HannsTouch — Audit Report / Information 2022

Oct 28, 2022

HANNSTOUCH SOLUTION INCORPORATED 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 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 versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of HannsTouch Solution Incorporated

Opinion

We have audited the accompanying consolidated balance sheets of HannsTouch Solution Incorporated and subsidiaries (the “Group”) as at December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and 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 at December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

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

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s 2022 consolidated financial statements. 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.

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Key audit matters for the Group’s 2022 consolidated financial statements are stated as follows:

Key Audit Matter – Appropriateness of cut-off of overseas warehouse operating revenue

Description

Refer to Note 4(31) for accounting policy on revenue recognition in the financial statements.

The Group stores inventories in the warehouses under the custody of foreign third parties. Such inventories are checked and accepted by the custodians in order to meet the requirements of overseas sales customers. The custodians regularly send inventory reports to the Group to verify the quantity, and the Group recognises operating revenue based on actual inventories used at customer side which are shown in the inventory report provided by the custodians.

As the process of revenue recognition arising from the Group’s foreign warehouse involves numerous manual procedures, we considered the appropriateness of cut-off of overseas warehouse operating revenue recognition as a key audit matter.

How our audit addressed the matter:

We performed the following audit procedures on the above key audit matter:

1. Obtained an understanding of and evaluated the Group’s procedures on overseas warehouse operating revenue, and selected samples to check the accuracy of operating revenue recognition.

2. Performed cut-off procedures on sales revenue from distribution warehouse recognised during a specific period before and after the period-end, including verifying delivery schedule of distribution warehouse and ensuring the movements of inventories contained in the statements and cost of goods sold had been recognised in the appropriate period; and

3. Observed the annual physical inventory conducted for significant warehouse.

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Key audit matter- Impairment assessment on property, plant and equipment

Description

Refer to Notes 4(16), 5(2) and 6(8) for accounting policy applied on impairment of property, plant and equipment, accounting estimates and assumptions applied on the impairment assessment of tangible assets and details of impairment.

The Group has appointed appraisers to appraise the property, plant and equipment in Taipei and to value the recoverable amount as the basis for assessing the impairment of property, plant and equipment.

The recoverable amount is calculated through income approach and comparison method. The determination of the recoverable amount is subject to management judgement and uncertainty, which could have a significant impact in assessing whether there is any impairment loss on property, plant and equipment. Thus, we considered the impairment assessment of property, plant and equipment as a key audit matter.

How our audit addressed the matter:

We understood the basis and process of management’s assessment and performed the following audit procedures in respect of the above key audit matter:

1. Assessed the appointed appraisers and appraisal firms in conformity with the rules of qualification and independence.

2. Assessed the expected future income used in the experts’ appraisal report and compared with local market price and forecast documents for the industry.

3. Assessed the discount rate used in the experts’ appraisal report and inspected the assumptions of cost of capital with return on similar assets in the market.

4. Examined the parameters of valuation model in the experts’ appraisal report and setting of formulas.

Other matter – Parent company only financial reports

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

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Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

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

Auditors’ responsibilities for the audit of the consolidated financial statements

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

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

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.

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

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

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

4. 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.

5. 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 of the current period 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.

Chen, Ching Chang

[Liao, Fu-Ming ]

For and on behalf of PricewaterhouseCoopers, Taiwan February 20, 2023

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows 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 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.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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HANNSTOUCH SOLUTION INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(1)(4) 6(5) 7 7 6(6) 6(7) and 8 6(2) 6(3) 6(4) 6(8) and 8 6(9) 6(24)	December 31, 2022 AMOUNT % $ 1,814,501 12 141,401 1 781,000 5 292,954 2 117 - 15,615 - - - 172,132 1 45,031 1 31,204 - 3,293,955 22 177,958 1 553,821 4 136,934 1 10,281,968 68 445,986 3 23,416 - 111,351 1 11,590 - 11,743,024 78 $ 15,036,979 100	December 31, 2021	December 31, 2021
		AMOUNT $ 1,814,501 141,401 781,000 292,954 117 15,615 - 172,132 45,031 31,204 3,293,955 177,958 553,821 136,934 10,281,968 445,986 23,416 111,351 11,590 11,743,024 $ 15,036,979	AMOUNT $ 1,843,653 71,107 2,255,907 328,325 184 10,335 1,074 204,452 44,957 26,103 4,786,097 96,109 778,137 - 10,549,981 293,534 15,189 96,277 2,950 11,832,177 $ 16,618,274	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1476 Other current financial assets 1479 Other current assets 11XX Total current assets Non-current assets 1510 Non-current financial assets at fair value through profit or loss 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				11 1 14 2 - - - 1 - -
				29
				- 5 - 63 2 - 1 -
				71
				100

(Continued)

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HANNSTOUCH SOLUTION INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2022 Notes AMOUNT % 6(2) $ - - 502 - 141,369 1 7 13,058 - 6(12) 361,641 3 7 40 - 103 - 30,009 - 6(14) 172,754 1 6,652 - 726,128 5 6(13) 1,500,000 10 6(14) 1,977,789 13 6(24) - - 433,151 3 18,693 - 3,929,633 26 4,655,761 31 6(16) 8,069,485 54 6(17) 312,925 2 6(18) 244,402 2 - - 1,248,767 8 ( 90,461) ( 1) 6(16) ( 18,264) - 9,766,854 65 4(3) 614,364 4 10,381,218 69 9 11 $ 15,036,979 100	December 31, 2021	December 31, 2021
		AMOUNT $ 8 1,703 159,990 - 401,179 1,194 24,844 15,179 251,015 41,631 896,743 1,500,000 2,972,282 55 284,929 16,329 4,773,595 5,670,338 8,069,485 312,925 144,361 6,457 1,600,011 217,756 - 10,350,995 596,941 10,947,936 $ 16,618,274	%
Current liabilities 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2670 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Equity attributable to owners of parent 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 3500 Treasury stock 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity			- - 1 - 2 - - - 2 -
			5
			9 18 - 2 -
			29
			34
			48 2 1 - 10 1 -
			62 4
			66
			100

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

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HANNSTOUCH SOLUTION INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items

Year ended December 31 2022 2021 Notes AMOUNT % AMOUNT % 6(19) and 7 $ 2,405,963 100 $ 3,775,822 100 6(6)(23) and 7 ( 2,272,770) ( 94) ( 2,477,053) ( 65) 133,193 6 1,298,769 35 6(23) and 7 ( 30,223) ( 1) ( 36,360) ( 1) ( 166,959) ( 7) ( 225,154) ( 6) ( 32,765) ( 2) ( 33,939) ( 1) 12(2) 10 - ( 11) - ( 229,937) ( 10) ( 295,464) ( 8) ( 96,744) ( 4) 1,003,305 27 6(20) 16,808 - 10,371 - 6(21) 124,737 5 176,598 5 6(22) 20,290 1 162,251 4 7 ( 50,853) ( 2) ( 70,540) ( 2) 110,982 4 278,680 7 14,238 - 1,281,985 34 6(24) 15,027 1 ( 234,040) ( 6) $ 29,265 1 $ 1,047,945 28 6(3) ($ 308,237) ( 13) $ 225,827 6 6(24) - - ( 1,614) - 20 - - - ($ 308,217) ( 13) $ 224,213 6 ($ 278,952) ( 12) $ 1,272,158 34 $ 24,772 1 $ 1,000,398 27 $ 4,493 - $ 47,547 1 ($ 283,445) ( 12) $ 1,224,611 33 $ 4,493 - $ 47,547 1 6(25) $ 0.03 $ 1.24 $ 0.03 $ 1.23

4000 Sales revenue 5000 Operating costs 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment gain (loss) determined in accordance with IFRS 9 6000 Total operating expenses 6900 Operating (loss) profit 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 benefit (expense) 8200 Profit for the year Components of other comprehensive income that will not be reclassified to profit or loss 8316 Unrealised (losses) gains from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation 8300 Other comprehensive (loss) income for the year 8500 Total comprehensive (loss) income for the year Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive income (loss) attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

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HANNSTOUCH SOLUTION INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2021 Balance at January 1, 2021 Profit Other comprehensive income Total comprehensive income Appropriations of 2020 earnings: Legal reserve Special reserve Cash dividends Increase in non-controlling interests Balance at December 31, 2021 Year ended December 31, 2022 Balance at January 1, 2022 Profit Other comprehensive income (loss) Total comprehensive income Appropriations of 2021 earnings: Legal reserve Special reserve Cash dividends Increase in non-controlling interests Purchase of treasury stock Balance at December 31, 2022	Notes 6(18) 6(18) 6(28) 6(16)					Equityattri	butable to owners of	theparent			Total	Non-controlling interest $ 269,594 47,547 - 47,547 - - - 279,800 $ 596,941 $ 596,941 4,493 - 4,493 - - - 12,930 - $ 614,364	Total equity
		Share capital - common stock		Capital Reserves	Capital surplus, others		Retained Earnings	Unappropriated retained earnings	Other EquityInterest Exchange differences on translation of foreign financial statements Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income $ - ( $ 6,457) - - - 224,213 - 224,213 - - - - - - - - $ - $ 217,756 $ - $ 217,756 - - 20 ( 308,237) 20 ( 308,237) - - - - - - - - - - $ 20 ( $ 90,481)	Treasurystock
			Total capital surplus, additional paid-in capital	Capital surplus, difference between consideration and carrying amount of subsidiaries acquired or disposed $ 919 - - - - - - - $ 919 $ 919 - - - - - - - - $ 919		Legal reserve	Special reserve $ 14,100 - - - - ( 7,643) - - $ 6,457 $ 6,457 - - - - ( 6,457) - - - $ -		Exchange differences on translation of foreign financial statements
		$ 8,069,485 - - - - - - - $ 8,069,485 $ 8,069,485 - - - - - - - - $ 8,069,485	$ 309,035 - - - - - - - $ 309,035 $ 309,035 - - - - - - - - $ 309,035		$ 2,971 - - - - - - - $ 2,971 $ 2,971 - - - - - - - - $ 2,971	$ 109,361 - - - 35,000 - - - $ 144,361 $ 144,361 - - - 100,041 - - - - $ 244,402		$ 941,680 1,000,398 - 1,000,398 ( 35,000) 7,643 ( 314,710) - $ 1,600,011 $ 1,600,011 24,772 - 24,772 ( 100,041) 6,457 ( 282,432) - - $ 1,248,767	$ - - - - - - - - $ - $ - - 20 20 - - - - - $ 20	$ - - - - - - - - $ - $ - - - - - - - - ( 18,264) ($ 18,264)	$ 9,441,094 1,000,398 224,213 1,224,611 - - ( 314,710) - $ 10,350,995 $ 10,350,995 24,772 ( 308,217) ( 283,445) - - ( 282,432) - ( 18,264) $ 9,766,854		$ 9,710,688 1,047,945 224,213 1,272,158 - - ( 314,710) 279,800 $ 10,947,936 $ 10,947,936 29,265 ( 308,217) ( 278,952) - - ( 282,432) 12,930 ( 18,264) $ 10,381,218

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

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HANNSTOUCH SOLUTION INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Expected credit (gain) loss on doubtful accounts Amortisation Interest expense Interest income Dividend income Loss (gain) on disposals of property, plant and equipment Gain on disposal of non-current assets held for sale Loss on financial assets at fair value through profit or loss Gain on lease modification Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss - current Accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Inventory Other current assets Changes in operating liabilities Notes payable Accounts payable Accounts payable - related parties Other payables Other payables - related parties Other current liabilities Other non-current liabilities Cash inflow generated from operations Interest received Cash dividends received Interest paid Income taxes paid Net cash flows from operating activities

Year ended December 31 Notes 2022 2021 $ 14,238 $ 1,281,985 6(23) 881,677 815,766 12(2) ( 10 ) 11 6(23) 11,400 9,886 50,853 70,540 6(20) ( 16,808 ) ( 10,371 ) 6(21) ( 52,972 ) ( 20,888 ) 6(22) 1,681 ( 114 ) 6(22) - ( 192,690 ) 6(2)(22) 17,831 30,300 6(9)(22) - ( 3,509 ) ( 94,384 ) ( 52,004 ) 35,381 ( 76,268 ) 67 16,710 ( 4,482 ) 23,969 1,074 ( 1,074 ) 32,320 ( 5,723 ) ( 4,429 ) 14,335 ( 1,201 ) 1,486 ( 18,621 ) 23,330 13,058 ( 2,486 ) ( 55,622 ) ( 17,216 ) ( 1,154 ) 1,128 ( 34,979 ) ( 9,634 ) 2,364 - 777,282 1,897,469 16,010 8,627 52,972 20,888 ( 43,253 ) ( 63,378 ) ( 25,515 ) ( 143 ) 777,496 1,863,463

(Continued)

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HANNSTOUCH SOLUTION INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of non-current financial assets at fair value through profit or loss Increase in financial assets at fair value through other comprehensive income Decrease (increase) in current financial assets at amortised cost Increase in non-current financial assets at amortised cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Proceeds from disposal of non-current assets held for sale Acquisition of intangible assets Increase in other non-current assets (Increase) decrease in other current financial assets Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term loans Repayment of short-term debt Proceeds from long-term debt Repayment of long-term debt Proceeds from corporate bonds payable Repayment of corporate bonds payable Repayment of lease liabilities Increase in non-controlling interests Cash dividends paid Payments to acquire treasury shares Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2022 2021 ($ 75,598 ) ($ 90,000 ) ( 83,921 ) ( 358,899 ) 1,474,907 ( 1,591,075 ) ( 136,934 ) - 6(27) ( 574,285 ) ( 447,688 ) - 147 - 1,660,264 ( 17,935 ) ( 960 ) ( 8,640 ) ( 1,710 ) ( 74 ) 14,433 577,520 ( 815,488 ) - 40,000 - ( 40,000 ) 6(27) - 336,630 6(27) ( 1,072,754 ) ( 1,873,333 ) 6(13)(27) - 1,500,000 6(27) - ( 900,000 ) 6(27) ( 23,668 ) ( 21,737 ) 6(28) 12,930 279,800 6(18) ( 282,432 ) ( 314,710 ) 6(16) ( 18,264 ) - ( 1,384,188 ) ( 993,350 ) 20 - ( 29,152 ) 54,625 6(1) 1,843,653 1,789,028 6(1) $ 1,814,501 $ 1,843,653

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

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HANNSTOUCH SOLUTION INCORPORATED 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 Organisation

HannsTouch Solution Incorporated (the ‘Company’) was incorporated in September 1999 as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the manufacture and sale of touch products, lease of property and hotel business. The common shares of the Company have been listed on the Taiwan Stock Exchange since September 27, 2002.

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

These financial statements were authorised for issuance by the Board of Directors on February 20, 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”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

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

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

(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:

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

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) 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:

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

(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 came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”).

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

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group classified’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial Consolidated 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 unrealised gains or losses are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (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 noncontrolling 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. Difference of adjustment of non-controlling interest and fair value of consideration paid or received is recognised 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 recognised in profit or loss. All amounts previously recognised 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

~16~

liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised 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:

Investor Name of subsidiary The Company Richest Investment Ltd. The Company Golden Apple Investment Corporation (Golden Apple) The Company Glory Stone Inc. (Glory Stone) The Company Yin Wang Investment Corporation (Yin Wang Investment) The Company Hanns Blegrain Ltd. (Hanns Blegrain) Glory Stone Xiao Ma Yin Meng Co., Ltd. (Xiao Ma Yin Meng) Glory Stone Pottery Inc. (formerly known as Han Yu Chu Co., Ltd. (Han Yu Chu)) Yin Wang Investment Pottery Inc. (formerly known as Han Yu Chu Co., Ltd. (Han Yu Chu)) Hanns Blegrain HeXin Shang Mao Technology Service (Shenzhen) Ltd.	Main business activities	December 31, December 31, 2022 2021 Description 100.00 100.00 - 100.00 100.00 - 42.31 42.31 Note 1 100.00 100.00 Note 2 100.00 100.00 Note 3 51.00 51.00 Note 4 51.00 - Note 5 Note6 30.00 - Note 5 Note6 100.00 - Note7 Ownership (%)
	Investment Investment Hotel business Investment Investment Food service Food service Food service Provision of technical services

• Note 1: Although HannsTouch Solution only held 42.31% equity interest in Glory Stone, the Group has control over this company as it accounted for two thirds of the Board of Directors and has relatively major voting rights than other shareholders. Therefore, Glory Stone was included in the consolidation. In August 2021, the Company participated in the cash capital increase of Glory Stone based on its original shareholding ratio for $198,000.

• Note 2: This company was newly established in November 2021 by the Company.

• Note 3: This company was newly established in December 2021 by the Company.

• Note 4: This company was newly established in November 2021 by Glory Stone which owned 51% of common shares, and related procedures of change had been completed. Glory Stone has control over this company as it accounted for two thirds of the Board of Directors and has relatively major voting rights than other shareholders. Therefore, Xiao Ma Yin Meng was included in the consolidation.

• Note 5: Glory Stone, Yin Wang Investment and the Group’s associate jointly established Han Yu Chu, and the registration was completed in April 2022. The paid-in capital for establishment was $150,000 and the investment amount of non-controlling equity shareholders was $28,500.

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• Note 6: Han Yu Chu has changed its name to "Pottery Inc.", and the registration was completed in October 2022.

• Note 7: The registration of Hanns Blegrain’s newly established company was completed in October 2022 and the capital injection was completed in January 2023.

• 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.

As of December 31, 2022 and 2021, the non-controlling interest amounted to $614,364 and $596,941, respectively. The information on non-controlling interest and respective subsidiaries is as follows:

Name of subsidiary	Principal place business Taiwan		Non-controllinginterest	Non-controllinginterest
		December	Ownership (%) 57.69% 31,2022	December	31,2021
		Amount 614,364 $		Amount 596,941 $	Ownership (%)
Glory Stone					57.69%

Summarised financial information of the subsidiaries:

Balance sheets

			Glory	Stone	Stone
		December	31,2022		December	31, 2021
Current assets		$	773,473		$	737,833
Non-current assets			1,454,252			1,405,336
Current liabilities	(		110,710)	(		107,230)
Non-current liabilities	(		1,019,303)	(		1,008,302)
Total net assets		$	1,097,712		$	1,027,637

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Statements of comprehensive income

Glory Stone

			Years ended	December31	December31
			2022		2021
Revenue		$	236,692	$	313,223
Profit before income tax			25,458		89,841
Income tax	(		1,896)	(	7,319)
Net profit		$	23,562	$	82,522
Total comprehensive income		$	23,562	$	82,522
Comprehensive income attributable to
non-controlling interest		$	4,493	$	47,547

Statements of cash flows

			Glory	Stone	Stone
			Years ended	December 31
			2022			2021
Net cash flows from operating activities		$	141,115		$	218,737
Net cash flows used in investing activities	(		163,094)	(		537,880)
Net cash flows (used in) from financing
activities	(		31,531)			406,351
Increase in cash and cash equivalents	(		53,510)			87,208
Cash and cash equivalents, beginning of			132,380			45,172
year
Cash and cash equivalents, end of year		$	78,870		$	132,380

(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 NTD, which is the Group’s functional and presentation currency.

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 recognised 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 retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• C. All other foreign exchange gains and losses based on the nature of those transactions are presented

~19~

in the statement of comprehensive income within ‘other gains and losses’.

• (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 realised, 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 realised 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 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 fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair

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value, and recognises the gain or loss in profit or loss.

• D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income:

• (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

• (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 fair value through other comprehensive income are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(9) Financial assets at amortised cost

• A. Financial assets at amortised 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 amortised cost are recognised and derecognised using settlement 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 recognised in profit or loss when the asset is derecognised 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.

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(10) Accounts receivable

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

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

(11) Impairment of financial assets

For financial assets at amortised cost including accounts receivable or contract assets that have a significant financing component, lease receivables, loan commitments and financial guarantee contracts, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) 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 recognises the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

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

－ (13) Leasing arrangements (lessor) operating leases

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

(14) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, 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 realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(15) Non-current assets held for sale

Non-current assets are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use, and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.

~22~

(16) Property, plant and equipment

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

• B. Subsequent costs are included in the asset’s carrying amount or recognised 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 derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. 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 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 2~35 years Machinery equipments 2~10 years Furniture and fixtures 2~6 years Other equipments 2~10 years

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

• A. Leases are recognised 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 lowvalue assets, lease payments are recognised 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 comprised of fixed payments, less any lease incentives receivable.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised 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.

~23~

• 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; and

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

The right-of-use asset is measured subsequently using the cost model and is depreciated from 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 recognised 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 to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

(18) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 2 to 6 years.

(19) 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 recognised 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 amortised historical cost would have been if the impairment had not been recognised.

(20) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings and other long-term and shortterm loans. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised 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 recognised as transaction costs of the loan 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 capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

~24~

(21) 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 accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(22) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges or financial liabilities designated at fair value through profit or loss on initial recognition. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss at initial recognition:

• (a) Hybrid (combined) contracts; or

• (b) They eliminate or significantly reduce a measurement or recognition inconsistency; or

• (c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

(23) Bonds payable

Ordinary corporate bonds issued by the Group are initially recognised at fair value, net of transaction costs incurred. Ordinary corporate bonds are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is accounted for as the premium or discount on bonds payable and presented as an addition to or deduction from bonds payable, which is amortized in profit or loss as an adjustment to the ‘financial cost’ over the period of bond circulation using the effective interest method.

(24) Derecognition of financial liabilities

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

(25) Non-hedging derivatives

Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognised in profit or loss.

~25~

(26) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, as a deduction of sales revenue in the period when related products are sold.

(27) 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 recognised as expense in that period when the employees render service.

B. Pensions

• (a) Defined contribution plan

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

• (b) Defined benefit plan

• 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 in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan 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).

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

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

• C. Employees’ compensation and directors’ remuneration

Employees’ compensation and directors’ remuneration are recognised 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.

~26~

(28) Income taxes

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

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

(29) Share capital

• A. 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.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(30) Dividends

Dividends are recorded in the Group’s financial statements in the period in which they are approved by the Group’s shareholders. Cash dividends are recorded as liabilities.

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(31) Revenue recognition

A. Sales of goods

• (a) The Group manufactures and sells touch panel and related products. Sales are recognised when control of the products has transferred, being when the products are delivered to the buyer, the buyer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the buyer’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 buyer, and either the buyer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• (b) Sales revenue of products was recognised based on the contract price net of sales returns and discount. The sales returns and discounts are estimated based on the anticipated annual sales quantities. Accumulated experience is used to estimate and provide for the sales returns and discounts, using the anticipated annual sales quantities, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales returns and discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the control was transferred with a credit term of 60 days, which is consistent with market practice.

• (c) A receivable is recognised 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.

B. Leases

The Group is engaged in the leasing of certain property classified as operating leases based on the lease condition. The lease payments received during the leasing period on a straight line basis are recognised as property lease income.

• C. Food services, sale of hotel products, accommodation and related services

• (a) Revenue from food services and sale of hotel products are recognised upon transfer of the items to customers. Payment of the transaction price is due immediately when the customer purchases products.

• (b) Revenue from accommodation is recognised in the accounting period in which the services are rendered. The customer pays at the time specified in the payment schedule.

• (c) As the time interval between the transfer of committed goods or services and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.

~28~

(32) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate.

(33) Business combinations

• A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

• B. The excess of the consideration transferred over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date.

(34) 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.

5. 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. The related information is addressed below:

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

None.

(2) Critical accounting estimates and assumptions

Impairment assessment of tangible assets

The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any

~29~

changes of economic circumstances or estimates due to the change of company strategy might cause material impairment on assets in the future.

6. Details of Significant Accounts

(1) Cash and cash equivalents

December31,2022 Cash on hand and revolving funds 443 $ Checking accounts and demand deposits 384,058 Time deposits 1,400,000 Cash equivalents Bills with repurchase agreement 30,000 1,814,501 $	December 31, 2021
	268 $ 343,385 1,400,000 100,000
	1,843,653 $

• 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. Certain cash and cash equivalents which were pledged as collaterals and restricted have been transferred to other financial assets. Refer to Notes 6(7) and 8 for details.

• C. As of December 31, 2022 and 2021, time deposits with maturity over three months amounting to $781,000 and $2,255,907, respectively, were reclassified as financial assets at amortised cost due to its lack of high liquidity in nature. Refer to Note 6(4) for details.

(2) Financial assets / liabilities at fair value through profit or loss

Items		December	31,2022		December	31,2021
Current items:
Financial assets mandatorily measured at fair
value through profit or loss
Listed stocks		$	124,962		$	55,965
Unlisted stocks			48,877			48,877
Non-hedging derivatives			48			363
			173,887			105,205
Valuation adjustment	(		32,486)	(		34,098)
		$	141,401		$	71,107
Financial liabilities mandatorily measured at
fair value through profit or loss
Non-hedging derivatives		$	-		$	8

~30~

==> picture [463 x 137] intentionally omitted <==

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

Items December 31, 2022 December 31, 2021
Non-current items:
Financial assets mandatorily measured at fair
value through profit or loss
Unlisted stocks $ 62,100 $ 40,000
Beneficiary certificates 103,498 50,000
165,598 90,000
Valuation adjustment 12,360 6,109
$ 177,958 $ 96,109
----- End of picture text -----

• A. The nature of financial assets at fair value through profit or loss are as follows:

• (a) Equity instruments: including listed and unlisted stocks.

• (b) Beneficiary certificates: including domestic limited partnership.

• (c) Derivative instruments: including forward foreign exchange contracts.

• B. Amounts recognised in profit or loss in relation to financial assets / liabilities at fair value through profit or loss are listed below:

			Years ended	December31
			2022	2021
Financial assets / liabilitites mandatorily
measured at fair value through profit or loss
Equity instruments		$	11,218	($	38,699)
Beneficiary certificates	(		3,809)		6,792
Derivative instruments	(		25,240)		1,607
	($		17,831)	($	30,300)

• C. The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed below:

Derivative financial instruments Presale forward exchange contracts -Sell USD and buy NTD	December 31, 2022	December 31, 2022
	(Notionalprincipal) (In thousands) USD 1,500 $ Contract amount	Contractperiod
	(Notionalprincipal) USD
		2022/12/29-2023/1/31

~31~

		December	31,2021	31,2021
	Contract amount
Derivative financial	(Notional principal)	(In thousands)		Contract period
instruments
Presale forward exchange
contracts
-Sell USD and	USD	$	5,500	2021/11/26-2022/1/28
buy NTD

The Group entered into forward foreign exchange contracts to sell to hedge exchange rate risk. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• D. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

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

Items December31,2022 Non-current items: Equity instruments Listed stocks 644,302 $ Valuation adjustment 90,481) ( 553,821 $	December31,2021
	560,381 $ 217,756
	778,137 $

• A. The Group has elected to classify equity investments that are considered to have stable dividend as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $553,821 and $778,137 as at December 31, 2022 and 2021, respectively.

• B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		Years ended	December31	December31
		2022		2021
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income	($	308,237)	$	225,827
Dividend income recognised in profit or loss
Held at end of year	$	46,760	$	20,696

~32~

• 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 financial assets at fair value through other comprehensive income held by the Group was $553,821 and $778,137, respectively.

• D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

(4) Financial assets at amortised cost

Items Current items: Time deposits with maturity over three months Non-current items: Corporate bonds	December31,2022 December31,2021 781,000 $ 2,255,907 $ $136,934 $-

• A. The Group recognised interest income in profit or loss in relation to financial assets at amortised cost in the amount of $5,783 and $3,957 for the years ended December 31, 2022 and 2021, respectively.

• B. 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 financial assets at amortised cost held by the Group was $917,934 and $2,255,907, respectively.

• C. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).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.

(5) Accounts receivable

		December	31,2022		December	31,2021
Accounts receivable		$	293,044		$	328,425
Less: Loss allowance	(		90)	(		100)
		$	292,954		$	328,325

• A. As of December 31, 2022 and 2021, the estimated sales discounts and allowances were $9,142 and $10,984, respectively. Since the sales discounts and allowances met the requirements for offset of financial liabilities and financial assets, the net amounts were shown under accounts receivable.

~33~

B. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

Not past due Up to 30 days	December31,2022 December31,2021 Accounts receivable Accounts receivable 272,665 $ 328,425 $ 20,379 - 293,044 $ 328,425 $

The above ageing analysis was based on past due date.

• C. As of December 31, 2022 and 2021, accounts receivable were all from contracts with customers. As of January 1, 2021, the balance of accounts receivable from contracts with customers amounted to $252,157.

• D. 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 accounts receivable was $293,044 and $328,425, respectively.

• E. Information relating to credit risk of accounts receivable is provided in Note 12(2).

(6) Inventories

Raw materials Work in progress Finished goods Room supplies (Note) Raw materials Work in progress Finished goods Room supplies (Note)		December31,2022
	Allowance for Cost valuation loss 87,758 $ 12,323) ($ 1,725 - 124,601 30,413) ( 784 - 214,868 $ 42,736) ($ December31,2021		Bookvalue
			75,435 $ 1,725 94,188 784
			172,132 $
	Allowance for Cost valuation loss 84,343 $ 4,250) ($ 39,700 - 88,417 4,962) ( 1,204 - 213,664 $ 9,212) ($		Bookvalue
			80,093 $ 39,700 83,455 1,204
			204,452 $

Note: Including food, beverage and merchandise inventory.

~34~

The cost of inventories recognised as expense for the year:

(7)

Other current financial assets 2022 2021 Cost of goods sold 1,803,052 $ 2,468,494 $ Unallocated overhead expense 429,857 6,725 Loss on (gain on reversal of) decline in market value 33,524 19,115) ( Scrapped inventory 6,337 20,949 2,272,770 $ 2,477,053 $ Years endedDecember31 December 31, 2022 December31,2021 Time deposits pledged 28,919 $ 28,919 $ Restricted bank deposits 16,112 16,038 45,031 $ 44,957 $

Refer to Note 8 for further information on other current financial assets pledged to others as collateral.

~35~

(8) Property, plant and equipment

January 1, 2022 Cost Accumulated depreciation and impairment 2022 At January 1 Additions Disposals Reclassifications Depreciation At December 31 December 31, 2022 Cost Accumulated depreciation and impairment

Buildings and Machinery and Furniture and Unfinished construction and equipment under Land structures equipment fixtures Otherequipment acceptance Total 4,974,140 $ 6,740,526 $ 8,113,460 $ 53,956 $ 69,419 $ 431,371 $ 20,382,872 $ - 2,660,153) ( 7,091,233) ( 19,822) ( 61,683) ( - 9,832,891) ( 4,974,140 $ 4,080,373 $ 1,022,227 $ 34,134 $ 7,736 $ 431,371 $ 10,549,981 $ 4,974,140 $ 4,080,373 $ 1,022,227 $ 34,134 $ 7,736 $ 431,371 $ 10,549,981 $ - 1,967 - 4,105 - 583,013 589,085 - 1,275) ( - 406) ( - - 1,681) ( - 152,667 672,143 20,936 1,164 846,910) ( - - 361,455) ( 475,920) ( 15,184) ( 2,858) ( - 855,417) ( 4,974,140 $ 3,872,277 $ 1,218,450 $ 43,585 $ 6,042 $ 167,474 $ 10,281,968 $ 4,974,140 $ 6,893,885 $ 8,785,603 $ 78,591 $ 70,583 $ 167,474 $ 20,970,276 $ - 3,021,608) ( 7,567,153) ( 35,006) ( 64,541) ( - 10,688,308) ( 4,974,140 $ 3,872,277 $ 1,218,450 $ 43,585 $ 6,042 $ 167,474 $ 10,281,968 $

~36~

January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Additions Disposals Reclassifications Depreciation At December 31 December 31, 2021 Cost Accumulated depreciation and impairment

Buildings and Machinery and Furniture and Unfinished construction and equipment under Land structures equipment fixtures Other equipment acceptance Total 4,974,140 $ 6,730,299 $ 8,075,148 $ 46,106 $ 69,309 $ 8,657 $ 19,903,659 $ - 2,306,726) ( 6,665,509) ( 10,178) ( 59,092) ( - 9,041,505) ( 4,974,140 $ 4,423,573 $ 1,409,639 $ 35,928 $ 10,217 $ 8,657 $ 10,862,154 $ 4,974,140 $ 4,423,573 $ 1,409,639 $ 35,928 $ 10,217 $ 8,657 $ 10,862,154 $ - 3,363 - 4,137 592 486,413 494,505 - 32) ( - 1) ( - - 33) ( - 7,015 44,125 3,714 172) ( 63,699) ( 9,017) ( - 353,546) ( 431,537) ( 9,644) ( 2,901) ( - 797,628) ( 4,974,140 $ 4,080,373 $ 1,022,227 $ 34,134 $ 7,736 $ 431,371 $ 10,549,981 $ 4,974,140 $ 6,740,526 $ 8,113,460 $ 53,956 $ 69,419 $ 431,371 $ 20,382,872 $ - 2,660,153) ( 7,091,233) ( 19,822) ( 61,683) ( - 9,832,891) ( 4,974,140 $ 4,080,373 $ 1,022,227 $ 34,134 $ 7,736 $ 431,371 $ 10,549,981 $

Note 1: Refer to Note 8 for further information on property, plant and equipment pledged to others as collateral.

Note 2: No interest expense was capitalised on property, plant and equipment for the years ended December 31, 2022 and 2021.

~37~

－ (9) Lease transactions lessee

• A. The Group leases various assets including land, buildings, machinery and business vehicles. Rental contracts are typically made for periods of 3 to 20 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 comprise offices and parking lots. Lowvalue assets comprise foreign warehouse and dormitory.

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

Land Buildings and structures Transportation equipment (Business vehicles) Other equipment Land Buildings and structures Transportation equipment (Business vehicles) Other equipment	December31,2022 December31,2021 Bookvalue Bookvalue 276,732 $ 275,939 $ 161,715 8,007 480 801 7,059 8,787 445,986 $ 293,534 $ Years ended December 31	December31,2021
		Bookvalue
		275,939 $ 8,007 801 8,787
		293,534 $
	2022 Depreciationcharge 15,303 $ 8,908 321 1,728 26,260 $	2021
		Depreciation charge
		15,888 $ 297 224 1,729
		18,138 $

• D. The movements of right-of-use assets of the Group during 2022 and 2021 are as follows:

Buildings and Transportation equipment Other equipment Land structures (Businessvehicles) (Tank) Total At January 1 275,939 $ 8,007 $ 801 $ 8,787 $ 293,534 $ Additions 16,096 162,616 - - 178,712 Depreciation 15,303) ( 8,908) ( 321) ( 1,728) ( 26,260) ( At December 31 276,732 $ 161,715 $ 480 $ 7,059 $ 445,986 $ 2022			2022
					Total
					445,986 $

~38~

							2021
				Buildings and			Transportation equipment		Other equipment
		Land			structures	(Businessvehicles)			(Tank)		Total
At January 1	$	325,143		$	-	$	64	$	10,516	$	335,723
Additions		-			8,304		961		-		9,265
Lease modification	(	33,316)			-		-		-	(	33,316)
Depreciation	(	15,888)	(		297)	(	224)	(	1,729)	(	18,138)
At December 31	$	275,939		$	8,007	$	801	$	8,787	$	293,534

• 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 leases of low-value assets Gains arising from lease modifications	Years ended December 31
	2022 2021 8,008 $ 6,700 $ 2,465 2,694 10,664 11,908 - 3,509

• F. For the years ended December 31, 2022 and 2021, the Group’s total cash outflow for leases were $36,797 and $36,339, respectively.

(10) Leasing arrangements - lessor

• A. The Group leases various assets including buildings. Rental contracts are typically made for periods of 1 and 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

• B. For the years ended December 31, 2022 and 2021, the Group recognised rent income as follow, respectively, based on the operating lease agreement, which does not include variable lease payments.

Rent income	Years ended December31	Years ended December31
	2022 2,020 $	2021
		68,955 $

(11) Non-current assets held for sale

On November 5, 2020, the Group considered the efficiency and utilization of assets, and decided to dispose the 1F to 3F of the plant located in Southern Taiwan Science Park after the resolution of the Board of Directors. The disposal transaction amount was $2,768,264. The inspection was completed on April 23, 2021. The proceeds from disposal were collected in three installments amounting to $1,108,000, $554,000 and $1,106,264 which were received on November 23, 2020, February 2, 2021 and May 23, 2021, respectively. The transaction was completed in the second quarter of 2021 and the gain on disposal of non-current asset held for sale was $192,690.

~39~

(12) Other payables

Salary and bonus payable Payables for machinery and equipment Repairs and maintenance expense payable Utility expenses payable Import / export (customs) expense payable Others	December31,2022 December31,2021 85,662 $ 153,907 $ 114,687 99,887 68,923 58,484 20,448 19,411 4,333 5,069 67,588 64,421 361,641 $ 401,179 $

(13) Bonds payable

Bonds payable Less: Maturity within one year	December 31, 2022 1,500,000 $ - 1,500,000 $	December31,2021
		1,500,000 $ -
		1,500,000 $

• A. In order to fulfill working capital, the Board of Directors resolved to issue the 2017 first domestic private unsecured bonds A, B and C on October 27, 2017 at an issuance amount of NT$300 million, NT$ 600 million and NT$900 million, respectively. In October 2019, August 2020 and April 2021, the Group has paid off in advance, respectively.

• B. In order to fulfill working capital, the Board of Directors resolved to issue the first domestic secured ordinary bonds on May 5, 2021. The terms and conditions of the ordinary bonds were as follows:

• (a) Issuance amount: The total issuance amount was NT$900 million. The bonds were divided into A, B and C bonds amounting to NT$300 million each.

• (b) Face value: NT$1 million

• (c) Issuance price: Issued at full amount of face value on the issuance date.

• (d) The time limit of issuance: The issuance period for each bond is 5 years from July 5, 2021 to July 5, 2026.

• (e) The interest rate of bond and payments of interest: The interest rate of each bond is 0.51% fixed per annum. The simple interest is calculated and paid per year starting from the issuance date.

• (f) The repayment date and method: repayable at once on the maturity date.

• (g) Guarantee: A, B and C bonds are secured by a bank guarantee issued by Mega International Commercial Bank Co., Ltd., Hua Nan Bank Co., Ltd. and Taishin International Bank Co., Ltd., respectively, in accordance with the commissioned guarantee agreement and bondfulfilling guarantee obligation agreement individually signed by the three banks.

~40~

(h) Guarantee bank: Bank SinoPac Co., Ltd.

• C. In order to fulfill working capital, the Board of Directors resolved to issue the second domestic secured ordinary bonds on November 5, 2021. The terms and conditions of the ordinary bonds were as follows:

• (a) Issuance amount: NT$600 million

• (b) Face value: NT$1 million

• (c) Issuance price: Issued at full amount of face value on the issuance date.

• (d) The time limit of issuance: The issuance period is 5 years from November 26, 2021 to November 26, 2026.

• (e) The interest rate of bond and payments of interest: The interest rate is 0.57% fixed per annum. The simple interest is calculated and paid per year starting from the issuance date.

• (f) The repayment date and method: repayable at once on the maturity date.

• (g) Guarantee: The bonds are guaranteed by a bank guarantee issued by Taiwan Shin Kong Commercial Bank Co., Ltd. in accordance with the commissioned guarantee agreement and bond-fulfilling guarantee obligation agreement.

• (h) Guarantee bank: Taishin International Bank Co., Ltd.

- (14) Long term borrowings

Borrowingnature, period and repayment term	Coupon Rate		December	31, 2022
Land and buildings on Yixian Road, Sec. 2 pledged as
collateral for borrowings
NTD borrowings from Land Bank: the borrowing
period is 15 years and interest is payable monthly for
the first 3 years, principal is payable quarterly starting
from the 4th year until May 2033 (Note).	1.70%		$	1,813,913
Machinery and equipment pledged as collateral for
borrowings
NTD borrowings from Bank of Taiwan: the borrowing
period is 5 years and interest is payable monthly for
the first 2 years, principal is payable quarterly starting
from the 3rd year until October 2026.	1.79%			336,630
				2,150,543
Less: Current portion (including unamortised long-term		(		172,754)
borrowing cost)
			$	1,977,789

~41~

Borrowing nature, period and repayment term Coupon Rate December 31, 2021

Land and buildings on Yixian Road, Sec. 2 pledged as collateral for borrowings NTD borrowings from Land Bank: the borrowing period is 15 years and interest is payable monthly for the first 3 years, principal is payable quarterly starting from the 4th year until May 2033 (Note). 1.20% $ 2,886,667 Machinery and equipment pledged as collateral for borrowings NTD borrowings from Bank of Taiwan: the borrowing period is 5 years and interest is payable monthly for the first 2 years, principal is payable quarterly starting from the 3rd year until October 2026. 1.10% 336,630 3,223,297 Less: Current portion (including unamortised long-term ( 251,015) borrowing cost) $ 2,972,282

• Note: The Group has pledged certain property, plant and equipment as collateral for the above borrowing. On May 8, 2018, the Group entered into a loan for 15 years with Land Bank, for a facility of $4,160,000 and has repaid $1,100,000 and $900,000 in advance in December 2021 and January 2022, respectively.

(15) Pensions

• A. Effective July 1, 2005, the Group 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 Group contributes 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.

• B. The pension costs under the defined contribution pension plan of the Group for the years ended December 31, 2022 and 2021 were $13,508 and $14,006, respectively.

~42~

(16) Share capital

• A. As of December 31, 2022, the Company’s authorized capital was $20,000,000, consisting of 2 billion shares, and the paid-in capital was $8,069,485 with a par value of $10 (in dollars) per share.

Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:

		2022	2021
At January 1		806,949	806,949
Purchase of treasury shares	(	1,907)	-
At December 31		805,042	806,949

• B. In order to promote the development of strategy alliance, improve financial structure and fulfill working capital, the Company's shareholders, on May 24, 2022, resolved to increase capital in cash and issue common shares up to 80 million shares or increase capital through the issuance of global depository receipts. The Company will choose one or both methods, at a par value of NT$10 per share.

C. Treasury shares

• (a) On August 1, 2022, the Board of Directors of the Company resolved to repurchase the Company’s ordinary shares for transfer to employees. The expected number of shares to be repurchased was 20,000 thousand shares. The repurchase period was from August 2, 2022 to December 31, 2022, and the price range was between $6.59 (in dollars) and $14.57 (in dollars). The details are as follows:

dollars). The details are as follows:
Name of company holding the shares Reason for reacquisition The Company To be reissued to employees	December	31, 2022
	Number of shares	Carrying amount (Note)
	1,907	$ 18,264

Note: Excluding transaction cost.

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

~43~

(17) 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 common 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 capitalised mentioned above should not exceed 10% of the paidin capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(18) Retained earnings / Events after the balance sheet date

• A. Under the Company’s Articles of Incorporation, the annual earnings, if any, shall first be used to pay all taxes and offset accumulated deficit and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. Except for the distribution of cash dividends and bonus which the Board of Directors are authorised to resolve and then report to shareholders, others will be proposed by the Board of Directors and approved by the shareholders.

• B. According to the Articles of Incorporation, the Company shall consider to appropriate all of current undistributed earnings based on finance, business, operation and other factors. The appropriation of earnings can be in the form of cash dividend or stock dividend separately or both. The ratio of cash dividend shall not be lower than 20% of the total dividends distributed.

• C. 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.

• D. On February 20, 2023, the Board of Directors during its meeting resolved the following:

Legal reserve Reversal of special reserve	Year ended December31,2022
	Amount
	2,477 $ 90,461
	92,938 $

~44~

• E. The appropriations of 2021 and 2020 earnings as resolved by the shareholders on May 24, 2022 and July 26, 2021 are as follows:

				Years ended	December31	December31
		2021				2020
				Dividends				Dividends
				per share				per share
		Amount		(indollars)		Amount		(indollars)
Legal reserve	$	100,041			$	35,000
Reversal of special
reserve	(	6,457)			(	7,643)
Cash dividends		282,432	$	0.35		314,710	$	0.39
	$	376,016			$	342,067

(19) Operating revenue

		Years ended	December 31	December 31
		2022		2021
Revenue from contracts with customers
Touch sensors and related products	$	2,098,527	$	3,413,623
Revenue from hotel business		235,439		295,134
Rental revenue from property		70,872		67,065
Others		1,125		-
	$	2,405,963	$	3,775,822

Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services at a point in time in the following major geographical regions:

Revenue from external customer contracts South Korea China Taiwan Europe	Years endedDecember31	Years endedDecember31
	2022 1,130,362 $ 939,013 334,527 2,061 2,405,963 $	2021
		2,228,543 $ 1,130,920 415,915 444
		3,775,822 $

~45~

(20) Interest income

Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	Years endedDecember31	Years endedDecember31
	2022 10,867 $ 5,783 158 16,808 $	2021
		6,278 $ 3,957 136
		10,371 $

(21) Other income

Dividend income Research and development income (Note 1) Government grant revenues (Note 2) Revenue from purchasing masks on behalf of others Rent income (Note 3) Other income (Note 4)	Years endedDecember31	Years endedDecember31
	2022 52,972 $ 33,506 10,566 10,859 2,020 14,814 124,737 $	2021 20,888 $ - 19,213 19,209 68,955 48,333
		176,598 $

• Note 1: Represents the income from the design and process development entrusted by the Group’s associate, Hannstar Display Corp.

• Note 2: As the Group was affected by COVID-19, the Group applied for economic relief package and recognised grant revenue in the amount of $10,566 and $19,213 for the years ended December 31, 2022 and 2021.

Note 3: Refer to Note 6(10) for details.

• Note 4: Other income for the year ended December 31, 2021 mainly refers to compensation for the underground pipe construction in the factory provided by the Company and property income from leasing plants, totaling $28,263.

~46~

(22) Other gains and losses

			Years ended	December31	December31	December31
			2022			2021
Foreign exchange gains (losses)		$	40,227	($		3,622)
Losses on financial instruments at fair value
through profit or loss	(		17,831)	(		30,300)
Gains arising from lease modifications			-			3,509
Gains on disposal of non-current asset held for sale			-			192,690
(Losses) gains on disposals of property, plant and
equipment	(		1,681)			114
Other losses	(		425)	(		140)
		$	20,290		$	162,251

(23) Employee benefit expense and expenses by nature / Events after the balance sheet date

Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Other personnel expenses Depreciation charge Amortisation charge Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Other personnel expenses Depreciation charge Amortisation charge	Year ended December31,2022	Year ended December31,2022	Year ended December31,2022
	Operating costs Operating expenses Total 161,175 $ 85,872 $ 247,047 $ 20,913 8,329 29,242 9,235 4,273 13,508 23,246 10,165 33,411 871,921 9,756 881,677 7,183 4,217 11,400 YearendedDecember31,2021		Total
	Operatingcosts 231,464 $ 21,644 8,956 23,231 812,370 5,839	Operatingexpenses 158,118 $ 9,810 5,050 10,675 3,396 4,047	Total
			389,582 $ 31,454 14,006 33,906 815,766 9,886

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall be between 0.001% and 15% for employees’ compensation and shall not be higher than 2% for directors’ remuneration.

~47~

• B. For the years ended December 31, 2022 and 2021, employees’ compensation was accrued at $1 and $54,000, respectively; while directors’ remuneration was accrued at $0 and $19,600, respectively. The aforementioned amounts were recognised in salary expenses.

For the year ended December 31, 2022, the employees’ compensation and directors’ remuneration were estimated and accrued based on profit of current year distributable as of the end of reporting period as prescribed by the Company’s Articles of Incorporation. In addition, the employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors on February 20, 2023 were the same, and the employees’ compensation will be distributed in the form of cash.

Employees’ compensation and directors’ remuneration for 2021 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2021 financial statements.

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

(24) Income taxes

• A. Income tax (benefit) expense

• (a) Components of income tax expense:

			Years ended	December 31	December 31	December 31
			2022			2021
Current tax:
Current tax on profits for the year		$	102		$	-
Prior year income tax overestimation			-	(		825)
Total current tax			102	(		825)
Deferred tax:
Origination and reversal of temporary
differences	(		15,129)			234,865
Total deferred tax	(		15,129)			234,865
	($		15,027)		$	234,040

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

Changes in fair value of financial assets at fair value through other comprehensive income	Years endedDecember31	Years endedDecember31
	2022 - $	2021
		1,614 $

~48~

B. Reconciliation between income tax (benefit) expense and accounting profit

			Years ended	December31	December31	December31
			2022			2021
Income tax calculated by applying statutory		$	2,848		$	254,641
rate to the profit before tax
Expenses disallowed by tax regulation			132			-
Tax exempt income by tax regulation	(		14,459)	(		14,602)
Taxable loss not recognised as deferred tax assets	(		6,193)			-
Tax losses not recognised as deferred tax
assets			2,645			1,694
Use of prior year taxable loss not recognised
as deferred tax assets			-	(		6,868)
Prior year income tax over estimation			-	(		825)
	($		15,027)		$	234,040

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

At January1 Temporary differences: －Deferred tax assets: Provisions 2,197 $ Impairment loss 11,177 Inventory valuation loss 1,843 Loss carryforward 76,254 Others 4,806 96,277 －Deferred tax liabilities: Unrealised exchange gain 55) ( 96,222 $		Recognised in profit or loss Recognised in other comprehensive income AtDecember31 369) ($ - $ 1,828 $ - - 11,177 6,705 - 8,548 12,463 - 88,717 3,725) ( - 1,081 15,074 - 111,351 55 - - 15,129 $ - $ 111,351 $ 2022	Recognised in profit or loss Recognised in other comprehensive income AtDecember31 369) ($ - $ 1,828 $ - - 11,177 6,705 - 8,548 12,463 - 88,717 3,725) ( - 1,081 15,074 - 111,351 55 - - 15,129 $ - $ 111,351 $ 2022
		Recognised in profit or loss
		369) ($ - 6,705 12,463 3,725) ( 15,074 55 15,129 $

~49~

2021

At January1 Recognised in profit or loss Temporary differences: －Deferred tax assets: Provisions 4,161 $ 1,964) ($ Impairment loss 13,313 2,136) ( Inventory valuation loss 5,666 3,823) ( Unrealised loss on valuation of financial instruments 1,614 - Loss carryforward 308,726 232,472) ( Others - 4,806 333,480 235,589) ( －Deferred tax liabilities: Unrealised exchange gain 6) ( 49) ( Unrealised gain on valuation of financial instruments 773) ( 773 779) ( 724 332,701 $ 234,865) ($

Recognised in other comprehensive income AtDecember31 - $ 2,197 $ - 11,177 - 1,843 1,614) ( - - 76,254 - 4,806 1,614) ( 96,277 - 55) ( - - - 55) ( 1,614) ($ 96,222 $

• D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

	December31,2022	December31,2022
Year incurred 2014 2016 2017 2018 2019 2020 2021 2022	Amount filed/ assessed Unused amount 994,010 $ 88,720 $ 278,110 278,086 36 15 10,972 15 67,311 608 3,148 536 8,824 8,824 90,028 90,028	Unrecognised deferred tax assets - $ 24 15 15 608 536 8,824 13,226	Expiry year
			2024 2026 2027 2028 2029 2030 2031 2032

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December 31, 2021

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Amount filed/ Unrecognised
Year incurred assessed Unused amount deferred tax assets Expiry year
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Year incurre	d a	ssessed	Unu	sed amount	deferre	d taxassets	Expiry year
2014	$	994,010	$	94,039	$	-	2024
2016		278,110		278,086		24	2026
2017		36		15		15	2027
2018		10,972		15		15	2028
2019		67,311		7,376		608	2029
2020		2,936		2,936		536	2030
2021		8,471		8,471		8,471	2031

• E. The status of the Company’s and its subsidiaries’ income tax returns which were assessed by the tax authority are as follows:

	Assessment
The Company	2020
Glory Stone	2020
Golden Apple Investment	2020

(25) 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 Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year ended December31,2022	Year ended December31,2022
	Weighted average number of ordinary shares outstanding Amount aftertax (sharesinthousands) 24,772 $ 806,460 24,772 $ 806,460 - 532 24,772 $ 806,992	Earnings per share (indollars)
		0.03 $
		0.03 $

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

Year ended December 31, 2021
Weighted average
number of ordinary
shares outstanding Earnings per share
Basic earnings per share Amount after tax (shares in thousands) (in dollars)
Profit attributable to ordinary $ 1,000,398 806,949 $ 1.24
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary $ 1,000,398 806,949
shareholders of the parent
-
Employees’ bonus 3,617
Profit attributable to ordinary
shareholders of the parent
plus assumed conversion of
all dilutive potential
ordinary shares $ 1,000,398 810,566 $ 1.23
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(26) Supplemental cash flow information

A. Investing activities with partial cash payments

			Years ended	December 31	December 31	December 31
			2022			2021
Purchase of property, plant and equipment		$	589,085		$	494,505
Add: Opening balance of payable on equipment			99,887			53,070
Less: Ending balance of payable on equipment	(		114,687)	(		99,887)
Cash paid during the year		$	574,285		$	447,688

(27) Changes in liabilities from financing activities

For the years ended December 31, 2022 and 2021, the Group’s liabilities from financing activities included short-term borrowings, dividends payable, bonds payable, long-term borrowings and lease liabilities. The changes all pertain to changes in the financing cash flow and other non-cash changes, the aggregate amounts were as follows. Refer to statements of cash flows for other information.

At January 1 Changes in cash flow from financing activities Changes in other non-cash items At December 31		2022

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				2021	2021
				Long-term		Lease		Liabilities from
		Bonds		borrowings		liability			financing
		payable		(Note)		(Note)		activities-gross
At January 1	$	900,000	$	4,760,000	$	342,765	$		6,002,765
Changes in cash flow from financing activities		600,000	(	1,536,703)	(	21,737)	(		958,440)
Changes in other non-cash items		-		-	(	20,920)	(		20,920)
At December 31	$	1,500,000	$	3,223,297	$	300,108	$		5,023,405

Note: Including current portion.

(28) Transactions with non-controlling interest

• A. The Group and non-controlling shareholders established a subsidiary, Pottery Inc. (formerly known as Han Yu Chu Co., Ltd.) in April 2022, and non-controlling equity shareholders’ investment amount was $28,500. In addition, the Group’s subsidiary, Glory Stone, paid cash dividends to non-controlling interest amounting to $15,570 in June 2022.

• B. In August 2021, the shareholders of the Group’s non-controlling interest increased its investment in the Group’s subsidiary, Glory Stone Inc., in the amount of $270,000. The shareholding ratio remained unchanged after the investment.

7. Related Party Transactions

(1) Names of related parties and relationship with the Group

Names of relatedparties	Relationship with theGroup
HannStar Display Corporation (Hannstar)	Entities with significant influence to the Group
Hannstar Technology Services (Shenzhen)	Other related party
Inc. (Hannstar Technology)
Hannstar Foundation	Other related party

(2) Significant related party transactions

• A. Operating revenue

Revenue from sales and rooms Entities with significant influence to the Group Other related party	Years ended December 31	Years ended December 31
	2022 5,085 $ 275 5,360 $	2021
		40,240 $ -
		40,240 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

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B. Purchases

	Years ended	December31
	2022	2021
Purchases of goods:
Entities with significant influence to the Group	21,425 $	5,518 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

C. Operating expenses

Rent expense Other related party Entities with significant influence to the Group	Years ended December31	Years ended December31
	2022 2021 2,389 $ - $ Years ended December31	2021
		- $
	2022 9,758 $	2021
		10,523 $

• D. Rent expense

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

E. Interest expenses

Receivables from related parties Enities with significant influence to the Group Accounts receivable: Entities with significant influence to the Group Other related party Other receivables: Entities with significant influence to the Group	Years endedDecember31	Years endedDecember31
	2022 - $ December31,2022 109 $ 8 117 $ - $	2021
		5,986 $
		December31,2021
		184 $ -
		184 $
		1,074 $

• F. Receivables from related parties

~54~

G. Payables to related parties

Accounts payable: Entities with significant influence to the Group Other payables: Entities with significant influence to the Group	December31,2022 December31,2021 13,058 $ - $ 40 $ 1,194 $

H. Property transactions:

Disposal of property, plant and equipment

Entities with significant influence to the Group	Disposal Disposal proceeds Gain proceeds Gain - $ - $ 2,768,284 $ 192,702 $ Years ended December31 2022 2021
	Disposal proceeds - $

• I. The design and process development income from entities with significant influence to the Group for the years ended December 31, 2022 and 2021 amounted to $33,506 and $0, respectively.

(3) Key management compensation

Salaries and other short-term employee benefits	Years ended December 31	Years ended December 31
	2022 27,022 $	2021
		39,444 $

8. Pledged Assets

The Group’s assets pledged for the purpose of long-term borrowings, notes, customs duty on raw material imports and performance bond are as follows:

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Book value
Pledged asset December 31, 2022 December 31, 2021
----- End of picture text -----

Pledged asset	December31,2022	December31,2021
Pledged time deposits (shown as other financial assets) Demand deposits (shown as other financial assets) Property, plant and equipment	28,919 $ 16,112 5,488,679 5,533,710 $	28,919 $ 16,038 5,144,468
		5,189,425 $

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9. Significant Contingent Liabilities and Unrecognised Contract Commitments

As of December 31, 2022, significant commitments and contingencies are outlined as follows:

(1) Contingencies

In November 2013, the Tainan District Prosecutors Office initiated the prosecution proceedings against the Company and the Company’s former Directors and financial managers suspected of false reporting, increasing the contract prices of construction projects, purchasing scrapped equipment, misappropriating deposits, receiving kickbacks, hollowing out the Company's assets and breach of trust under the Securities and Exchange Act, Criminal Code, Business Entity Accounting Act and Tax Collection Act and other crimes. In December 2016, the Criminal court of Tainan District Court has rendered its decision that the Company is innocent. In March 2019, the second instance court has found the other defendants guilty. However, in November 2020, the third instance court remanded certain part of the cases back to the second instance court, and the criminal cases were pending with the Tainan Branch of the Taiwan High Court. Further, the Company filed incidental civil lawsuits against other defendants suspected of the criminal case. The first instance court and the second instance court have rendered its judgment whereby the Company partly won in some of the cases. In September 2022, the Company filed appeals to the third instance, and the former incidental civil lawsuits are pending with the Supreme Court. As the construction and equipment had been derecognised from past financial statements through depreciation, impairment and loss from disposal, the above cases have no significant effect on the Company’s financial situation.

(2) Commitments

• A. As of December 31, 2022, the Group’s capital expenditure contracted for at the balance sheet date but not incurred amounted to $293,653.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

• (1) Refer to Notes 6(18) and 6(23) for details.

• (2) On February 20, 2023, the Company planned to change its name to “精金科技股份有限公司” and English name as “ HannsTouch Solutions & Investments Corporation. ”

• (3) On February 20, 2023, the Company’s board of directors resolved not to proceed with the capital increase by cash through the issuance of up to 80 million shares of stock either through private placement or public offering, as resolved by the shareholders during their meeting last May 24, 2022 for the purpose of developing strategic alliances, increasing working capital, etc. However, in order for the Company to have the flexibility to respond to changes in the industry and the economy, and in line with the practice of the competent authority to review the plans of companies to raise capital, the Company’s board of directors proposed another resolution for the capital increase.

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• (4) For the purpose of developing strategic alliances and increasing working capital, the Company’s board of directors during its meeting on February 20, 2023 resolved to increase capital through the issuance of up to 80 million shares of stock or depository receipts with a proposed denomination of NT$10 per share through private placement or public offering.

• (5) On February 20, 2023, the Board of Directors of the Company resolved to retire the treasury shares acquired in 2022 that have not been transferred to employees. The effective date for retirement of untransferred treasury shares was set on March 30, 2023, and the chairman of the board has been authorised to handle the registration of the capital reduction as a result of the retirement of the treasury shares.

• (6) On February 20, 2023, the Board of Directors of the Company resolved to repurchase the Company’s ordinary shares for transfer to employees. The expected number of shares to be repurchased was 5,000 thousand shares. The repurchase period was from February 21, 2022 to April 20, 2023, and the price range was between $6.8 (in dollars) and $13 (in dollars).

• (7) On February 20, 2023, the Company’s Board of Directors resolved to purchase common shares of Hannstar Display Corp. in batches from open market with the aggregate amount of up to $1,500,000.

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. To maintain or adjust the capital structure, the Company adjusted the capital structure through the issuance of new shares to borrow or repay loans.

~57~

(2) Financial instruments

A. Financial instruments by category

December 31, 2022 December 31, 2021

Financial assets

Financial assets	December31,2022	December31,2021
Financial assets at fair value through profit or loss (current and non-current) Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost (current and non-current) Accounts receivable (including related parties) Other receivables (including related parties) Other financial assets Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading Financial liabilities at amortised cost Notes payable Accounts payable (including related parties) Other payables (including related parties) Bonds payable (Note) Long-term borrowings (Note) Lease liability (Note)	319,359 $ 553,821 $ 1,814,501 $ 917,934 293,071 15,615 45,031 3,086,152 $ - $ 502 $ 154,427 361,681 1,500,000 2,150,543 4,167,153 $ 463,160 $	167,216 $
		778,137 $
		1,843,653 $ 2,255,907 328,509 11,409 44,957 4,484,435 $
		8 $
		1,703 $ 159,990 402,373 1,500,000 3,223,297
		5,287,363 $
		300,108 $

Note: Including current portion.

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Group, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk.

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• (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Exchange rate 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 JPY. Foreign exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is measured through a forecast of highly probable USD and JPY expenditures. Forward foreign exchange contracts are adopted to minimise the volatility of the exchange rate affecting cost of forecast inventory purchases.

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

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December 31, 2022
Book value Sensitivity analysis
Foreign currency Effect on Effect on other
amount Exchange Degree of profit comprehensive
(In thousands) rate (NTD) variation or loss income
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD $ 11,121 30.715 $ 341,582 1% $ 3,416 $ -
JPY:NTD 79,482 0.2325 18,480 1% 185 -
Financial liabilities
Monetary items
USD:NTD 1,073 30.715 32,957 1% 330 -
JPY:NTD 207,559 0.2325 48,257 1% 483 -
December 31, 2021
Book value Sensitivity analysis
Foreign currency Effect on Effect on other
amount Exchange Degree of profit comprehensive
(In thousands) rate (NTD) variation or loss income
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD $ 10,758 27.680 $ 297,781 1% $ 2,978 $ -
JPY:NTD 79,282 0.2404 19,059 1% 191 -
Financial liabilities
Monetary items
USD:NTD 2,683 27.680 74,265 1% 743 -
JPY:NTD 82,885 0.2404 19,926 1% 199 -
----- End of picture text -----

• iv. Total exchange gain (loss), including realised and unrealised, 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 $40,227 and ($3,622), respectively.

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’s investments in equity securities and funds comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased / decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2022 and 2021 would have increased / decreased by $3,194 and $1,669, respectively. Other components of equity would have increased / decreased by $5,538 and $7,781, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

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Cash flow and fair value interest rate risk

The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. Group policy is to maintain at least 1~3% of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 2022 and 2021, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars.

(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 the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost, at fair value through profit or loss.

• ii. The Group adopts the assumption that the default occurs when the contract payments are past due over 120 days.

• iii. The Group adopts the following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• 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 reorganisation 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.

• v. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. On December 31, 2022 and 2021, the Group had no written-off financial assets that are still under recourse procedures.

• vi. The methods used by the Group in assessing the expected credit risk of accounts receivable were as follows:

• (i) Individually estimated expected credit loss according to individual significant accounts receivable which are considered on default;

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• (ii) Other customers’ accounts receivable were classified based on the Group's credit rating standards. The Group applies different loss rate methodology and provision matrix to estimate the expected credit loss of different groups.

• (iii) Loss rates are calculated based on past and current information, taking into account forward-looking information provided by the Basel Committee on Banking Supervision.

• (iv) On December 31, 2022 and 2021, the provision loss for accounts receivable which were individually estimated by loss rate methodology and provision matrix were as follows:

December 31, 2022 Expected loss rate Total book value December 31, 2021 Expected loss rate Total book value	Group1 0.03%~100% - $ Group1 0.03%~100% - $	Group2 0.03% 293,044 $ Group2 0.03% 328,425 $	Total
			293,044 $
			Total
			328,425 $

• Group 1: For customers with impairment indications, individual expected credit loss is determined through considering the claim order of insurance and debts.

Group 2: Long-term customers with good credit history.

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

2022 Accountsreceivable At January 1 100 $ Provision for impairment - Reversal of impairment loss 10) ( At December 31 90 $	2021
	Accountsreceivable
	89 $ 11 -
	100 $

(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 borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing

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facilities. Such forecasting takes into consideration the Group’s financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.

• ii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities were as follows:

Non-derivative financial liabilities:

December 31, 2022 Notes payable Accounts payable (including related parties) Other payables (including related parties) Current tax liabilities Lease liability Other current liabilities Bonds payable Long-term borrowings December 31, 2021 Notes payable Accounts payable (including related parties) Other payables (including related parties) Current tax liabilities Lease liability Other current liabilities Bonds payable Long-term borrowings Derivative financial liabilities : Forward foreign exchange contracts	Less than 1year 502 $ 154,427 361,681 103 30,009 6,652 8,010 208,271 Less than 1year 1,703 $ 159,990 402,373 24,844 15,179 41,631 8,010 287,969 8 $	Between 2 and3 years - $ - - - 63,039 - 16,020 628,004 Between 2 and3 years - $ - - - 31,208 - 16,020 678,443 - $	Between 3and 4years - $ - - - 63,915 - 1,508,010 497,005 Between 3and 4years - $ - - - 32,132 - 1,516,020 774,232 - $	Over 5 years
				- $ - - - 306,197 - - 995,193 Over 5 years
				- $ - - - 221,589 - - 1,695,989 - $

• iii. In order to repay the borrowings, the Group plans to issue share of stocks through public offering or private placement. Refer to Note 6(16)C for details.

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(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. An active market refers to a market in which transactions for an asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is 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 forward foreign exchange contracts is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market and beneficiary certificates is included in Level 3.

• B. Financial instruments not measured at fair value

Except for those listed in the table below, the carrying amounts of cash and cash equivalents, financial assets at amortised cost, accounts receivable (including related parties), other receivables (including related parties), other financial assets - current, notes payable, accounts payable (including related parties), other payables (including related parties) and lease liabilities are approximate to their fair values.

Financial liabilities: Bonds payable Long-term borrowings (Note) Financial liabilities: Bonds payable Long-term borrowings (Note)		December	31, 2022
	Bookvalue 1,500,000 $ 2,150,543 3,650,543 $		Fairvalue
		Level 1 - $ - - $ December	Level 2 1,262,123 $ - 1,262,123 $ 31,2021	Level3
				- $ 1,858,726
				1,858,726 $
	Bookvalue 1,500,000 $ 3,223,297 4,723,297 $		Fairvalue
		Level 1 - $ - - $	Level 2 1,238,489 $ - 1,238,489 $	Level3
				- $ 2,719,194
				2,719,194 $

Note: Including current portion.

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• C. Financial and non-financial instruments measured at fair value

• (a) The related information on 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 at December 31, 2022 and 2021 are as follows:

December 31, 2022 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks Beneficiary certificates Unlisted stocks Non-hedging derivatives Financial assets at fair value through other comprehensive income Listed and emerging stocks December 31, 2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks Beneficiary certificates Unlisted stocks Non-hedging derivatives Financial assets at fair value through other comprehensive income Listed and emerging stocks Liabilities Recurring fair value measurements Financial liabilities at fair value through other comprehensive income Listed and emerging stocks	Level 1 123,121 $ - - - 553,821 676,942 $ 53,697 $ - - - 778,137 831,834 $ - $	Level 2 - $ - - 48 - 48 $ - $ - - 363 - 363 $ 8 $	Level3 - $ 105,171 91,019 - - 196,190 $ - $ 55,483 57,673 - - 113,156 $ - $	Total
				123,121 $ 105,171 91,019 48 553,821
				873,180 $
				53,697 $ 55,483 57,673 363 778,137
				945,353 $
				8 $

• (b) The methods and assumptions the Group used to measure fair value are as follows:

• i. For the instruments the Group used market quoted prices as their fair values (that is, Level 1), the Group uses the closing price of the listed shares as fair value.

~65~

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• D. On December 31, 2022 and 2021, there was no transfer between Level 1 and Level 2.

• E. For the years ended December 31, 2022 and 2021, there was no transfer into or out from Level 3.

• F. Finance and accounting segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. The Group’s finance and accounting department use valuation methods and assumptions announced by the Financial Supervisory Commission, Securities and Futures Bureau or through outsourced appraisal performed by the external valuer to assess non-current assets held for sale.

• H. 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:

	December 31, 2022	December 31, 2022	Valuation	Significant	Range (weighted	Relationship of
		Fair value	technique	unobservable input	average)	inputs to fair value
Non-derivative equity	instrument:
Unlisted shares	$	91,019	Market	Price book ratio	0.17~5.02	The higher the multiple
			comparable	multiplier, discount		and control premium, the
			companies	for lack of		higher the fair value;
				marketability		the higher the discount for
						lack of marketability, the
						lower the fair value
Private equity		105,171	Net asset value	Not applicable	Not applicable	Not applicable
fund investment

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December 31, 2021 Valuation Significant Range (weighted Relationship of
Fair value technique unobservable input average) inputs to fair value
Non-derivative equity instrument:
Unlisted shares $ 57,673 Market Price book ratio 0.23~2.00 The higher the multiple
comparable multiplier, discount and control premium, the
companies for lack of higher the fair value;
marketability the higher the discount for
lack of marketability, the
lower the fair value
Private equity 55,483 Net asset value Not applicable Not applicable Not applicable
fund investment
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(4) Other matter

The Group has complied with the relevant measures announced by the Central Epidemic Command Centre and the relevant epidemic prevention regulations of the Communicable Disease Control Act. There was no significant impact on the Group’s operations, its ability to continue as a going concern and financing risks as a result of the COVID-19 pandemic and the various epidemic prevention measures imposed by the government. Based on the Group’s assessment, the pandemic had no significant impact on the Group’s overall operations and financial position.

13. Supplementary Disclosures

(1) Significant transactions information

• A. Loans to others: Refer to table 1.

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Refer to table 2.

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

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

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

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: None.

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

• I. Trading in derivative instruments undertaken during the reporting period: Please refer to Notes 6(2).

• J. Significant inter-company transactions during the reporting periods: None.

~67~

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Refer to table 3.

(3) Information on investments in Mainland China

• A. Basic information: Refer to table 4.

• 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: Refer to Table 5.

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.

(2) Measurement of segment information

The Group measures operating segment revenue and net operating profit or loss, and the Company has eliminated the impact of inter-segment transactions.

(3) Measurement of segment information

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

is as follows:
Manufacturing of touch production Revenue from external customers 2,098,527 $ Inter-segment revenue - Total segment revenue 2,098,527 $ Segment operating income (loss) 174,484) ($ Segment operating income (loss), including: Depreciation and amortisation 806,684 $		Year ended December31,2022
		Hotelbusiness 235,439 $ 1,253 236,692 $ 12,605 $ 116,840 $

~68~

Manufacturing of touch production Revenue from external customers 3,413,623 $ Inter-segment revenue - Total segment revenue 3,413,623 $ Segment operating income (loss) 865,933 $ Segment operating income (loss), including: Depreciation and amortisation 748,474 $	Adjustment and Hotel business Others write-offs 295,134 $ 67,065 $ - $ 18,089 78,956 97,045) ( 313,223 $ 146,021 $ 97,045) ($ 72,833 $ 57,881 $ 6,658 $ 113,264 $ 37,587 $ 73,673) ($ Year ended December31,2021	Total 3,775,822 $ -
		3,775,822 $
		1,003,305 $
		825,652 $

(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:

			Years ended	December 31	December 31
			2022		2021
Reportable segments income / (loss)	($		161,879)	$	938,766
Other segments income / (loss)			65,135		64,539
Total segments	(		96,744)		1,003,305
Non-operating income and expenses			110,982		278,680
Income before tax from continuing operations		$	14,238	$	1,281,985

(5) Geographical information

South Korea China Taiwan Europe	Years endedDecember31	Years endedDecember31	Years endedDecember31
	Non-current Revenue assets 1,130,362 $ - $ 939,013 - 334,527 10,762,960 2,061 - 2,405,963 $ 10,762,960 $ 2022	2021
	Revenue 1,130,362 $ 939,013 334,527 2,061 2,405,963 $	Revenue 2,228,543 $ 1,130,920 415,915 444 3,775,822 $	Non-current assets
			- $ - 10,861,653 -
			10,861,653 $

~69~

(6) Major customer information

			Years ended	December31	December31
		2022			2021
		Revenue	Location		Revenue	Location
A	$	1,128,983	South Korea	$	2,227,200	South Korea
B		620,062	China		657,499	China

~70~

HannsTouch Solution Incorporated and Subsidiaries

Loans to others

Year ended December 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 1

Maximum outstanding balance during the year General ended Balance at Amount of Allowance Limit on loans Ceiling on ledger Is a December December transactions Reason for granted to total loans No. account related 31, 2022 31, 2022 Actual amount Interest Nature of with the for short-term doubtful Collateral a single party granted （Note 1） Creditor Borrower （Note 2） party （Note 3） （Note 3） drawn down rate loan borrower financing accounts Item Value （Note 4） （Note 5） Note 0 HannsTouch Glory Stone Other Yes $ 200,000 $ 200,000 $ - Undetermined Necessary $ - Increase working $ - None $ - $ 1,953,371 $ 2,930,056 Note 4, 5 Solution Co., Ltd. receivables for shortcapital Incorporated due from term related financing parties

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: Fill in the name of account in which the loans are recognised, such as receivables–related parties, current account with stockholders, prepayments, temporary payments, etc. Note 3: The upper limit of capital loan and balance of capital loans in the end of the year are the amount approved by the Board of Directors, not actual drawn amount. Note 4: The limit of HannsTouch Solution Incorporated loans to individual who has the needs of short-term financing shall not exceed 20% of the net asset value of latest financial statements. Note 5: The total loans amount of HannsTouch Solution Incorporated shall not exceed 30% of net asset value.

Table 1

HannsTouch Solution Incorporated and Subsidiaries

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

December 31, 2022

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

Table 2

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		Ending	Balance		Note
				Number of shares (in thousands)	Book value	Ownership (%)	Fair value (Note)
HannsTouch Solution Incorporated Golden Apple Investment Corporation Glory Stone Inc.	Stock HIM International Music Inc. Union Bank of Taiwan Preferred Stock A Banyan Tree Holding Limited Fullerton Technology co., Ltd. ATEN INTERNATIONAL CO., LTD. YH Bio Co., Ltd. Touch Cloud Inc Nfore Technology Co., Ltd. BORETECH Resource Recovery Engineering CO., Hannstar Display Corp. Bonds NISSAN MOTOR CO LTD FINA FINANCE & TRADING CO., LTD. Benefit certificate Lian Ding Capital Co., Ltd. Grandfull Convergence Innovation Growth Fund, L.P..C. Cypress Venture Capital III Ltd. Stock Chaiin Hotel Co., Ltd. Bonds FINA FINANCE & TRADING CO., LTD.	None 〞 〞 〞 〞 〞 〞 〞 〞 Other related parties None 〞 None 〞 〞 None None	Financial assets at fair value through profit or loss - current 〞 〞 〞 〞 〞 〞 Financial assets at fair value through profit or loss - non-current 〞 Financial assets at fair value through other comprehensive income- non-current Financial assets at amortised cost – non- current 〞 Financial assets at fair value through profit or loss - non-current 〞 〞 Financial assets at fair value through other comprehensive income- current Financial assets at amortised cost – non- current	191 466 2,990 3,209 44 6,973 250 1,000 425 49,670 1,250 units 50,000 units Not applicable Not applicable Not applicable 2,100 50,000 units	15,490 $ 24,092 21,885 58,244 3,410 7,917 878	0.36% Not applicable 0.35% 2.78% 0.04% 3.40% 1.88% 2.86% 0.65% 1.74% Not applicable Not applicable Not applicable Not applicable Not applicable 19.00% Not applicable	15,490 $ 24,092 21,885 58,244 3,410 7,917 878 47,573 $ 25,214 553,821 $ 36,934 $ 50,000 57,095 $ 29,553 18,523 9,437 $ 50,000 $
					131,916 $
					47,573 $ 25,214
					72,787 $
					553,821 $
					36,934 $ 50,000
					86,934 $
					57,095 $ 29,553 18,523
					105,171 $
					9,437 $
					50,000 $

Note: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Table 2

Table 3

Hannstouch Solution Incorporated and Subsidiaries

Information on investees

Year ended December 31, 2022

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

Investor	Investee （Notes 1 and 2）	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December31,2022	Shares held as at December31,2022	Shares held as at December31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December31,2022	Note
				Balance as at December31,2022	Balance as at December31,2021	Number of shares	Ownership (%)	Bookvalue
HannsTouch Solution Incorporated 〞 〞 〞 〞 Glory Stone Co., Ltd. 〞 Yin Wang Investment Corporation	Richest Investment Ltd. Golden Apple Investment Corporation Glory Stone Co., Ltd. Yin Wang Investment Corporation Hanns Blegrain Ltd. Xiao Ma Yin Meng Co., Ltd. Pottery Inc. Pottery Inc.	Cayman Islands Taiwan Taiwan Taiwan Cayman Islands Taiwan Taiwan Taiwan	Investment Investment Hotel business Investment Investment Food service Food service Food service	148,434 $ 150,000 406,582 150,000 30,695 10,200 76,500 45,000	148,434 $ 150,000 418,000 150,000 - 10,200 - -	4,500 15,000 33,000 15,000 1,000 1,020 7,650 4,500	100.00 100.00 42.31 100.00 100.00 51.00 51.00 30.00	- $ 121,455 457,734 149,182 30,714 7,759 74,663 43,919	- $ 1,737) ( 27,616 919) ( 1) ( 4,670) ( 3,602) ( 3,602) (	- $ 1,737) ( 10,318 820) ( 1) ( 2,307) ( 1,837) ( 1,081) (	Note 1 〞 〞 〞 〞 Note 2 〞 〞

Note 1: The Company’s subsidiary.

Note 2: The Company’s second tier subsidiary.

Table 3

Hannstouch Solution Incorporated and Subsidiaries

Information on investments in Mainland China

Year ended December 31, 2022

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

Table 4

Investee in Mainland China	Main business activities	Paid-in capital （Note1）	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2022	endedDecember31,2022 Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year	endedDecember31,2022 Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2022	Net income of investee for the year ended December31,2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2022	Book value of investments in Mainland China as of December 31, 2022(Note 3)	Accumulated amount of investment income remitted back to Taiwan as of December31,2022	Note
					Remitted to Mainland China	Remitted back toTaiwan
NanJin GuanXin Co. Ltd. HeXin Shang Mao Technology Service (Shenzhen) Ltd.	Development and production of PMMA, light guide plate and related components Provision of technical services	$ 469,950 29,179	Note 2 Note 3	$ 148,434 -	$ - 29,179	$ - -	$ 148,434 29,179	$ - -	31.12 100.00	$ - -	$ - 29,179	$ - -	Note 4

Accumulated amount of remittance from Taiwan to Investment amount approved by the Ceiling on investments in Mainland Mainland China as Investment Commission of the China imposed by the Investment of December 31, 2022 Ministry of Economic Affairs Commission of Company name (Note 5) (MOEA) MOEA HannsTouch Solution Incorporated $ 1,819,128 $ 1,721,665 $ 6,228,731

Note 1: Translated from historical exchange rate. Note 2: Reinvested through Richest Investment Ltd. Note 3: Reinvested through Hanns Blegrain Ltd. Note 4: In 2013, the Company’s investment in NanJin GuanXin Co. Ltd. has been reduced to $0. Note 5: NTD amount was translated from historical exchange rate of actual remittance.

Table 4

HannsTouch Solution Incorporated and Subsidiaries

Major shareholders information

December 31, 2022

Table 5

Name of major shareholders	Shares	Shares
	Number of shares held(shares in thousands)	Ownership (%)
Hannstar Display Corp. Huali Investment Corp.	214,639 59,440	26.59% 7.36%

Table 5