HOTRON - AGM Information 2023 | FinancialReports.eu

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO., LTD. 2023 Annual Meeting of Shareholders Meeting Minutes (Translation)

Time: 9:00 a.m. on May 30 (Tuesday), 2023

Place: 8F, No. 99, Sec. 6, Minquan E. Rd., Neihu Dist., Taipei City

(Neihu. District Office Auditorium)

Number of shares present: The total number of shares represented by present shareholders and proxies was 55,983,276 (including 1,345,930 shares attended electronic voting), accounting for 54.23% of the Company’s 103,220,991 issued and outstanding shares.

、、 Board Members Present: Chang, Li-Jung(Chairman) Lu, I- Hsuan(Director) Chen,

、 、 Tai-Chung(Director) Hsu, Ting-Jung(Director) Hsieh, 、 I-Ta(Independent Director) Chu, Yann-Fang(Independent 、 Director) Chou, Che-Yi (Independent Director), all 7 members of the Board of Directors(including 3 Independent Directors) are present.

、 Attendance: Ms. Chou, Pao-Lin (Director of PwC Taiwan)

Ms. Wang,Tong-Ying (Manager of PwC Taiwan).

Chairman: Chang, Li-Jung (Chairman of the Board of Directors )

Recorder : Wu, Hui-Min

The Chairman called the Meeting to Order.

Report on number of shares present. The aggregate shareholding of the shareholders and proxies present constituted a quorum.

Chairperson Remarks (omitted)

Matters to Report

2022 Business Report (Please refer to Annex 1)
2022 Audit Committee's Review Report (Please refer to Annex 2)
3.2022 The distribution of employees' compensation and directors' profit-sharing compensation. (1)The distribution of employees' compensation and directors' profit-sharing compensation for 2022 was in accordance with Article 20 of the Company's Articles of Incorporation.
(2)In accordance with the Company's Articles of Incorporation and the resolution of the board of directors' meeting held on February 24, 2023, to set aside approximately 3% of employees' compensation in the amount of NT$2,606,713 and 3% of directors' profit-sharing compensation in the amount of NT$2,606,713, all of which were paid in the form of cash.

2022 The remuneration received by directors
(1) The Company’s remuneration policy, standards, and structure paid to the ordinary directors and independent directors, and the procedure for determining remuneration.
- 1). Paying remuneration policy, standards, and structure
  - The Company's policy and evaluation of remuneration are based on the law, Article 13-2 and Article 20 of the Company's Articles of Incorporation, the "Remuneration Committee Charter" and the "Regulations Governing the Payment of the Remuneration to the Director". The remuneration paid to directors and independent directors is determined by the Company in two categories: directors' compensation and director profit-sharing compensation.
  - A. Directors' compensation, i.e., the compensation for the execution of business by directors, shall be determined in accordance with Article 13-2 of the Company's Articles of Incorporation, based on the evaluation by the Remuneration Committee, the Company's "Regulations Governing the Payment of the Remuneration to the Director", taking into account the extent of each director's participation in the Company's operations, their individual contribution (including their responsibilities, risks, time commitment, etc.), as well as taking into account the remuneration standards in the same industry, and considering the overall operational performance and taking into account external market factors. Reasonable remuneration is approved by the Remuneration Committee and the Board of Directors after regular review. The relevant performance evaluation and the reasonableness of compensation are reviewed by the Remuneration Committee and the Board of Directors, and the remuneration system is reviewed from time to time in accordance with the actual operating conditions and relevant laws and regulations in order to strike a balance between sustainable operation and risk control of the Company.
  - B. Director profit-sharing compensation, in accordance with Article 20 of the Company's Articles of Incorporation, if the Company makes a profit in a year, it shall set aside not more than 3% of the annual profit as directors' compensation for that year.
- 2). Procedure for determining remuneration
  - To enhance corporate governance and ensure a sound remuneration system for our directors and independent directors, the Company has established a Remuneration Committee in accordance with Article 14-6 of the Securities and Exchange Act and the "Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange". The members of this committee are professional and independent, and are in a professional and objective position to evaluate the remuneration policies and systems of our directors and independent directors and make recommendations to the Board of Directors for reference in decision-making.

(2) The remuneration received by the Company's directors, individual remuneration package, amount, and association with outcomes of performance reviews, please refer to Annex 3.
2022 Cash Dividend Payment
(1) The Company's 2022 cash dividends will be paid in accordance with Article 20 of the Company's Articles of Incorporation.
(2) In accordance with the Company's Articles of Incorporation and a special resolution of the Board of Directors on April 17, 2023, the Company shall distribute cash dividends of NT$51,610,496 to shareholders in the amount of NT$0.50 per share, calculated up to the NT$1 (rounded down to the nearest NT$1), and its fractional balance of all dividends less than NT$1 will be summed into the Company's other income, and the Chairman of the Board of Directors is hereby authorized to set the record date, the cash dividend payment date, and the related matters of dividend distribution.
(3) If the number of outstanding shares is adjusted as a result of the change in the capital stock, and subsequently the amount distributed to shareholders per share is changed, the chairman is authorized to make further adjustments in the ratio of the number of outstanding shares on the record date for dividend distribution.
The 1st domestic secured convertible corporate bonds The Company issued its first domestic secured convertible bonds to repay bank loans. The issuance was authorized by the Financial Supervisory Commission (FSC) issued no.: 1090353275 on August 26, 2020, and approved by the Taipei Exchange (TPEx)with letter No. 10900111101 on September 17, 2020, the total issuance amount was NT$500 million, and began trading on the Taipei Exchange from September 21, 2020. Please refer to the table below for the issuance status as of March 31, 2023.

Corporate bond type	1st domestic secured convertible corporate bond
Issuingdate	September 21,2020
Face value	NT$100,000
Place of issuance and trading	R.O.C
Issuing price	Issued at 102% of face value
Total Amount	NT$500,000,000
Interest rate	0%
Duration	Threeyears;maturitydate: September 21,2023
Assuranceagency	HuaNanCommercial Bank,Ltd.
Trustee	CTBC Bank Co.,Ltd.
Underwriter	First Securities Incorporation
Repayment method	Except for the conversion of the convertible bonds into the Company's common stock in accordance with Article 10 of this Rules, or the early redemption by the Company in accordance with Article 18 of this Rules, or the exercise of the right of repurchase in accordance with Article 19 of this Rules, or the purchase and cancellation by the Company from the securities dealer's office, the Company shall repay the bondsincash at face value upon maturity.

As of the date of publication of the annual report, outstanding principal amount	As of the date of publication of the annual report, outstanding principal amount	NT$ 8,200,000
Terms of redemption or early repayment Restrictions		Please refer to this conversion bond prospectus.
Other rights	As of the date of publication of the annual report, the amount of conversion (exchange or subscription) common stock, overseas depositary receipts or other securities	0
	Issuing and conversion (exchange or subscription) method	Please refer to this conversion bond prospectus.
Possible impact of the issuance and conversion (or exchange or subscription) method or issuing conditions on the dilution of equity and existing shareholders' rights		The total amount of convertible bonds issued is NT$500,000 thousand. Since the bonds have a three-year maturity period, the timing of conversion requests by creditors varies, which will delay the result of earnings per share and will not have a significant impact on the shareholders' equity. Since the bond's coupon rate is 0% and the conversion price is at a premium, there should be no negative impact on shareholders' equity.
Implementation of the capital allocationplans		Completed in the third quarter of 2020

Amendment to the "Rules of Procedure for Board of Directors Meetings"
(1) In accordance with the Financial Supervisory Commission (FSC) issued no.: 1110383263 on August 5, 2022, to amend the "Rules of Procedure for Board of Directors Meetings" of the Company.
(2) "Rules of Procedure for Board of Directors Meetings" Comparison table of amended articles, please refer to page 24 of the handbook for the 2023 Annual Meeting of Shareholders [Annex 2].
(3) The pre-amendment "Rules of Procedure for Board of Directors Meetings", please refer to page 65 of the handbook for the 2023 Annual Meeting of Shareholders [Appendix 3].

Matters for Proposal

Item 1 (Proposed by the Board of Directors) Motion: 2022 Business Report and Financial Statements. Proposed for approval. Descriptions:

The Company’s Parent Company Only Financial Statements and Consolidated Financial Statements, which have been audited by CPAs WU, HAN-CHI and LIN, YA-HUI of PwC Taiwan, and an audit report has been issued, together with the Business Report have been reviewed by the Audit Committee.
For the Independent Auditors’ Report, Parent Company Only Financial Statements and Consolidated Financial Statements, please refer to Annex 4-5.

Resolution:

The number of voting rights of shareholders present at the time of voting: 55,983,276 Rights.

Voting Results (Including Electronic Voting)	Voting Results (Including Electronic Voting)	Percentage of voting rights of shareholders present at the time of voting
approval votes	55,735,980	99.55%
disapproval votes	51,232	0.09%
invalid votes	0	0.00%
abstention votes/no votes	196,064	0.35%

Proposal was approved after voting.

Item 2 (Proposed by the Board of Directors) Motion: Distribution of earnings for 2022, proposed for approval. Descriptions:

The Company's net profit after tax for 2022 was NT$65,745,751, and a proposal for distribution of earnings for 2022 has been prepared in accordance with the Company's Articles of Incorporation for approval.

Hotron Precision Electronic Industrial Co., Ltd. 2022 Earnings Distribution Table

2022 Earnings Distribution Table
	Unit: NT$
Items	Amount
Undistributedretained earnings, beginning of the period	169,860,419
Add:netprofit after tax-2022	65,745,751
Add:Actuarialgainor lossadjustment - 2022	654,054
Distributablenetprofit	236,260,224
Less: 10%legal reserve	(6,639,981)
Add:Reversalofspecial reserve	32,211,917
Distributablenetprofit for the period	261,832,160
Distributableitems:
Stockdividendsto shareholders-stockdividends NT$0.3	(30,966,300)
Stockdividendto shareholders-cashdividends NT$0.5	(51,610,496)
Unappropriatedretained earnings, end of the period	179,255,364

Chairman: CHANG, LI-JUNG General Manager: LU, I-HSUAN Finance Supervisor: HSU, KUO-HUANG Resolution:

The number of voting rights of shareholders present at the time of voting: 55,983,276 Rights.

Voting Results (Including Electronic Voting)	Voting Results (Including Electronic Voting)	Percentage of voting rights of shareholders present at thetime ofvoting
approval votes	55,733,950	99.55%
disapproval votes	53,302	0.09%
invalid votes	0	0.00%
abstention votes/no votes	196,024	0.35%

Proposal was approved after voting.

Matters for Discussion

(Proposed by the Board of Directors) Motion: Issuance of new shares from earnings of 2022. Proposed for discussion. Descriptions:

In order to accommodate the expansion of operations, the Company intends to issue new shares in the amount of NT$30,966,300 by capitalizing retained earnings, which will be divided into 3,096,630 shares, all of which will be issued as new shares by capitalizing shareholders' dividends.
The capitalization of the earnings is allocated in accordance with the shareholding ratio of shareholders as stated in the register of shareholders on the record date of capitalization. 30 bonus shares will be allotted for every thousand shares. Shareholders can request to consolidate fractional shares with the Company's shareholder service agent within the period of five days from the share transfer suspension date. The fractional shares shall be converted to cash at the face value of the shares and calculated up to NT$ 1(rounded down to the nearest NT$ 1), and authorize the chairman of the board of directors to solicit specified persons to subscribe at par value.
The shareholder rights and obligations of these newly issued shares are the same as existing ordinary shares.
Upon the resolution of the shareholders' meeting and the approval of the competent authority, the board of directors is authorized to set another record date for the capital increase and allotment of shares, the payment date and other related matters.
If the number of outstanding shares is subsequently affected by a change in the Company's capital stock, resulting in a change in the shareholders' allotment rate, it is proposed the Board of Directors shall be authorized by the shareholders' meeting to make any such adjustment at its sole discretion.
If the proposed capital increase has been approved by the competent authorities and is necessary to be changed or amended in accordance with the objective circumstances, the Board of Directors shall be authorized by the shareholders' meeting. The Board of Directors shall be authorized by the shareholders' meeting to handle all matters relating to the proposal.
Propose for discussion.

Resolution:

The number of voting rights of shareholders present at the time of voting: 55,983,276 Rights.

Voting Results (Including Electronic Voting)	Voting Results (Including Electronic Voting)	Percentage of voting rights of shareholders present at thetime ofvoting
approval votes	55,818,546	99.70%
disapproval votes	59,742	0.10%
invalid votes	0	0.00%
abstention votes/no votes	104,970	0.18%

Proposal was approved after voting.

Matters for Election

(Proposed by the Board of Directors) Motion: Election of the 10th Director (including Independent Directors) Descriptions:

The term of office of the 9th director of the Company will terminate on June 4, 2023 and it is proposed to be fully re-elected prior to the 2023 Annual General Meeting of Shareholders.
It is proposed that seven director seats (including three independent director seats) will be elected, and the entire newly elected independent directors will compose the Audit Committee.
The 10th director shall be elected for a term of three years and shall be eligible for re-election, from May 30, 2023 to May 29, 2026, the date of election by the Shareholders' Meeting.
In accordance with the Company's Articles of Incorporation, the election of directors (including independent directors) is adopted by the candidate nomination system. The list of candidates for the current term of directors (including independent directors) was reviewed and approved by the Company's Board of Directors on April 17, 2023. the list of candidates nominated for directors (including independent directors) is as follows:

Category	Name	Shareholding	Educational Background and Experience
Director	Gao Peng Co., Ltd. Representative: CHANG, LI-JUNG	8,494,978 shares	Division of Mechanical Engineering, Wufeng Industrial College Chairman of the Company Researcher, Silicon Center of Semiconductor Research Laboratory, Tatung Institute of Technology Head of External Section Group, Hung Hai Precision IndustryCo.,Ltd.
Director	LU, I-HSUAN	70,831 shares	Master, Department of Business Administration, National Chengchi University Director of the Company General Manager of the Company Vice President, Management Department of Askey Computer Corp. Chief Financial Officer, Finance Center of TAINET Communication System Corp. General Manager,HongXuan Information Co.,Ltd.
Director	CHEN, SHUH	0 share	Ph.D., Graduate School of Business Administration, National Taiwan University Passed the R.O.C. Examination Yuan Qualification Screening Examination for Certified Public Accountants (1986 Taiwan Exam No. 866) Passed the R.O.C. Examination Yuan Qualification for Accountant of higher examination (1983 Professional Exam No. 94) Chairman,ZhongDao Association of Leadership&

Category	Name	Shareholding	Educational Background and Experience
			Culture Chairperson, Financial Supervisory Commission, Executive Yuan Chairman, Taiwan Stock Exchange Corporation Chairman, Taipei Exchange Chairman and President, Taiwan Academy of Banking and Finance Administrative Deputy Minister, Ministry of Finance Chairperson, Securities and Futures Commission, Executive Yuan Honorary Chair Professor, Chung Yuan University Full-time Chair Professor,Chinese Culture University
Director	CHEN, TAI-CHUNG	0 shares	Graduated from An-Nan National School, Dongshi Township, Yunlin County President, Xiang-Yang Land Development Co., Ltd. President, Feng Dien Development & Construction Co., Ltd.
Independe nt Director	HSIEH, I-TA	0 shares	Department of Law, College of Law and Business at National Chung Hsing University Director and Practicing Lawyer, Yi-Cheng Law Firm Officer,Taipei CityConstruction Management Office
Independe nt Director	CHU, YANN- FANG	0 shares	Ph.D., Graduate School of Business Administration, National Taiwan University Project Management Professional (PMP), Project Management Institute (PMI) Adjunct Associate Professor, Shih Chien University Adjunct Associate Professor, Soochow University The 5th,6th,7th,8thdirector, National Project Management Association of China
Independe nt Director	CHOU, CHE-YI	0 shares	Master, Department of Accounting, Business Administration at National Taipei University Certified Public Accountant, Cheng Sing CPA Firm Financial Assistant, ABICO AVY Co., Ltd. Assurance Associate, PwC Taiwan Independent Director, Nan Yang Dyeing & Finishing Co.,Ltd.

The qualifications and independence of the independent director nominees have been reviewed by the officer in charge of corporate governance and are in compliance with the relevant laws and regulations.
In accordance with the "Procedures for Election of Directors" of the Company, we hereby propose for election.

Resolution:

After the election results of this case, the list of elected directors (including independent directors) is as follows:

The 10th Director (including independent directors) elected list

Category	Number	Name	The number of voting rights
Director	29	Gao Peng Co., Ltd Representative: CHANG,LI-JUNG	70,051,688
Director	225	LU, I-HSUAN	59,558,888
Director	P10198****	CHEN,SHUH	55,002,686
Director	P10199****	CHEN,TAI-CHUNG	52,352,788
Independent Director	Q12065****	HSIEH,I-TA	50,202,716
Independent Director	G10181****	CHU,YANN-FANG	50,132,670
Independent Director	C12084****	CHOU,CHE-YI	50,066,057

Other Matters

(Proposed by the Board of Directors) Motion: Release the Newly-Elected Directors and its representative from Non-Competition Restrictions. Propose for discussion.

Descriptions:

In accordance with Article 209 of the Company Act, a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
2.In order to meet the actual business needs and without prejudice to the interests of the Company, it is proposed that the 2023 shareholders' meeting agree to release the newly-elected directors and its representative from non-competition restrictions under Article 209 of the Company Act in order to facilitate business development.
3.Propose for discussion.

Resolution:

The number of voting rights of shareholders present at the time of voting: 55,983,276 Rights.

Voting Results (Including Electronic Voting)	Voting Results (Including Electronic Voting)	Percentage of voting rights of shareholders present at the time of voting
approval votes	55,583,171	99.28%
disapproval votes	178,785	0.31%
invalid votes	0	0.00%
abstention votes/no votes	221,320	0.39%

Proposal was approved after voting.

Extemporary Motions

There being no other special motion.

Meeting Adjournment

9:30 a.m., on the May 30 (Tuesday), 2023

There were no questions from shareholders at this 2023 Annual Meeting of Shareholders.

Annex 1

Business Report

Dear Shareholders,

Welcome to the 2023 annual general meeting of shareholders.

According to a research report by the Taiwan Institute of Economic Research, last year (2022) due to the outbreak of armed conflict in Russia and Ukraine, resulting in a surge in global energy and raw material prices, and China also due to the outbreak of epidemics, which led to the adoption of strict control measures, resulting in the global supply chain suffered another blow; in addition, Europe and the U.S. as inflation continues to rise, the U.S. Federal Reserve in order to curb inflation, rising interest rates rapidly since March, and since the second half of the year to reduce bond purchases, resulting in increased volatility in global financial markets, non-USD currencies mostly have seen significant depreciation, also led to a surge in imported inflationary pressure in many countries. Looking ahead to 2023, as major economies have been raising interest rates since 2022 to curb inflation, manufacturing activity in various countries has slowed down significantly, coupled with the unresolved war between Russia and Ukraine and the resurgence of the U.S.-China technology war and other variables continue to deepen doubts about the global economic outlook, major international forecasters all believe that global economic and trade growth will slow down in 2023 compared to 2022.

Hotron Group's consolidated revenue for last year (2022) was NT$3,362 million, although it was 12% growth compared to the previous year (2021), when the revenue was NT$3,007 million., it was still affected by the war in Russia, the epidemic, the exchange rate, the interest rate hike and the increase in raw material prices, which led to the increase in costs and expenses. Although the net income for the year was NT$65,746 thousand, an 190% growth compared to NT$22,676 thousand in the previous year (2021), and the after-tax earnings per share was NT$0.71, the profit was still not satisfactory. Despite the profit was not as expected, however, Hotron Group has entered the stage of industrial upgrading and corporate transformation, and is optimistic about the future development.

Hotron Group has already taken the leading position in the market share of the existing cable products. However, in order to maintain the corporate advantages and enhance the competitiveness of the industry, Hotron Group still continues to actively carry out product upgrades and industrial transformation. In addition to the upgrade of existing products and the development of more advanced cable products with faster transmission speed, the charging gun products for electric vehicles have been steadily shipped, and we have planned to continue to develop the charging equipment products and extend the depth and breadth of electric vehicle products in order to establish a firm foothold in the electric vehicle industry in the shortest possible time. Furthermore, the new factories in Vietnam and Hubei have been put into production, which not only enable us to serve customers and supply goods locally, but also increase our production capacity, which will help increase our revenue sources and profitability.

I would like to wish all shareholders, ladies and gentlemen Good health! All the best!

Chairman: CHANG, LI-JUNG General Manager: LU, I-HSUAN Finance Supervisor: HSU, KUO-HUANG

Annex 2

Audit Committee's Review Report

The Board of Directors has prepared the Company's 2022 Business Report, Parent Company Only Financial Statements and Consolidated Financial Statements, which have been audited by CPAs WU, HAN-CHI and LIN, YA-HUI of PwC Taiwan, and have been reviewed by the Audit Committee and have considered that there are no discrepancies, in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

Hotron Precision Electronic Industrial Co., Ltd. 2023 Annual General Shareholders' Meeting

Audit Committee Convener: CHOU, CHE-YI

February 24, 2023

Audit Committee's Review Report

The Board of Directors has prepared the proposal for the Compnay’s distriction of earnings for 2022, which have been reviewed by the Audit Committee and have considered that there are no discrepancies, in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

To

Hotron Precision Electronic Industrial Co., Ltd. 2023 Annual General Shareholders' Meeting

Audit Committee Convener: CHOU, CHE-YI

April 17, 2023

Annex 3

Report on the remuneration received by directors in 2022

Unit: NT$ thousand

Job title	Name	Remuneration to directors	Remuneration to directors	Remuneration to directors	Remuneration to directors	Remuneration to directors	Remuneration to directors			Sum of A+B+C+D and ratio to net income (Note 7)	Sum of A+B+C+D and ratio to net income (Note 7)	Remuneration received by directors for concurrent service as an employee	Remuneration received by directors for concurrent service as an employee	Remuneration received by directors for concurrent service as an employee	Remuneration received by directors for concurrent service as an employee	Remuneration received by directors for concurrent service as an employee	Remuneration received by directors for concurrent service as an employee	Remuneration received by directors for concurrent service as an employee	Remuneration received by directors for concurrent service as an employee	Sum of A+B+C+D+E+F+ G and ratio to net income (Note 7)	Sum of A+B+C+D+E+F+ G and ratio to net income (Note 7)	Remuneration received from investee enterprises other than subsidiaries or from the parent company (Note 8)
		Base compensation (A) (Note 1)		Retirement pay and pension (B)		Director profit-sharing compensation (C) (Note 2)		Expenses and perquisites (D) (Note 3)				Salary,rewards , and special disbursements (E) (Note 4)		Retirement pay and pension (F)		Employee profit-sharing compensation (G)(Note 5)
		The Company	All consolidated entities (Note 6)	The Company	All consolidated entities (Note 6)	The Company	All consolidated entities (Note 6)	The Company	All consolidated entities (Note 6)	The Company	All consolidated entities (Note 6)	The Company	All consolidated entities (Note 6)	The Company	All consolidated entities (Note 6)	Company	The	d entities (Note 6)	All consolidate	The Company	All consolidated entities (Note 6)
																Amount in cash	Amount in stock	Amount in cash	Amount in stock
Chairman	CHANG, LI-JUNG	5,980	5,980	0	0	375	375	18	18	9.69%	9.69%	0	0	0	0	0	0	0	0	9.69%	9.69%	None
Director	LU, I-HSUAN	0	0	0	0	375	375	18	18	0.60%	0.60%	2,507	2,507	108	108	93	0	93	0	4.72%	4.72%	None
Director	HSU, TING- JUNG	0	0	0	0	375	375	18	18	0.60%	0.60%	0	0	0	0	0	0	0	0	0.60%	0.60%	None
Director	CHEN, TAI- CHUNG	0	0	0	0	375	375	16	16	0.59%	0.59%	0	0	0	0	0	0	0	0	0.59%	0.59%	None
Independ ent Director	HSIEH, I-TA	0	0	0	0	375	375	44	44	0.64%	0.64%	0	0	0	0	0	0	0	0	0.64%	0.64%	None
	CHU, YANN- FANG	0	0	0	0	375	375	44	44	0.64%	0.64%	0	0	0	0	0	0	0	0	0.64%	0.64%	None
	CHOU, CHE-YI	0	0	0	0	375	375	44	44	0.64%	0.64%	0	0	0	0	0	0	0	0	0.64%	0.64%	None

13 -

Item /Name	Total remuneration as apercentage of net income after tax(Note)	Total remuneration as apercentage of net income after tax(Note)	Total remuneration as apercentage of net income after tax(Note)	Total remuneration as apercentage of net income after tax(Note)
	2022		2021
	The Company	All consolidated entities	The Company	All consolidated entities
Director,Independent Director	17.52%	17.52%	48.31%	48.31%

Note: The higher percentage of total remuneration to net income after tax is mainly due to the lower profit in the current year, resulting in a higher percentage. The remuneration policies and the determination of remuneration are in line with the relevant regulations and should be reasonable.
In addition to what is disclosed in the above table, please specify the amount of remuneration received by directors in the most recent fiscal year for providing services (e.g., for serving as a non-employee consultant to the parent company /any consolidated entities / invested enterprises): None.
3.Its linkage to operating performance and future risk exposure:

The remuneration of directors and independent directors is based on their participation and individual contribution to the Company's operations, taking into account the Company's internal "Regulations for the Approval of Salaries" and "Regulations for the Payment of Directors' Remuneration", with reference to the normal standards of listed companies, and are highly linked to the Company's operating performance and its business responsibilities. The Company's Management and Remuneration Committee also regularly review the Company's salary policy and make appropriate adjustments in order to ensure the Company's competitive advantage in the area of human resources and risk management at the management level.

Note 1: This refers to director base compensation in 2022 (including director salary, duty allowances, and various rewards and incentives, etc.). Note 2: Fill in the amount of director profit-sharing compensation approved by the board of directors for distribution for 2022.
Note 3: This refers to director expenses and perquisites in 2022 (including travel expenses, stipends of any kind, etc.).
Note 4: This includes any remuneration received by a director for concurrent service as an employee in 2022, including salary, duty allowances, rewards, incentives, travel expenses, stipends of any kind, and provision of facilities such as vehicles, etc.
Note 5: This refers to employee profit-sharing compensation (cash) received by a director for concurrent service as an employee in 2022. The amount expected to be distributed by calculating pro-rata to the amount that was actually distributed in the preceding fiscal year.
Note 6: Disclose the total amount of remuneration paid to the directors of the Company by all companies in the consolidated financial report (including the Company).
Note 7: Net income means the net income after tax on the individual financial report for 2022.
Note 8: The directors of the company did not receive the amount of remuneration received from investee enterprises other than subsidiaries or from the parent company.
14 -

Annex 4

2022 Parent Company Only Financial Statements and Independent Auditors' Report

(2023) No. Financial-Supervisory-Securities-Auditing-22004209

To Hotron Precision Electronic Industrial Co., Ltd. ：

Opinion

We have audited the accompanying parent company only financial statements of Hotron Precision Electronic Industrial Co., Ltd. (the “Company”), which comprise the parent company only balance sheets as of December 31, 2022 and 2021, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China 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 Company’s parent company only financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

15 -

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

Investments accounted for using equity method and the recognition of the investment profit or loss

Explanations

For the accounting policies concerning the investments accounted for using equity method, please refer to Note 4(j) to the parent company only financial statements. For the explanation concerning investments accounted for using equity method, please refer to Note 6(d) to the parent company only financial statements.

As of December 31, 2022, the investments accounted for using equity method amounted to NT$1,770,334 thousands, and the share of the profit or loss of subsidiaries, associates and joint ventures accounted for using the equity method amounted to NT$(1,129) thousands in the year ended December 31, 2022. The balance of the investment accounted for using equity method is identified as one of the key audit matter, as the aforementioned amounts are material to the financial statements.

Audit procedures in response

The main audit procedures in response to the aforementioned key audit matter implemented on specific level are summarized below ：

1.Obtain an understanding of the accounting policies of the investments accounted for using equity method, verify whether the accounting policies are in accordance with the regulations governing the preparation of financial reports, and assess whether the accounting policies are appropriate.
2.Obtain an understanding of the relevant control procedures of the investment accounted for using equity method, test and calculate the accuracy of the recognition of related additions, disposals, investment profit or loss and the share of the profit or loss in other comprehensive income.

Revenue Cut-off of Sales from Hubs

Explanations

For the accounting policies concerning the recognition of revenue, please refer to Note 4(u) to the parent company only financial statements.

There are two main types of sales, including recognizing revenue after shipping from the factory, and recognizing revenue after shipping from hubs. The revenue of the sales from the hubs shall be recognized after the end customers pick up the cargo and the transfer of the risk and reward has been confirmed. The Company recognizes revenue based on the information of actual shipments from the hub to the customers derived from the report or other information provided by the hub’s custodian.

The revenue of sales from hubs is recognized based on the report or other information provided by the hub’s custodian and the revenue recognition involves numerous manual procedures. As there are numerous sales from hubs, and the transaction amounts prior to and after the balance sheet date are significant to the financial statements, revenue cut-off of sales from hubs has been identified as one of the key audit matters.

16 -

Audit procedures in response

The main audit procedures in response to the revenue cut-off of sales from hubs implemented are summarized below ：

1.Obtain an understanding of the revenue recognition procedures of the sales from hubs, including obtaining an understanding of the relevant internal control procedures and the information and reports provided by the hub’s custodian, to assess the appropriateness of the revenue recognition of sales from hubs.
2.Perform the internal control testing to the revenue from the sales from hubs, to ensure the Company recognized revenue after the end customers pick up the cargo and the transfer of the risk and reward has been confirmed.
3.Perform the revenue cut-off testing to the transactions of sales from hub during a certain period prior and after the balance sheet date, including verifying the supporting documents, shipping certificates, and revenue recognition has been recorded in the appropriate period.
4.Send confirmation letters about the inventory quantities to the hubs, and verify the number with the quantities in the account books.

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

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

In preparing the parent company only financial statements, management is responsible for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

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

17 -

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

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

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

We also provide those charged with governance, with a statement that we have complied with 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.

18 -

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

PricewaterhouseCoopers Taiwan

Wu, Han-Chi CPA Lin, Ya-Hui

Securities and Futures Bureau Reference number of the approval letter ： (90)No. Taiwan-Finance-Securities-VI-157088 Financial Supervisory Commission Reference number of the approval letter ： No. Financial-Supervisory-Securities-Auditing-1070323061 February 24, 2023

19 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. Parent Company Only Balance Sheets December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars

Assets	December 31, 2022 Amount % $ 284,284 9 265,325 8 35,376 1 1,519 - - - - - 15,817 1 369,880 12 91 - 972,292 31 1,770,334 56 105,244 3 302,961 9 887 - 18,008 1 2,920 - 2,200,354 69 $ 3,172,646 100	December 31, 2021	December 31, 2021
	Amount $ 284,284 265,325 35,376 1,519 - - 15,817 369,880 91 972,292 1,770,334 105,244 302,961 887 18,008 2,920 2,200,354 $ 3,172,646	Amount $ 178,921 355,376 49,063 30 692 225 8,786 246,006 1,435 840,534 1,687,437 107,576 307,695 111 18,763 2,034 2,123,616 $ 2,964,150	%
Current Assets 1100 Cash and cash equivalents 1170 Accounts receivable, net 1180 Accounts receivable – related parties, net 1200 Other receivables 1210 Other receivables– related parties 1220 Current tax assets 130X Inventories 1410 Prepayments 1479 Other current assets– others 11XX Total current assets Non-current Assets 1550 Investments accounted for using equity method 1600 Property, plant, and equipment 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			6 12 2 - - - - 8 -
			28
			57 4 10 - 1 -
			72
			100

(Continued)

20 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. Parent Company Only Balance Sheets December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars

Liabilities and Equity	Notes 6(i), 8 6(j) 6(l) 6(k) 6(w) 6(m) 6(w) 7 6(o) 6(p) 6(q) 9 11	December 31, 2022 Amount % $ 865,000 27 109,843 4 2,116 - 13,501 - 16,553 1 8,182 - 484 - 1,015,679 32 92,041 3 2,095 - 94,136 3 1,109,815 35 932,210 29 641,858 20 220,291 7 115,046 4 236,260 8 ( 82,834) ( 3) 2,062,831 65 $ 3,172,646 100	December 31, 2021 Amount % $ 732,000 25 149,932 5 1,811 - 14,250 1 - - 42,055 1 397 - 940,445 32 91,890 3 1,604 - 93,494 3 1,033,939 35 923,181 31 616,880 21 218,051 7 112,601 4 174,544 6 ( 115,046) ( 4) 1,930,211 65 $ 2,964,150 100
		Amount $ 865,000 109,843 2,116 13,501 16,553 8,182 484 1,015,679 92,041 2,095 94,136 1,109,815 932,210 641,858 220,291 115,046 236,260 ( 82,834) 2,062,831 $ 3,172,646	Amount $ 732,000 149,932 1,811 14,250 - 42,055 397 940,445 91,890 1,604 93,494 1,033,939 923,181 616,880 218,051 112,601 174,544 ( 115,046) 1,930,211 $ 2,964,150
Current Liabilities 2100 Short-term borrowings 2110 Short-term notes payable 2120 Current financial liabilities at fair value through profit or loss 2200 Other payables 2230 Current tax liabilities 2320 Long-term liabilities-current portion 2399 Other current liabilities-others 21XX Total current liabilities Non-current Liabilities 2570 Deferred income tax liabilities 2670 Other non-current liabilities-others 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Ordinary share Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Other equity 3400 Other equity 3XXX Total equity Significant contingencies and unrecognized contract commitments Significant subsequent events 3X2X Total liabilities and equity

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

Chairman ： Chang, Li-Jung

General Manager ： Lu, I-Hsuan

Accounting Officer ： Hsu, Kuo-Huang

21 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. Parent Company Only Statements of Comprehensive Income As of and For the Years Ended December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars (Earnings per share is expressed in New Taiwan Dollars)

Items	2022 2021 Notes Amount % Amount % 6(r), 7 $ 778,225 100 $ 538,469 100 6(c), 7 ( 700,522) ( 90) ( 464,068) ( 86) 77,703 10 74,401 14 6(v), 7 ( 190) - ( 35) - ( 50,879) ( 6) ( 45,914) ( 8) ( 51,069) ( 6) ( 45,949) ( 8) 6(s) 64,321 8 ( 8,274) ( 2) 90,955 12 20,178 4 7 3,429 - 1,964 - 704 - 931 - 6(t) ( 225) - ( 1,228) - 6(u) ( 10,163) ( 1) ( 7,211) ( 1) 6(d) ( 1,129) - 13,596 2 ( 7,384) ( 1) 8,052 1 83,571 11 28,230 5 6(w) ( 17,825) ( 2) ( 5,554) ( 1) $ 65,746 9 $ 22,676 4 6(n) $ 181 - ($ 157) - 510 - ( 154) - 6(w) ( 36) - 31 - 655 - ( 280) - 32,212 4 ( 2,445) - 32,212 4 ( 2,445) - $ 32,867 4 ($ 2,725) - $ 98,613 13 $ 19,951 4 6(x) $ 0.71 $ 0.25 $ 0.71 $ 0.25
4000 Operating revenue 5000 Operating costs 5900 Net gross profit Operating expenses 6100 Selling expenses 6200 Administrative expenses 6000 Total operating expenses 6500 Other revenue and expenses 6900 Net operating income Non-operating income and expenses 7100 Interest revenue 7010 Other revenue 7020 Other gains and losses 7050 Finance cost 7070 Share of profit or loss of subsidiaries, associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before tax 7950 Income tax expenses 8200 Profit Other comprehensive income, net Items not to be reclassified into profit or loss 8311 Remeasurements of defined benefit plans 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method-components not to be reclassified to profit or loss 8349 Income tax related to items of other comprehensive income not to be reclassified to profit or loss 8310 Items not to be reclassified into profit or loss Items that may be subsequently reclassified into profit or loss 8361 Exchange differences on translation of foreign financial statements 8360 Items that may be subsequently reclassified into profit or loss 8300 Other comprehensive income (loss), net of tax 8500 Total comprehensive income Basic earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share

Items

2022
2021
Notes
Amount
%
Amount
%
6(r), 7
$ 778,225
100
$ 538,469
100
6(c), 7 (
700,522) (
90) (
464,068) (
86)
77,703
10
74,401
14
6(v), 7
(
190)
- (
35)
-
(
50,879) (
6) (
45,914) (
8)
(
51,069) (
6) (
45,949) (
8)
6(s)
64,321
8 (
8,274) (
2)
90,955
12
20,178
4
7
3,429
-
1,964
-
704
-
931
-
6(t)
(
225)
- (
1,228)
-
6(u)
(
10,163) (
1) (
7,211) (
1)
6(d)
(
1,129)
-
13,596
2
(
7,384) (
1)
8,052
1
83,571
11
28,230
5
6(w)
(
17,825) (
2) (
5,554) (
1)
$ 65,746
9
$ 22,676
4
6(n)
$ 181
- ($ 157)
-
510
- (
154)
-
6(w)
(
36)
-
31
-
655
- (
280)
-
32,212
4 (
2,445)
-
32,212
4 (
2,445)
-
$ 32,867
4 ($ 2,725)
-
$ 98,613
13
$ 19,951
4
6(x)
$ 0.71
$ 0.25
$ 0.71
$ 0.25

4000
Operating revenue
5000
Operating costs
5900
Net gross profit
Operating expenses
6100
Selling expenses
6200
Administrative expenses
6000
Total operating expenses
6500
Other revenue and expenses
6900
Net operating income
Non-operating income and expenses
7100
Interest revenue
7010
Other revenue
7020
Other gains and losses
7050
Finance cost
7070
Share of profit or loss of subsidiaries, associates
and joint ventures accounted for using equity
method
7000
Total non-operating income and expenses
7900
Profit before tax
7950
Income tax expenses
8200
Profit
Other comprehensive income, net
Items not to be reclassified into profit or loss
8311
Remeasurements of defined benefit plans
8330
Share of other comprehensive income of
subsidiaries, associates and joint ventures
accounted for using equity method-components
not to be reclassified to profit or loss
8349
Income tax related to items of other
comprehensive income not to be reclassified to
profit or loss
8310
Items not to be reclassified into profit or loss
Items that may be subsequently reclassified into
profit or loss
8361
Exchange differences on translation of foreign
financial statements
8360
Items that may be subsequently reclassified into
profit or loss
8300
Other comprehensive income (loss), net of tax
8500
Total comprehensive income
Basic earnings per share
9750
Basic earnings per share
9850
Diluted earnings per share

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

Chairman ： Chang, Li-Jung General Manager ： Lu, I-Hsuan Accounting Officer ： Hsu, Kuo-Huang

22 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD.

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

Expressed in thousands of New Taiwan Dollars

Notes 2021 Balance at January 1, 2021 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of 2020 earnings`：`6(q) Legal reserve Special reserve Cash dividends Conversion of convertible bonds 6(m)(o) Unclaimed dividends overdue transferred to capital surplus Balance at December 31, 2021 2022 Balance at January 1, 2022 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of 2021 earnings`：`6(q) Legal reserve Special reserve Conversion of convertible bonds 6(m)(o) Unclaimed dividends overdue transferred to capital surplus Balance at December 31, 2022	OrdinaryShares $ 832,810 - - - - - - 90,371 - $ 923,181 $ 923,181 - - - - - 9,029 - $ 932,210			Capital surplus	Capital surplus			Retained earnings Other equity Special reserve Unappropriated retained earnings Exchange differences on translation of foreign financial statements Total equity $ 117,252 $ 285,152 ($ 112,601 ) $ 1,694,256 - 22,676 - 22,676 - ( 280 ) ( 2,445 ) ( 2,725 ) - 22,396 ( 2,445 ) 19,951 - ( 12,733 ) - - ( 4,651 ) 4,651 - - - ( 124,922 ) - ( 124,922 ) - - - 340,921 - - - 5 $ 112,601 $ 174,544 ($ 115,046 ) $ 1,930,211 $ 112,601 $ 174,544 ($ 115,046 ) $ 1,930,211 - 65,746 - 65,746 - 655 32,212 32,867 - 66,401 32,212 98,613 - ( 2,240 ) - - 2,445 ( 2,445 ) - - - - - 33,998 - - - 9 $ 115,046 $ 236,260 ($ 82,834 ) $ 2,062,831	Retained earnings Other equity Special reserve Unappropriated retained earnings Exchange differences on translation of foreign financial statements Total equity $ 117,252 $ 285,152 ($ 112,601 ) $ 1,694,256 - 22,676 - 22,676 - ( 280 ) ( 2,445 ) ( 2,725 ) - 22,396 ( 2,445 ) 19,951 - ( 12,733 ) - - ( 4,651 ) 4,651 - - - ( 124,922 ) - ( 124,922 ) - - - 340,921 - - - 5 $ 112,601 $ 174,544 ($ 115,046 ) $ 1,930,211 $ 112,601 $ 174,544 ($ 115,046 ) $ 1,930,211 - 65,746 - 65,746 - 655 32,212 32,867 - 66,401 32,212 98,613 - ( 2,240 ) - - 2,445 ( 2,445 ) - - - - - 33,998 - - - 9 $ 115,046 $ 236,260 ($ 82,834 ) $ 2,062,831	Retained earnings Other equity Special reserve Unappropriated retained earnings Exchange differences on translation of foreign financial statements Total equity $ 117,252 $ 285,152 ($ 112,601 ) $ 1,694,256 - 22,676 - 22,676 - ( 280 ) ( 2,445 ) ( 2,725 ) - 22,396 ( 2,445 ) 19,951 - ( 12,733 ) - - ( 4,651 ) 4,651 - - - ( 124,922 ) - ( 124,922 ) - - - 340,921 - - - 5 $ 112,601 $ 174,544 ($ 115,046 ) $ 1,930,211 $ 112,601 $ 174,544 ($ 115,046 ) $ 1,930,211 - 65,746 - 65,746 - 655 32,212 32,867 - 66,401 32,212 98,613 - ( 2,240 ) - - 2,445 ( 2,445 ) - - - - - 33,998 - - - 9 $ 115,046 $ 236,260 ($ 82,834 ) $ 2,062,831	Retained earnings Other equity Special reserve Unappropriated retained earnings Exchange differences on translation of foreign financial statements Total equity $ 117,252 $ 285,152 ($ 112,601 ) $ 1,694,256 - 22,676 - 22,676 - ( 280 ) ( 2,445 ) ( 2,725 ) - 22,396 ( 2,445 ) 19,951 - ( 12,733 ) - - ( 4,651 ) 4,651 - - - ( 124,922 ) - ( 124,922 ) - - - 340,921 - - - 5 $ 112,601 $ 174,544 ($ 115,046 ) $ 1,930,211 $ 112,601 $ 174,544 ($ 115,046 ) $ 1,930,211 - 65,746 - 65,746 - 655 32,212 32,867 - 66,401 32,212 98,613 - ( 2,240 ) - - 2,445 ( 2,445 ) - - - - - 33,998 - - - 9 $ 115,046 $ 236,260 ($ 82,834 ) $ 2,062,831
		Capital surplus $ 351,320 - - - - - - 262,477 - $ 613,797 $ 613,797 - - - - - 26,140 - $ 639,937		Treasury share transactions $ 1,615 - - - - - - - - $ 1,615 $ 1,615 - - - - - - - $ 1,615	Share options $ 13,377 - - - - - - ( 11,927 ) - $ 1,450 $ 1,450 - - - - - ( 1,171 ) - $ 279	Others	Legal reserve $ 205,318 - - - 12,733 - - - - $ 218,051 $ 218,051 - - - 2,240 - - - $ 220,291	Special reserve
						$ 13 - - - - - - - 5 $ 18 $ 18 - - - - - - 9 $ 27			$ 117,252 - - - - ( 4,651 - - - $ 112,601 $ 112,601 - - - - 2,445 - - $ 115,046	)	$ 285,152 22,676 ( 280 ) 22,396 ( 12,733 ) 4,651 ( 124,922 ) - - $ 174,544 $ 174,544 65,746 655 66,401 ( 2,240 ) ( 2,445 ) - - $ 236,260

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

Chairman ： Chang, Li-Jung

General Manager ： Lu, I-Hsuan Accounting Officer ： Hsu, Kuo-Huang - 23 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. Parent Company Only Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars

				For the year ended			For the year ended
	Notes			December 31,2022			December 31,2021
Cash flows from operating activities
Profit before tax			$	83,571		$	28,230
Adjustments
Items of income and expense
Depreciation expense (including right-of-use assets and	6(e)(f)(h)
investment properties)	(v)			7,531			7,213
Amortization expense	6(v)			39			15
Interest expense	6(u)			9,958			5,977
Net loss on financial liabilities at fair value through profit or	6(l)(m)
loss	(t)			225			1,228
Interest revenue		(		3,429 )	(		1,964 )
Share of profit or loss of subsidiaries, associates and joint	6(d)
ventures accounted for using equity method				1,129	(		13,596 )
Bond discount amortization	6(u)			205			1,234
Changes in operating assets and liabilities
Net changes in operating assets
Accounts receivable				90,051	(		327,154 )
Accounts receivable – related parties, net				13,687			26,171
Other receivables				-			12,479
Other receivables– related parties				692	(		692 )
Inventories		(		7,031 )	(		3,287 )
Prepayments		(		123,874 )	(		245,320 )
Other current assets				1,351	(		994 )
Defined benefit assets–non-current		(		705 )	(		840 )
Net changes in operating liabilities
Notes payable				-	(		500 )
Accounts payable– related parties				-	(		10,792 )
Other payables		(		2,122 )	(		14,225 )
Other current liabilities				87	(		203 )
Cash inflow (outflow) generated from operations				71,365	(		537,020 )
Interest received				1,940			2,343
Interest paid		(		9,879 )	(		5,960 )
Income taxes paid		(		178 )	(		19,048 )
Net cash inflow (outflow) provided by operating activities				63,248	(		559,685 )
Cash flows from investing activities
Decrease in financial assets at amortized cost				-			165,184
Acquisition of property, plant and equipment	6(e)	(		472 )	(		6,619 )
Acquisition of intangible assets		(		815 )	(		126 )
Acquisition of investments accounted for using equity method	6(d)	(		50,000 )			-
Decrease in refundable deposits				-			420
Net cash inflow (outflow) provided by investing activities		(		51,287 )			158,859
Cash flows from financing activities
Increase in short-term borrowings	6(y)			133,000			80,000
Increase (Decrease) in short-term notes payables	6(y)	(		40,089 )			99,938
Increase in guaranteed deposits received				491			4
Repayments of lease principal	6(y)			-	(		435 )
Cash dividends paid	6(q)			-	(		124,922 )
Net cash inflow (outflow) provided by financing activities				93,402			54,585
Net increase (decrease) in cash and cash equivalents				105,363	(		346,241 )
Cash and cash equivalents at the beginning of period	6(a)			178,921			525,162
Cash and cash equivalents at the end of period	6(a)		$	284,284		$	178,921

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

Chairman ： Chang, Li-Jung

General Manager ： Lu, I-Hsuan

Accounting Officer ： Hsu, Kuo-Huang

24 -

Annex 5

2022 Consolidated Financial Statements and Independent Auditors' Report

(2023) No. Financial-Supervisory-Securities-Auditing-22003983

To Hotron Precision Electronic Industrial Co., Ltd.:

Opinion

We have audited the accompanying financial statements of Hotron Precision Electronic Industrial Co., Ltd. and subsidiaries(the “Group”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 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 auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

25 -

Key audit matters for the Group’s consolidated financial statements for the year ended December 31, 2022 are stated as follows:

Valuation for Inventories

Explanations

For the accounting policies concerning the valuation of inventories, please refer to Note 4(j) to the consolidated financial statements. For the uncertainty arising from accounting estimates and assumptions of the valuation of inventories, please refer to Note 5(b) to the consolidated financial statements. For the explanations of the allowance for reduction of inventory to market, please refer to Note 6(c) to the consolidated financial statements. The inventories and allowance for inventory valuation losses amounted to NT$1,116,557 thousands and NT$74,888 thousands respectively as of December 31, 2022.

The Group manufactures and sells cables and wires for 3C products. As the life cycle of electronic products is very short, and the market is highly competitive, the risk of suffering from inventory valuation losses is high. The Group measure inventories by the lower of cost and net realizable value. Net realizable value is estimated by the actual average selling prices less the variable selling expense. However, as the net realizable value used in inventory valuation is involved in subjective judgment, it has the characteristic of high uncertainty arising from accounting estimates. The valuation of the allowance inventory valuation losses has been identified as one of the key audit matters.

Audit procedures in response

The main audit procedures in response to the allowance inventory valuation losses implemented are summarized below:

1.Obtain an understanding of the operation and the nature of the industry of the Group, to assess the rationality of the recognition policies and procedures of the allowance inventory valuation losses, including the rationality of base to determine the net realizable value.
2.Obtain an understanding of the process of hub management, check the annual stocktaking plan, and participate in the annual stocktaking, to assess the effectiveness of identifying and controlling the inventories by the management.
3.Verify the appropriateness of the inventory aging report used for inventory valuation, to ensure the information in the report is in consistency with the policies.
4.Perform the verification of the logic to calculate the net realizable value of the inventories, to assess the rationality of determining the allowance inventory valuation losses.
26 -

Revenue Cut-off of Sales from Hubs

Explanations

For the accounting policies concerning the recognition of revenue, please refer to Note 4(22) to the consolidated financial statements.

There are two main types of sales, including recognizing revenue after shipping from the factory, and recognizing revenue after shipping from hubs. The revenue of the sales from the hubs shall be recognized after the end customers pick up the cargo and the transfer of the risk and reward has been confirmed. The Group recognizes revenue based on the information of actual shipments from the hub to the customers derived from the report or other information provided by the hub’s custodian.

Audit procedures in response

The main audit procedures in response to the revenue cut-off of sales from hubs implemented are summarized below:

1.Obtain an understanding of the revenue recognition procedures of the sales from hubs, including obtaining an understanding of the relevant internal control procedures and the information and reports provided by the hub’s custodian, to assess the appropriateness of the revenue recognition of sales from hubs.
2.Perform the internal control testing to the revenue from the sales from hubs, to ensure the Group recognized revenue after the end customers pick up the cargo and the transfer of the risk and reward has been confirmed.
3.Perform the revenue cut-off testing to the transactions of sales from hub during a certain period prior and after the balance sheet date, including verifying the supporting documents, shipping certificates, and revenue recognition has been recorded in the appropriate period.
4.Send confirmation letters about the inventory quantities to the hubs, and verify the number with the quantities in the account books.

`－` Other Matter Parent Company Only Financial Statements

We have also audited the parent company only financial statements of Hotron Precision Electronic Industrial Co., Ltd. as of and for the years ended December 31, 2022 and 2021 on which we have issued an unqualified 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 for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

27 -

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 members of 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 auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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 from on 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 financial statements or, if such disclosures are inadequate, we are required to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our 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 appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
28 -

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.

PricewaterhouseCoopers Taiwan

Wu, Han-Chi CPA Lin, Ya-Hui

Securities and Futures Bureau Reference number of the approval letter:(90)No. Taiwan-Finance-Securities-VI-157088 Financial Supervisory Commission Reference number of the approval letter: No. Financial-Supervisory-Securities-Auditing-1070323061

February 24, 2023

29 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Balance Sheets December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars

Assets	December 31,2022 Amount % $ 566,947 10 8,683 - 975,045 18 32,164 1 - - 1,041,669 19 27,312 1 76,729 1 2,728,549 50 2,313,052 43 97,533 2 139,996 2 5,853 - 38,085 1 99,755 2 2,694,274 50 $ 5,422,823 100	December 31,2021	December 31,2021
	Amount $ 566,947 8,683 975,045 32,164 - 1,041,669 27,312 76,729 2,728,549 2,313,052 97,533 139,996 5,853 38,085 99,755 2,694,274 $ 5,422,823	Amount $ 371,589 15,031 1,415,485 4,461 2,247 803,372 54,912 49,345 2,716,442 1,790,292 97,518 142,318 377 22,492 236,079 2,289,076 $ 5,005,518	%
Current Assets 1100 Cash and cash equivalents 1150 Notes receivables, net 1170 Accounts receivables, net 1200 Other receivables 1220 Current tax assets 130X Inventories 1410 Prepayments 1479 Other current assets– others 11XX Total current assets Non-current assets 1600 Property, plant and equipment 1755 Right-of-use Assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			8 - 28 - - 16 1 1
			54
			36 2 3 - - 5
			46
			100

(Continued)

30 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Balance Sheets December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars

Liabilities and Equity	Notes 6(j),h 6(k) 6(m) 6(t) 6(l) 6(y) 6(n),8 6(y) 6(o) 6(q) 6(r) 6(s) 9 11	December 31,2022 Amount % $ 1,387,703 26 139,840 3 2,116 - 6,669 - 8,815 - 254,304 5 400,978 7 34,034 1 2,325 - 8,182 - 9,462 - 2,254,428 42 87,410 1 2,208 - 1,015,946 19 1,105,564 20 3,359,992 62 932,210 17 641,858 12 220,291 4 115,046 2 236,260 4 ( 82,834) ( 1) 2,062,831 38 2,062,831 38 $ 5,422,823 100	December 31,2021 Amount % $ 865,955 17 179,922 4 1,811 - - - 6,878 - 604,267 12 329,482 7 6,913 - 2,066 - 42,055 1 10,457 - 2,049,806 41 91,377 2 4,467 - 929,657 18 1,025,501 20 3,075,307 61 923,181 19 616,880 12 218,051 4 112,601 2 174,544 4 ( 115,046) ( 2) 1,930,211 39 1,930,211 39 $ 5,005,518 100
		Amount $ 1,387,703 139,840 2,116 6,669 8,815 254,304 400,978 34,034 2,325 8,182 9,462 2,254,428 87,410 2,208 1,015,946 1,105,564 3,359,992 932,210 641,858 220,291 115,046 236,260 ( 82,834) 2,062,831 2,062,831 $ 5,422,823	Amount $ 865,955 179,922 1,811 - 6,878 604,267 329,482 6,913 2,066 42,055 10,457 2,049,806 91,377 4,467 929,657 1,025,501 3,075,307 923,181 616,880 218,051 112,601 174,544 ( 115,046) 1,930,211 1,930,211 $ 5,005,518
Current Liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2120 Current financial liabilities at fair value through profit or loss 2130 Current contract liabilities 2150 Notes payables 2170 Accounts payables 2200 Other payables 2230 Current tax liabilities 2280 Lease liabilities-current 2320 Long-term liabilities-current portion 2399 Other current liabilities-others 21XX Total Current liabilities Non-current liabilities 2570 Deferred tax liabilities 2580 Lease liabilities-non-current 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Equity attributable to the owner of the company Share capital 3110 Ordinary share Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Other equity 3400 Other equity 31XX Total equity attributable to the owner of the company 3XXX Total equity Significant contingencies and unrecognized contract commitments Significant subsequent events 3X2X Total liabilities and equity

Please refer to the accompanying notes as an integral part of the consolidated financial statements.

General Manager: Lu, I-Hsuan

Chairman: Chang, Li-Jung

Accounting Officer: Hsu, Kuo-Huang

31 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Statements of Comprehensive Income As of and For the Years Ended December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars (Earnings per share is expressed in New Taiwan Dollars)

Items	2022 2021 Notes Amount % Amount % 6(t) $ 3,362,189 100 $ 3,006,985 100 6(c)(x), 7 ( 2,783,377) ( 83) ( 2,516,502) ( 84) 578,812 17 490,483 16 6(x), 7 ( 132,966) ( 4) ( 119,593) ( 4) ( 306,782) ( 9) ( 225,988) ( 8) ( 121,045) ( 4) ( 99,333) ( 3) ( 560,793) ( 17) ( 444,914) ( 15) 6(u) 64,237 2 ( 18,707) - 82,256 2 26,862 1 6,316 - 6,340 - 11,795 - 4,587 - 6(v) ( 1,851) - ( 3,253) - 6(w) ( 20,940) - ( 8,053) - ( 4,680) - ( 379) - 77,576 2 26,483 1 6(y) ( 11,830) - ( 3,807) - $ 65,746 2 $ 22,676 1 6(p) $ 819 - ($ 350) - 6(y) ( 164) - 70 - 655 - ( 280) - 32,212 1 ( 2,445) - 32,212 1 ( 2,445) - $ 32,867 1 ($ 2,725) - $ 98,613 3 $ 19,951 1 $ 65,746 2 $ 22,676 1 $ 98,613 3 $ 19,951 1 6(z) $ 0.71 $ 0.25 $ 0.71 $ 0.25
4000 Operating revenue 5000 Operating costs 5900 Net gross profit Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expense 6000 Total operating expenses 6500 Other revenue and expenses 6900 Net operating income Non-operating income and expenses 7100 Interest revenue 7010 Other revenue 7020 Other gains and losses 7050 Finance cost 7000 Total non-operating income and expenses 7900 Profit before tax 7950 Income tax expenses 8200 Profit Other comprehensive income, net Items not to be reclassified into profit or loss 8311 Remeasurements of defined benefit plans 8349 Income tax related to items of other comprehensive income not to be reclassified to profit or loss 8310 Items not to be reclassified into profit or loss Items that may be subsequently reclassified into profit or loss 8361 Exchange differences on translation of foreign financial statements 8360 Items that may be subsequently reclassified into profit or loss 8300 Other comprehensive income (loss), net of tax 8500 Total comprehensive income Net profit (loss) attributable to: 8610 Owners of the Company Total comprehensive income (loss) attributable to: 8710 Owners of the Company Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share

Items

2022
2021
Notes
Amount
%
Amount
%
6(t)
$ 3,362,189
100
$ 3,006,985
100
6(c)(x), 7
(
2,783,377) (
83) (
2,516,502) (
84)
578,812
17
490,483
16
6(x), 7
(
132,966) (
4) (
119,593) (
4)
(
306,782) (
9) (
225,988) (
8)
(
121,045) (
4) (
99,333) (
3)
(
560,793) (
17) (
444,914) (
15)
6(u)
64,237
2 (
18,707)
-
82,256
2
26,862
1
6,316
-
6,340
-
11,795
-
4,587
-
6(v)
(
1,851)
- (
3,253)
-
6(w)
(
20,940)
- (
8,053)
-
(
4,680)
- (
379)
-
77,576
2
26,483
1
6(y)
(
11,830)
- (
3,807)
-
$ 65,746
2
$ 22,676
1
6(p)
$ 819
- ($ 350)
-
6(y)
(
164)
-
70
-
655
- (
280)
-
32,212
1 (
2,445)
-
32,212
1 (
2,445)
-
$ 32,867
1 ($ 2,725)
-
$ 98,613
3
$ 19,951
1
$ 65,746
2
$ 22,676
1
$ 98,613
3
$ 19,951
1
6(z)
$ 0.71
$ 0.25
$ 0.71
$ 0.25

4000
Operating revenue
5000
Operating costs
5900
Net gross profit
Operating expenses
6100
Selling expenses
6200
Administrative expenses
6300
Research and development expense
6000
Total operating expenses
6500
Other revenue and expenses
6900
Net operating income
Non-operating income and expenses
7100
Interest revenue
7010
Other revenue
7020
Other gains and losses
7050
Finance cost
7000
Total non-operating income and
expenses
7900
Profit before tax
7950
Income tax expenses
8200
Profit
Other comprehensive income, net
Items not to be reclassified into profit or
loss
8311
Remeasurements of defined benefit plans
8349
Income tax related to items of other
comprehensive income not to be
reclassified to profit or loss
8310
Items not to be reclassified into profit or loss
Items that may be subsequently
reclassified into profit or loss
8361
Exchange differences on translation of
foreign financial statements
8360
Items that may be subsequently reclassified
into profit or loss
8300
Other comprehensive income (loss), net of
tax
8500
Total comprehensive income
Net profit (loss) attributable to:
8610
Owners of the Company
Total comprehensive income (loss)
attributable to:
8710
Owners of the Company
Earnings per share
9750
Basic earnings per share
9850
Diluted earnings per share

Please refer to the accompanying notes as an integral part of the consolidated financial statements

Chairman: Chang, Li-Jung General Manager: Lu, I-Hsuan

Accounting Offier: Hsu, Kuo-Huang

32 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Statements of Changes in Equity For the Years Ended December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars

Equity attributable to owners of parent

2021 Balance at January 1, 2021 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of 2020 earnings: Legal reserve Special reserve Cash dividends Conversion of convertible bonds Unclaimed dividends overdue transferred to capital surplus Balance at December 31, 2021 2022 Balance at January 1, 2022 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of 2021 earnings: Legal reserve Special reserve Conversion of convertible bonds Unclaimed dividends overdue transferred to capital surplus Balance at December 31, 2022	Notes		Ordinary Shares				Capital	surplus	surplus				Retained earnings	Retained earnings	Retained earnings	Retained earnings	Retained earnings		Other equity		Total equity
				Capital surplus			Treasury share transactions		Share options		Others		Legal reserve		Special reserve	Unappropriated retained earnings			Exchange differences on translation of foreign financial statements
	6(s) 6(n)(q) 6(s) 6(n)(q)		$832,810 - - - - - - 90,371 - $923,181 $923,181 - - - - - 9,029 - $932,210		$351,320 - - - - - - 262,477 - $613,797 $613,797 - - - - - 26,140 - $639,937		$ 1,615 - - - - - - - - $ 1,615 $ 1,615 - - - - - - - $ 1,615		$ 13,377 - - - - - - ( 11,927 ) - $ 1,450 $ 1,450 - - - - - ( 1,171 ) - $ 279		$ 13 - - - - - - - 5 $ 18 $ 18 - - - - - - 9 $ 27		$ 205,318 - - - 12,733 - - - - $ 218,051 $ 218,051 - - - 2,240 - - - $ 220,291		$ 117,252 - - - - ( 4,651 ) - - - $ 112,601 $ 112,601 - - - - 2,445 - - $ 115,046		$ 285,152 22,676 ( 280 ) 22,396 ( 12,733 ) 4,651 ( 124,922 ) - - $ 174,544 $ 174,544 65,746 655 66,401 ( 2,240 ) ( 2,445 ) - - $ 236,260		($ 112,601 ) - ( 2,445 ) ( 2,445 ) - - - - - ($ 115,046 ) ($ 115,046 ) - 32,212 32,212 - - - - ($ 82,834 )	$ 1,694,256 22,676 ( 2,725 ) 19,951 - - ( 124,922 ) 340,921 5 $ 1,930,211 $ 1,930,211 65,746 32,867 98,613 - - 33,998 9 $ 2,062,831

Please refer to the accompanying notes as an integral part of the consolidated financial statements.

General Manager: Lu, I-Hsuan

Accounting Officer: Hsu, Kuo-huang

Chairman: Chang, Li-Jung

33 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars

Cash flows from operating activities
Profit before tax
Adjustments
Items of income and expense
Depreciation expense (including right-of-use
assets and investment properties)
Amortization expense
Interest expense
Interest revenue
Bond discount amortization
Loss (Gain) from disposal of property, plant
and equipment
Net loss on financial assets at fair value
through profit or loss
Changes in operating assets and liabilities
Net changes in operating assets
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Net changes in operating liabilities
Contract liabilities
Notes payables
Accounts payables
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow (outflow) generated from operations
Interest received
Interest paid
Income taxes paid
Net cash inflow (outflow) provided by
operating activities

Notes
For the year ended
December 31,2022
For the year ended
December 31,2021
$ 77,576
$ 26,483
6(e)(f)(h)
(x)
157,368
86,393
6(x)
1,123
360
6(w)
20,735
6,819
(
6,316 )
(
6,340 )
6(w)
205
1,234
6(v)
(
1,633 )
1,874
6(m)
(v)
225
1,228
6,348
(
7,677 )
440,440
(
354,195 )
(
23,916 )
20,146
(
238,297 )
(
295,525 )
27,665
(
27,404 )
(
27,239 )
(
39,310 )
(
2,950 )
(
3,773 )
6,669
-
1,937
6,378
(
349,963 )
219,777
(
93,422 )
21,148
(
995 )
6,775
(
674 )
(
827 )
(
5,114 )
(
336,436 )
6,745
5,181
(
19,653 )
(
6,793 )
(
6,486 )
(
28,967 )
(
24,508 )
(
367,015 )

(Continued)

34 -

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

Expressed in thousands of New Taiwan Dollars

Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Increase (decrease) in refundable deposits
Increase in prepayments for equipment
Decrease in financial assets at amortized
cost–current
Net cash inflow (outflow) provided by
investing activities
Cash flows from financing activities
Increase in short-term borrowings
Increase (Decrease) in short-term notes payables
Increase in guaranteed deposits received
Repayments of lease principal
Cash dividends paid
Net cash inflow (outflow) provided by
financing activities
Effect of movements in exchange on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period

Notes
For the year ended
December 31,2022
For the year ended
December 31,2021
6(aa)
( $ 243,131 )
( $ 132,544 )
32,078
1,146
(
6,541 )
(
353 )
(
733 )
1,035
(
40,077 )
(
211,621 )
-
165,184
(
258,404 )
(
177,153 )
6(ab)
521,748
193,272
6(ab)
(
40,082 )
99,932
5,854
921
6(ab)
(
2,103 )
(
3,046 )
6(t)
-
(
124,922 )
485,417
166,157
(
7,147 )
(
8,245 )
195,358
(
386,256 )
6(a)
371,589
757,845
6(a)
$ 566,947
$ 371,589

Please refer to the accompanying notes as an integral part of the consolidated financial statements.

General Manager: Lu, I-Hsuan

Chairman: Chang, Li-Jung

Accounting Officer: Hsu, Kuo-Huang

AI assistant

HOTRON — AGM Information 2023

52294_rns_2023-06-01_8af2a8cc-5726-4797-a5be-27415c5c544e.pdf

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO., LTD. 2023 Annual Meeting of Shareholders Meeting Minutes (Translation)

The Chairman called the Meeting to Order.

Chairperson Remarks (omitted)

Matters to Report

Matters for Proposal

Matters for Discussion

Matters for Election

Other Matters

Extemporary Motions

Meeting Adjournment

Business Report

Dear Shareholders,

Audit Committee's Review Report

Audit Committee's Review Report

To

Report on the remuneration received by directors in 2022

2022 Parent Company Only Financial Statements and Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

Investments accounted for using equity method and the recognition of the investment profit or loss

Explanations

Audit procedures in response

Revenue Cut-off of Sales from Hubs

Explanations

Audit procedures in response

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. Parent Company Only Balance Sheets December 31, 2022 and 2021

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. Parent Company Only Balance Sheets December 31, 2022 and 2021

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. Parent Company Only Statements of Comprehensive Income As of and For the Years Ended December 31, 2022 and 2021

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD.

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

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. Parent Company Only Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

2022 Consolidated Financial Statements and Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

Valuation for Inventories

Explanations

Audit procedures in response

Revenue Cut-off of Sales from Hubs

Explanations

Audit procedures in response

－ Other Matter Parent Company Only Financial Statements

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Balance Sheets December 31, 2022 and 2021

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Balance Sheets December 31, 2022 and 2021

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Statements of Comprehensive Income As of and For the Years Ended December 31, 2022 and 2021

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Statements of Changes in Equity For the Years Ended December 31, 2022 and 2021

Equity attributable to owners of parent

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

HOTRON PRECISION ELECTRONIC INDUSTRIAL CO.LTD. AND THE SUBSIDIARIES Consolidated Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

More from HOTRON

HOTRON AGM Information 2023

`－` Other Matter Parent Company Only Financial Statements