HK — Audit Report / Information 2022

Nov 14, 2022

Hold-Key Electric Wire & Cable Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2022 and 2021 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2022 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard No. 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD.

By

March 24, 2023

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Hold-Key Electric Wire & Cable Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Hold-Key Electric Wire & Cable Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

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

Basis for Opinion

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

Key Audit Matters

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

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Revenue Recognition

The Group’s revenue, which comes from sales of wires and cables to domestic contractors, is recognized upon the customers’ acceptance of the products based on the agreed upon conditions. Since the amount of such revenue is significant to the consolidated financial statements, we considered the occurrence of such revenue as a key audit matter for the year ended December 31, 2022.

To address this matter, we evaluated the Group’s revenue recognition policy and the design and implementation of internal controls for such revenue and conducted the relevant internal control test and substantive test. We selected samples of such recorded sales revenue and verified them against the contract, customers’ acceptance documents, sales orders, invoices, etc., and confirmed the occurrence of this type of revenue transactions.

Other Matter

We have also audited the financial statements of Hold-Key Electric Wire & Cable Co., Ltd. as of and for the years ended December 31, 2022 and 2021, on which we have issued an unmodified opinion.

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

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

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

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

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.

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

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

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

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

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

5. 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.

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

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

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

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

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The engagement partners on the audits resulting in this independent auditors’ report are Tza-Li Gung and Wen-Yuan Chuang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 24, 2023

Notice to Readers

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

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

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HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - current (Notes 4 and 8) Financial assets at amortized cost - current (Notes 4, 9 and 29) Contract assets - current (Notes 4 and 22) Notes receivable (Notes 4, 10, 22 and 28) Trade receivables (Notes 4, 10, 22 and 28) Other receivables (Note 10) Inventories (Notes 4, 5 and 11) Other current assets (Note 17) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8) Contract assets - non-current (Notes 4 and 22) Property, plant and equipment (Notes 4, 14 and 29) Right-of-use assets (Notes 4 and 15) Investment properties (Notes 4, 16 and 29) Deferred tax assets (Notes 4, 5 and 24) Other non-current assets (Note 17) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 4 and 18) Contract liabilities - current (Notes 4 and 22) Notes payable Trade payables to unrelated parties Trade payables to related parties (Note 28) Other payables (Note 19) Current tax liabilities (Notes 4 and 24) Lease liabilities - current (Notes 4 and 15) Other current liabilities (Note 19) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 24) Lease liabilities - non-current (Notes 4 and 15) Other non-current liabilities (Notes 19, 20 and 28) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT (Notes 4, 8 and 21) Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized valuation gain on financial assets at fair value through other comprehensive income Total other equity Total equity attributable to owners of the parent TOTAL		2022 Amount % $ 145,087 3 176,715 4 96,614 2 28,407 1 269,035 6 26,416 - 460,694 9 6,274 - 1,048,506 22 62,912 1 2,320,660 48 805,741 17 46,660 1 1,309,001 27 10,127 - 272,898 6 23,592 - 42,839 1 2,510,858 52 $ 4,831,518 100 $ 149,319 3 31,585 1 445 - 162,919 3 23,944 - 86,889 2 27,666 1 4,787 - 2,511 - 490,065 10 4,394 - 5,416 - 31,173 1 40,983 1 531,048 11 1,926,917 40 234,910 5 358,541 7 1,630,983 34 1,989,524 41 6,875 - 142,244 3 149,119 3 4,300,470 89 $ 4,831,518 100		2021
				Amount % $ 176,505 4 157,113 3 93,689 2 28,408 1 267,778 6 36,115 1 303,131 7 10,953 - 906,904 20 12,838 - 1,993,434 44 905,744 20 - - 1,345,559 30 12,312 - 289,931 6 24,517 - 11,938 - 2,590,001 56 $ 4,583,435 100 $ - - 29,244 1 429 - 128,715 2 15,476 - 84,038 2 33,319 1 4,769 - 2,462 - 298,452 6 474 - 7,608 - 36,033 1 44,115 1 342,567 7 1,926,917 42 283,083 6 332,672 7 1,453,006 32 1,785,678 39 6,259 - 238,931 6 245,190 6 4,240,868 93 $ 4,583,435 100

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

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HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 22, 28 and 35) OPERATING COSTS (Notes 11, 20, 23 and 28) GROSS PROFIT OPERATING EXPENSES (Notes 20, 23 and 28) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income (Notes 23 and 35) Other income (Notes 23 and 35) Other gains and losses (Notes 13, 23 and 35) Finance costs (Notes 23 and 35) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4, 5 and 24) NET PROFIT FOR THE YEAR		2022 Amount % $ 2,864,412 100 2,542,078 89 322,334 11 49,004 2 46,086 1 3,564 - 98,654 3 223,680 8 701 - 57,288 2 24,293 - (1,603) - 80,679 2 304,359 10 56,282 2 248,077 8		2021
				Amount % $ 2,803,841 100 2,458,739 88 345,102 12 47,814 2 41,540 1 4,888 - 94,242 3 250,860 9 1,525 - 42,452 1 (3,683) - (215) - 40,079 1 290,939 10 58,023 2 232,916 8 (Continued)

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HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized loss on investments in equity instruments at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 25) Basic Diluted		2022 Amount % $ 2,210 - (94,955) (3) 616 - (92,129) (3) $ 155,948 5 $ 1.29 $ 1.28		2021
				Amount % $ (1,237) - (48,835) (2) 454 - (49,618) (2) $ 183,298 6 $ 1.04 $ 1.04
		$		$

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

(Concluded)

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HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES

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

Share Capital Capital Surplus BALANCE AT JANUARY 1, 2021 $ 2,408,647 $ 359,377 Appropriation of the 2020 earnings Legal reserve - - Special reserve - - Issuance of cash dividends from capital surplus - (72,259) Capital reduction (481,730) - Disposal of investments accounted for using the equity method - (4,035) Net profit for the year ended December 31, 2021 - - Other comprehensive income (loss) for the year ended December 31, 2021, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2021 - - Disposals of investments in equity instruments designated as at fair value through other comprehensive income - - BALANCE AT DECEMBER 31, 2021 1,926,917 283,083 Appropriation of the 2021 earnings Legal reserve - - Cash dividends to shareholders - - Issuance of cash dividends from capital surplus - (48,173) Net profit for the year ended December 31, 2022 - - Other comprehensive income (loss) for the year ended December 31, 2022, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2022 - - Disposals of investments in equity instruments designated as at fair value through other comprehensive income - - BALANCE AT DECEMBER 31, 2022 $ 1,926,917 $ 234,910	Retained Earnings	Total $ 1,526,992 - - - - - 232,916 (1,237) 231,679 27,007 1,785,678 - (48,173) - 248,077 2,210 250,287 1,732 $ 1,989,524	Other Equity	Total $ 320,578 - - - - - - (48,381) (48,381) (27,007) 245,190 - - - - (94,339) (94,339) (1,732) $ 149,119	Total Equity $ 4,615,594 - - (72,259) (481,730) (4,035) 232,916 (49,618) 183,298 - 4,240,868 - (48,173) (48,173) 248,077 (92,129) 155,948 - $ 4,300,470
			Exchange Differences on Translating Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Foreign Operations Comprehensive Income $ 5,805 $ 314,773 - - - - - - - - - - - - 454 (48,835) 454 (48,835) - (27,007) 6,259 238,931 - - - - - - - - 616 (94,955) 616 (94,955) - (1,732) $ 6,875 $ 142,244
	Legal Reserve Special Reserve Unappropriated Earnings $ 307,990 $ 11,237 $ 1,207,765 24,682 - (24,682) - (11,237) 11,237 - - - - - - - - - - - 232,916 - - (1,237) - - 231,679 - - 27,007 332,672 - 1,453,006 25,869 - (25,869) - - (48,173) - - - - - 248,077 - - 2,210 - - 250,287 - - 1,732 $ 358,541 $ - $ 1,630,983

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

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HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expense Amortization expense Loss (reversal of) expected credit loss on trade receivables Net (gain) loss on fair value changes of financial assets designated as at fair value through profit or loss Finance costs Interest income Dividend income (Gain) loss on disposal of property, plant and equipment Gain on disposal of investment accounted for using the equity method Write-downs of inventories Reversal of write-downs of inventories Net (gain) loss on foreign currency exchange Other non-cash items Changes in operating assets and liabilities Contract assets Notes receivable Trade receivables Other receivables Inventories Other current assets Other non-current assets Contract liabilities Notes payable Trade payables Other payables Other current liabilities Other non-current liabilities Cash (used in) generated from operations Interest paid Income tax paid Net cash (used in) generated from operating activities	2022 $ 304,359 62,992 - 2,474 (19,602) 1,603 (701) (44,920) (883) - 335 - (801) - (47,578) 9,760 (159,559) (824) (141,937) (50,074) - 2,341 16 42,597 2,591 49 (2,098) (39,860) (1,537) (57,642) (99,039)	2021 $ 290,939 62,554 1 (158) 10,395 215 (1,525) (32,901) 86 (4,448) 15,595 (20,113) 288 (12) (27,708) (9,329) (13,140) (2,626) (144,812) 27,689 (65) 9,110 139 (76,149) (1,881) (3,194) (235) 78,715 (215) (65,810) 12,690 (Continued)

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HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Proceeds from capital reduction by return of shares - financial assets at FVTOCI Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Proceeds from sale of investments in associates Payments for property, plant and equipment Proceeds from sale of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Payments for investment properties Increase in prepayments for equipment Interest received Other dividends received Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase repayments of short-term borrowings Proceeds from guarantee deposits received Refunds of guarantee deposits received Repayment of the principal portion of lease liabilities Cash dividends Payment for reduction of capital Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2022 $ - 2,123 5,504 (19,015) 19,016 - (8,576) 5,500 (19,802) 18,080 - (29,223) 698 44,920 19,225 149,319 150 (150) (5,193) (96,346) - 47,780 616 (31,418) 176,505 $ 145,087	2021 $ (9,690) 73,196 - (42,408) 50,000 1,484 (48,056) - (11,221) 11,708 (21,609) (626) 1,624 32,901 37,303 - 3,496 (3,450) (4,380) (72,259) (481,730) (558,323) (47) (508,377) 684,882 $ 176,505

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

(Concluded)

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

HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES

1. GENERAL INFORMATION

Hold-Key Electric Wire & Cable Co., Ltd. (the “Company”) was established in Taipei, Taiwan in March 1989 and its factories are located in Taoyuan, Taiwan. The Company mainly manufactures and sells XLPE power cables, electric cables, aluminum cables, rubber cables, communication cables, fiber optic cables, LAN cables, cable accessories, etc. and is also engaged in the import and export of the aforementioned products and lease of properties.

The Company’s shares are listed and have been traded on the Taiwan Stock Exchange since September 2000.

The consolidated financial statements of the Company and its subsidiaries, collectively referred to as the “Group”, are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors and authorized for issue on March 24, 2023.

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

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

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

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

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

• Note 1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 2: The amendments will be applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

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• Note 3: Except for deferred taxes that were recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments were applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group assesses that the application of above standards and interpretations have no material impact on the Group’s financial position and financial performance.

• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

Effective Date New IFRSs Announced by IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” January 1, 2024 (Note 2) Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2024 Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants” January 1, 2024

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, other regulations and IFRSs as endorsed and issued into effect by the FSC.

• b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

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

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for an asset or liability.

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• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period; even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and

• 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period. 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.

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

The Group is engaged in the construction business, which has an operating cycle of over 1 year. The normal operating cycle applies when considering the classification of the Group’s construction-related assets and liabilities.

• d. Basis of consolidation

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

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

Refer to Note 12 and Table 3 for detailed information of subsidiaries (including the percentage of ownership and main business).

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e. Business combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as they are incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

f. Foreign currencies

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

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

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

Non-monetary items that are measured at historical cost in a foreign currency are not translated using the exchange rate at the date of the transaction.

For the purpose of presenting the consolidated financial statements, the functional currencies of the Company and the entities in the Group (including subsidiaries and associates in other countries that use currencies which are the different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

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

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

• 15 -

g. Inventories

Inventories consist of raw materials, supplies, finished goods and work-in-process and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

h. Investments in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.

The Group uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group’s share of equity of associates.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

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

When the Group’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

• 16 -

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest.

When an entity in the Group transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Group’ consolidated financial statements only to the extent of interests in the associate that are not related to the Group.

• i. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss.

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

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

• j. Investment properties

Investment properties are properties held to earn rentals or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

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

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

• k. Impairment of property, plant and equipment, right-of-use assets, investment properties and assets related to contract costs

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use assets and investment properties to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

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

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Before the Group recognizes an impairment loss from assets related to contract costs, any impairment loss on inventories and property, plant and equipment related to the contract shall be recognized in accordance with applicable standards. Then, impairment loss from the assets related to the contract costs is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Group expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services and which have not been recognized as expenses. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that cash-generating unit.

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

l. Financial instruments

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

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

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

1) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI.

a) Financial assets at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 27.

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• b) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• i. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables at amortized cost, notes receivable, other receivables and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for:

• i. Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit adjusted effective interest rate to the amortized cost of the financial asset; and

• ii. Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.

Cash equivalents include time deposits, commercial papers and repurchase agreements collateralized by bonds with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• c) Investments in equity instruments at FVTOCI

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

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

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

• 2) Impairment of financial assets and contract assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables), as well as contract assets.

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

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

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

• 3) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.

Equity instruments

Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument.

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

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

Financial liabilities

• 1) Subsequent measurement

All the financial liabilities are measured at amortized cost using the effective interest method.

• 2) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

• m. Revenue recognition

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

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1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of electric wires and cables. Sales of goods are recognized as revenue when the goods are delivered to the customer’s specific location and examined by the customer because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Revenue and contract assets are recognized concurrently. Any amounts previously recognized as contract assets are subsequently reclassified to trade receivables when invoices are issued. The transaction price received is recognized as a contract liability until the goods have been delivered to the customer or examined by the customer.

2) Revenue from the rendering of services

Revenue from the rendering of services comes from cable and wire installation services. Revenue from the installation of electric wires and cables and contract assets are recognized concurrently when the installation has been completed and examined by the customer. Contract assets are subsequently reclassified to trade receivables when invoices are issued.

n. Leases

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

1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

When a lease includes both land and building elements, the Group assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the lessee. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

2) The Group as lessee

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

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

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

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

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

o. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than those stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

p. Employee benefits

1) Short-term employee benefits

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

• 2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered services entitling them to the contributions.

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

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

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• 3) Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plans except that remeasurement is recognized in profit or loss.

• q. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

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

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

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

• 2) Deferred tax

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

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carryforwards and unused tax credits for purchases of machinery, equipment and technology, to the extent that it is probable that taxable profit will be available against which those deductible temporary differences can be utilized.

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

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

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

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3) Current and deferred taxes

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

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

Key Sources of Estimation Uncertainty

a. Write-down of inventories

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

b. Income taxes

As of December 31, 2022 and 2021, the carrying amount of deferred tax assets in relation to deductible temporary differences was $23,592 thousand and $24,517 thousand, respectively. As of December 31, 2022 and 2021, no deferred tax asset was recognized on tax losses of $71,426 thousand and $76,667 thousand, respectively, due to the unpredictability of future profit streams. A key source of estimation uncertainty is the determination of the realizability of deferred tax assets, which mainly depends on whether sufficient future profit or taxable temporary differences will be available. In cases where the actual future profit generated is less than expected, a material reversal of deferred tax assets may arise, which would be recognized in profit or loss for the period in which such a reversal takes place.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits with original maturities of 3 months or less		December 31	December 31
		2022 $ 145 141,516 3,426 $ 145,087	2021 $ 147 160,558 15,800 $ 176,505

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The marketing rate intervals of cash in banks at the end of the reporting period were as follows:

Bank balance	December 31
	2022 2021 0%-2.75% 0%-0.41%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Gold investment account		December 31	December 31
		2022 $ 176,715	2021 $ 157,113

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in Equity Instruments at FVTOCI

Current Domestic investments Listed shares Ordinary shares - Taiwan Cooperative Financial Holding Co., Ltd. Ordinary shares - DrayTek Company Ordinary shares - Mega Financial Holding Company Ltd. Non-current Domestic investments Listed shares Ordinary shares - Young Fast Optoelectronics Co., Ltd. Ordinary shares - Fuzetec Technology Co., Ltd. Unlisted shares Ordinary shares - Sol Young Enterprises Co., Ltd. Ordinary shares - Bond-Galv Industrial Co., Ltd. Ordinary shares - Mosart Semiconductor Corp. Ordinary shares - Luminous Optical Technology Co., Ltd. Ordinary shares - Taiwan Submarine Cable Co., Ltd. Preference shares - MagiCap Venture Capital Co., Ltd.		December 31	December 31
		2022 $ 85,572 6,376 4,666 $ 96,614 $ 554,263 55,800 124,593 39,375 14,738 13,244 - 3,728 $ 805,741	2021 81,323 7,033 5,333 $ 93,689 $ 587,947 87,410 130,086 50,782 30,333 12,549 300 6,337 $ 905,744

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These investments in equity instruments are held for medium to long-term strategic purposes, and the Group expects to profit from the shares through long-term investment. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

In 2021, the Group acquired investments in equity instruments for medium to long-term strategic purposes of $9,690 thousand; the management designated these investments as at FVTOCI.

In 2022 and 2021, the Group sold its shares in order to manage credit concentration risk. The sold shares had a fair value of $2,123 thousand and $73,196 thousand, respectively, and the related unrealized valuation gain of $1,732 thousand and $27,007 thousand, respectively, was transferred from other equity to retained earnings.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Domestic investments Time deposits with original maturities of more than 3 months Restricted assets - demand deposit		December	31
		2022 $ 19,000 9,407 $ 28,407	2021 $ 19,000 9,408 $ 28,408

• a. As of December 31, 2022 and 2021, the interest rates for time deposits with original maturity of more than 3 months were 1.04% and 0.79%, respectively.

• b. Refer to Note 29 for information relating to investments in financial assets at amortized cost pledged as security.

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

Notes receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss		December 31	December 31
		2022 $ 26,794 (378) $ 26,416	2021 $ 36,554 (439) $ 36,115 (Continued)

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Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Tax refund receivable Earned revenue receivable and others Trade receivables at amortized cost		**December 31 **	**December 31 **
		2022 $ 466,294 (5,600) $ 460,694 $ 2,173 4,101 $ 6,274	2021 $ 306,196 (3,065) $ 303,131 $ 1,001 9,952 $ 10,953 (Concluded)

In order to minimize credit risk, the management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

Other than government agencies, the Group transacted with customers from diverse industries that are unrelated to each other; thus, no concentration of credit risk was observed.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The following table details the loss allowance of trade receivables based on the Group’s provision matrix:

December 31, 2022

	Not Past Due
Expected credit loss rate	1%
Gross carrying amount	$ 493,088
Loss allowance (Lifetime ECLs)	(5,978)
Amortized cost	$ 487,110

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December 31, 2021

	Not Past Due
Expected credit loss rate	1%
Gross carrying amount	$ 342,750
Loss allowance (Lifetime ECLs)	(3,504)
Amortized cost	$ 339,246

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

Balance at January 1 Add: Provision for impairment loss Less: Recovery for impairment loss Balance at December 31	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2022 $ 3,504 2,474 - $ 5,978	2021 $ 3,662 - (158) $ 3,504

11. INVENTORIES

Finished goods (including merchandise) Work in progress Raw materials Agricultural products		**December 31 **	**December 31 **
		2022 $ 223,046 402,682 420,387 2,391 $ 1,048,506	2021 $ 251,598 333,913 319,390 2,003 $ 906,904

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2022 and 2021 was $2,498,052 thousand and $2,388,843 thousand, respectively.

The cost of goods sold included write-downs of inventories of $335 thousand for the year ended December 31, 2022. The cost of goods sold included reversal of write-downs of inventories of $20,113 thousand and inventory write-downs of $15,595 thousand for the year ended December 31, 2021. Previous write-downs were reversed as a result of increased selling price and the sale of obsolete and slow-moving inventories which were previously written down.

12. SUBSIDIARIES

Subsidiaries Included in the Consolidated Financial Statements

Nature of Investor Investee Activities The Company Holdkey (Belize) Investments Limited Investment Muchonfarm Inc. Agriculture	Proportion of Ownership (%)
	**December 31 **
	2022 2021 100 100 100 100

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13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

The Group held 21.83% interest in Midori Mark (H.K.) Limited and accounted for the investment as associate. In February 2021, the Group sold all its interest in Midori Mark (H.K.) Limited. This transaction resulted in the recognition of a gain in profit or loss, which was calculated as follows:

Proceeds from disposal (received in February 2021) Less: Carrying amount of investment at the date of disposal Less: Loss on foreign currency exchange Add: Capital reserve on the date of disposal - capital reserve from investment in associate accounted for using the equity method Gain on disposal of associate	$ 1,484 (571) (500) 4,035 $ 4,448

14. PROPERTY, PLANT AND EQUIPMENT

Assets Used by the Group

Freehold Land Cost Balance at January 1, 2022 $ 543,810 Additions - Disposals - Transferred from investment properties 3,279 Balance at December 31, 2022$ 547,089 Accumulated depreciation and impairment Balance at January 1, 2022 $ - Disposals - Depreciation expense - Transferred from investment properties - Balance at December 31, 2022$ - Balance at December 31, 2022, net $ 547,089 Cost Balance at January 1, 2021 $ 523,580 Additions - Disposals - Transferred from prepaid equipment - Transferred from investment properties 20,230 Transferred to investment properties - Balance at December 31, 2021$ 543,810	Buildings Machinery and Equipment $ 1,192,447 $ 196,963 - 5,050 (17,591 ) (40,187 ) 2,850 - $ 1,177,706 $ 161,826 $ (482,394 ) $ (155,224 ) 17,591 35,570 (30,645 ) (5,957 ) (1,065) - $ (496,513) $ (125,611) $ 681,193 $ 36,215 $ 1,376,724 $ 236,144 43,553 879 (24,322 ) (40,060 ) 11,377 - - - (214,885) - $ 1,192,447 $ 196,963	Other Equipment Lease Improvement Total $ 80,084 $ 2,683 $ 2,015,987 3,720 - 8,770 (6,669 ) - (64,447 ) - - 6,129 $ 77,135 $ 2,683 $ 1,966,439 $ (30,666 ) $ (2,144 ) $ (670,428 ) 6,669 - 59,830 (9,046 ) (127 ) (45,775 ) - - (1,065) $ (33,043) $ (2,271) $ (657,438) $ 44,092 $ 412 $ 1,309,001 $ 84,674 $ 2,683 $ 2,223,805 4,336 - 48,768 (8,926 ) - (73,308 ) - - 11,377 - - 20,230 - - (214,885) $ 80,084 $ 2,683 $ 2,015,987 (Continued)

• 29 -

Freehold Land Accumulated depreciation and impairment Balance at January 1, 2021 $ - Disposals - Depreciation expense - Transferred to investment properties - Balance at December 31, 2021$ - Balance at December 31, 2021, net $ 543,810	Buildings Machinery and Equipment $ (589,159 ) $ (187,561 ) 24,322 40,060 (34,919 ) (7,723 ) 117,362 - $ (482,394) $ (155,224) $ 710,053 $ 41,739	Other Equipment Lease Improvement Total $ (30,100 ) $ (1,958 ) $ (808,778 ) 8,840 - 73,222 (9,406 ) (186 ) (52,234 ) - - 117,362 $ (30,666) $ (2,144) $ (670,428) $ 49,418 $ 539 $ 1,345,559 (Concluded)

In July 2017, Muchonfarm Inc. purchased a piece of land located in Qimei Section of Ruisui Township, Hualien County, with the purchase price of $24,376 thousand for organic farming. Because it is an agricultural land, the land use right is temporarily registered under the name of Hsin-Cheng Lee, the chairman of Muchonfarm Inc. Muchonfarm Inc. entered into an agreement with Hsin-Cheng Lee and signed a contract of borrowing other’s name for real estate registration, which stated that Muchonfarm Inc. is the legal owner of the abovementioned land.

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

Buildings 6-50 years Machinery and equipment 4-20 years Other equipment 3-16 years Lease improvements 4-11 years

The major parts of the buildings held by the Group include plants and fire extinguishing equipment, which are depreciated over their estimated useful lives of 50 years and 10 years, respectively.

Refer to Note 29 for the carrying amount of property, plant and equipment pledged for general banking facilities granted to the Group.

15. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amount Land Buildings Transportation equipment		December	31
		2022 $ 2,912 4,634 2,581 $ 10,127	2021 $ 3,626 6,263 2,423 $ 12,312

• 30 -

Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Transportation equipment	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2022 $ 3,019 $ 714 2,684 1,806 $ 5,204	2021 $ 7,977 $ 712 1,852 1,754 $ 4,318

b. Lease liabilities

Carrying amount Current Non-current Range of discount rates for lease liabilities was as follows: Land Buildings Transportation equipment		**December **	**31 **
		2022 $ 4,787 $ 5,416 December	2021 $ 4,769 $ 7,608 31
	2022 2021 1.465% 1.465% 1.195%-1.60% 1.195%-1.465% 1.165%-1.725% 1.165%-1.465%

c. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2022 $ 3,118 $ 101 $ (5,335)	2021 $ 3,627 $ 102 $ (4,520)

The Group’s leases of certain buildings, transportation equipment, etc., qualify as short-term leases and leases of certain office equipment qualify as low-value asset leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

Lease arrangements under operating leases for the leasing out of investment properties are set out in Note 16.

• 31 -

16. INVESTMENT PROPERTIES

Freehold Land Cost Balance at January 1, 2022 $ 109,938 Disposals - Transferred to properties, plant and equipment (3,279) Balance at December 31, 2022 $ 106,659 Accumulated depreciation and impairment Balance at January 1, 2022 $ - Disposals - Depreciation expense - Transferred to properties, plant and equipment - Balance at December 31, 2022 $ - Balance at December 31, 2022, net $ 106,659 Cost Balance at January 1, 2021 $ 130,168 Additions - Disposals - Transferred from prepaid equipment - Transferred from properties, plant and equipment - Transferred to properties, plant and equipment (20,230) Balance at December 31, 2021 $ 109,938 Accumulated depreciation and impairment Balance at January 1, 2021 $ - Disposals - Depreciation expense - Transferred from properties, plant and equipment - Balance at December 31, 2021 $ - Balance at December 31, 2021, net $ 109,938	Buildings $ 332,096 (88) (2,850) $ 329,158 $ (152,103) 88 (11,969) 1,065 $ (162,919) $ 166,239 $ 91,666 21,609 (114) 4,050 214,885 - $ 332,096 $ (28,898) 114 (5,957) (117,362) $ (152,103) $ 179,993	Total $ 442,034 (88) (6,129) $ 435,817 $ (152,103) 88 (11,969) 1,065 $ (162,919) $ 272,898 $ 221,834 21,609 (114) 4,050 214,885 (20,230) $ 442,034 $ (28,898) 114 (5,957) (117,362) $ (152,103) $ 289,931

Investment properties are depreciated on a straight-line basis over their estimated useful lives of 6 to 55 years.

The fair value of investment properties was $437,316 thousand and $440,725 thousand as of December 31, 2022 and 2021, respectively. The fair value was not evaluated by an independent appraiser; the Group evaluated it with reference to the market evidence of similar real estate transaction prices.

The investment properties were leased out for 1 to 5 years. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.

• 32 -

As of December 31, 2022 and 2021, guarantee deposits received by the Group for operating lease contracts were both amounted to $3,978 thousand.

The maturity analysis of lease payments receivable under operating leases of investment properties was as follows:

Year 1 Year 2 Year 3 Year 4		**December **	**31 **
		2022 $ 20,809 18,484 16,509 14,909 $ 70,711	2021 $ 13,462 1,947 - - $ 15,409

The Group has freehold interest in all of its investment property. Refer to Note 29 for the carrying amount of investment properties pledged to secure general banking facilities granted to the Group.

17. OTHER ASSETS

Current Prepayments Temporary payments and payments on behalf of others Others Non-current Refundable deposits Prepayments for equipment Others		December	31
		2022 $ 44,683 2,109 16,120 $ 62,912 $ 12,976 29,849 14 $ 42,839	2021 $ 7,947 973 3,918 $ 12,838 $ 11,254 626 58 $ 11,938

18. SHORT-TERM BORROWINGS

Secured borrowings (Note 29) Bank borrowings Unsecured borrowings Bank line of credit borrowings		**December 31 **	**December 31 **
		2022 $ 23,844 125,475 $ 149,319	2021 $ - - $ -

• 33 -

The interest rate range of short-term borrowings interest rate was 1.596%-1.85% per annum at December 31, 2022.

19. OTHER LIABILITIES

Current Other payables Payable for purchase of equipment Salaries or bonuses Payable for commissions Payable for retirement and others Other liabilities Temporary receipts Others Non-current Other liabilities Net defined benefit liabilities (Note 20) Guarantee deposits received (Note 16)		December	31
		2022 $ 3,591 44,147 3,222 35,929 $ 86,889 $ 1,736 775 $ 2,511 $ 27,195 3,978 $ 31,173	2021 $ 3,397 41,492 3,210 35,939 $ 84,038 1,714 748 $ 2,462 $ 32,055 3,978 $ 36,033

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company and Muchonfarm Incorporated Limited adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Company and Muchonfarm Incorporated Limited make monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

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b. Defined benefit plans

The defined benefit plan adopted by the Company in accordance with the Labor Standards Act is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. Since February 2022, the Company contributes original amounts equal to 2% to 6% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

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

December 31 2022 2021 Present value of the defined benefit obligation $ 77,967 $ 75,774 Fair value of the plan assets (50,772) (43,719) Deficit 27,195 32,055 Net defined benefit liabilities $ 27,195 $ 32,055 Movements in net defined benefit liabilities (assets) were as follows: Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Net Defined Benefit Liabilities (Assets) Balance at January 1, 2021 $ 84,492 $ (53,748) $ 30,744 Service cost Current service cost 653 - 653 Net interest expense (income) 422 (271) 151 Recognized in profit or loss 1,075 (271) 804 Remeasurement Return on plan assets (excluding amounts included in net interest) - (695) (695) Actuarial (gain) loss - changes in demographic assumptions 1,996 - 1,996 Actuarial (gain) loss - changes in financial assumptions (883) - (883) Actuarial (gain) loss - experience adjustments 1,128 - 1,128 Recognized in other comprehensive income 2,241 (695) 1,546 Contributions from the employer - (1,039) (1,039) Benefits paid (12,034) 12,034 - Balance at December 31, 2021 $ 75,774 $ (43,719) $ 32,055 (Continued)		December	31

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	Present Value		Net Defined
	of the Defined		Benefit
	Benefit	Fair Value of	Liabilities
	Obligation	the Plan Assets	(Assets)
Balance at January 1, 2022	$ 75,774	$ (43,719)	$ 32,055
Service cost
Current service cost	430	-	430
Net interest expense (income)	474	(277)	197
Recognized in profit or loss	904	(277)	627
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(4,051)	(4,051)
Actuarial (gain) loss - changes in financial
assumptions	(2,700)	-	(2,700)
Actuarial (gain) loss - experience
adjustments	3,989	-	3,989
Recognized in other comprehensive income	1,289	(4,051)	(2,762)
Contributions from the employer	-	(2,725)	(2,725)
Balance at December 31, 2022	$ 77,967	$ (50,772)	$ 27,195
			(Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

Operating costs Selling and marketing expenses General and administrative expenses Research and development expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 460 75 73 19 $ 627	2021 $ 756 134 (116) 30 $ 804

Through the defined benefit plans under the Labor Standards Act, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government or corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.

• 36 -

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

Discount rate(s) Expected rate(s) of salary increase	**December 31 **
	2022 2021 1.50% 0.63% 2.50% 2.00%

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

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase/decrease 0.25% increase 0.25% decrease		December	31
		2022 $ (1,665) $ 1,718 $ 1,671 $ (1,627)	2021 $ (1,762) $ 1,823 $ 1,767 $ (1,717)

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

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
		2022 $ 3,183 8.7 years	2021 $ 1,038 9.4 years

21. EQUITY

• a. Share capital

Ordinary shares

Number of authorized shares (in thousands) Amount of authorized shares Number of issued and fully paid shares (in thousands) Amount of issued and fully paid shares		**December 31 **	**December 31 **
		2022 320,000 $ 3,200,000 192,692 $ 1,926,917	2021 320,000 $ 3,200,000 192,692 $ 1,926,917

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and a right to receive dividends.

• 37 -

The Company’s shareholders in their meetings on July 20, 2021 resolved to reduce its capital of $481,730 thousand, which eliminated 48,173 thousand ordinary shares, and the reduction rate is about 20%. The paid ordinary shares after reduction were 192,692 thousand shares. On August 24, 2021, the above transaction was approved by the FSC and the subscription base date was determined by the board of the directors to be August 26, 2021.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Arising from issuance of ordinary shares May be used to offset a deficit only Arising from changes in percentage of ownership interest in subsidiaries (2)		**December 31 **	**December 31 **
		2022 $ 234,751 159 $ 234,910	2021 $ 282,924 159 $ 283,083

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

• 2) Such capital surplus arises from the effect of changes in ownership interest in a subsidiary resulted from equity transactions other than actual disposal or acquisition, or from changes in capital surplus of subsidiaries accounted for using equity method.

c. Retained earnings and dividends policy

The Company considers the needs of the environment and the characteristics of the industry and long-term financial planning, dividend policy, measure of investment funds, financial structure, and surplus situation before it decides on the amount and type of surplus distribution.

Under the dividends policy as set forth in the Articles, when the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes and offsetting losses of previous years. The Company shall, after its losses have been covered and all taxes and dues have been paid and at the time of allocating surplus profit, first set aside 10% of such profit as a legal reserve. However, when the legal reserve amounts to the authorized capital, this shall not apply. In addition to the aforesaid legal reserve, the Company appropriates another sum as a special reserve. Finally, any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. Distribution of cash dividends shall not be less than 10% of total dividends.

The Company’s shareholders resolved the amendments to the Company’s Articles of Incorporation on July 20, 2021. The amendment explicitly stipulates that the board of directors is authorized to adopt a special resolution to distribute dividends, bonuses, capital surplus or all or part of legal reserve in cash and a report of such distribution should be submitted in the shareholders’ meeting. The requirement to submit a resolution to the shareholders’ meeting shall not apply as of the Amendment Date.

For the policies on distribution of compensation of employees and remuneration of directors, refer to compensation of employees and remuneration of directors in Note 23-h.

• 38 -

Legal reserve shall be appropriated until it has reached the Company’s paid-in capital. This reserve may be used to offset a deficit. If the Company has no deficit, and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriation of earnings for 2021 and 2020 were approved in the shareholders’ meetings on June 27, 2022 and July 20, 2021, respectively, were as follows:

Legal reserve Special reserve Cash dividends Cash dividend per dollar (NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended December 31
		2021 $ 25,869 $ - $ 48,173 $ 0.25	2020 $ 24,682 $ (11,237) $ - $ -

The above 2021 appropriations for cash dividends were resolved by the Company’s board of directors on May 12, 2022; the other proposed appropriations were resolved by the shareholders in their meeting on June 27, 2022.

On May 12, 2022, the Board of Directors resolved to appropriate the capital surplus of $48,173 thousand for cash. The Company’s shareholders in their meetings resolved to appropriate the capital surplus of $72,259 thousand for cash on July 20, 2021.

The proposed appropriations for 2022 was resolved by the Board of Directors on May, 2023.The appropriation of earnings for 2022 will be resolved by the shareholders in their meeting to be held on June 26, 2023.

22. REVENUE

Wires and cables revenue Rental revenue Others	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2022 $ 2,838,476 22,499 3,437 $ 2,864,412	2021 $ 2,779,747 20,296 3,798 $ 2,803,841

Contract Balances

December 31, 2022 December 31, 2021 Notes and trade receivables (Note 10) $ 487,110 $ 339,246 Contract assets - current Sale of goods $ 269,035 $ 267,778 Contract assets - non-current Sale of goods 46,660 - $ 315,695 $ 267,778	January 1, 2021 $ 317,030 $ 240,070 - $ 240,070 (Continued)

• 39 -

December 31, 2022 December 31, 2021 Contract liabilities - current Sale of goods $ 24,680 $ 25,842 Installation services 6,905 3,402 $ 31,585 $ 29,244	January 1, 2021 $ 15,653 4,481 $ 20,134 (Concluded)

The changes in the balance of contract assets primarily resulted from the timing difference between the Group’s satisfaction of performance obligations and the respective customer’s payment; other significant changes are as follows:

Contract assets Balance at beginning of the year transferred to trade receivables	For the Year Ended	For the Year Ended	December 31
		2022 $ (88,051)	2021 $ (135,294)

23. NET PROFIT

a. Interest income

Bank deposits Interest on deposits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 681 20 $ 701	2021 $ 1,503 22 $ 1,525

• b. Other income

Dividends Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 44,920 12,368 $ 57,288	2021 $ 32,901 9,551 $ 42,452

• 40 -

c. Other gains and losses

Gain (loss) on financial assets mandatorily classified as at FVTPL Net foreign exchange gains Gain (loss) on disposal of property, plant and equipment Gain on disposal of associates Others d. Finance costs Interest on bank loan Interest on lease liabilities Interest on deposits e. Depreciation and amortization An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating costs f. Operating expenses directly related to investment properties Direct operating expenses of investment properties generating rental income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2022 2021 $ 19,602 $ (10,395) 3,893 2,449 883 (86) - 4,448 (85) (99) $ 24,293 $ (3,683) For the Year Ended December 31
	2022 2021 $ 1,430 $ 44 142 140 31 31 $ 1,603 $ 215 For the Year Ended December 31
	2022 2021 $ 59,580 $ 59,676 3,412 2,878 $ 62,992 $ 62,554 $ - $ 1 For the Year Ended December 31
		2022 $ 13,640	2021 $ 7,167

• 41 -

g. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans (Note 20) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2022 $ 5,777 627 6,404 189,923 $ 196,327 $ 145,097 51,230 $ 196,327	2021 $ 5,887 804 6,691 186,249 $ 192,940 $ 143,137 49,803 $ 192,940

h. Compensation of employees and remuneration of directors

According to the Company’s Articles, where the Company made a profit in a fiscal year, it distributes compensation of employees at the rate of no less than 1% and no higher than 5% and remuneration of directors at the rate of no higher than 2.5% of net profit before income tax. The compensation of employees is calculated based on the remaining balance of the current year’s profit (i.e., profit before income tax prior to the distribution of compensation of employees and remuneration of directors) minus accumulated deficits.

The compensation of employees and remuneration of directors for the year ended December 31, 2022 are subject to the approval by the Company’s board of directors. The compensation of employees and remuneration of directors for the year ended December 31, 2021 were approved by the Company’s board of directors on May 12, 2022 as follows:

Accrual rate

Compensation of employees Remuneration of directors Amount Compensation of employees Remuneration of directors	**For the Year Ended December 31 **	**For the Year Ended December 31 **
	2022 2021 3.00% 2.94% 2.02% 1.96% For the Year Ended December 31
	2022 Cash $ 9,600 6,480	2021
		Cash $ 9,000 6,000

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

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

• 42 -

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

• i. Gains or losses on foreign currency exchange

Foreign exchange gains Foreign exchange losses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 6,599 (2,706) $ 3,893	2021 $ 5,031 (2,582) $ 2,449

24. INCOME TAXES

• a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior year Deferred tax In respect of the current year Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 43,152 8,794 43 4,293 $ 56,282	2021 $ 48,480 7,623 71 1,849 $ 58,023

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

Profit before tax Income tax expense calculated at the statutory rate Non-deductible expenses in determining taxable income Loss on property transaction Tax-exempt income Income tax on unappropriated earnings Unrecognized deductible temporary differences Adjustments for prior years’ tax Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2022 $ 304,359 $ 60,872 10 (30) (8,984) 8,794 (4,423) 43 $ 56,282	2021 $ 290,939 $ 58,188 12 - (6,580) 7,623 (1,291) 71 $ 58,023

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b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Remeasurement of defined benefit plans Total income tax expense (benefit) recognized in other comprehensive income Current tax liabilities Current tax liabilities Income tax payable	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 552 $ 552 **December **	2021 $ (309) $ (309) **31 **
		2022 $ 27,666	2021 $ 33,319

c. Current tax liabilities

d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2022

Deferred Tax Assets Temporary differences Unrealized investment losses Inventory write-downs Defined benefit plans Others Deferred Tax Liabilities Temporary differences Unrealized valuation gains	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Closing Balance $ 4,091 $ 127 $ - $ 4,218 12,077 67 - 12,144 7,942 (420) (552) 6,970 407 (147) - 260 $ 24,517 $ (373) $ (552) $ 23,592 Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Closing Balance $ 474 $ 3,920 $ - $ 4,394

• 44 -

For the year ended December 31, 2021

Deferred Tax Assets Temporary differences Unrealized investment losses Inventory write-downs Defined benefit plans Others Deferred Tax Liabilities Temporary differences Unrealized valuation gains	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Closing Balance $ 3,941 $ 150 $ - $ 4,091 16,100 (4,023) - 12,077 7,680 (47) 309 7,942 415 (8) - 407 $ 28,136 $ (3,928) $ 309 $ 24,517 Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Closing Balance $ 2,553 $ (2,079) $ - $ 474

e. Deductible temporary differences and unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

Deductible temporary differences Unrealized investment losses Impairment of assets Loss carryforwards Expiry in 2022 Expiry in 2023 Expiry in 2024 Expiry in 2025 Expiry in 2026 Expiry in 2027 Expiry in 2028 Expiry in 2029 Expiry in 2030 Expiry in 2031 Expiry in 2032		December 31	December 31
		2022 $ 323,806 3,571 $ 327,377 $ - 2,893 7,905 5,984 2,007 3,536 1,965 2,282 1,877 854 450 $ 29,753	2021 $ 323,134 26,357 $ 349,491 $ 4,512 2,893 7,905 5,984 2,007 3,536 1,965 2,282 1,877 884 - $ 33,845

f. Income tax assessments

The income tax returns of the Company and the subsidiary, Muchonfarm Inc. through 2020 have been assessed and cleared by the tax authorities.

• 45 -

25. EARNINGS PER SHARE

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

Net Profit for the Year

Profit for the year attributable to owners of the Company Weighted Average Number of Ordinary Shares Outstanding	For the Year Ended	For the Year Ended	December 31
		2022 $ 248,077	2021 $ 232,916

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Employees’ compensation issued Weighted average number of ordinary shares used in the computation of diluted earnings per share	(In Thousands of Shares) For the Year Ended December 31	(In Thousands of Shares) For the Year Ended December 31	(In Thousands of Shares) For the Year Ended December 31
		2022 192,692 927 193,619	2021 223,971 789 224,760

The Group may settle the compensation of employees in cash or shares; therefore, the Group assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares will be included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

26. CAPITAL MANAGEMENT

In consideration of the industry dynamics, the Group manages its capital in a manner to ensure that it has sufficient and necessary financial resources to find its working capital needs, capital assets purchases, research and development activities, and dividend payments associated with its existing operations over the next 12 months.

27. FINANCIAL INSTRUMENTS

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

Management believes the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values or their fair values cannot be reliably measured.

• 46 -

• b. Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2022 Financial assets at FVTPL Gold investment account Financial assets at FVTOCI Listed securities in the ROC Equity securities Unlisted securities in the ROC Equity securities Preference shares December 31, 2021 Financial assets at FVTPL Gold investment account Financial assets at FVTOCI Listed securities in the ROC Equity securities Unlisted securities in the ROC Equity securities Preference shares	Level 1 $ 176,715 706,677 - - $ 883,392 Level 1 $ 157,113 769,046 - - $ 926,159	Level 2 $ - - - - $ - Level 2 $ - - - - $ -	Level 3 $ - - 191,950 3,728 $ 195,678 Level 3 $ - - 224,050 6,337 $ 230,387	Total $ 176,715 706,677 191,950 3,728 $ 1,079,070 Total $ 157,113 769,046 224,050 6,337 $ 1,156,546

There were no transfers between Levels 1 and 2 in the current and prior years.

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

For the year ended December 31, 2022

Financial assets Balance at January 1, 2022 Disposals/settlements Recognized in other comprehensive income (included in unrealized valuation gain (loss) on financial assets at FVTOCI) Balance at December 31, 2022	Financial Assets **at FVTOCI **
	Equity Instruments $ 230,387 (2,123) (32,586) $ 195,678

• 47 -

For the year ended December 31, 2021

Financial assets Balance at January 1, 2021 Disposals/settlements Return of shares after capital reduction Recognized in other comprehensive income (included in unrealized valuation gain (loss) on financial assets at FVTOCI) Balance at December 31, 2021	Financial Assets **at FVTOCI **
	Equity Instruments $ 240,835 (1,627) (5,504) (3,317) $ 230,387

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

Domestic unlisted shares were valued using the market approach. The estimates and assumptions used by the Group under the market approach are consistent with those used by market participants in the pricing of financial instruments.

• c. Categories of financial instruments

Financial assets FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (Note 1) Financial assets at FVTOCI Financial liabilities Amortized cost (Note 2)	**December 31 **
	2022 2021 $ 176,715 $ 157,113 679,854 566,366 902,355 999,433 427,494 232,636

• Note 1: The balances include financial assets at amortized cost, which comprise cash and cash equivalents, debt investments, notes receivable, trade receivables, other receivables and refundable deposits.

• Note 2: The balances include financial liabilities at amortized cost, which comprise short-term borrowings, notes payable, trade payables, other payables and guarantee deposits.

• d. Financial risk management objectives and policies

The Group sought to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives was governed by the Group’s policies approved by the board of directors.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

• 48 -

a) Foreign currency risk

With regard to the carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation), refer to Note 33.

Sensitivity analysis

The Group is mainly exposed to the USD and JPY.

The following table details the Group’s sensitivity to a 2% increase in New Taiwan dollars (the functional currency) against the relevant foreign currencies. The sensitivity rate of 2% is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items at the end of the reporting period under the assumption of a 2% change in foreign currency rates. A positive number below indicates an increase/decrease in pre-tax profit/loss when New Taiwan dollars strengthened by 2% against the relevant currency. For a 2% weakening of New Taiwan dollars against the relevant currency, there would be an equal and opposite impact on pre-tax profit/loss and the balances below would be negative.

Profit or loss	USD Impact For the Year Ended December 31 2022 2021 $ 336 $ 348	JPY Impact
		For the Year Ended **December 31 **
		2022 2021 $ 407 $ 130

The amounts were mainly attributable to the outstanding receivables and payables, which were not hedged at the end of the reporting period.

The Group’s sensitivity to foreign currency risk in 2022 and 2021 has not changed significantly from the prior year.

b) Interest rate risk

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

Fair value interest rate risk Financial assets Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2022 2021 $ 22,426 $ 34,800 150,170 169,228 149,319 -

Sensitivity analysis

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. A sensitivity rate of 0.25% increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

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If interest rates had been 0.25% higher/lower and all other variables were held constant, the Group’s pre-tax profit/loss for the years ended December 31, 2022 and 2021 would have increased/decreased by $2 thousand and $423 thousand, respectively, which was mainly a result of variable-rate bank deposits and short-term borrowings.

The Group’s sensitivity to interest rate risk in 2022 and 2021 has not changed significantly from the prior year.

c) Other price risk

The Group was exposed to equity price risk through its investments in equity securities. The Group has appointed a special team to monitor the price risk and make plans to manage the price risk.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to the price risks of the aforementioned investments at the end of the reporting period.

If equity prices had been 1% higher/lower, pre-tax profit for the years ended December 31, 2022 and 2021 would have increased/decreased by $1,767 thousand and $1,571 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the years ended December 31, 2022 and 2021 would have increased/decreased by $7,067 thousand and $7,690 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

The Group’s sensitivity to investments in equity securities in 2022 has not changed significantly from the prior year.

2) Credit risk

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

• a) The carrying amount of the respective recognized financial assets as stated in the balance sheets; and

• b) The amount of contingent liabilities in relation to financial guarantee issued by the Group.

The Group adopted a policy of only dealing with government agencies and creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of investment grade and above.

Refer to Note 10 for impairment assessment of individual customer receivables.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

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The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2022 and 2021, the Group had available unutilized short-term bank loan facilities of $742,991 thousand and $1,072,995 thousand, respectively.

28. TRANSACTIONS WITH RELATED PARTIES

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

• a. Related party name and category

Related Party Name Related Party Category

Young Fast Optoelectronics Co., Ltd. (Young Fast)

Taiwan SRU Corp. Ltd. (SRU) Bond-Galv Industrial Co., Ltd. (Bond-Galv)

Other related party (the Company is the corporate director)

Other related party (related party in substance) Other related party (corporate director of the Company)

• b. Operating revenue

Line Item Related Party Category/Name Sales Other related parties Rental revenue Other related parties Young Fast SRU	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2022 $ 2,104 $ 15,309 3,203 $ 18,512	2021 $ 2,508 $ 13,467 2,603 $ 16,070

Sales were made at discounted market price to reflect the quantity of goods sold and the relationships between the parties.

Terms of sales from related parties were similar to those from third parties.

The Group rented houses to related parties. The amount of rent was agreed by both parties.

Terms of rent collection from related parties were similar to those from third parties.

As of December 31, 2022 and 2021, guarantee deposits received from the renting of houses to related parties were as follows:

Line Item Related Party Category/Name Guarantee deposits received Other related parties Young Fast SRU		December 31	December 31
		2022 $ 3,000 450 $ 3,450	2021 $ 3,000 450 $ 3,450

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• c. Purchases of goods

Related Party Category Other related parties	For the Year Ended	For the Year Ended	December 31
		2022 $ 130,895	2021 $ 90,014

Purchases were made at discounted market prices to reflect the quantity of goods purchased and the relationships between the parties.

Terms of purchases from related parties were similar to those from third parties.

• d. Receivables from related parties

Line Item Related Party Category Notes receivable Other related parties Trade receivables Other related parties		December 31	December 31
		2022 $ 7 $ -	2021 $ - $ 130

The outstanding trade receivables from related parties are unsecured. For the years ended December 31, 2022 and 2021, no impairment losses were recognized for trade receivables from related parties.

• e. Payables to related parties

Line Item Related Party Category/Name Trade payables to related Other related parties parties Young Fast		December 31	December 31
		2022 $ 23,944	2021 $ 15,476

The outstanding payables to related parties were unsecured.

• f. Service costs

Related Party Category/Name Other related parties Young Fast		December 31	December 31
		2022 $ 9,918	2021 $ -

The service cost of the related party is incurred for the installation work contracted to the related party, so the price between the related party is mutually agreed upon.

The payment terms between the Group and its related parties are not materially different from those of non-related parties.

• g. Remuneration of key management personnel

Short-term employee benefits	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2022 $ 22,677	2021 $ 22,637

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

• 52 -

29. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets have been mortgaged as collateral for long- and short-term bank credit lines, performance guaranty, and a deposit for management and maintenance of public open space:

Financial assets at amortized cost - current Restricted asset - demand deposit Property, plant and equipment Freehold land Buildings, net Investment properties Freehold land Buildings, net		December 31	December 31
		2022 $ 9,407 194,247 492,270 28,182 140,397 $ 864,503	2021 $ 9,408 190,967 512,785 31,462 153,066 $ 897,688

30. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of December 31, 2022 and 2021 were as follows:

• a. As of December 31, 2022 and 2021, unused letters of credit for purchases of raw materials and machinery and equipment amounted to the following:

USD JPY		**December 31 **	**December 31 **
		2022 $ 2,766 $ 23,332	2021 $ 3,486 $ 124,650

• b. Unrecognized commitments for purchase of property, plant and equipment amounted to the following:

NTD		December 31	December 31
		2022 $ 163,295	2021 $ 8,623

• c. Unrecognized contractual commitments of contracts entered into between the Group and the subcontractors are as follows:

NTD		December 31	December 31
		2022 $ 277,651	2021 $ 132,145

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• d. In accordance with the customs import tariff of the post-release duty payment for imported goods, the bank issued a letter of guarantee on behalf of the Group to the customs. The endorsement/guarantee amount was as follows:

NTD		**December **	**31 **
		2022 $ 15,000	2021 $ 8,000

31. SIGNIFICANT LOSSES FROM DISASTERS: NONE

32. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD: NONE

33. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

December 31, 2022

	Foreign	Foreign		Carrying
	Currency			Amount
	(In Thousands)		Exchange Rate	(In Thousands)
Financial assets
Monetary items
USD	$	878	30.66	$ 26,933
JPY		88,271	0.23	20,338
				$ 47,271
Financial liabilities
Monetary items
USD		329	30.76	$ 10,118
December 31, 2021
	Foreign			Carrying
	Currency			Amount
	(In Thousands)		Exchange Rate	(In Thousands)
Financial assets
Monetary items
USD	$	1,624	27.63	$ 44,879
JPY		55,378	0.24	13,208
				$ 58,087
				(Continued)

• 54 -

	Foreign	Foreign		Carrying
	Currency			Amount
	(In Thousands)		Exchange Rate	(In Thousands)
Financial liabilities
Monetary items
USD	$	990	27.73	$ 27,455
JPY		27,600	0.24	6,693
				$ 34,148
				(Concluded)

The Group is mainly exposed to the USD and JPY. The following information was aggregated by the functional currencies of the entities in the Group, and the exchange rate between the respective functional currency and the presentation currency was disclosed. The significant realized and unrealized foreign exchange gains (losses) were as follows:

Functional Currency NTD	For the Year Ended December 31	For the Year Ended December 31
	2022 Exchange Rate Net Foreign Exchange Gain (Loss) 1 (NTD:NTD) $ 3,893	2021
		Exchange Rate Net Foreign Exchange Gain (Loss) 1 (NTD:NTD) $ 2,449

34. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions:

• 1) Financing provided to others: None.

• 2) Endorsements/guarantees provided: None.

• 3) Marketable securities held (excluding investments in subsidiaries, associates and joint controlled entities) (Table 1)

• 4) Marketable securities acquired and disposed of at costs or prices at least NT$300 million or 20% of the paid-in capital: None.

• 5) Acquisitions of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.

• 6) Disposals of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: (Table 2)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.

• 55 -

• 9) Trading in derivative instruments: None.

• 10) Intercompany relationships and significant intercompany transactions: As the transaction amounts are not significant, they are not separately disclosed.

• b. Information on investees (Table 3)

• c. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: None.

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None.

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

  • c) The amount of property transactions and the amount of the resultant gains or losses.

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

  • e) The highest period balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

  • f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services.

• d. Information of major shareholders:

List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 4)

35. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on types of goods or services delivered or provided.

• 56 -

a. Segment revenue and results:

The information of the Group’s revenue and results by segment was as follows:

For the year ended December 31, 2022

Wires and Cables Segment Others Segment Segment revenue $ 2,838,476 $ 25,936 Segment income 217,553 6,127 Interest income Other gains and losses Finance costs Profit before tax	Total $ 2,864,412 $ 223,680 701 81,581 (1,603) $ 304,359

For the year ended December 31, 2021

Wires and Cables Segment Others Segment Segment revenue $ 2,779,747 $ 24,094 Segment income 240,654 10,206 Interest income Other gains and losses Finance costs Profit before tax	Total $ 2,803,841 $ 250,860 1,525 38,769 (215) $ 290,939

The revenue above was generated from transactions with external customers.

Segment profit represented the profit before tax earned by each segment without allocation of central administration costs, share of profit of associates, interest income, dividend income, gain or loss on disposal of property, plant and equipment, gain or loss on disposal of financial instruments, foreign exchange gains or losses, finance costs, other gains and losses and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

b. Segment total assets and liabilities

The amounts of the Group’s assets and liabilities are not used in the management’s decision-making; therefore, the amounts of assets and liabilities were zero.

c. Other segment information

Wires and cables segment	Depreciation and Amortization	Depreciation and Amortization	Depreciation and Amortization
	For the Year Ended December 31
		2022 $ 50,077	2021 $ 55,430

• 57 -

• d. Revenue from major products and services

The following is an analysis of the Group’s revenue from continuing operations from its major products and services.

Wires and cables segment	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 2,838,476	2021 $ 2,779,747

• e. Geographical information

The Group mainly operates in Taiwan, Europe, USA, and Asia.

The Group’s revenue from external customers by location is detailed below:

Taiwan Europe USA Asia	Revenue from External Customers	Revenue from External Customers	Revenue from External Customers
	For the Year Ended December 31
		2022 $ 2,689,468 30,420 65,243 79,281 $ 2,864,412	2021 $ 2,706,837 32,842 26,302 37,860 $ 2,803,841

• f. Information about major customers

Single customers contributing 10% or more to the Group’s revenue were as follows:

Customer A Customer B Customer C	**For the Year Ended December 31 **	**For the Year Ended December 31 **
	2022 Sales % $ 663,752 23 334,274 12 316,563 11	2021
		Sales % $ 1,004,018 36 (Note) (Note) (Note) (Note)

Note: Revenue is less than 10% of the Group’s revenue.

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TABLE 1

HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars/Shares, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			December 31, 2022	December 31, 2022		Note
				Number of Shares		Carrying Amount	% of Ownership	Fair Value
Hold-Key Electric Wire & Cable Co., Ltd.	Taiwan Cooperative Financial Holding Co., Ltd. DrayTek Company Mega Financial Holding Company Ltd. Young Fast Optoelectronics Co., Ltd. MagiCap Venture Capital Co., Ltd. Sol Young Enterprises Co., Ltd. Bond-Galv Industrial Co., Ltd. Fuzetec Technology Co., Ltd. Mosart Semiconductor Corp. Luminous Optical Technology Co., Ltd.	- - - The Company is the corporate director - Corporate director Corporate director - - -	Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	3,291 253 154 20,415 54 3,652 1,797 1,247 743 275		$ 85,572 6,376 4,666 554,263 3,728 124,593 39,375 55,800 14,738 13,244 $ 902,355	0.02 0.28 0.00 13.49 1.77 5.60 11.46 3.33 3.32 5.50	$ 85,572 6,376 4,666 554,263 3,728 124,593 39,375 55,800 14,738 13,244

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TABLE 2

HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars Unless Stated Otherwise)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	Ending Balance
Hold-Key Electric Wire & Cable Co., Ltd.	Young Fast Optoelectronics Co., Ltd.	The Company is the corporate director	Purchase	$ 130,895	5.75	Payment in 60 days after acceptance	Note	Equivalent	$ (23,944)	(12.79%)

Note: Based on agreements by both parties.

• 60 -

TABLE 3

HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, U.S. Dollars and Hong Kong Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of December 31, 2022	As of December 31, 2022	As of December 31, 2022	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2022	December 31, 2021	Number of Shares	% of Ownership	Carrying Amount
Hold-Key Electric Wire & Cable Co., Ltd.	Holdkey (Belize) Investments Limited Muchonfarm Inc.	Belize City 3F., No. 36-10, Sec. 1, Fuxing S. Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.)	Investment Agriculture	$ 346,448 (US$ 10,237) (HK$ 1,000) 87,250	$ 346,448 (US$ 10,237) (HK$ 1,000) 87,250	9,971 13,000	100.00 100.00	$ 6,223 47,767	$ (34) (1,275)	$ (34) (1,275)	Subsidiary Subsidiary

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TABLE 4

HOLD-KEY ELECTRIC WIRE & CABLE CO., LTD.

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2022

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Sol Young Enterprises Co., Ltd.	62,045,531	32.19

Note: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Company based on the number of ordinary shares and preference shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• 62 -