ITE — AGM Information 2023

Jun 26, 2023

ITE Tech. Inc. 2023 Annual Shareholders’ Meeting Minutes (Translation)

Time: 9:00 a.m. on Friday, Jun. 16, 2023

Place: ITE’s office, No. 9, Chuangsin 1st Rd., Science Park, Hsinchu

Convening Methods: Physical Shareholders’ Meeting

Attendants: All shareholders and their proxy holders, representing 103,513,157 shares (among them, 27,770,230 shares voted via electronic transmission), or 64.26% of the total 161,080,124 outstanding shares (deducting 0 non-voting share as required in Article 179 of the Company Act).

Directors present: Chun-Yang Hu (Chairman), Hung-Yao Lin, Yun-Yu Chen, Yi-Tsung Huang (Independent Director & the convener of the Audit Committee), Shih-Fang Hsu (Independent Director), Shou-Shan Chen (Independent Director)

Others present: CPA Yu-Ni Yang, Ya-Shu Hsu (Financial Director)

Chairman: Mr. Chun-Yang Hu, the Chairman of the Board of Directors Minute Recorder: Kuei-Lan Fan

• Ⅰ . Chairman announced commencement. (The aggregate shareholding of the shareholders present in person or by proxy constituted a quorum.)

Ⅱ . Chairman’s Address (omitted)

Ⅲ . Report Items

1. The Business of 2022 (Annex 1)

Acknowledged

1. 2022 Audit Committee’s Review Report (Annex 2) Acknowledged

2. The Issuance Status of Employee Restricted Shares

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Acknowledged

1. 2022 Distributable Compensation for Directors and Employees Acknowledged

2. Cash Dividends Distribution of 2022 Earnings Acknowledged

3. Cash Dividends Distribution from Capital Surplus

4. Acknowledged

Ⅳ . Approval Items

1. 2022 Business Report and Financial Statements Description: (1) The 2022 financial statements have been completed with the auditing and attestation by certified public accountants Yu-Ni Yang and Hsin-min Hsu of Ernst & Young accounting firm.

2. (2) For the business report, independent auditors' report, and financial statements in the preceding paragraph, please refer to Annex 1 and Annex 3 to Annex 12.

Voting Result: 103,513,157 shares were represented at the time of voting

(including 27,770,230 shares voted via electronic transmission)

Voting Results	％of the total represented share present
Votes in favor: 98,722,776 votes (including 22,979,849 shares voted via electronic transmission)	95.37%
Votes against: 111,083 votes (including 111,083 shares voted via electronic transmission)	0.10%
Votes invalid: 0 votes	0.00%
Votes abstained: 4,679,298 votes (including 4,679,298 shares voted via electronic transmission)	4.52%

Resolution: Approved and acknowledged as proposed by the Board of Directors.

1. 2022 Earnings Distribution

Description: The 2022 earnings distribution table were approved by the 16th meeting of the Company’s 10th term Board of Directors and were submitted to the Audit Committee; the written review report is on file. For the earnings distribution table, please refer to Annex 13.

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Voting Result: 103,513,157 shares were represented at the time of voting

(including 27,770,230 shares voted via electronic transmission)

Voting Results	％of the total represented share present
Votes in favor: 99,207,076 votes (including 23,464,149 shares voted via electronic transmission)	95.84%
Votes against: 23,856 votes (including 23,856 shares voted via electronic transmission)	0.02%
Votes invalid: 0 votes	0.00%
Votes abstained: 4,282,225 votes (including 4,282,225 shares voted via electronic transmission)	4.13%

Resolution: Approved and acknowledged as proposed by the Board of Directors.

Ⅴ. Election

1. To elect Seven Directors for the Company’s 11th term board members (including four independent directors)

2. Description: (1) According to Article 17 of the Company’s Articles of

    - Incorporation, seven Directors (including 4 independent directors) for the 11th term of Directors shall be elected. The tenure of the newly elected Directors is 3 years and effective from Jun. 16 2023 to Jun. 15 2026. The term of the 10th Board of Directors shall expire when newly elected Directors assume office.
   

   • (2) The directors shall be elected by adopting the nomination system whereby the shareholders elect candidate from Director Candidate List. The Director Candidates’ academic background, experiences and relevant information are listed as below.

Director Candidate List

Title	Name	Shares	Education & Experience
Director	Hu, Chun-yang	1,985,361	Master of Electronics Engineering, National Chiao Tung University, Chairman of ITE Tech. Inc.
Director	Lin, Hung-yao	513,699	EMBA of National Chiao Tung University, President and Director of ITE Tech. Inc.
Director	UMC	13,959,978	N/A

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Title	Name	Shares	Education & Experience
Independent Directors	Hsu, Shih-fang	0	Bachelor, Department of Electrical Engineering, National Cheng Kung University, Independent Director of U-MEDIA Communications Inc., Independent Director of ITE Tech. Inc.
Independent Directors	Huang, Yi-tsung	0	Bachelor, Department of Accounting, Tamkang University, Director of PixArt Imaging Inc., Independent Director of eCloudvalley Digital Technology Co., Ltd., Independent Director of Aethertek technology co., Ltd., Independent Director of Kayee International Croup Co.,Ltd., Independent Director of ITE Tech. Inc.
Independent Directors	Chen, Shou-shan	0	Master, Institute of Electronics Engineering, National Chiao Tung University, Director and Vice President of Weida Hi- Tech Co., Ltd., Director of Fu-Cheng Investment co., Ltd., Independent Director of ITE Tech. Inc.
Independent Directors	Lee, Fan-tine	0	Master, Institute of Electronics Engineering, National Taiwan University Senior Manager of LiteOn Technology Corp., Director of Dragonjet Corp.

(3) Please vote.

Election Results: The following personnel are elected as the 11th Board of

Directors:

Title	Name	Votes Received
Director	Hu, Chun-yang	110,393,023
Director	Lin, Hung-yao	96,151,181
Director	UMC	94,899,675
Independent Director	Hsu, Shih-fang	92,721,278
Independent Director	Lee, Fan-tine	92,715,195
Independent Director	Huang, Yi-tsung	92,529,712
Independent Director	Chen, Shou-shan	92,036,415

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Ⅵ . Discussion Items

1. To release newly- elected Directors from non-competition restrictions Description: (1) According to 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 at the Shareholders Meeting the essential contents of such an act and secure the approval thereof.”

2. (2) In accordance with the Company Act, it will be proposed to release the newly elected directors from non-competition restrictions as below.

Name of Director	Position of Other Companies
Hu, Chun-yang	・Director of RDC Semiconductor Co., Ltd., ・Independent Director of U-MEDIA Communications Inc.
Lin,Hung-yao	・Director of ITE Tech.(Shenzhen)Inc.
UMC	・Director of Faraday Technology Corp. ・Director of Unimicron Technology Corp. ・Director of Novatek Microelectronics Corp. ・Director of Silicon Integrated Systems Corp.
Hsu,Shih-fang	・Independent Director of U-MEDIA Communications Inc.
Huang, Yi-tsung	・Director of PixArt Imaging Inc. ・Independent Director of eCloudvalley Digital Technology Co., Ltd. ・Independent Director of Aethertek technologyco.,Ltd.
Chen,Shou-shan	・Director of Weida Hi-Tech Co.,Ltd.
Lee,Fan-tine	・Director of Dragonjet Corp.

Voting Result: 103,513,157 shares were represented at the time of voting

(including 27,770,230 shares voted via electronic transmission)

Voting Results	％of the total represented share present
Votes in favor: 97,929,777 votes (including 22,186,850 shares voted via electronic transmission)	94.60%
Votes against: 865,861 votes (including 865,861 shares voted via electronic transmission)	0.83%
Votes invalid: 0 votes	0.00%
Votes abstained: 4,717,519 votes (including 4,717,519 shares voted via electronic transmission)	4.55%

Resolution: Approved and acknowledged as proposed by the Board of

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Directors.

1. To issue Employee Restricted Shares

2. Description: In order to continue to attract and retain the tech professionals and other professional talents required by the Company; as well as to motivate employees, enhance team cohesion, and sense of belonging; and by doing so to jointly create benefits for the Company and shareholders, the Company proposes to issue employee restricted shares in accordance with Company Act and securities regulations. The proposal is further described as follows:

   • (1) Total shares of issuance: 5,000,000 shares, with the subscription price per share of NT$10. Once adopted by resolution of the Annual Meeting of Shareholders, the Board of Directors is then authorized to report to the competent authority for issuance in one or several times within one year.

   • (2) Eligibility criteria for awarded employees:

     • 1) Limited to full-time employees of the Company with performance appraisal outcomes as “good” (or above) in the most recent period.

     • 2) All eligible employees and the number of allotment of shares, with Company consideration regarding their seniority and contributions, shall be submitted to the Board of Directors for determination; however, employees who are managers or board members must first obtain the approval of the Remuneration Committee, employees who are not managers or board members must be approved by the Audit Committee.

   • (3) Issuance conditions:

     • 1) Types of shares and issuance price: Issuance of new ordinary shares; the issuance price for each share is NT$10.

     • 2) Vesting conditions after issuance and allotment of shares to employees: Employees still employed during the vesting period and achieved the personal performance criterion

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of ”good” (or above) with no violation of work rules are required to receive the vesting shares by the portion of: After 2 years of employment: 30%

After 3 years of employment: 30%

After 4 years of employment: 40%

The shares shall be kept in the depository unit designated by the Company before the vesting conditions are met. When employees fail to meet the vesting conditions, the Company will buy back such shares and the shares will be nullified.

• 3) In the event of inheritance, the Company will buy back such shares and the shares will be nullified; however, if an employee dies while on duty, the number of vested shares shall be calculated in proportion of the number of months of employment and rounded off to the nearest thousand shares. Such shares shall also be subject to safekeeping in the depository unit in accordance with the original vesting period, until expiration of the original vesting period; and for the portion that does not reach the vested share quantity, the Company shall still buy back such shares.

• (4) Restricted rights to shares: These employee restricted shares are common shares, the relevant rights on such shares are subject to restrictions under securities issuance regulations. That is, such shares shall be kept while the vesting period has not been fulfilled, but can receive various dividend distributions including but not limited to dividends, capital surplus and legal reserves. The rights of option for cash capital increase are the same as the common shares. Such shares shall also be subject to restrictions on any right to dispose of shares, including but not limited to trading and transfer, pledge, mortgaging, gifting, contingent inheritance, etc., but not other restrictions on shareholder rights.

• (5) Necessity for undertaking this issuance of employee restricted shares: The purpose is to continue to attract and retain

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technical professionals and other professional talents required by the Company, as well as to motivate employees, and enhance team cohesion and sense of belonging, so as to create benefits for both the Company and shareholders.

(6) Possible expensing amount, the status of the Company’s diluted earnings per share, and other matters affecting shareholder equity: Currently, there are 161,080,124 outstanding shares, and it is estimated that the issuance of employee restricted shares will account for 3.10% of total outstanding shares. Based on the closing price of NT$86.7 per share on February 22, 2023, the estimated expensing amount will be approximately NT$383,500,000. Based on the vesting period set by the Guidelines, after the issuance (to be estimated temporarily based on issuance of 5,000,000 shares in October 2023), it will be approximately NT$33,556,000 for 2023, NT$134,225,000 for 2024, NT$119,844,000 for 2025, NT$67,112,000 for 2026, and NT$28,763,000 for 2027. Calculated based on the number of outstanding shares, that is 161,080,124 shares. The affected earnings per share for the years 2023~2027 will be NT$0.21, NT$0.83, NT$0.74, NT$0.42, and NT$0.18, respectively, which will not have a significant impact on shareholder equity.

(7) If it is necessary to revise the content of relevant conditions set forth above in response to laws and regulations or requirements of the competent authority, the Board of Directors shall be authorized to handle such matters.

Voting Result: 103,513,157 shares were represented at the time of voting (including 27,770,230 shares voted via electronic transmission)

Voting Results	％of the total represented sharepresent
Votes in favor: 86,773,490 votes (including11,030,563 shares voted via electronic transmission)	83.82%
Votes against: 11,986,969 votes	11.58%

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(including11,986,969 shares voted via electronic transmission)
Votes invalid: 0 votes	0.00%
Votes abstained: 4,752,698 votes (including4,752,698 shares voted via electronic transmission)	4.59%

Resolution: Approved and acknowledged as proposed by the Board of Directors.

Ⅶ . Extempore Motion : None

Ⅷ . Adjournment : Meeting ended at 09:37 am

There are no questions from shareholders at this shareholders meeting.

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Ⅸ . Annex

1. 2022 Business report

2022 Business report

As we all know, in 2022 the world's economy has entered an unprecedented severe situation. While the lifting of pandemic restrictions in many countries should have led to an increase in economic activity, various negative factors such as the war between Ukraine and Russia in Europe, rising inflation and interest rates in the United States, China's Covid-Zero policy, and the confrontation between the United States and China have all suppressed the global economy simultaneously. This has resulted in weak consumer demand and a sluggish economy. Unfortunately, ITE was caught in this cycle of ups and downs and our business was greatly impacted. ITE's revenue in 2022 was NT$5.212 billion, which is slightly higher than it was when the Covid-19 pandemic first broke out in 2020. However, compared to the Work from Home (WFH) boom driven by the pandemic in 2021, the contrast in terms of operation is particularly obvious.

I. Operating outcome in 2022

The decline in demand for chips has been exacerbated due to excess inventory at the client end. Despite the harsh environment, ITE remains committed to maintaining a gross profit margin of over 50%. Here is ITE 2022 operating performance,

1. The annual revenue was NT$5.212 billion, a decrease of 27.45% from the previous year.

2. The annual gross profit margin was 52.3%, down 0.4% from the previous year.

3. The annual net profit after tax was NT$1.217 billion, a decrease of 32.57% from the previous year.

4. II. Overview of annual business plan for 2023

5. Product development policy

   • A. PC/NB related ICs

Keep up with the evolution of mainstream CPU technology and align with the demands of computer manufacturers to quickly provide products and technologies.

• B. High-speed interface ICs

Develop technologies and products to satisfy video streaming with the increasing data volume, and thus meet product specifications for the new generation mobile devices and consumer electronics.

C. HMI ICs

In response to the gradual transformation to digital color display controls in human-machine interfaces such as home appliances, video intercoms, and automotive and industrial applications, ITE will develop corresponding software and hardware-integrated chips to improve the performance of HMI-related development systems.

1. Sales goals

Looking ahead to 2023, we anticipate that once the pandemic has slowed down in various countries, economic activity will eventually return to normal. While the consumer market may not recover quickly in the short term, the main market momentum is expected to come from work and commercial needs. Industries such as the live streaming industry, e-Sports market, HPC, AI, 5G, and other industrial applications require PC and audio-visual products, and ITE is a supplier of chips for these purposes, so the market trend is relatively favorable. As a result,

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the business outlook remains optimistic. Although the demand of NB for WFH in the postpandemic era has decreased significantly, ITE still has new products such as e-paper, Type-C and Re-timer that can fill the gap and become a new driving force for the business.

• III. The Company’s future development strategies

• Continue developing key technologies to strengthen technology roadmap, and continue developing new processes to reduce costs.

• Actively explore innovative applications, and design customized, high-value, growth-oriented new products.

• Actively seek strategic customer cooperation, strengthen brand-customer marketing, and strive for the market initiative through a pragmatic business model.

• IV. The influence of the external competitive environment, regulatory environment, and overall business environment

As always, competition never stops. However, this year the industry environment will be impacted by two other factors. First, in terms of regulatory environment, the US-China confrontation, the relocation of supply chains out of China, and the issuance of entity lists and technology ban orders by the US to China, chip exports to China must comply with US regulations. Second, in terms of overall business environment, the global economy is not doing well, affecting consumer demand, and there is no sign of recovery in the short term. The industry environment is constantly changing, and by reviewing the trend of the industry in the next few years and aligning our product roadmap with the trend and international regulations, ITE will be able to maintain its market advantage. We are confident that we can overcome the impact and challenges brought by the current overall industry environment.

This year will be full of new challenges. Since the United States has imposed restrictions on China's development of high-tech products, it is inevitable that the world's top two economies will collide fiercely, and the global industrial landscape will undergo tremendous changes. Despite this, ITE remains confident due to our solid technical foundation and strong relationships with customers, and is prepared to respond to the situation with calmness. Although there are too many variables in the overall economic environment, we are committed to doing our best to overcome the challenges and keep the company moving forward steadily.

Chairman: Hu, Chun-yang President: Lin, Hung-yao Chief Financial Officer: Hsu, Ya-shu

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2. 2022 Audit Committee's Review Report

Audit Committee’s Review Report

The Board of Directors has prepared and submitted the Company's 2022 business report, financial statements, and earnings distribution proposal. The financial statements have been completed with an audit by CPAs Yang, Yu-Ni and Hsin-Min Hsu of Ernst & Young Accounting Firm, and an audited report has been issued thereon. The aforementioned business report, financial statements, and earnings distribution proposal have been reviewed by this Committee and found to have no discrepancy. The above is hereby reported in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

To ITE Tech. Inc. 2023 Annual General Shareholders' Meeting.

Independent director: Huang, Yi-tsung Independent director: Hsu, Shih-fang Independent director: Chen, Shou-shan

February 23, 2023

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3. Independent Auditors' Report on Consolidated Financial Statements

Independent Auditors’ Report Translated from Chinese

To ITE Tech. Inc.

Opinion

We have audited the accompanying consolidated balance sheets of ITE Tech. Inc. and its subsidiaries (the “Group”) as of December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2022 and 2021, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter – Making Reference to the Audits of Component Auditors section of our report ), the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, and their consolidated financial performance and cash flows for the years ended December 31, 2022 and 2021, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed and became effective by 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 (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key Audit Matters

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

Revenue recognition

The Group recognized NT$5,212,206 thousand as operating revenues for the year ended December 31, 2022, which includes sale of goods and other operating revenues for the year ended December 31, 2022. It is necessary for the Group to judge and determine the performance obligation of a contract, the timing of its satisfaction, and the estimate of the variable considerations. As a result, we determined the matter to be a key audit matter.

Our audit procedures include (but are not limited to) testing the effectiveness of internal control; assessing the appropriateness of the accounting policy for revenue recognition; conducting analytical procedures for gross profit by product; selecting the samples to perform detailed transaction tests and reviewing the significant terms of sales agreements and trade terms to determine the accuracy of the timing of revenue recognition, testing the accuracy of the sales discount calculation and the payments of refund liabilities in the subsequent period; and performing cut-off procedures on selected samples for a period before and after the reporting date.

We also considered the appropriateness of the disclosures of operating revenues. Please refer to Note4(17), Note 5 and Note 6(16) in notes to the Group’s consolidated financial statements.

Other Matter – Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the reports of other auditors. These associates and joint ventures under equity method amounted to NT$8,278 thousand and NT$13,294 thousand, representing 0.12% and 0.15% of consolidated total assets as of December 31, 2022 and 2021, respectively. The related shares of profit or loss from the associates and joint ventures under the equity method amounted to NT$(5,016) thousand and NT$4,806 thousand, representing (0.34)% and 0.22% of the consolidated net income before tax for the years ended December 31, 2022 and 2021, respectively.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed and became effective by 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 ability to continue as a going concern of the Group, 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 audit committee, are responsible for overseeing the financial reporting process of the Group.

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

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

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

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

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

3. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Group. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

4. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2022 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s 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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Other

We have audited and expressed an unqualified opinion including an Other Matter Paragraph on the parent company only financial statements of ITE Tech. Inc. as of and for the years ended December 31, 2022 and 2021.

Yang, Yu-Ni

Hsu, Hsin-Min

Ernst & Young, Taiwan

February 23, 2023

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, results of operations 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 accepted and applied in the Republic of China.

Accordingly, the accompanying consolidated financial statements and report of independent auditors are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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4. Consolidated Balance Sheets

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5. Consolidated Statements of Comprehensive Income

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6. Consolidated Statements of Changes in Equity

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7. Consolidated Statements of Cash Flows

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8. Independent Auditors' Report on Parent Company Only Financial Statements

Independent Auditors’ Report Translated from Chinese

To ITE Tech. Inc.

Opinion

We have audited the accompanying parent company only balance sheets of ITE Tech. Inc. (the “Company”) as of December 31, 2022 and 2021, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2022 and 2021, and notes to the parent company only financial statements, including the summary of significant accounting policies (together “the parent company only financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter – Making Reference to the Audits of Component Auditors section of our report ), the parent company only financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and cash flows for the years ended December 31, 2022 and 2021, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the 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 (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key Audit Matters

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

Revenue recognition

The Company recognized NT$5,212,206 thousand as operating revenues for the year ended December 31, 2022, which includes sale of goods and other operating revenues for the year ended December 31, 2022. It is necessary for the Company to judge and determine the performance obligation of a contract, the timing of its satisfaction, and the estimate of the variable considerations. As a result, we determined the matter to be a key audit matter.

Our audit procedures include (but are not limited to) testing the effectiveness of internal control; assessing the appropriateness of the accounting policy for revenue recognition; conducting analytical procedures for gross profit by product; selecting the samples to perform detailed transaction tests and reviewing the significant terms of sales agreements and trade terms to determine the accuracy of the timing of revenue recognition, testing the accuracy of the sales discount calculation and the payments of refund liabilities in the subsequent period; and performing cut-off procedures on selected samples for a period before and after the reporting date.

We also considered the appropriateness of the disclosures of operating revenues. Please refer to Note 4(16), Note 5 and Note 6(16) in notes to the parent company only financial statements.

Other Matter – Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the reports of other auditors. These associates and joint ventures under equity method amounted to NT$8,278 thousand and NT$13,294 thousand, representing 0.12% and 0.15% of parent company only total assets as of December 31, 2022 and 2021, respectively. The related shares of profit or loss from the associates and joint ventures under the equity method amounted to NT$(5,016) thousand and NT$4,806 thousand, representing (0.34)% and 0.22% of the parent company only net income before tax for the years ended December 31, 2022 and 2021, respectively.

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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 requirements of 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 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 ability to continue as a going concern of the Company, 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 audit committee, are responsible for overseeing the financial reporting process of the Company.

Auditor’s 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 auditor’s 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 parent company only financial statements.

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

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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 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 internal control of the Company.

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 ability to continue as a going concern of the Company. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor ’ s report to the related disclosures in the parent company only 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 auditor ’ s 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 accompanying notes, 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 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.

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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 2022 parent company only financial statements and are therefore the key audit matters. We describe these matters in our auditor’s 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.

Yang, Yu-Ni

Hsu, Hsin-Min

Ernst & Young, Taiwan

February 23, 2023

Notice to Readers

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

Accordingly, the accompanying financial statements and report of independent auditors are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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9. Parent Company Only Balance Sheets

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10. Parent Company Only Statements of Comprehensive Income

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11. Parent Company Only Statements of Changes in Equity

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12. Parent Company Only Statements of Cash Flows

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13. Earnings Distribution Table

ITE Tech. Inc. 2022 Earnings Distribution Table

	Unit: NT$	Unit: NT$
	Amount
Item
	Subtotal	Total
Beginning balance		504,068,466
Add: Earnings before tax for the current year	1,462,062,579 (244,371,023)
Less: Income tax expense
Net profit after tax for the current year	1,217,691,556 7,360,690 2,318,097
Add: Disposal of financial assets at fair value through Other
Comprehensive income
Add: Actuarial loss for defined benefitplan
Amount of net profit after tax for the current period, plus the	1,227,370,343 (122,737,034)
amount of items other than the net profit after tax for the current
period that are recorded in undistributed earnings for the
current year
Less: Legal reserve appropriated		1,104,633,309
Distributable earnings		1,608,701,775
Distributions:
Shareholders cash dividend (The proposed dividend
NT$5.5 per share)	(885,940,682)
Endingundistributed earnings		722,761,093

Chairman: Hu, Chun-yang President: Lin, Hung-yao Chief Financial Officer: Hsu, Ya-shu

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