841 Bookvalue $ 5,566 $ 273,484		Fair value
		Level 1 $ - $ -	Level 2 $ 6,102 $ 267,814 Fair value	Total
				$ -
				$ -
		Level 1 $ - $ -	Level 2 $ 5,566 $ 271,247	Total
				$ -
				$ -

• (b) The methods and assumptions of fair value estimate are as follows:

• i. Corporate bonds: They are measured at present value, which is calculated based on the cash flow expected to be received from the objective asset and discounted using a market rate prevailing at balance sheet date.

• ii. Bonds payable: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date.

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• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

follows:
December 31,2022 Assets Recurring fair value measurements Investment property December 31,2021 Assets Recurring fair value measurements Investment property	Level 1 $ - Level 1 $ -	Level 2 $ - Level 2 $ -	Level3 $ 1,615,691 Level3 $ 1,465,874	Total
				$ 1,615,691
				Total
				$ 1,465,874

• D. For the years ended December 31, 2022 and 2021, there was no transfer between Level 1 and Level 2.

• E. The following chart is the movement of Level 3 for the years ended December 31, 2022 and 2021:

21:
At January 1 Additions－from acquisitions Additions－from subsequent expenditures Gain on fair value changes Effect of exchange rate changes At December 31	Investment	property
	2022 ($ 1,465,874 - 36,371 77,537 35,909 ($ 1,615,691	2021
		($ 1,301,016 55,329 23,870 118,207 ( 32,548)
		($ 1,465,874

F. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

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Non-financial instruments Investment property Non-financial instruments Investment property	Fair value at December 31,2022 $ 1,615,691 Fair value at December 31,2021 $ 1,465,874	Valuation technique Discounted cash flow method Land development analysis approach Valuation technique Discounted cash flow method Land development analysis approach	Significant unobservable input Discount rate Rate of return Overall capital interest rate Significant unobservable input Discount rate Rate of return Overall capital interest rate	Range (Weighted average) 2.1% ~3.25% 13% 10.43% Range (Weighted average) 2.2% ~3.25% 15% 11.09%	Relationship of inputs to fairvalue
					The higher discount rate, the lower fair value The higher rate of return, the higher the fair value The higher overall capital interest rate, the lower the fair value Relationship of inputs to fairvalue
					The higher the discount rate, the lower the fair value The higher rate of return, the higher the fair value The higher overall capital interest rate, the lower fair value

13. Supplementary Disclosures

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

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• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 5.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 6.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

(4) Major shareholders information

Major shareholders information: Please refer to table 8.

14. Segment Information

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.

The Group's corporate composition, the basis for segment determined and the basis for

measurement of segment information have not significant change during the current year.

The reportable operating segments are as follows:

• A. Optoelectronics

• B. Energy & Materials

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C. Others

D. Industrial Park Development

(2) Segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

Year ended	December 31	December 31
	Segment income(loss)
	2022 $ 161,574 ( 31,865) 5,178 ( 406) ( 7,753) 126,728 ( 87,629) 28,766 99,777 ( 54,304) $ 113,338	2021 $ 77,706 ( 2,467) 12,456 ( 2,427) ( 6,745)
		78,523 ( 77,798) 11,834 90,492 ( 36,660)
		$ 66,391

(3) Information about segment profit or loss, assets and liabilities

2022 Revenue from external customers Segments costs Segments gross profit 2021 Revenue from external customers Segments costs Segments gross profit	Optoelectronics $ 621,222 ( 404,290) $ 216,932 Optoelectronics $ 582,040 ( 470,601) $ 111,439	LED lighting $ 693,482 (583,501) $109,981 LED lighting $ 658,979 (555,130) $103,849	Energy & Materials $ 76,029 ( 65,789) $ 10,240 Energy & Materials $ 88,969 ( 72,224) $ 16,745	Others $ 45 ( 67) ($ 22) Others $ 11,824 ( 10,928) $ 896	Total
					$ 1,390,778 (1,053,647)
					$ 337,131
					Total
					$ 1,341,812 (1,108,883)
					$ 232,929

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(4) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external customers

reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income.

A reconciliation of reportable segment income or loss to the income/(loss) before tax from

continuing operations for the years ended December 31, 2022 and 2021 is provided as follows:

Reportable segments profit Reportable segments operating expense Finance costs, net Other Income before tax from continuing operations	Year ended December 31	Year ended December 31
	2022 $ 337,131 ( 298,032 ) ( 54,304 ) 128,543 $ 113,338	2021
		$ 232,929 ( 232,204 ) ( 36,660 ) 102,326
		$ 66,391

The amounts provided to the chief operating decision maker with respect to total assets are measured in a manner consistent with that of the financial statements.

(5) Information on products and services

Please refer to Note 6 (20) for the related information.

Details of revenue from products and services from continuing operations are as follows:

Sales revenue Energy & Materials revenue Other revenue	Year ended December 31	Year ended December 31
	2022 $ 1,314,704 76,029 45 $ 1,390,778	2021
		$ 1,241,019 88,969 11,824
		$ 1,341,812

(6) Geographical information

Information about geographic areas for the years ended December 31, 2022 and 2021 were as follows:

Taiwan America Asia and others	Year ended December 31	Year ended December 31	Year ended December 31
	2022 Revenue Non-current assets $ 105,492 $ 586,248 684,966 827 600,320 2,000,574 $ 1,390,778$ 2,587,649	2021
	Revenue $ 105,492 684,966 600,320 $ 1,390,778	Revenue $ 94,323 654,562 592,927 $ 1,341,812	Non-current assets
			$ 587,413 913 1,814,674
			$ 2,403,000

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(7) Major customer information

Major customer information of the Group for the years ended December 31, 2022 and 2021 were as follows:

W X Y	Year ended December 31	Year ended December 31
	2022 Revenue $ 485,506 63,687 84,366 $ 633,559	2021
		Revenue
		$ 434,064 46,197 86,849
		$ 567,110

~80~

COSMO ELECTRONICS CORPORATION

Loans to others

For the year ended December 31, 2022

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Table 1															Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)	Expressed in thousands of NTD (Except as otherwise indicated)
Number (Note 1)	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31,2022	Balance at December 31, 2022	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral		Limit on loans granted to a Ceiling on total singleparty loansgranted Footnote
													Item	Value
1 1 1 2 3	True Glory Investments Limited True Glory Investments Limited True Glory Investments Limited Guizhou Guanwang International Digicrown Electronic Technology Co., Ltd. Shaoguan Woncrown Electronics Technology Co.,Ltd.	PT Cijambe Indah PT Cosmo Technology Cosmo Electronics (HK) Company Limited Evermerit Technology Electronic Co., Ltd. Evermerit Technology Electronic Co., Ltd.	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Y Y Y Y Y	$ 61,420 36,852 107,485 18,618 18,514	$ - - - - 17,632	$ - - - - 17,632	0.00% 3.00% 0.00% 0.00% 0.00%	Short- term financing Short- term financing Short- term financing Short- term financing Short- term financing	- - - - -	Operations Operations Operations Operations Operations	$ - - - - -	- - - - -	$ - - - - -	$ 379,929 379,929 379,929 61,242 22,671	$ 759,858 759,858 759,858 61,242 22,671	Note 2 Note 2 Note 2 Note 2 Note 2

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’. 。

• (2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Limit on total loans for financing granted by and to subsidiaries of which the ultimate parent directly or indirectly holds 100% of its voting shares is 200% of the lender's net assets based on the latest audited or reviewed financial statements, and limit on loans to each entity is 200% of the lender's net assets based on the latest audited or reviewed financial statements. However, inn accordance with the Operational Procedures for Loans to Others of the Company, the total loans for financing granted by and to subsidiaries of which the ultimate parent directly or indirectly holds 100% of its voting shares must not exceed 40% of the lender's net assets based on the latest audited or reviewed financial statements, and the loans to each entity for financing must not exceed 20% of the lender's net assets based on the latest audited or reviewed financial statements. Therefore, limit on loan is the smaller one of above conditions.

Table 1

COSMO ELECTRONICS CORPORATION

Provision of endorsements and guarantees to others

For the year ended December 31, 2022

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note1)	Endorser/guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party	Maximum outstanding Outstanding endorsement/ endorsement/ guarantee amountguarantee amount as of December as of December 31,2022 31,2022	Maximum outstanding Outstanding endorsement/ endorsement/ guarantee amountguarantee amount as of December as of December 31,2022 31,2022	Actual amount drawndown	Ratio of accumulated Amount of endorsement/ endorsements/ guarantee amount guarantees to net asset value secured with of the endorser/ collateral guarantor	Ratio of accumulated Amount of endorsement/ endorsements/ guarantee amount guarantees to net asset value secured with of the endorser/ collateral guarantor	Ceiling on total Provision of amount of endorsements/ endorsements/ guarantees by guarantees parent company provided to subsidiary	Ceiling on total Provision of amount of endorsements/ endorsements/ guarantees by guarantees parent company provided to subsidiary	Provision of endorsements/ guarantees by subsidiary to parentcompany	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/guarantor (Note2)
0 0 1 2 3	Cosmo Electronics Corporation Cosmo Electronics Corporation PT Cosmo Technology PT Cosmo Technology PT Cjambe Indah	True Glory Investments Limited PT Cosmo Technology True Glory Investments Limited Cosmo Electronics Corporation Cosmo Electronics Corporation	(2) (2) (4) (3) (3)	759,858 $ 759,858 1,899,645 1,899,645 949,822	130,518 $ 400,000 130,518 926,000 300,000	70,633 $ 400,000 70,633 926,000 300,000	- $ 400,000 - 689,000 300,000	0 0 0 0 0	0.00% 21.06% 0.00% 36.27% 15.79%	949,822 $ 949,822 1,899,645 1,899,645 1,899,645	Y Y N N N	N N N Y Y	N N N N N	Note 3 and 5 Note 3 Note 4 and 5 Note 4 Note 4 and 6

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’. 。

• (2) The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories:

• (1) Having business relationship.

• (2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

• (4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

• (5) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

• (6) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

• (7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

• Note 3: Limit on total endorsements is 50% of the Company's net assets , and limit on endorsements to a single party is 40% of the Company's net assets .

• Note 4: When endorser is the Company, limit on total endorsements is 100% of the Company's net assets, and limit on endorsements to a single party is 100% of the Company's net assets. Note 5: The Company and PT Cosmo Technology were joint endorsements for True Glory Investments Limited. Note 6: PT Cjambe Indah endorsed for convertible bonds issued by the Company.

Table 2

COSMO ELECTRONICS CORPORATION

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

For the year ended December 31, 2022

Securitiesheld by Table 3	Marketable securities	Relationship with the securitiesissuer	General ledgeraccount		As of December31,2022	As of December31,2022	Fairvalue Footnote Expressed in thousands of NTD (Except as otherwise indicated)	Fairvalue Footnote Expressed in thousands of NTD (Except as otherwise indicated)
				Numberofshares	Bookvalue	Ownership (%)	Fairvalue
True Glory Investments Limited	Corporate bond-CFE	-	Financial assets at amortized cost-non current	-	6,102 $	-	- $	Note 1

Note 1: Management believes that the fair value of the above bond investments cannot be reliably measured since the range of reasonable fair value estimates was so significant and the probabilities of the various estimates cannot be reasonably assessed. Therefore, the above bond investments were measured at book value using the effective interest method less impairment at balance sheet date.

Table 3

COSMO ELECTRONICS CORPORATION

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

For the year ended December 31, 2022

Table 4

Expressed in thousands of NTD

(Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		compared Differences in	to thirdparty transaction terms	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Cosmo Electronics Corporation Cosmo Electronics Corporation Cosmo Electronics (HK) Company Limited Dong Guan Guan Zhen Xing Trading Limited	Cosmo Electronics Technology (KunShan) Co., Ltd. Dongguan Guanwang Electronic Technology Co., Ltd. PT Cosmo Technology Cosmo Electronics (HK) Company Limited	Group Group Group Group	Purchases Sales Sales Sales	128,288 $ 143,558) ( 389,851) ( 318,915) (	37.79% 22.88% 100.00% 96.65%	According to the terms agreed by both parties According to the terms agreed by both parties According to the terms agreed by both parties According to the terms agreed by both parties	- $ - - -	- - - -	33,082) ($ 101,606 31,675 26,478	25.66% 56.13% 100.00% 100.00%	Note Note Note Note

Note : These transactions were eliminated in the preparation of consolidated financial statements.

Table 4

Table 5

Expressed in thousands of NTD

COSMO ELECTRONICS CORPORATION

Significant inter-company transactions during the reporting periods

For the year ended December 31, 2022

(Except as otherwise indicated)

Number (Note1)	Companyname	Counterparty	Relationship (Note2)			Transaction
				General ledger account	Amount	Percentage of consolidated total operating revenues Transaction terms or total assets (Note 3)
0 0 1 2 2 3 4 5 6 6	Cosmo Electronics Corporation Cosmo Electronics Corporation Cosmo Electronics Technology (KunShan) Co., Ltd. PT Cosmo Technology PT Cosmo Technology Cosmo Electronics (HK) Company Limited Dong Guan Guan Zhen Xing Trading Limited PT Cjambe Indah Guizhou Guanwang International Digicrown Electronic Technology Co., Ltd. Guizhou Guanwang International Digicrown Electronic Technology Co., Ltd.	Dongguan Guanwang Electronic Technology Co., Ltd. Dongguan Guanwang Electronic Technology Co., Ltd. Cosmo Electronics Corporation Real Bonus Limited Cosmo Lighting Inc. PT Cosmo Technology Cosmo Electronics (HK) Company Limited PT Cosmo Technology Dongguan Guanwang Electronic Technology Co., Ltd. Dong Guan Guan Zhen Xing Trading Limited	(1) (1) (2) (3) (3) (3) (3) (3) (3) (3)	Sales Accounts receivable Process revenue Sales Sales Sales Sales Other unearned revenue Accounts receivable Other receivable	143,558 $ 101,606 128,288 87,695 45,972 389,851 318,915 75,600 67,773 46,725	- 10.32% - 2.33% According to the terms agreed by both parties 9.22% - 6.31% - 3.31% - 28.03% - 22.93% - 1.73% Irregularly payment 1.55% - 1.07%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows: (1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Table 5

COSMO ELECTRONICS CORPORATION

The related information on investees are as follows (not including investees in Mainland China)

For the year ended December 31, 2022

Table 6

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor Investee Location Mainbusiness activities	Initial investmentamount	Sharesheld as at December31,2022	Investment income Net profit (loss) (loss) recognised by of the investee for the the Company for the year ended year ended December31,2022 December31,2022	Footnote
	Balance as at Balance as at Ownership December31,2022 December31,2021 Numberofshares (%) Bookvalue
Cosmo Electronics Corporation Cosmo Electronics Samoa Samoa Islands Investment activities Cosmo Electronics Corporation Cosmo Electronics (HK) Company Limited Hong Kong Trading of electronic products Cosmo Electronics Corporation Grand Concept Group Limited Samoa Islands Investment activities Cosmo Electronics Corporation Grandway International Limited Samoa Islands Investment activities Cosmo Electronics Corporation PT Cosmo Technology Indonesia Manufacturing and selling of LED lighting Cosmo Electronics Corporation Cosmo Green Power Limited Vietnam Manufacturing and selling of material of biomass energy Cosmo Electronics Samoa Cosmo Electronics Technology Co., Ltd. Mauritius Islands Investment activities Cosmo Electronics (HK) Company Limited Cosmo Lighting Inc. U.S.A Selling of LED lighting Cosmo Electronics (HK) Company Limited Cosmo Recycling Inc. U.S.A Recycling and selling of waste Grand Concept Group Limited True Glory Investments Limited Samoa Islands Investment activities and processing and trading of PCBs Grand Concept Group Limited Real Bonus Limited Samoa Islands Selling of LED lighting Grandway International Limited Truly Top Investments Limited Samoa Islands Investment activities Grandway International Limited Renown Boom Limited Samoa Islands Investment activities and processing and selling of routers True Glory Investments Limited PT Cosmo Technology Indonesia Manufacturing and selling of LED lighting True Glory Investments Limited PT Cosmo Green Technology Indonesia Manufacturing and selling of material of	193,912 $ 193,912 $ 5,500,038 100% 217,131 $ 269,412 269,412 63,180,000 100% 143,228 270,524 240,734 8,950,000 100% 1,183,141 941,532 941,532 30,080,000 100% 873,573 87,075 87,075 3,000,000 14% 102,003 31,760 31,760 - 100% 9,821 193,912 193,912 5,500,038 100% 217,115 49,046 49,046 1,620,000 100% 39,228 24,270 24,270 800,000 100% 7 270,524 240,734 8,950,000 100% 1,133,733 - - - 100% 49,408 538,516 538,516 16,850,000 100% 568,917 402,983 402,983 13,230,000 100% 304,829 87,514 87,514 2,750,000 13% 93,503 44,603 44,603 15,000 50% 47,000		17,748 $ 17,748 $ 8,259) ( 8,259) ( 48,582 48,582 18,665) ( 18,665) ( 27,407) ( 3,897) ( - - 17,748 17,748 3,223) ( 3,223) ( 298) ( 298) ( 51,566 51,566 2,984) ( 2,984) ( 16,381) ( 16,381) ( 2,284) ( 2,284) ( 27,407) ( 3,572) ( 7,201 3,601	Note 1 Note 2 Note 2 Note 1 Note 1

Table 6-1

COSMO ELECTRONICS CORPORATION

The related information on investees are as follows (not including investees in Mainland China)

For the year ended December 31, 2022

Investor Investee Location Mainbusiness activities Table 6	Initial investmentamount	Sharesheld as at December31,2022	Investment income Net profit (loss) (loss) recognised by of the investee for the the Company for the year ended year ended December31,2022 December31,2022 Footnote (Except as otherwise indicated) Expressed in thousands of NTD	Investment income Net profit (loss) (loss) recognised by of the investee for the the Company for the year ended year ended December31,2022 December31,2022 Footnote (Except as otherwise indicated) Expressed in thousands of NTD
	Balance as at Balance as at Ownership December31,2022 December31,2021 Numberofshares (%) Bookvalue
True Glory Investments Limited PT Cijambe Indah Indonesia Land development True Glory Investments Limited PT Cosmo Electronics Indonisia Indonesia Manufacturing and selling of new electronic Truly Top Investments Limited PT Cosmo Technology Indonesia Manufacturing and selling of LED lighting Truly Top Investments Limited PT Cosmo Green Technology Indonesia Manufacturing and selling of material of Renown Boom Limited PT Cijambe Indah Indonesia Land development	346,704 $ 240,875 $ 101,179 93% 920,258 $ 317 - 10,000 100% 207 493,651 493,651 15,350,000 73% 521,917 44,865 44,865 15,000 50% 47,000 266,944 266,944 6,579 7% 123,979		56,392 $ 49,697 $ 97) ( 97) ( 27,407) ( 19,938) ( 7,201 3,601 56,392 6,695	Note 1 Note 1 Note 1 Note 1

Note 1: The difference between the profit and loss of the investee company and the investment income and loss recognized by the Company is the investment income and loss recognized according to the ownership ratio of the current period. Note 2: It is limited company.

Table 6-2

COSMO ELECTRONICS CORPORATION

Information on investments in Mainland China For the year ended December 31, 2022

Investee in Mainland China Table 7	Main business activities	Paid-incapital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2022	Amount remitted from Taiwan December 31,2022 year ended to Mainland China/Amount remitted back to Taiwan for the	Amount remitted from Taiwan December 31,2022 year ended to Mainland China/Amount remitted back to Taiwan for the	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2022	Net income of investee as of December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2022 (Note 2)	Book value of investments in Mainland China as of December 31, 2022	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022 Footnote Expressed in thousands of NTD (Except as otherwise indicated)	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022 Footnote Expressed in thousands of NTD (Except as otherwise indicated)
					Remitted to Mainland China	Remitted back toTaiwan
Cosmo Electronics Technology (KunShan) Co., Ltd. Dong Guan Guan Zhen Xing Trading Limited Shaoguan Woncrown Electronics Technology Co.,Ltd. Guizhou Guanwang International Digicrown Electronic Technology Co., Ltd. Dongguan Guanwang Electronic Technology Co., Ltd. Companyname	Manufacturing and selling of new electronic parts 193,912 $ Manufacturing and selling of material of biomass energy 187,563 Developing, manufacturing and selling of electronic products 90,751 Developing, manufacturing and selling of electronic products 158,446 Developing, manufacturing and selling of electronic products 49,053 Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022		1 193,912 $ 2 85,367 2 - 2 - 2 - by the Investment Commission of the Ministry of Economic Affairs (MOEA)(Note3) Investment amount approved		- $ - $ - - - - - - - - Ceiling on investments in Mainland China imposed by the Investment Commissionof MOEA(Note4)		193,912 $ 85,367 - - -	17,746 $ 5,911) ( 191) ( 15,423 15,951) (	100% 100% 100% 100% 100%	17,746 $ 5,911) ( 191) ( 15,423 15,951) (	217,113 $ 218,900 45,342 153,106 48,635) (	- $ - - - -
Cosmo Electronics Corporation	279,279 $		$ 506,715		1,139,786 $

Note 1: Investment methods are classified into the following two categories:

(1)Through investing and establishment in Cosmo Electronics Co., Ltd.(Samoa) and Cosmo Electronics Technology Co., Ltd.(Mauritius) in the third area, which then invested in the investee in Mainland China.

(2)Through investing in an existing company, Renown Boom Limited, in the third area, which then invested in the investee in Mainland China.

Note 2: The company recognised investment income / loss based on the audited financial statements.

Note 3: Investment amount approved by the Investment Commission of the Ministry of Economic Affairs was US$16,500 thousand. Note 4: It was calculated by the limit of the combined net asstes in accordance with Order No. MOEA-09704604680.

Table 7

COSMO ELECTRONICS CORPORATION

Table 8

Major shareholders information

For the year ended December 31, 2022

Name of majorshareholders	Shares	Shares
	No. ofsharesheld	Ownership (%)
Digicrown Technologies Ltd. Wei Jia Investment Co., Ltd. Da Liang Investment Ltd. Hung Yi Investment Ltd. Tsan Hua Investment Co., Ltd. Kuan Che Investment Ltd. Tai Sung Investment Co., Ltd. Kuan Chia Investment Ltd. Flyachieve Limited.	15,002,531 13,826,944 13,600,400 13,204,532 12,506,249 12,194,722 11,688,124 11,580,937 10,580,537	9.28% 8.55% 8.41% 8.17% 7.74% 7.55% 7.23% 7.17% 6.55%

Table 8