Mirle - Annual Report 2022 | FinancialReports.eu

Mirle Automation Corporation

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

==> picture [595 x 171] intentionally omitted <==

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Mirle Automation Corporation

Opinion

We have audited the accompanying financial statements of Mirle Automation Corporation (the “Corporation”), which comprise the balance sheets as of December 31, 2022 and 2021, and the 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 financial statements present fairly, in all material respects, the financial position of the Corporation 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 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 Financial Statements section of our report. We are independent of the Corporation 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 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.

The key audit matter of the Corporation’s financial statements for the year ended December 31, 2022 is described as follows:

Recognition of income

Construction contract revenue is the Corporation’s major source of revenue (accounting for about 87% of total revenue). According to the International Financial Reporting Standards, the recognition of income is subject to contracts approved by all parties, and they have promised to fulfill their respective obligations.

Due to the fact that the contract or order may be started before the contract or order is confirmed, there is a risk that the amount of revenue recognized is overestimated; therefore, we considered the authenticity of the contract or order as a significant risk and deemed it as a key audit matter.

The audit procedures performed in response to the aforementioned key audit matter were as follows:

We understood the internal controls of the contracts and orders, and tested the operating effectiveness of the controls.
We confirmed that the recognized construction contract revenue was based on actual contracts or orders.

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

Management is responsible for the preparation and fair presentation of the 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 financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

Identify and assess the risks of material misstatement of the 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.
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 Corporation’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 Corporation’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, 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 Corporation to cease to continue as a going concern.
2 -
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Corporation to express an opinion on the 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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.

The engagement partners on the audits resulting in this independent auditors’ report are Mei-Chen Tsai and Yu-Feng Huang.

Deloitte & Touche Taipei, Taiwan Republic of China March 14, 2023

Notice to Readers

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

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

MIRLE AUTOMATION CORPORATION

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

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4, 6 and 27) Financial assets at fair value through profit or loss - current (Notes 4, 7 and 27) Contract assets - current (Notes 4, 5, 21 and 28) Notes receivable (Notes 4, 9, 21 and 27) Accounts receivable (Notes 4, 9, 21 and 27) Receivables from related parties (Notes 4, 21, 27 and 28) Other receivables (Notes 4, 9 and 27) Other receivables from related parties (Notes 4, 27 and 28) Inventories (Notes 4, 5 and 10) Other current assets (Notes 4, 15 and 28) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4, 8 and 27) Investments accounted for using the equity method (Notes 4 and 11) Property, plant and equipment (Notes 4, 12 and 28) Right-of-use assets (Notes 4 and 13) Other intangible assets (Notes 4, 14, 28 and 29) Deferred income tax assets (Notes 4 and 23) Prepayments for equipment Refundable deposits (Note 27) Total non-current assets TOTAL		2022 Amount % $ 1,012,010 8 - - 4,717,201 39 7,799 - 124,027 1 16,167 - 60,242 1 1,349 - 1,388,228 11 65,907 1 7,392,930 61 55,422 - 2,037,581 17 2,261,804 19 225,180 2 53,056 - 16,023 - 2,335 - 99,511 1 4,750,912 39 $ 12,143,842 100		2021 Amount % $ 2,110,140 19 100,078 1 2,692,054 25 11,813 - 210,664 2 27,730 - 97,994 1 10,730 - 1,164,415 11 71,297 1 6,496,915 60 48,697 1 1,970,543 18 1,930,797 18 250,296 2 40,348 - 7,779 - 25,046 - 88,832 1 4,362,338 40 $ 10,859,253 100

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term bank loans (Notes 16 and 27) Contract liabilities - current (Notes 4, 5, 21 and 28) Notes payable (Note 27) Accounts payable (Note 27) Accounts payable to related parties (Notes 27 and 28) Current income tax liabilities (Notes 4 and 23) Provisions - current (Notes 4 and 18) Lease liabilities - current (Notes 4, 13 and 27) Current portion of long-term bank loans (Notes 16 and 27) Accrued expenses and other current liabilities (Notes 17, 27 and 28) Total current liabilities NON-CURRENT LIABILITIES Long-term bank loans (Notes 16 and 27) Deferred income tax liabilities (Notes 4 and 23) Lease liabilities - non-current (Notes 4, 13 and 27) Net defined benefit liabilities - non-current (Notes 4 and 19) Guarantee deposits received (Note 27) Other non-current liabilities (Notes 17 and 27) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE CORPORATION (Notes 4 and 20) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Exchange differences on the translation of the financial statements of foreign operations Unrealized valuation gain (loss) on financial assets at fair value through other comprehensive income Total shareholders' equity TOTAL		2022 Amount % $ 1,413,000 12 1,006,218 8 33,231 - 2,602,273 21 115,627 1 117,239 1 10,174 - 25,794 - 464,723 4 609,293 5 6,397,572 52 936,988 8 11,140 - 209,735 2 260,524 2 271 - 4,000 - 1,422,658 12 7,820,230 64 1,955,312 16 270,290 2 953,456 8 167,859 2 1,104,072 9 (128,817) (1) 1,440 - 4,323,612 36 $ 12,143,842 100		2021
				Amount % $ 300,000 3 1,257,822 12 51,963 - 2,352,798 22 26,676 - 156,769 1 10,688 - 25,500 - 42,724 - 708,104 7 4,933,044 45 1,188,643 11 - - 233,936 2 302,945 3 298 - - - 1,725,822 16 6,658,866 61 1,955,312 18 254,964 2 902,775 8 152,050 2 1,103,145 10 (160,814) (1) (7,045) - 4,200,387 39 $ 10,859,253 100

The accompanying notes are an integral part of the parent company only financial statements.

MIRLE AUTOMATION CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET SALES (Notes 4, 21 and 28) OPERATING COSTS (Notes 4, 10, 22 and 28) GROSS PROFIT REALIZED (UNREALIZED) GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 22 and 28) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit gain (Note 9) Total operating expenses OTHER OPERATING INCOME AND EXPENSES (Note 22) PROFIT FROM OPERATIONS NONOPERATING INCOME AND EXPENSES Interest income (Note 22) Other income (Notes 14, 22, 25 and 28) Other gains and losses (Notes 22 and 28) Finance costs (Note 22) Share of (loss) gain of subsidiaries and associates (Note 11) Foreign exchange gain (loss), net (Note 31) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 23) NET PROFIT FOR THE YEAR		2022 Amount % $ 9,075,402 100 7,412,619 82 1,662,783 18 420 - 1,663,203 18 433,941 5 446,456 5 430,994 4 (1,047) - 1,310,344 14 (2,843) - 350,016 4 3,228 - 20,501 - (15,146) - (22,167) - (6,763) - 248,796 3 228,449 3 578,465 7 63,741 1 514,724 6		2021
				Amount % $ 8,363,386 100 6,486,725 78 1,876,661 22 (93) - 1,876,568 22 408,372 5 425,101 5 373,714 4 (7,097) - 1,200,090 14 (148) - 676,330 8 4,818 - 16,370 - (6,226) - (11,646) - 11,852 - (81,687) (1) (66,519) (1) 609,811 7 81,915 1 527,896 6

(Continued)

MIRLE AUTOMATION CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) (Notes 19, 20 and 27) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain on investments in equity instruments at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on the translation of the financial statements of foreign operations Other comprehensive income (loss) for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 24) Basic Diluted		2022 Amount % $ (17,138) - 8,485 - 31,997 - 23,344 - $ 538,068 6 $ 2.63 $ 2.63		2021
				Amount % $ (21,082) - 600 - (16,410) - (36,892) - $ 491,004 6 $ 2.70 $ 2.70

The accompanying notes are an integral part of the parent company only financial statements. (Concluded)

MIRLE AUTOMATION CORPORATION

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

Share Capital Shares (In Thousands) Amount 195,531 $ 1,955,312 - - - - - - - - - - - - - - - - 195,531 1,955,312 - - - - - - - - - - - - - - - - 195,531 $ 1,955,312		Capital Surplus	Capital Surplus	Retained Earnings
	Equity Component of Convertible Bonds Issued by the Corporation $ 234,579 - - - - - - - - 234,579 - - - - - - - - $ 234,579	Investments in Associates Accounted for Using the Equity Method $ - - - - 2 1,233 - - - 1,235 - - - 10 15,316 - - - $ 16,561	Treasury Shares Transactions $ 19,150 - - - - - - - - 19,150 - - - - - - - - $ 19,150
Shares (In Thousands) 195,531 - - - - - - - - 195,531 - - - - - - - - 195,531
				Unappropriated Legal Reserve Special Reserve Earnings $ 852,644 $ 173,348 $ 1,016,226 50,131 - (50,131 ) - (21,298 ) 21,298 - - (391,062 ) - - - - - - - - 527,896 - - (21,082) - - 506,814 902,775 152,050 1,103,145 50,681 - (50,681 ) - 15,809 (15,809 ) - - (430,169 ) - - - - - - - - 514,724 - - (17,138) - - 497,586 $ 953,456 $ 167,859 $ 1,104,072

The accompanying notes are an integral part of the parent company only financial statements.

MIRLE AUTOMATION CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit gain Net gain on fair value change of financial assets at fair value through profit or loss Finance costs Interest income Share of loss (gain) of subsidiaries and associates Loss on disposal of property, plant and equipment Reclassify property, plant and equipment as expenses Inventory write-downs (reversed) Unrealized gain on transactions with subsidiaries and associates Realized gain on transactions with subsidiaries and associates Net (gain) loss on foreign currency exchange Changes in operating assets and liabilities Contract assets Notes receivable Accounts receivable Receivable from related parties Other receivables Other receivables - related parties Inventories Other current assets Contract liabilities Notes payable Accounts payable Accounts payable to related parties Provisions Accrued expenses and other current liabilities Net defined benefit liabilities Cash (used in) generated from operations Income tax paid Net cash (used in) generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Cash returns from capital reduction of investments in financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Disposal of financial assets at fair value through profit or loss Acquisition of long-term investments accounted for using the equity method	2022 $ 578,465 127,321 30,892 (1,047) (106) 22,167 (3,228) 6,763 2,843 49 7,500 - (420) (168,081) (2,025,147) 4,117 202,427 11,563 37,864 (729) (230,621) 5,390 (251,604) (18,732) 242,851 88,951 (514) (69,611) (59,559) (1,460,236) (100,375) (1,560,611) 1,760 (100,000) 200,184 (30,100)	2021 $ 609,811 113,133 26,438 (7,097) (384) 11,646 (4,818) (11,852) 148 - (7,820) 93 - 6,354 (196,387) (908) (5,700) 29,562 (50,234) (380) 120,148 27,429 (385,764) 31,487 634,992 19,809 7,557 67,078 (24,527) 1,009,814 (83,456) 926,358 1,001 (420,000) 320,306 (27,550) (Continued)

MIRLE AUTOMATION CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Increase in other receivables from related parties Decrease in other receivables from related parties Acquisition of intangible assets Increase in prepayments for equipment Decrease in prepayments for equipment Interest received Dividends received from subsidiaries Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term bank loans Decrease in short-term bank loans Proceeds from long-term bank loans Repayments of long-term bank loans Decrease in guarantee deposits Repayment of the principal portion of lease liabilities Dividends paid Interest paid Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2022 $ (472,612) 5,432 (10,679) - - 10,110 (37,474) - 22,711 2,941 4,042 (403,685) 3,113,000 (2,000,000) 228,960 (58,616) (27) (25,840) (430,169) (21,176) 806,132 60,034 (1,098,130) 2,110,140 $ 1,012,010	2021 $ (245,692) 1,631 - 25,940 (10,266) - (31,222) (22,047) - 4,858 5,065 (397,976) 320,000 (320,000) 172,400 (5,000) - (24,540) (391,062) (11,611) (259,813) (25,805) 242,764 1,867,376 $ 2,110,140

The accompanying notes are an integral part of the parent company only financial statements.

(Concluded)

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

MIRLE AUTOMATION CORPORATION

1. GENERAL INFORMATION

Mirle Automation Corporation (the “Corporation”) was incorporated in Hsinchu Science Industrial Park, Republic of China (ROC) on February 2, 1989 and commenced business on March 16, 1989. The Corporation is mainly engaged in the business of automation equipment systems and its components, various parking facilities, medical equipment and the design, development, production and sale of the automation equipment used in these products, and also provides after-sales services for the products. The Corporation is also engaged in the leasing business, and develops and sells software and databases that are used in automation equipment. Moreover, the Corporation also provides construction planning, installation, consulting and maintenance services for the above products.

The Corporation’s shares were listed and have been trading on the Taiwan Stock Exchange (TWSE) since September 2001.

The financial statements are presented in the Corporation’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the board of directors and authorized for issue on March 14, 2023.

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

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

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

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

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

Note 1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
10 -
Note 2: The amendments will be applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 3: Except for deferred taxes that were recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments were applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the financial statements were authorized for issue, the Corporation has assessed that the application of the above standards and interpretations will not have a material impact on the Corporation’s financial position and financial performance.

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

New, Amended and Revised Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants”	Effective Date Announced by IASB (Note 1)
	To be determined by IASB January 1, 2024 (Note 2) January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024

New, Amended and Revised Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between An Investor and Its Associate or Joint Venture”

Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 -
Comparative Information”

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 1 “Non-current Liabilities with Covenants”

Effective Date
Announced by IASB (Note 1)

To be determined by IASB
January 1, 2024 (Note 2)
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2024
January 1, 2024

Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of preparation

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

11 -

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

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.

When preparing these parent company only financial statements, the Corporation used the equity method to account for its investment in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the shareholders of the Corporation in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries and associates, the share of other comprehensive income (loss) of subsidiaries and associates and the related equity items, as appropriate, in the parent company only financial statements.

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

Current assets include:

Assets held primarily for the purpose of trading;
Assets expected to be realized within 12 months after the reporting period; and
Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

Liabilities held primarily for the purpose of trading;
Liabilities due to be settled within 12 months after the reporting period; and
Liabilities for which the Corporation does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

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

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

d. Foreign currencies

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

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

12 -

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

Non-monetary item denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

For the purpose of presenting parent company only financial statements, the financial statements of the Corporation’s foreign operations (including subsidiaries and associates in other countries) that are prepared using functional currencies which are different from the currency of the Corporation are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

e. Inventories

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

f. Investments in subsidiaries

The Corporation uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Corporation.

Under the equity method, an investment in subsidiary is initially recognized at cost and adjusted thereafter to recognize the Corporation’s share of the profit or loss and other comprehensive income of the subsidiary. The Corporation also recognizes the changes in the Corporation’s share of equity of subsidiaries.

Changes in the Corporation’s ownership interest in a subsidiary that do not result in the Corporation losing control of the subsidiary are accounted for as equity transactions. The Corporation recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

Any excess of the cost of acquisition over the Corporation’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Corporation’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business over the cost of acquisition is recognized immediately in profit or loss.

The Corporation assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Corporation recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been

13 -

recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

Profit or loss resulting from downstream transactions is eliminated in full only in the parent company only financial statements. Profit or loss resulting from upstream transactions and transactions between subsidiaries is recognized only in the parent company only financial statements and only to the extent of interests in the subsidiaries that are not related to the Corporation.

g. Investments in associates

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

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

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

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

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When the Corporation transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Corporation’s parent company only financial statements only to the extent of interests in the associate that are not related to the Corporation.

h. Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are measured at cost less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

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

14 -

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

i. Intangible assets
1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis.

When the Corporation has a right to charge for the usage of concession infrastructure (as a consideration for providing construction services in a service concession arrangement), it recognizes this as an intangible asset. The intangible asset is subsequently measured at cost less accumulated amortization and any accumulated impairment loss.

2) Internally-generated intangible assets - research and development expenditures

Expenditures on research activities are recognized as expenses in the period in which they are incurred.

3) Derecognition of intangible assets

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

j. Impairment of property, plant and equipment, right-of-use assets, intangible assets and assets related to contract costs

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

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

Before the Corporation recognizes an impairment loss from assets related to contract costs, any impairment loss on inventories and property, plant and equipment related to the contract applicable under IFRS 15 shall be recognized in accordance with applicable standards. Then, impairment loss from the assets related to the contract costs is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Corporation expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services and which have not been recognized as expenses. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that cash-generating unit.

15 -

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

k. Financial instruments

Financial assets and financial liabilities are recognized when the Corporation becomes a party to the contractual provisions of the instruments.

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

1) Financial assets

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

a) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at fair value through other comprehensive income (FVTOCI).

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified at FVTPL.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends or interest earned on such financial assets are recognized in other income and interest income, respectively; any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 27: Financial Instruments.

ii. Financial assets at amortized cost

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

i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

16 -

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

i) Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and
ii) Financial asset that is not credit impaired on purchase or origination but has subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit impaired when one or more of the following events have occurred:

i) Significant financial difficulty of the issuer or the borrower;
ii) Breach of contract, such as a default;
iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or
iv) The disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits with original maturities within 1 year from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii. Investments in equity instruments at FVTOCI

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

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

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

b) Impairment of financial assets and contract assets

The Corporation recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable), as well as contract assets.

The Corporation always recognizes lifetime expected credit losses (ECLs) for accounts receivable and contract assets. For all other financial instruments, the Corporation recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly

17 -

since initial recognition, the Corporation measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

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

For internal credit risk management purposes, the Corporation considers the following situations as indications that a financial asset is in default (without taking into account any collateral held by the Corporation):

i. Internal or external information shows that the debtor is unlikely to pay its creditors.
ii. Financial asset is more than 90 days past due unless the Corporation has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

c) Derecognition of financial assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

Equity instruments issued by the Corporation are classified as equity in accordance with the substance of the contractual arrangements and the definitions of an equity instrument.

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

3) Financial liabilities

a) Subsequent measurement

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

b) Derecognition of financial liabilities

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

18 -

l. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Warranties

Provisions for the expected cost of warranty obligations to assure that products comply with agreed-upon specifications are recognized on the date of sale of the relevant products at the best estimate by the management of the Corporation of the expenditures required to settle the Corporation’s obligations.

m. Revenue recognition

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

For contracts where the period between the date on which the Corporation transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Corporation does not adjust the promised amount of consideration for the effects of a significant financing component.

1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of information products. The Corporation recognizes income and accounts receivable in accordance with the terms stated in the contract.

The Corporation does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

2) Revenue from the rendering of services

As the Corporation provides hardware and software installation services, customers simultaneously receive and consume the benefits provided by the Corporation’s performance. Consequently, the related revenue is recognized when services are rendered.

3) Construction contract revenue

Customers control properties while the construction is in progress; thus, the Corporation recognizes revenue over time. The Corporation measures the progress on the basis of costs incurred relative to the total expected costs as there is a direct relationship between the costs incurred and the progress of satisfying the performance obligations. Contract assets are recognized during the construction and are reclassified to accounts receivable at the point at which the customer is invoiced. If the milestone payments exceed the revenue recognized to date, then the Corporation recognizes contract liabilities for the difference. Certain payments, which are retained by the customer as specified in the contract, are intended to ensure that the Corporation adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Corporation satisfies its performance obligations.

When the outcome of a performance obligation cannot be reasonably measured, contract revenue is recognized only to the extent of contract costs incurred in satisfying the performance obligation for which recovery is expected.

19 -

n. Leases

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

1) The Corporation as lessor

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

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

2) The Corporation as lessee

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

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

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee’s incremental borrowing rate will be used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Corporation remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the parent company only balance sheets.

o. Borrowing costs

Borrowing costs are recognized in profit or loss in the period in which they are incurred.

p. Government grants

Government grants are not recognized until there is reasonable assurance that the Corporation will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized as a reduction of the related costs and expenses or in other income on a systematic basis over the periods in which the Corporation recognizes as expenses the related costs that the grants intend to compensate. Specifically, government grants whose primary

20 -

condition is that the Corporation should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Corporation with no future related costs are recognized in profit or loss in the period in which they are received.

q. Employee benefits
1) Short-term employee benefits

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

2) Retirement benefits

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

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

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

3) Termination benefits

A liability for a termination benefit is recognized at the earlier of when the Corporation can no longer withdraw the offer of the termination benefit and when the Corporation recognizes any related restructuring costs.

r. Taxation

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

1) Current tax

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

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

2) Deferred tax

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

21 -

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, and research and development expenditures to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

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

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

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

3) Current and deferred taxes

Current and deferred taxes are recognized in profit or loss.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The Corporation considers the possible impact of the recent development of the COVID-19 and its economic environment implications when making its critical accounting estimates on cash flow, growth rate, discount rate, profitability, etc. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Key Sources of Estimation Uncertainty

a. Write-down of inventories

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

22 -

b. Construction contracts

Contract revenue and costs are recognized by reference to the stage of completion of each contract. The stage of completion of a contract is measured based on the proportion of contract costs incurred for work performed to date to the estimated total contract costs. Incentives and penalties stipulated in the contract are considered as variable consideration and should be included in the contract revenue only when it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The estimated total contract costs and contractual items are assessed and determined by management, based on the nature of the work, expected sub-contracting charges, construction periods, processes, methods, etc., for each construction contract. Changes in these estimates might affect the calculation of the percentage of completion and related profit and loss from the construction contracts. See Note 21 for the details.

6. CASH AND CASH EQUIVALENTS

Cash on hand Demand deposits Checking accounts Cash equivalent Time deposits with original maturities within 3 months Time deposits with original maturities of more than 3 months but less than 1 year		December 31	December 31
		2022 $ 8,978 972,202 120 - 30,710 $ 1,012,010	2021 $ 8,868 1,535,192 1,080 564,000 1,000 $ 2,110,140

The market rates intervals of cash in bank at the end of the reporting period were as follows:

Bank balance	December 31
	2022 2021 0.00%-4.37% 0.001%-2.65%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit or loss (FVTPL)-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds		December 31	December 31
		2022 $ -	2021 $ 100,078

23 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Non-current Investments in equity instruments FVTOCI Domestic investments Unlisted shares Foreign investments Unlisted shares		December	31
		2022 $ 55,422 $ 9,955 45,467 $ 55,422	2021 $ 48,697 $ 12,125 36,572 $ 48,697

The Corporation invested in TIEF FUND, L.P. and PHOENIX II INNOVATION VENTURE CAPITAL CO., LTD. for medium to long-term strategic purposes, and expects to make profit through long-term investments. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Corporation’s strategy of holding these investments for long-term purposes.

9. NOTES RECEIVABLE, ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

Notes receivable Operating Less: Allowance for impairment loss Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Business tax Others Less: Allowance for impairment loss		December 31	December 31
		2022 $ 7,895 (96) $ 7,799 $ 130,395 (6,368) $ 124,027 $ 52,154 11,202 63,356 (3,114) $ 60,242	2021 $ 12,012 (199) $ 11,813 $ 222,180 (10,516) $ 210,664 $ 93,956 6,977 100,933 (2,939) $ 97,994

24 -
a. Notes receivable and accounts receivable

The average credit period of sales of goods was 30 to 180 days.

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

The Corporation measures the loss allowance for accounts receivable at an amount equal to lifetime ECLs. The expected credit losses on accounts receivable are estimated using a provision matrix prepared by reference to the past default experience of the customer, the customer’s current financial position, economic condition of the industry in which the customer operates, as well as the GDP forecasts and industry outlook. As the Corporation’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Corporation’s different customer base.

The Corporation writes off an accounts receivable when there is evidence indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation. For accounts receivable that have been written off, the Corporation continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of notes receivable and accounts receivable based on the Corporation’s provision matrix:

December 31, 2022

Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2021 Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Up to 30 Days $ 35,126 (354) $ 34,772 Up to 30 Days $ 28,031 (369) $ 27,662	31 to 90 Days $ 78,798 (784) $ 78,014 31 to 90 Days $ 101,527 (1,287) $ 100,240	91 to 180 Days $ 11,821 (124) $ 11,697 91 to 180 Days $ 93,553 (888) $ 92,665	Over 180 Days $ 12,545 (5,202) $ 7,343 Over 180 Days $ 10,081 (8,171) $ 1,910	Total $ 138,290 (6,464) $ 131,826 Total $ 233,192 (10,715) $ 222,477

The movements of the loss allowance of notes receivable and accounts receivable were as follows:

Balance at January 1 Less: Amounts written off Less: Net remeasurement of loss allowance Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 10,715 (3,029) (1,222) $ 6,464	2021 $ 21,803 (3,991) (7,097) $ 10,715

25 -

As of December 31, 2022 and 2021, the amounts of loss allowance which included individually impaired notes receivable and accounts receivable of debtors in significant financial difficulty were $5,123 thousand and $8,151 thousand, respectively. The expected credit losses recognized are the carrying amounts of notes receivable and accounts receivable. The Corporation does not hold any collateral over the balance of these notes receivable and accounts receivable.

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

Balance at January 1 Add: Net remeasurement of loss allowance Balance at December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2022 $ 2,939 175 $ 3,114	2021 $ 2,939 - $ 2,939

10. INVENTORIES

Finished goods Work in progress Raw materials Inventory in transit		December 31	December 31
		2022 $ 14,878 940,645 427,232 5,473 $ 1,388,228	2021 $ 24,406 778,749 349,083 12,177 $ 1,164,415

The components of operating costs related to inventories are as follows:

Cost of inventories sold Inventory write-downs (reversed) Sale of scraps	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 7,412,619 $ 7,500 $ (2,176)	2021 $ 6,486,725 $ (7,820) $ (8,686)

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries Investments in associates		December 31	December 31
		2022 $ 1,989,809 47,772 $ 2,037,581	2021 $ 1,936,233 34,310 $ 1,970,543

26 -

a. Investments in subsidiaries

Unlisted shares MIRTEK (BVI) CORP. LTD. MIRLE AUTOMATION INTER CO., LTD. DAVID INVESTMENT CO., LTD. FACTORY AUTOMATION INTERNATIONAL CO., LTD. Name of Subsidiary MIRTEK (BVI) CORP. LTD. MIRLE AUTOMATION INTER CO., LTD. DAVID INVESTMENT CO., LTD. FACTORY AUTOMATION INTERNATIONAL CO., LTD.		December 31
		2022 2021 $ 1,777,761 $ 1,736,303 73,868 74,853 84,814 79,355 53,366 45,722 $ 1,989,809 $ 1,936,233 Proportion of Ownership and Voting Rights
		December 31
		2022 2021 100% 100% 100% 100% 100% 99% 51% 51%

On November 10, 2021, the Corporation’s board of directors approved the capital increase of NT$2,700 thousand in cash for 300 thousand ordinary shares of MIRLE AUTOMATION INTER CO., LTD.

On April 29, 2022, the Corporation acquired 1% of the shares released by other shareholders of DAVID INVESTMENT CO., LTD. for NT$100 thousand, and the shareholding ratio increased from 99% to 100%.

The share of profit or loss and other comprehensive income (loss) of the investments in the associate accounted for using the equity method for the years ended December 31, 2022 and 2021 were based on the associate’s audited financial statements for the same years.

b. Investments in associates

Associates that are not individually material MAIN DRIVE CORPORATION		December	31
		2022 $ 47,772	2021 $ 34,310

1) Aggregate information of associates that are not individually material

The Corporation’s share of: Net loss for the year	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ (31,854)	2021 $ (29,147)

The Corporation subscribed for 2,485 thousand common shares of MAIN DRIVE CORPORATION for NT$24,850 thousand in cash after approval was obtained from the board of directors on May 12, 2021, which decreased the proportion of ownership from 27.61% to 26.85%.

27 -

The Corporation subscribed for 2,000 thousand ordinary shares of MAIN DRIVE CORPORATION for NT$30,000 thousand in cash after approval was obtained from the board of directors on March 17, 2022, which decreased the proportion of ownership from 26.85% to 23.43%.

2) The share of profit or loss and other comprehensive income (loss) of the investments in the associate accounted for using the equity method for the years ended December 31, 2022 and 2021 were based on the associate’s audited financial statements for the same years.

12. PROPERTY, PLANT AND EQUIPMENT

Assets used by the Corporation Assets leased under operating leases Freehold Land Buildings and Ancillary Equipment Cost Balance at January 1, 2022 $ 179,901 $ 1,548,461 Additions - 800 Disposals - (620 ) Transfers to assets leased under operating leases - (117,531 ) Transfers from assets leased under operating leases - - Reclassified - 855,059 Balance at December 31, 2022 $ 179,901 $ 2,286,169 Accumulated depreciation Balance at January 1, 2022 $ - $ 452,347 Depreciation expenses - 48,579 Disposals - (611 ) Transfers to assets leased under operating leases - (89 ) Transfers from assets leased under operating leases - - Balance at December 31, 2022 $ - $ 500,226 Accumulated impairment Balance at January 1, 2022 $ - $ - Disposals - - Balance at December 31, 2022 $ - $ - Carrying amount at December 31, 2022 $ 179,901 $ 1,785,943 Cost Balance at January 1, 2021 $ 179,901 $ 1,545,749 Additions - 2,624 Disposals - (3,514 ) Transfers to assets leased under operating leases - - Reclassified - 3,602 Balance at December 31, 2021 $ 179,901 $ 1,548,461 Accumulated depreciation Balance at January 1, 2021 $ - $ 415,416 Depreciation expenses - 40,034 Disposals - (3,103 ) Transfers to assets leased under operating leases - - Balance at December 31, 2021 $ - $ 452,347 Accumulated impairment Balance at January 1, 2021 $ - $ - Disposals - - Balance at December 31, 2021 $ - $ - Carrying amount at December 31, 2021 $ 179,901 $ 1,096,114	Assets used by the Corporation Assets leased under operating leases Freehold Land Buildings and Ancillary Equipment Cost Balance at January 1, 2022 $ 179,901 $ 1,548,461 Additions - 800 Disposals - (620 ) Transfers to assets leased under operating leases - (117,531 ) Transfers from assets leased under operating leases - - Reclassified - 855,059 Balance at December 31, 2022 $ 179,901 $ 2,286,169 Accumulated depreciation Balance at January 1, 2022 $ - $ 452,347 Depreciation expenses - 48,579 Disposals - (611 ) Transfers to assets leased under operating leases - (89 ) Transfers from assets leased under operating leases - - Balance at December 31, 2022 $ - $ 500,226 Accumulated impairment Balance at January 1, 2022 $ - $ - Disposals - - Balance at December 31, 2022 $ - $ - Carrying amount at December 31, 2022 $ 179,901 $ 1,785,943 Cost Balance at January 1, 2021 $ 179,901 $ 1,545,749 Additions - 2,624 Disposals - (3,514 ) Transfers to assets leased under operating leases - - Reclassified - 3,602 Balance at December 31, 2021 $ 179,901 $ 1,548,461 Accumulated depreciation Balance at January 1, 2021 $ - $ 415,416 Depreciation expenses - 40,034 Disposals - (3,103 ) Transfers to assets leased under operating leases - - Balance at December 31, 2021 $ - $ 452,347 Accumulated impairment Balance at January 1, 2021 $ - $ - Disposals - - Balance at December 31, 2021 $ - $ - Carrying amount at December 31, 2021 $ 179,901 $ 1,096,114	Assets used by the Corporation Assets leased under operating leases Freehold Land Buildings and Ancillary Equipment Cost Balance at January 1, 2022 $ 179,901 $ 1,548,461 Additions - 800 Disposals - (620 ) Transfers to assets leased under operating leases - (117,531 ) Transfers from assets leased under operating leases - - Reclassified - 855,059 Balance at December 31, 2022 $ 179,901 $ 2,286,169 Accumulated depreciation Balance at January 1, 2022 $ - $ 452,347 Depreciation expenses - 48,579 Disposals - (611 ) Transfers to assets leased under operating leases - (89 ) Transfers from assets leased under operating leases - - Balance at December 31, 2022 $ - $ 500,226 Accumulated impairment Balance at January 1, 2022 $ - $ - Disposals - - Balance at December 31, 2022 $ - $ - Carrying amount at December 31, 2022 $ 179,901 $ 1,785,943 Cost Balance at January 1, 2021 $ 179,901 $ 1,545,749 Additions - 2,624 Disposals - (3,514 ) Transfers to assets leased under operating leases - - Reclassified - 3,602 Balance at December 31, 2021 $ 179,901 $ 1,548,461 Accumulated depreciation Balance at January 1, 2021 $ - $ 415,416 Depreciation expenses - 40,034 Disposals - (3,103 ) Transfers to assets leased under operating leases - - Balance at December 31, 2021 $ - $ 452,347 Accumulated impairment Balance at January 1, 2021 $ - $ - Disposals - - Balance at December 31, 2021 $ - $ - Carrying amount at December 31, 2021 $ 179,901 $ 1,096,114	Assets Us	ed by the Corpora	tion			December 31	December 31	December 31
								2022 $ 2,145,604 116,200 $ 2,261,804 Assets Lease Operating Work in Progress Buildings and Ancillary Equipment $ 505,921 $ - 362,049 - - - - 117,531 - - (857,598) - $ 10,372 $ 117,531 $ - $ - - 1,242 - - - 89 - - $ - $ 1,331 $ - $ - - - $ - $ - $ 10,372 $ 116,200 $ 299,139 $ - 227,185 - - - - - (20,403) - $ 505,921 $ - $ - $ - - - - - - - $ - $ - $ - $ - - - $ - $ - $ 505,921 $ -		2021 $ 1,930,524 273 $ 1,930,797 d under Leases Machinery Equipment Total - $ 1,142 $ 2,565,521 - 440,295 - (61,493 ) - - (1,142 ) - - (741) $ - $ 2,943,582 $ 869 $ 630,296 273 100,272 - (52,947 ) - - (1,142) - $ - $ 677,621 $ - $ 4,428 - (271) $ - $ 4,157 $ - $ 2,261,804 $ - $ 2,331,317 - 275,545 - (41,341 ) 1,142 - - - $ 1,142 $ 2,565,521 $ - $ 584,292 228 85,336 - (39,332 ) 641 - $ 869 $ 630,296 $ - $ 4,658 - (230) $ - $ 4,428 $ 273 $ 1,930,797

F	reehold Land $ 179,901 - - - - - $ 179,901 $ - - - - - $ - $ - - $ - $ 179,901 $ 179,901 - - - - $ 179,901 $ - - - - $ - $ - - $ - $ 179,901	Buildings and Ancillary Equipment $ 1,548,461 800 (620 ) (117,531 ) - 855,059 $ 2,286,169 $ 452,347 48,579 (611 ) (89 ) - $ 500,226 $ - - $ - $ 1,785,943 $ 1,545,749 2,624 (3,514 ) - 3,602 $ 1,548,461 $ 415,416 40,034 (3,103 ) - $ 452,347 $ - - $ - $ 1,096,114	Machinery Equipment T $ 252,229 45,446 (49,287 ) - 1,142 2,458 $ 251,988 $ 133,876 36,958 (40,763 ) - 1,142 $ 131,213 $ 4,428 (271) $ 4,157 $ 116,618 $ 234,237 30,383 (28,050 ) (1,142 ) 16,801 $ 252,229 $ 126,625 34,347 (26,455 ) (641) $ 133,876 $ 4,658 (230) $ 4,428 $ 113,925	ransportation Equipment $ 26,560 3,920 (4,013 ) - - - $ 26,467 $ 15,460 3,781 (4,000 ) - - $ 15,241 $ - - $ - $ 11,226 $ 25,123 3,395 (1,958 ) - - $ 26,560 $ 13,795 3,620 (1,955 ) - $ 15,460 $ - - $ - $ 11,100	Office Equipment $ 50,247 28,080 (7,573 ) - - (660) $ 70,094 $ 27,744 8,591 (7,573 ) - - $ 28,762 $ - - $ - $ 41,332 $ 47,168 10,898 (7,819 ) - - $ 50,247 $ 28,456 7,107 (7,819 ) - $ 27,744 $ - - $ - $ 22,503	Leasehold Improveme $ 1,060 - - - - -	nt	Work in Progress $ 505,921 362,049 - - - (857,598) $ 10,372 $ - - - - - $ - $ - - $ - $ 10,372 $ 299,139 227,185 - - (20,403) $ 505,921 $ - - - - $ - $ - - $ - $ 505,921	Buildings and Ancillary Equipment $ - - - 117,531 - - $ 117,531 $ - 1,242 - 89 - $ 1,331 $ - - $ - $ 116,200 $ - - - - - $ - $ - - - - $ - $ - - $ - $ -
						$ 1,060
						$ - 848 - - -
						$ 848
						$ - -
						$ -
						$ 212
						$ - 1,060 - - -
						$ 1,060
						$ - - - -
						$ -
						$ - -
						$ -
						$ 1,060

Operating leases are related to leases of machinery equipment with lease terms 0.5-5 year. The lessees do not have bargain purchase options to acquire the assets at the expiry of the lease periods.

28 -

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

Year 1 Year 2 Year 3 Year 4 Year 5		December	31
		2022 $ 3,027 2,756 2,756 2,756 1,608 $ 12,903	2021 $ 2,536 - - - - $ 2,536

There was no indication of impairment on the Corporation’s property, plant and equipment for the years ended December 31, 2022 and 2021.

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

Buildings and ancillary equipment 4-50 years Machinery equipment 1-20 years Transportation equipment 5-8 years Office equipment 3-6 years Leasehold improvement 1-2 years

The major component of the Corporation’s buildings comprises the main building of the plant and electromechanical power equipment, which are depreciated on a straight-line basis over their estimated useful lives of 40-50 years and 4-15 years, respectively.

13. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Transportation equipment		December 31	December 31
	2022 $ 222,870 2,310 $ 225,180 For the Year Ended		2021 $ 245,709 4,587 $ 250,296 December 31
		2022 $ 1,933 $ 24,772 2,277 $ 27,049	2021 $ 2,483 $ 25,911 1,886 $ 27,797

29 -

b. Lease liabilities

Carrying amount Current Non-current Range of discount rate for lease liabilities was as follows: Land Transportation equipment		December 31
		2022 2021 $ 25,794 $ 25,500 $ 209,735 $ 233,936 December 31
	2022 2021 1.92%-2.16% 1.92%-2.16% 1.44% 1.44%

c. Material leasing activities and terms

The Corporation leases land and transportation equipment for office space and operational uses with lease terms of 9-19 years and 3 years, respectively. The Corporation does not have bargain purchase options to acquire the leasehold land and transportation equipment at the end of the lease terms.

d. Other lease information

Other lease information
Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	For the Year Ended December 31
		2022 $ 8,004 $ 21 $ (38,885)	2021 $ 4,811 $ 141 $ (34,942)

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

14. OTHER INTANGIBLE ASSETS

Service Concession Arrangements Cost Balance at January 1, 2022 $ 9,389 Additions - Disposals - Balance at December 31, 2022 $ 9,389 Accumulated amortization Balance at January 1, 2022 $ 4,225 Amortization expense 469 Disposals - Balance at December 31, 2022 $ 4,694 Carrying amount at December 31, 2022 $ 4,695	Computer Software Licenses and Franchises $ 37,682 $ - 14,634 8,000 (21,938) - $ 30,378 $ 8,000 $ 23,959 $ - 11,865 216 (21,938) - $ 13,886 $ 216 $ 16,492 $ 7,784	Others Total $ 58,272 $ 105,343 20,966 43,600 - (21,938) $ 79,238 $ 127,005 $ 36,811 $ 64,995 18,342 30,892 - (21,938) $ 55,153 $ 73,949 $ 24,085 $ 53,056 (Continued)

30 -

Service Concession Arrangements Cost Balance at January 1, 2021 $ 9,389 Additions - Disposals - Balance at December 31, 2021 $ 9,389 Accumulated amortization Balance at January 1, 2021 $ 3,755 Amortization expense 470 Disposals - Balance at December 31, 2021 $ 4,225 Carrying amount at December 31, 2021 $ 5,164	Computer Software Licenses and Franchises $ 42,762 $ - 4,399 - (9,479) - $ 37,682 $ - $ 20,213 $ - 13,225 - (9,479) - $ 23,959 $ - $ 13,723 $ -	Others Total $ 31,449 $ 83,600 26,823 31,222 - (9,479) $ 58,272 $ 105,343 $ 24,068 $ 48,036 12,743 26,438 - (9,479) $ 36,811 $ 64,995 $ 21,461 $ 40,348 (Concluded)

The Corporation signed several power purchase agreements with Taiwan Power Company that would expire in 20 years starting from the date of interconnection of the electric generators. The gains for the years ended December 31, 2022 and 2021, which were recognized as other income amounted to $5,697 thousand and $2,452 thousand, respectively.

Other intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Service concession arrangements 20 years Computer software 3 years Licenses and Franchises 10 years Others 1-10 years

Other intangible assets pledged as collateral for bank borrowings are set out in Note 29.

15. OTHER CURRENT ASSETS

Current Temporary payments Prepayments foreign travel Prepayments rents Prepayments for software maintenance Prepayments for construction Prepayments tax Others		December	31
		2022 $ 13,703 11,851 7,048 6,884 4,684 3,642 18,095 $ 65,907	2021 $ 13,707 11,545 5,960 3,663 13,724 2,108 20,590 $ 71,297

31 -

16. BORROWINGS

a. Short-term bank loans

Unsecured borrowings Working capital loan		December 31	December 31
		2022 $ 1,413,000	2021 $ 300,000

The effective interest rates of the working capital loan were 1.28%-1.95% and 0.51% as of December 31, 2022 and 2021, respectively.

b. Long-term bank loans

Unsecured borrowings Bank loans - expiring before February 15, 2027 Less: Current portion Long-term bank loans		December 31	December 31
		2022 $ 1,401,711 (464,723) $ 936,988	2021 $ 1,231,367 (42,724) $ 1,188,643

The effective interest rates of the long-term bank loans were 0.85%-1.14% and 0.41%-0.50% as of December 31, 2022 and 2021, respectively.

17. OTHER LIABILITIES

Current Accrued expenses and other current liabilities Bonus Salaries Outsourcing fee Compensation of employees and remuneration of directors and supervisors Purchases of equipment Others Non-current Other non-current liabilities Long-term payables		December 31	December 31
		2022 $ 224,381 132,624 61,385 14,832 13,075 162,996 $ 609,293 $ 4,000	2021 $ 270,889 91,027 112,777 15,636 45,392 172,383 $ 708,104 $ -

32 -

18. PROVISIONS - CURRENT

Warranties Balance at January 1 Additional provisions recognized Amount used Balance at December 31		December	31
	2022 2021 $ 10,174 $ 10,688 For the Year Ended December 31
		2022 $ 10,688 15,344 (15,858) $ 10,174	2021 $ 3,131 27,967 (20,410) $ 10,688

The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic benefits that will be required under the Corporation’s obligations for warranties under contracts for the sale of goods. The estimate has been made on the basis of historical warranty trends and may vary as a result of new materials, altered manufacturing processes or other events affecting product quality.

19. RETIREMENT BENEFIT PLANS

a. Defined contribution plan

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

b. Defined benefit plan

The defined benefit plan adopted by the Corporation in accordance with the Labor Standards Act is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Corporation contributes amounts equal to 11% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Corporation assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Corporation is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Corporation has no right to influence the investment policy and strategy.

The amounts included in the parent company only balance sheets in respect of the Corporation’s defined benefit plans are as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities		December 31	December 31
		2022 $ 526,489 (265,965) $ 260,524	2021 $ 559,090 (256,145) $ 302,945

33 -

Movements in net defined benefit liabilities were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of	Benefit
	Obligation	the Plan Assets	Liabilities
Balance at January 1, 2021	$ 637,231	$ (330,841)	$ 306,390
Service cost
Current service cost	2,518	-	2,518
Net interest expense (income)	3,186	(1,680)	1,506
Recognized in profit or loss	5,704	(1,680)	4,024
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(4,608)	(4,608)
Actuarial loss
Changes in demographic assumptions	14,423	-	14,423
Changes in financial assumptions	(6,267)	-	(6,267)
Experience adjustments	17,534	-	17,534
Recognized in other comprehensive loss
(income)	25,690	(4,608)	21,082
Contributions from the employer	-	(28,551)	(28,551)
Benefits paid	(109,535)	109,535	-
Balance at December 31, 2021	559,090	(256,145)	302,945
Service cost
Current service cost	2,109	-	2,109
Net interest expense (income)	3,494	(1,626)	1,868
Recognized in profit or loss	5,603	(1,626)	3,977
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(23,329)	(23,329)
Actuarial loss
Changes in financial assumptions	3,684	-	3,684
Experience adjustments	36,783	-	36,783
Recognized in other comprehensive loss
(income)	40,467	(23,329)	17,138
Contributions from the employer	-	(63,536)	(63,536)
Benefits paid	(78,671)	78,671	-
Balance at December 31, 2022	$ 526,489	$ (265,965)	$ 260,524

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

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets shall not be below the interest rate for a 2-year time deposit with local banks.
2) Interest risk: A decrease in the government or corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.
3) Salary risk: The present value of the defined benefit obligation is calculated using the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.
34 -

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

Discount rate Expected rate of salary increase	December 31
	2022 2021 1.500% 0.625% 5% 4.00%

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

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase/decrease 0.25% increase 0.25% decrease		December	31
		2022 $ (11,416) $ 11,810 $ 11,233 $ (10,923)	2021 $ (12,496) $ 12,943 $ 12,323 $ (11,968)

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

Expected contributions to the plans for the next year Average duration of the defined benefit obligation		December 31	December 31
		2022 $ 6,953 8.8 years	2021 $ 8,030 9.0 years

20. EQUITY

a. Share capital
1) Ordinary shares

Shares authorized (in thousands of shares) Shares authorized Shares issued and fully paid (in thousands of shares) Shares issued		December 31	December 31
		2022 250,000 $ 2,500,000 195,531 $ 1,955,312	2021 250,000 $ 2,500,000 195,531 $ 1,955,312

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

A total of 20,000 thousand ordinary shares are reserved for the exercise of employee share options, preferred shares with share options or bonds with attached share options.

35 -

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Conversion of bonds Treasury share transactions May only be used to offset a deficit Changes in percentage of ownership interests in subsidiaries (2) Share of changes in capital surplus of associates (3)		December 31	December 31
		2022 $ 234,579 19,150 12 16,549 $ 270,290	2021 $ 234,579 19,150 2 1,233 $ 254,964

1) Such capital surplus may be used to offset a deficit; in addition, when the Corporation has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Corporation’s capital surplus and to once a year).
2) Such capital surplus arises from the effects of changes in ownership interests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions or from changes in capital surplus of subsidiaries accounted for using the equity method.
3) Pursuant to IAS 28, if the Corporation subscribes for the shares of its associates at a percentage different from its existing ownership percentage, causing the proportion of ownership to change but still having significant influence on the associate, its adjusted capital surplus may only be used to offset deficit.
c. Retained earnings and dividends policy

The shareholders of the Corporation held their regular meeting on July 29, 2021 and in that meeting, resolved the amendments to the Corporation’s Articles of Incorporation (the “Articles”). The board of directors is authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders’ meeting.

Under the dividends policy as set forth in the amended Articles, where the Corporation made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Corporation’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. If the surplus distribution is issued as cash dividends, the board of directors shall be authorized to distribute by special resolution and shall be reported to the shareholders’ meeting.

In accordance with the Corporation’s Articles, the dividends policy is to enable the shareholders to have a share in the Corporation's profit, for continuous expansion of its business and stabilization of profitability. At least 30% of the dividends to be distributed to shareholders shall be allocated, and the total cash dividends paid in any given year should be at least 40% of total dividends distributed.

Under the dividends policy as set forth in the Articles before the amendments, where the Corporation made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of

36 -

previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Corporation’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders.

In accordance with the Corporation’s Articles, the dividends policy is to enable the shareholders to have a share in the Corporation’s profit, for continuous expansion of its business and stabilization of profitability. The total cash dividends paid in any given year should be at least 40% of total dividends distributed.

For the policies on the distribution of compensation of employees and remuneration of directors and supervisors after the amendment, refer to compensation of employees and remuneration of directors and supervisors in Note 22(h).

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Corporation’s paid-in capital. The legal reserve may be used to offset deficits. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

When a special reserve is appropriated for cumulative net debit balance reserves from prior period, the special reserve is only appropriated from the prior unappropriated earnings.

The appropriations of earnings for 2021 and 2020 were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended		December 31
		2021 $ 50,681 $ 15,809 $ 430,169 $ 2.2	2020 $ 50,131 $ (21,298) $ 391,062 $ 2.0

The appropriation for cash dividends for 2021 had been resolved by the Corporation’s board of directors on March 17, 2022; the other proposed appropriations for 2021 had been resolved by the shareholders in their meeting on June 9, 2022. The appropriation of earnings for 2020 had been resolved by the shareholders in their meeting on July 29, 2021.

The appropriation of earnings for 2022, which were proposed by the Corporation’s board of directors on March 14, 2023, were as follows:

	For the Year	For the Year
		Ended
	December 31,
		2022
Legal reserve	$	49,758
Special reserve	$	(40,482)
Cash dividends	$	351,956
Cash dividends per share (NT$)	$	1.8

The above appropriation for cash dividends has been resolved by the Corporation’s board of directors; the other proposed appropriations will be resolved by the shareholders in their meeting to be held on May 30, 2023.

37 -

d. Special reserve

Balance at January 1 Appropriations in respect of Debits to other equity items Reversals: Reversal of the debits to other equity items Balance at December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 2021 $ 152,050 $ 173,348 15,809 - - (21,298) $ 167,859 $ 152,050

e. Other equity items

1) Exchange differences on the translation of the financial statements of foreign operations

Balance at January 1 Recognized for the year Exchange differences on the translation of the financial statements of foreign operations Other comprehensive income (loss) recognized for the year Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ (160,814) 31,997 31,997 $ (128,817)	2021 $ (144,404) (16,410) (16,410) $ (160,814)

2) Unrealized valuation gain (loss) on financial assets at FVTOCI

Balance at January 1 Recognized for the year Unrealized gain (loss) - equity instruments Other comprehensive income (loss) recognized for the year Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ (7,045) 8,485 8,485 $ 1,440	2021 $ (7,645) 600 600 $ (7,045)

21. REVENUE

Revenue from contracts with customers Construction contract revenue Revenue from the sale of goods Revenue from the rendering of services	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 7,856,070 869,953 349,379 $ 9,075,402	2021 $ 6,168,055 1,721,657 473,674 $ 8,363,386

38 -
a. Contract balances

December 31,
2022
December 31,
2021
Notes receivable (Note 9)
$ 7,799
$ 11,813

Accounts receivable (Note 9)
$ 124,027
$ 210,664

Receivables from related parties (Note 28)
$ 16,167
$ 27,730

Contract assets - current
Construction contracts
$ 4,717,201
$ 2,692,054

Contract liabilities - current
Construction contracts
$ 670,670
$ 1,103,158

Sale of goods

335,548

154,664

$ 1,006,218
$ 1,257,822

January 1,
2021
$ 10,982
$ 180,723
$ 57,292
$ 2,495,667
$ 1,216,836

426,750
$ 1,643,586

The changes in the balance of contract assets and contract liabilities primarily result from the timing difference between the Corporation’s satisfaction of performance obligations and the respective customer’s payment.

b. Disaggregation of customer contract revenue

For the year ended December 31, 2022 Type of goods or services Construction contract revenue Revenue from the sale of goods Revenue from the rendering of services For the year ended December 31, 2021 Type of goods or services Construction contract revenue Revenue from the sale of goods Revenue from the rendering of services		Reportable Segments
		Logistics System Segment Information and Controller Segment $ 7,402,587 $ 453,483 64,201 805,752 58,037 291,342 $ 7,524,825 $ 1,550,577 $ 5,809,587 $ 358,468 85,646 1,636,011 65,035 408,639 $ 5,960,268 $ 2,403,118	Total $ 7,856,070 869,953 349,379 $ 9,075,402 $ 6,168,055 1,721,657 473,674 $ 8,363,386

22. NET PROFIT FROM CONTINUING OPERATIONS

a. Other operating income and expenses

Loss on disposal of property, plant and equipment	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ (2,843)	2021 $ (148)

39 -

b. Interest income

For the Year Ended	For the Year Ended	December 31
2022 $ 3,199 29 $ 3,228 For the Year Ended		2021 $ 2,411 2,407 $ 4,818 December 31
2022 $ 5,697 4,721 3,810 1,442 130 4,701 $ 20,501 For the Year Ended		2021 $ 2,452 2,050 - - 10,367 1,501 $ 16,370 December 31
2022 $ 106 (15,252) $ (15,146) For the Year Ended		2021 $ 384 (6,610) $ (6,226) December 31
2022 $ 17,147 5,020 $ 22,167 For the Year Ended		2021 $ 6,196 5,450 $ 11,646 December 31
	2022 $ 100,272 27,049 30,892 $ 158,213	2021 $ 85,336 27,797 26,438 $ 139,571 (Continued)

c. Other income

d. Other gains and losses
e. Finance costs
f. Depreciation and amortization
40 -

An analysis of depreciation by function Operating costs Operating expense An analysis of amortization by function Operating costs Selling and marketing expense General and administrative expense Research and development expense Other expense g. Employee benefits expense Post-employment benefits (Note 19) Defined contribution plans Defined benefit plans Termination benefits Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	For the Year Ended	December 31
	2022 $ 40,117 87,204 $ 127,321 $ 9,870 1,955 15,289 3,309 469 $ 30,892 For the Year Ended			2021 $ 34,436 78,697 $ 113,133 $ 7,224 1,711 13,000 4,033 470 $ 26,438 (Concluded) December 31
		2022 $ 54,239 3,977 58,216 975 1,408,313 $ 1,467,504 $ 905,792 561,712 $ 1,467,504	2021 $ 47,434 4,024 51,458 3,704 1,390,837 $ 1,445,999 $ 795,387 650,612 $ 1,445,999

h. Employees’ compensation and remuneration of directors and supervisors

According to the Corporation’s Articles, the Corporation accrues compensation of employees and remuneration of directors and supervisors at rates of no less than 1% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors and supervisors. The compensation of employees and the remuneration of directors and supervisors for the years ended December 31, 2022 and 2021, which were approved by the Corporation’s board of directors on March 14, 2023 and March 17, 2022, respectively, are as follows:

Accrual rate

Compensation of employees Remuneration of directors and supervisors	For the Year Ended December 31
	2022 2021 1% 1% 1.5% 1.5%

41 -

Amount

Compensation of employees Remuneration of directors and supervisors	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022	2021
		Cash $ 5,933 $ 8,899	Cash $ 6,254 $ 9,382

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

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

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

23. INCOME TAXES RELATING TO CONTINUING OPERATIONS

a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current year Adjustments for prior year Deferred tax In respect of the current year Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 81,784 (20,939) 2,896 $ 63,741	2021 $ 117,952 (36,037) - $ 81,915

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

Profit before tax from continuing operations Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Nondeductible (deductible) items in determining taxable income Unrecognized temporary differences Adjustments for prior years’ tax Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2022 $ 578,465 $ 115,693 2,908 1,316 (35,237) (20,939) $ 63,741	2021 $ 609,811 $ 121,962 4,471 (2,386) (6,095) (36,037) $ 81,915

42 -

b. Current tax liabilities

December 31 2022 2021 Current tax liabilities Income tax payable $ 117,239 $ 156,769 Deferred tax assets and liabilities The movements of deferred tax assets and deferred tax liabilities were as follows: For the year ended December 31, 2022 Opening Balance Recognized in Profit or Loss Closing Balance Deferred tax assets Temporary differences Associates $ 7,779 $ (3,925) $ 3,854 Defined benefit obligations - 12,169 12,169 $ 7,779 $ 8,244 $ 16,023 Deferred tax liabilities Temporary differences Unrealized exchange gains $ - $ 11,140 $ 11,140 For the year ended December 31, 2021 Opening Balance Recognized in Profit or Loss Closing Balance Deferred tax assets Temporary differences Associate $ 7,779 $ - $ 7,779		December 31	December 31
			2021 $ 156,769 Closing Balance $ 3,854 12,169 $ 16,023 $ 11,140 Closing Balance $ 7,779

c. Deferred tax assets and liabilities

d. Deductible temporary differences for which no deferred tax assets have been recognized in the consolidated balance sheets

Deductible temporary differences After-sales service guarantee Deferred revenue		December	31
		2022 $ 10,174 1,492 $ 11,666	2021 $ 10,689 1,912 $ 12,601

43 -
e. The aggregate amount of temporary differences associated with investments for which deferred tax liabilities have not been recognized

As of December 31, 2022 and 2021, the taxable temporary differences associated with investments in subsidiaries and branches for which no deferred tax liabilities have been recognized were $140,034 thousand and $141,387 thousand, respectively.

f. Income tax assessments

The Corporation’s income tax returns through 2020 have been assessed by the tax authorities.

24. EARNINGS PER SHARE

EARNINGS PER SHARE
Basic earnings per share Diluted earnings per share	Unit: NT$ Per Share For the Year Ended December 31
		2022 $ 2.63 $ 2.63	2021 $ 2.70 $ 2.70

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

Net Profit for the Year

Profit for the year attributable to shareholders of the Corporation Earnings used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Compensation of employees Earnings used in the computation of diluted earnings per share	For the Year Ended	For the Year Ended	December 31
		2022 $ 514,724 514,724 - $ 514,724	2021 $ 527,896 527,896 - $ 527,896

The weighted average number of ordinary shares outstanding (in thousands of shares) was as follows:

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended	For the Year Ended	December 31
		2022 195,531 188 195,719	2021 195,531 169 195,700

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

44 -

25. GOVERNMENT GRANTS

The Corporation participated in a project proposed by the Ministry of Economic Affairs called “Smart Measuring Technology Applied to 3D Curved Glass Manufacturing Process”, with the Institute for Information Industry in June 2020. The subsidy provided by the Ministry of Economic Affairs was NT$12,893 thousand. As of June 30, 2021, the accumulated government grant income recognized was NT$12,419 thousand.

26. PARTIAL ACQUISITION OR DISPOSAL OF SUBSIDIARIES - WITHOUT LOSS OF CONTROL

On April 29, 2022, the Corporation acquired an additional 1% equity interest in DAVID INVESTMENT CO., LTD., and increased its continuing interest from 99% to 100%.

The above transactions were accounted for as equity transactions, since the Corporation did not cease to have control over these subsidiaries. Refer to Note 29 to the Corporation’s consolidated financial statements for the year ended December 31, 2022.

27. FINANCIAL INSTRUMENTS

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

The management believes that except for the financial assets at amortized cost whose fair values cannot be reliably measured, the carrying amounts of the other financial assets and financial liabilities approximate their fair values.

b. Fair value of financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2022

Financial assets at FVTOCI Investments in equity instruments Domestic unlisted shares Foreign unlisted shares December 31, 2021 Financial assets at FVTPL Mutual funds Financial assets at FVTOCI Investments in equity instruments Domestic unlisted shares Foreign unlisted shares	Level 1 $ - - $ - Level 1 $ 100,078 $ - - $ -	Level 2 $ - - $ - Level 2 $ - $ - - $ -	Level 3 $ 9,955 45,467 $ 55,422 Level 3 $ - $ 12,125 36,572 $ 48,697	Total $ 9,955 45,467
				$ 55,422
				Total $ 100,078
				$ 12,125 36,572
				$ 48,697

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

45 -
2) Reconciliation of Level 3 fair value measurements of financial instruments

Financial Assets Balance at January 1 Recognized in other comprehensive income Purchases Cash returns from capital reduction Balance at December 31	Financial Assets at FVTOCI	Financial Assets at FVTOCI	Financial Assets at FVTOCI
		Equity Instruments
		2022 $ 48,697 8,485 - (1,760) $ 55,422	2021 $ 39,098 600 10,000 (1,001) $ 48,697

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

The fair value of unlisted shares is estimated based on the financial statements of the issuer of such shares or based on the observable price of stock of comparable companies at the end of the period. The estimated fair value is further evaluated by comparing the financial position and financial performance of the issuer with the comparable companies and by applying the implied value multiplier to the estimated price at the balance sheet date.

c. Categories of financial instruments

Financial assets
FVTPL
Mandatorily classified as at FVTPL

Amortized cost
Cash and cash equivalents
Notes receivable (including related parties)
Accounts receivable (including related parties)
Other receivables (including related parties)
Refundable deposits
Financial assets at FVTOCI
Equity instruments
Financial liabilities
Amortized cost
Short-term bank loans
Notes payable
Accounts payable (including related parties)
Accrued expenses and other current liabilities
Long-term bank loans (including current portion)
Lease liabilities
Long-term payables
Guarantee deposits received

December 31

2022
2021
$ -
$ 100,078
1,012,010
2,110,140
7,997
12,288
139,996
237,919
61,591
108,724
99,511
88,832
55,422
48,697
1,413,000
300,000
33,231
51,963
2,717,900
2,379,474
609,293
708,104
1,401,711
1,231,367
235,529
259,436
4,000
-
271
298

46 -
d. Financial risk management objectives and policies

The Corporation’s financial risk management objectives are to manage market risk, credit risk and liquidity risk relating to the operations of the Corporation. To reduce the related financial risks, the Corporation is committed to identify, evaluate and avoid the uncertainty of the market to reduce the potentially negative effects of market volatility on the Corporation’s financial performance.

The Corporation’s important financial activities were reviewed by the management in accordance with relevant regulations and the internal control system. During the execution of the financial plans, the Corporation strictly complied with the relevant financial operating procedures.

1) Market risk

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

There had been no change to the Corporation’s exposure to market risks or the manner in which these risks were managed and measured.

a) Foreign currency risk

Several subsidiaries of the Corporation have foreign currency denominated sales and purchases, which expose the Corporation to foreign currency risk.

The Corporation’s main operating activities are foreign currency denominated sales and purchases, which expose the Corporation to the risk of exchange rate changes.

The carrying amounts of the Corporation’s foreign currency denominated monetary assets and monetary liabilities are set out in Note 31.

Sensitivity analysis

The Corporation is mainly exposed to the USD, RMB and the JPY.

The following table details the Corporation’s sensitivity to a 5% increase and decrease in the New Taiwan dollar (i.e., the functional currency) against the relevant foreign currencies. The sensitivity analysis included outstanding foreign currency denominated monetary items and adjusted their translation at the end of the reporting period for a 5% change in foreign currency rates. The sensitivity analysis included cash and cash equivalents, accounts receivable, accounts payable, and short-term bank loans. A negative number below indicates a decrease in pre-tax profit associated with the New Taiwan dollar strengthening 5% against the relevant currency. For a 5% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on pre-tax profit and the balances below would be positive.

Profit or loss	USD Impact For the Year Ended December 31 2022 2021 $ (79,203) $ (106,726)	CNY Impact For the Year Ended December 31 2022 2021 $ 2,649 $ (3,689)	JPY Impact
			For the Year Ended December 31
			2022 2021 $ (5,843) $ 362

The Corporation’s sensitivity to USD and RMB decreased during the year mainly due to a decrease in USD denominated net assets and an increase in RMB denominated net liabilities; JPY increased during the year mainly due to an increase in JPY denominated net assets.

47 -

b) Interest rate risk

The Corporation is exposed to interest rate risk because the Corporation borrow funds at both fixed and floating interest rates. The risk is managed by the Corporation by maintaining an appropriate mix of fixed and floating rate borrowings and using interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetites ensuring the most cost-effective hedging strategies are applied.

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

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2022 2021 $ 30,710 $ 565,000 1,348,529 259,436 972,202 1,535,192 1,701,711 1,531,367

Sensitivity analysis

The sensitivity analysis below was determined based on the Corporation’s exposure to interest rates for both derivative and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. A 1% increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 1% higher and all other variables were held constant, the Corporation’s pre-tax profit for the years ended December 31, 2022 and 2021 would have decreased by $17,017 thousand and $15,314 thousand, respectively, which was mainly attributable to the Corporation’s exposure to cash flow interest rate risk on its variable-rate borrowings.

The Corporation’s sensitivity to interest rate changed during the current year mainly due to the increase in variable-rate debt instruments.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in a financial loss to the Corporation. As at the end of the reporting period, the Corporation’s maximum exposure to credit risk, which will cause a financial loss to the Corporation due to failure of counterparties to discharge an obligation and financial guarantees provided by the Corporation arises from the carrying amount of the respective recognized financial assets as stated in the parent company only balance sheets.

The Corporation’s concentration of credit risk of 60.90% and 45.04% of total amounts of accounts receivable and contract assets as of December 31, 2022 and 2021, respectively, was attributable to the Corporation’s ten largest customers in the property construction business segment. The concentration of credit risk of the remaining accounts receivable and contract assets was not significant.

48 -

3) Liquidity risk

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

a) Liquidity and interest rate risk tables for non-derivative financial liabilities

The following tables detail the Corporation’s remaining contractual maturities for its non-derivative financial liabilities with agreed upon repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Corporation can be required to pay. The tables include both interest and principal cash flows.

Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed upon repayment dates.

To the extent that interest flows are at floating rates, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

December 31, 2022

On Demand or Less than 1 Month Noninterest bearing (Note) $ 483,936 Lease liabilities 2,534 Variable interest rate liabilities 5,980 Fixed interest rate liabilities 528,000 $ 1,020,450	1-3 Months 3 Months to 1 Year $ 682,962 $ 387,369 5,068 22,714 40,006 718,737 535,000 50,000 $ 1,263,036 $ 1,178,820	1+ Years $ 113,414 232,813 936,988 -
		$ 1,283,215

Further information on the maturity analysis of the above financial liabilities was as follows:

Less than 1 Year 1-5 Years Lease liabilities $ 30,316 $ 114,237 Variable interest rate liabilities 764,723 936,988 $ 795,039 $ 1,051,225 December 31, 2021 On Demand or Less than 1 Month Non-interest bearing (Note) $ 449,151 Lease liabilities 2,491 Variable interest rate liabilities - $ 451,642	5-10 Years $ 74,202 - $ 74,202 1-3 Months $ 809,464 4,982 6,705 $ 821,151	10-15 Years 15-20 Years $ 44,374 $ - - - $ 44,374 $ - 3 Months to 1 Year $ 296,919 22,420 336,019 $ 655,358	20+ Years $ - - $ - 1+ Years $ 55,606 277,285 1,188,643 $ 1,521,534	20+ Years $ - -
				$ -

49 -

Further information on the maturity analysis of the above financial liabilities was as follows:

Lease liabilities Variable interest rate liabilities	Less than 1 Year $ 29,893 342,724 $ 372,617	1-5 Years $ 127,066 1,172,619 $ 1,299,685	5-10 Years $ 96,859 16,024 $ 112,883	10-15 Years $ 53,360 - $ 53,360	15-20 Years $ - - $ -	20+ Years $ - -
						$ -

Note: Non-interest bearing liabilities do not include estimated accounts payable.

b) Financing facilities

Long-term bank loan facilities: Amount used Amount unused Short-term bank loan facilities: Amount used Amount unused		December 31	December 31
		2022 $ 1,401,711 836,099 $ 2,237,810 $ 2,292,003 3,365,567 $ 5,657,570	2021 $ 1,231,367 1,473,113 $ 2,704,480 $ 1,166,812 3,787,748 $ 4,954,560

28. TRANSACTIONS WITH RELATED PARTIES

The Corporation and related parties are disclosed below:

a. Related party name and relationship

Related Party Name

Relationship with the Corporation

Subsidiary

MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD. MIRLE AUTOMATION (KUNSHAN) CO., LTD. IOT SERVICES INFORMATION SYSTEM CORPORATION

Subsidiary Subsidiary

VAN QUOC INFORMATION TECHNOLOGY Subsidiary CONSULTING SERVICES CO., LTD. MIRLE AUTOMATION INTER CORP. LTD. Subsidiary FACTORY AUTOMATION INTERNATIONAL Subsidiary CO., LTD. MAIN DRIVE CORPORATION Associate MIRLE AUTOMATION TECHNOLOGY Associate (GUANGDONG) CO., LTD. I-MEI FOODS CO., LTD. I-MEI JISHENG CO., LTD. I-MEI BIOMEDICINE CO., LTD. I-MEI MACROBIOTICS CO., LTD.

Key management personnel Subsidiary of key management personnel Subsidiary of key management personnel Subsidiary of key management personnel

(Continued)

50 -

Related Party Name

Relationship with the Corporation

JIANXUE RESTAURANT CO., LTD. I-MEI STORE COMPANY LTD.

I-ME-I INFORMATION TECHNOLOGY CO., LTD.

OPENFIND INFORMATION TECHNOLOGY INC.

SHINE MEI FOODS MARKETING & DISTRIBUTION CO., LTD.

GOLDEN SADDLE MACHINERY CO., LTD.

Subsidiary of key management personnel Substantive related party Substantive related party

Substantive related party

(Concluded)

b. Operating transactions

Sales Subsidiaries Associates Substantive related parties Key management personnel Subsidiaries of key management personnel Purchases Subsidiaries Associates Manufacturing expenses Subsidiaries Associates Operating expenses Subsidiaries Substantive related parties Associates Other gains and losses Substantive related parties	For the Year Ended	For the Year Ended	December 31
		2022 $ 105,856 99,651 5,574 5,460 32 $ 216,573 $ 187,931 9,663 $ 197,594 $ 27,131 99 $ 27,230 $ 13,452 153 10 $ 13,615 $ 585	2021 $ 92,776 21,455 6,006 1,998 123 $ 122,358 $ 46,568 16,555 $ 63,123 $ 12,992 60 $ 13,052 $ 40,192 645 165 $ 41,002 $ -

51 -

Acquisition of property, plant and equipment

Related Party Category/Name Subsidiaries Disposal of property, plant and equipment Proceeds For the Year Ended December 31 Related Party Category/Name 2022 2021 Subsidiaries $ 181 $ 1,519	Related Party Category/Name Subsidiaries Disposal of property, plant and equipment Proceeds For the Year Ended December 31 Related Party Category/Name 2022 2021 Subsidiaries $ 181 $ 1,519	Related Party Category/Name Subsidiaries Disposal of property, plant and equipment Proceeds For the Year Ended December 31 Related Party Category/Name 2022 2021 Subsidiaries $ 181 $ 1,519	Purchase Price	Purchase Price	Purchase Price	Purchase Price
			For the Year Ended December 31
				2022 2021 $ 194 $ - Gainon Disposal

Related Party Category/Name Subsidiaries
	For the Year Ended December 31				For the Year Ended December 31
	2022 $ 181	2021 $ 1,519			2022 $ -	2021 $ 110

Lease arrangements the Corporation is lessor - Lease arrangements the Corporation is lessor under operating leases

The Corporation leases out plant to its associate, MAIN DRIVE CORPORATION, under operating leases with lease terms of 5 year. As of December 31, 2022 and 2021, the balance of the operating lease receivable were $12,632 thousand and $2,536 thousand, respectively. The amounts of lease income recognized for the years ended December 31, 2022 and 2021 was as follows:

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2022 2021 $ 3,684 $ 1,811 Purchase Price
For the Year Ended December 31
	2022 $ 120 60 $ 180	2021 $ - 79 $ 79

The products sold to related parties and purchases from related parties have no other suitable counterparties to compare with, so the collection and payment term are the same as general customers. Manufacturing expenses and operating expenses of the Corporation and related parties are outsourcing fee, management and support expenses, which are based on the prices decided by both parties and payment terms.

The transaction price and payment terms of the property, plant and equipment and the other intangible assets acquired and disposed of by the Corporation and its related parties are determined based on negotiation between the parties of the transaction. The related gain on disposal is recognized as unrealized gain.

52 -

c. Balances on the balance sheet date

Contract assets Subsidiaries Contract liabilities Subsidiaries Associates Accounts receivable from related parties Subsidiaries MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD. Others Substantive related parties I-MEI STORE COMPANY LTD. Others Associate Key management personnel Notes receivable from related parties Substantive related parties Key management personnel Other receivables from related parties Associates MAIN DRIVE CORPORATION Subsidiaries IOT SERVICES INFORMATION SYSTEM CORPORATION MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD. Others Prepayments Substantive related parties		December 31	December 31
		2022 $ 77,290 $ 5,299 9,235 $ 14,534 $ 10,471 1,584 3,672 128 69 45 $ 15,969 $ 198 - $ 198 $ 1,109 190 34 16 $ 1,349 $ 17	2021 $ 32,631 $ 2,184 - $ 2,184 $ 23,293 2,354 1,550 1 7 50 $ 27,255 $ 255 220 $ 475 $ 380 - 10,342 8 $ 10,730 $ - (Continued)

53 -

Accounts payable to related parties Subsidiaries MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD. FACTORY AUTOMATION INTERNATIONAL CO., LTD. IOT SERVICES INFORMATION SYSTEM CORPORATION Associates MAIN DRIVE CORPORATION Accrued expenses and other current liabilities Subsidiaries Associates		December 31	December 31
		2022 $ 105,475 6,395 3,042 715 $ 115,627 $ 20,441 104 $ 20,545	2021 $ 5,974 2,835 4,734 13,133 $ 26,676 $ 45,922 63 $ 45,985

No collateral is provided for the outstanding payables to related parties, which will be paid off by cash. The outstanding accounts receivable from related parties are unsecured. For the years ended December 31, 2022 and 2021, no impairment losses were recognized for the accounts receivable from related parties.

d. Remuneration of key management personnel

The remuneration of directors and the key management personnel for the years ended December 31, 2022 and 2021 was as follows:

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 49,262 1,528 $ 50,790	2021 $ 63,567 1,708 $ 65,275

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

29. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets had been pledged or mortgaged as collateral mainly for bank borrowings:

Other intangible assets		December	31
		2022 $ 4,695	2021 $ 5,164

54 -

30. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

The Corporation’s significant commitments and contingencies as of December 31, 2022 were as follows:

The endorsements/guarantees provided by the Corporation for MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD, MIRLE AUTOMATION (KUNSHAN) CO., LTD. and MIRLE AUTOMATION INTER CORP. LTD. amounted to $460,650 thousand, $122,840 thousand and $92,130 thousand, respectively.

On April 11, 2022, the Corporation received a notice from the Intellectual Property and Commercial Court that the Securities Investor and Futures Trader Protection Center (hereinafter referred to as the “Insurance Center”) filed a lawsuit against the Corporation’s financial statements from 2012 to 2017. For actual reasons, a lawsuit for damages was filed against the Corporation, its principal, directors, supervisors and accounting supervisors, and the requested amount was $158,959 thousand. The Corporation has appointed lawyers to deal with the lawsuit brought by Shanghai Kai Insurance Center, which has no significant impact on the Corporation’s financial and operation at this stage.

31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

(In thousands of foreign currencies)

Financial assets Monetary items USD JPY RMB EUR Non-monetary items Investments accounted for using the equity method USD THB Financial liabilities Monetary items USD JPY RMB EUR CAD	December 31, 2022
	Foreign Currency Exchange Rate $ 53,622 30.710 (USD:NTD) 776,039 0.2324 (JPY:NTD) 22,504 4.408 (RMB:NTD) 116 32.72 (EUR:NTD) 57,962 30.710 (USD:NTD) 82,618 0.8941 (THB:NTD) 2,041 30.710 (USD:NTD) 273,199 0.2324 (JPY:NTD) 34,522 4.408 (RMB:NTD) 281 32.72 (EUR:NTD) - 22.67 (CAD:NTD)

55 -

Financial assets Monetary items USD JPY RMB EUR Non-monetary items Investments accounted for using the equity method USD THB Financial liabilities Monetary items USD JPY RMB EUR CAD	December 31, 2021
	Foreign Currency Exchange Rate $ 83,563 27.680 (USD:NTD) 155,405 0.2405 (JPY:NTD) 22,853 4.344 (RMB:NTD) 325 31.32 (EUR:NTD) 62,828 27.680 (USD:NTD) 89,677 0.8347 (THB:NTD) 6,449 27.680 (USD:NTD) 185,531 0.2405 (JPY:NTD) 5,870 4.344 (RMB:NTD) 376 31.32 (EUR:NTD) 1 21.62 (CAD:NTD)

For the years ended December 31, 2022 and 2021, realized and unrealized net foreign exchange gains (losses) were $248,796 thousand and $(81,687) thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the Corporation.

32. SEPARATELY DISCLOSED ITEMS

a. Information on significant transactions:
1) Financing provided to others (Table 1)
2) Endorsements/guarantees provided (Table 2)
3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures) (Table 3)
4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (None)
56 -
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (None)
9) Trading in derivative instruments (None)
b. Information on investees (Table 4)
c. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 5)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (Table 6)
d. Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 7)
57 -

TABLE 1

MIRLE AUTOMATION CORPORATION

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period (Note 4)	Ending Balance (Note 4)	Actual Amount Borrowed	Interest Rate (%)	Nature of Financing (Note 2)	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limit (Note 3)	Note
													Item	Value
0 1	The Corporation MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD.	MIRLE AUTOMATION (KUNSHAN) CO., LTD. MIRLE AUTOMATION (KUNSHAN) CO., LTD.	Other receivables from related parties Other current assets	Yes Yes	$ 290,928 352,640	$ 290,928 352,640	$ - -	3 -	2 2	$ - -	Working capital Working capital	$ - -	- -	$ - -	$ 1,729,444 532,831	$ 1,729,444 532,831	- -

Note 1: The total amount of financing provided to others shall not exceed 40% of the net value of the Corporation’s net value based on its most recent audited or reviewed financial statements. However, foreign companies in which the Corporation directly and indirectly held 100% of the voting shares are not subject to the preceding restrictions in the preceding requirement, but their total amount of financing provided to others shall not exceed 40% of the Corporation’s net value.

Note 2: Nature of financing:

For business
For short-term financing

Note 3: The total amount of financing provided to others shall not exceed 40% of the Corporation’s net value in its most recent audited or reviewed financial statements. The total amount of financing provided by Mirle Automation Technology (Shanghai) Co., Ltd. to others shall not exceed 40% of its net value in its most recent audited or reviewed financial statements.

Note 4: Financing limit approved by the board of directors.

58 -

TABLE 2

MIRLE AUTOMATION CORPORATION

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guarantee Given on Behalf of Each Party (Note 3)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Amount Borrowed	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 3)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China
	Name	Relationship
The Corporation	MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD. MIRLE AUTOMATION TECHNOLOGY (KUNSHAN) CO., LTD. MIRLE AUTOMATION INTER CORP. LTD.	Note 1 Note 1 Note 2	$ 1,297,083 1,297,083 1,297,083	$ 460,650 122,840 92,130	$ 460,650 122,840 92,130	$ - - 26,257	$ - - -	11 3 2	$ 2,161,806 2,161,806 2,161,806	Yes Yes Yes	No No No	Yes Yes No

Note 1: The Corporation’s indirect wholly-owned subsidiaries.

Note 2: The Corporation’s direct wholly-owned subsidiaries.

Note 3: The amount of guarantees provided by the Corporation to any individual entity shall not exceed 10% of the Corporation’s net worth. The aggregate amount of guarantees available shall not exceed 50% of the Corporation’s net worth. The aggregate amount of guarantees given by the parent company on behalf of subsidiaries or subsidiaries on behalf of the parent company shall not exceed 30% of the Corporation’s net worth.

59 -

TABLE 3

MIRLE AUTOMATION CORPORATION

MARKETABLE SECURITIES HELD DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2022	December 31, 2022		Note
				Number of Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
The Corporation	TIEF FUND, L.P.	-	Financial assets at fair value through other comprehensive income - non-current	1,500	$ 45,467	7	$ 45,467	Note 1
	TSUKUBASEIKO CO., LTD.	-	Financial assets at fair value through profit or loss- non-current	143	-	4	-	Note 1
	PHOENIX II INNOVATION VENTURE CAPITAL CO., LTD.	-	Financial assets at fair value through other comprehensive income - non-current	1,000	9,955	2	9,955	Note 1
MIRTEK (BVI) CORP. LTD.	AMERICAN MERCHANTS HEAT CO., LTD.	-	Financial assets at fair value through other comprehensive income - non-current	1,654	-	6	-	Note 1
FACTORY AUTOMATION INTERNATIONAL CO., LTD.	UNION MONEY MARKET FUND	-	Financial assets as fair value through profit or loss - current	1,869	25,080	-	25,080	Note 2

Note 1: The market value was based on the fair value as of December 31, 2022.

Note 2: The fair value was based on the net assets value of the fund as of December 31, 2022.

Note 3: As of December 31, 2022, the above marketable securities had not been pledged or mortgaged.

Note 4: See Tables 4 and 5 for detailed information on subsidiaries and associates.

60 -

TABLE 4

MIRLE AUTOMATION CORPORATION

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31,	As of December 31,	2022	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2022	December 31, 2021	Number of Shares	%	Carrying Amount
The Corporation MIRTEK (BVI) CORP. LTD. DAVID INVESTMENT CO., LTD IOT SERVICES INFORMATION SYSTEM CORPORATION	MIRTEK (BVI) CORP. LTD. DAVID INVESTMENT CO., LTD MIRLE AUTOMATION INTER CO., LTD. FACTORY AUTOMATION INTERNATIONAL CO., LTD. FORMOSA MEDICAL DEVICES INC. MAIN DRIVE CORPORATION MIRLE HOLDING CO., LTD. IOT SERVICES INFORMATION SYSTEM CORPORATION VAN QUOC INFORMATION TECHNOLOGY CONSULTING SERVICES CO., LTD.	British Virgin Islands Taipei City Thailand Taipei City Taipei City Hsinchu County Seychelles Taipei City Vietnam	Investment Investment Machinery installation construction, automatic warehousing and logistics equipment and cybernation equipment construction Computer application package software design, computer and peripheral equipment sales Medical equipment wholesale and retail Machinery and equipment manufacturing and installation construction, wholesale and retail sale of computing and business machinery equipment Investment Machinery and equipment manufacturing and installation construction, wholesale and retail sale of computing and business machinery equipment Machinery and equipment manufacturing and installation construction, wholesale and retail sale of computing and business machinery equipment	$ 951,348 76,100 103,921 42,075 21,911 127,130 544,745 76,100 15,520	$ 951,348 76,000 103,921 42,075 21,911 97,130 544,745 76,100 15,520	29,641 - 10,300 1,275 2,523 11,713 17,000 7,610 -	100 100 100 51 21 23.43 100 100 100	$ 1,777,761 84,814 73,868 53,366 - 47,772 446,482 84,810 29,846	$ 16,035 7,346 (6,039) 14,988 - (131,250) (31,341) 7,346 2,775	$ 16,145 7,341 (6,039) 7,644 - (31,854) (31,341) 7,346 2,775	Subsidiary Subsidiary Subsidiary Subsidiary Note 2 Associate Second-tier subsidiary Second-tier subsidiary Third-tier subsidiary

Note 1: Refer to Table 5 for information on investments in mainland China.

Note 2: FORMOSA MEDICAL DEVICES INC. was dissolved on May 27, 2020, but the liquidation procedures have not yet been completed.

61 -

TABLE 5

MIRLE AUTOMATION CORPORATION

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2022	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2022	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2022	Accumulated Repatriation of Investment Income as of December 31, 2022
					Outward	Inward
MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD.	Developing, producing and selling of various packing machines, labeling machines, other food machinery, components of thermoforming models and automatic storage management equipment, logistics, other automated product systems and services and computer and network system integration and services	US$ 13,230 thousand (Note 2)	Note 1	US$ 11,610 thousand (Note 3)	$ -	$ -	US$ 11,610 Thousand	$ 47,419	100	$ 47,419 (Note 5)	$ 1,332,078	$ -
MIRLE AUTOMATION (KUNSHAN) CO., LTD.	Researching, developing and producing of welding robots and their welding equipment, automatic storage and management equipment, logistics and other automated product systems, industrial controller products and systems and providing industrial robot system, visual inspection system and computer and network system integrated application services	US$ 17,000 thousand (Note 4)	Note 1	US$ 17,000 thousand	-	-	US$ 17,000 thousand	(31,341)	100	(31,341) (Note 5)	446,482	-
MIRLE AUTOMATION TECHNOLOGY (GUANGDONG) CO., LTD.	Selling and manufacturing of industrial automatic control system devices; technical services, development, consulting, communication, transfer and promotion; electronic components and electromechanical component equipment manufacturing and selling; hardware research development, manufacturing and wholesale; electronic product sales; distribution switcher control equipment manufacturing, power transmission and distribution and control equipment manufacturing; motor and its control system research and development; servo control mechanism manufacturing and sales; electromechanical coupling system research and development; electrical equipment manufacturing; intelligent control system integration	US$ 1,500 thousand (Note 2)	Note 1	$ -	-	-	$ -	526	49	348 (Note 6)	21,983	-

(Continued)

62 -

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2022	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2022	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2022	Accumulated Repatriation of Investment Income as of December 31, 2022
							Outward	Inward
HICHAIN & MIRLE AUTOMATION CO., LTD.	Engaged in technical services, technical development, technical consultation; general machinery installation; intelligent control system integration, software development, material handling equipment sales, internet equipment sales, computer hardware and software and auxiliary equipment retail		US$ 580 thousand (Note 2)		Note 1	$ -	$ -	$ -	$ -	$ 21	40	$ - (Note 5)	$ 17,638	$ -

Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2022		Investment Amount Authorized by the Investment Commission, MOEA		Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA
US$28,610 thousand		US$31,560 thousand		$ 2,594,167

Note 1: By establishing MIRTEK (BVI) CORP. LTD. through investment in the third region and then invested in companies in mainland China.
Note 2: Accumulated outward remittance for investment from Taiwan is US$7,900 thousand. The amount of retained earnings transferred to ordinary shares is US$2,950 thousand and the investment amount of XINJI PHOTOELECTRIC CO., LTD. is US$2,380 thousand. After that, the Corporation acquired full ownership of MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD. through MIRTEK (BVI) CORP. LTD.; meanwhile, the Corporation reinvested in MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD. to acquire a 49% ownership of MIRLE AUTOMATION TECHNOLOGY (GUANGDONG) CO., LTD. and a 40% ownership of HAICHAIN MIRLE AUTOMATION CO., LTD.
Note 3: Accumulated outward remittance for investment from Taiwan is US$7,900 thousand. The Corporation obtained the shares of Mirle Automation Technology (Shanghai) Co., Ltd. by paying US$3,710 thousand to Xinji Photoelectric Co., Ltd.
Note 4: Accumulated outward remittance for investment from Taiwan is US$17,000 thousand. The Corporation invested and established MIRLE HOLDING CO., LTD. through MIRTEK (BVI) CORP. LTD.; meanwhile, the Corporation acquired full ownership of Mirle Automation (Kunshan) Co., Ltd. through MIRLE HOLDING CO., LTD.
Note 5: Calculated by audited financial statements of the investees for the same reporting periods as those of the Corporation.

Note 6: Calculated by unaudited financial statements of the investees for the same reporting periods as those of the Corporation.

(Concluded)

63 -

TABLE 6

MIRLE AUTOMATION CORPORATION

SIGNIFICANT TRANSACTIONS WITH INVESTEE COMPANIES IN MAINLAND CHINA, EITHER DIRECTLY OR INDIRECTLY THROUGH A THIRD PARTY, AND THEIR PRICES, PAYMENT TERMS, AND UNREALIZED GAINS OR LOSSES

FOR THE YEAR ENDED DECEMBER 31, 2022

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

Investee Company	Transaction Type	Purchase/Sale	Purchase/Sale	Price	Transaction Details	Transaction Details	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Unrealized (Gain) Loss	Note
		Amount	%		Payment Terms	Comparison with Normal Transactions	Ending Balance	%
MIRLE AUTOMATION TECHNOLOGY (SHANGHAI) CO., LTD. MIRLE AUTOMATION (KUNSHAN) CO., LTD. MIRLE AUTOMATION TECHNOLOGY (GUANGDONG) CO., LTD.	Sales Purchase Sales Sales	$ 18,086 114,169 84,638 99,352	0.2 1.7 0.9 1.1	Calculated according to the contract Calculated according to the contract Calculated according to the contract Calculated according to the contract	Based on mutual agreement Based on mutual agreement Based on mutual agreement Based on mutual agreement	No other equivalent transactions for comparison No other equivalent transactions for comparison No other equivalent transactions for comparison No other equivalent transactions for comparison	$ 10,471 (105,475) - -	7.1 3.8 - -	$ - - - -	None None None None

64 -

TABLE 7

MIRLE AUTOMATION CORPORATION

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2022

No.	Name of Major Shareholder	Shares	Shares
		Number of Shares Held	Ownership Percentage
1	I-MEI FOODS CO., LTD.	11,496,066	5.87%

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

65 -

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM

STATEMENT INDEX

MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE	Note 7
THROUGH PROFIT OR LOSS - CURRENT
STATEMENT OF CONTRACT ASSETS - CURRENT	Note 21
STATEMENT OF NOTES RECEIVABLE	2
STATEMENT OF ACCOUNTS RECEIVABLE	3
STATEMENT OF OTHER RECEIVABLES	Note 9
STATEMENT OF INVENTORIES	4
STATEMENT OF OTHER CURRENT ASSETS	Note 15
STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE	Note 8
THROUGH OTHER COMPREHENSIVE INCOME - NONCURRENT
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR	5
USING THE EQUITY METHOD
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note 12
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF	Note 12
PROPERTY, PLANT AND EQUIPMENT
STATEMENT OF CHANGES IN ACCUMULATED IMPAIRMENT OF	Note 12
PROPERTY, PLANT AND EQUIPMENT
STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS	6
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF	6
RIGHT-OF-USE ASSETS
STATEMENT OF CHANGES IN INTANGIBLE ASSETS	Note 14
STATEMENT OF SHORT-TERM BANK LOANS	Note 16
STATEMENT OF CONTRACT LIABILITIES - CURRENT	Note 21
STATEMENT OF NOTES PAYABLE	7
STATEMENT OF ACCOUNTS PAYABLE	8
STATEMENT OF PROVISIONS - CURRENT	Note 18
STATEMENT OF ACCRUED EXPENSES AND OTHER CURRENT	Note 17
LIABILITIES
STATEMENT OF LONG-TERM BANK LOANS	Note 16
STATEMENT OF LEASE LIABILITIES	9
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS
STATEMENT OF NET SALES	10
STATEMENT OF OPERATING COSTS	11
STATEMENT OF MANUFACTURING EXPENSES	12
STATEMENT OF OPERATING EXPENSES	13
STATEMENT OF OTHER GAINS AND LOSSES	Note 22
STATEMENT OF FINANCE COSTS	Note 22
SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION AND	14
AMORTIZATION EXPENSES BY FUNCTION

66 -

STATEMENT 1

MIRLE AUTOMATION CORPORATION

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Cash in banks Current accounts Foreign currency accounts (Note 1) Time deposits (Note 2) Checking accounts Cash on hand	Amount $ 517,130 455,072 30,710 120 1,003,032 8,978 $ 1,012,010

Note 1: Including US$8,260 thousand @30.710, ￥ $767,474 thousand @0.2324, CNY4,369 thousand @4.408 and €116 thousand @32.72.
Note 2: Expired by the end of April 2023, annual interest rate of 4.37%.
67 -

STATEMENT 2

MIRLE AUTOMATION CORPORATION

STATEMENT OF NOTES RECEIVABLE DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Client Name Client A Client B Client C Client D Client E Others (Note) Less: Allowance for impairment loss	Amount $ 2,916 1,159 886 866 847 1,221 7,895 (96) $ 7,799

Note: The amount of individual client in others does not exceed 5% of the account balance.

68 -

STATEMENT 3

MIRLE AUTOMATION CORPORATION

STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Client Name Client F Client G Client H Others (Note) Less: Allowance for impairment loss	Amount $ 24,912 13,017 6,506 85,960 130,395 (6,368) $ 124,027

Note: The amount of individual client in others does not exceed 5% of the account balance.

69 -

STATEMENT 4

MIRLE AUTOMATION CORPORATION

STATEMENT OF INVENTORIES DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Item Finished goods Work in process Raw materials Inventory in transit Note 1: Based on the net realizable value. Note 2: The amount of inventory insured is NT$708,000 thousand.		Amount
		Cost Market Value (Note 1) $ 14,878 $ 26,020 940,645 1,236,983 427,232 439,336 5,473 5,473 $ 1,388,228 $ 1,707,812

70 -

STATEMENT 5

MIRLE AUTOMATION CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2022

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

MIRTEK (BVI) CORP. LTD. MIRLE AUTOMATION INTER CORP. LTD. DAVID INVESTMENT CO., LTD. FACTORY AUTOMATION INTERNATIONAL CO., LTD. MAIN DRIVE CORPORATION FORMOSA MEDICAL DEVICES INC.	Balance, January 1, 2022 Number of Shares (In Thousands) Amount 29,641 $ 1,736,303 10,300 74,853 - 79,355 1,275 45,722 9,713 34,310 2,523 - $ 1,970,543	Share of Exchange Differences on Additions Profit or Translation Number of Shares Loss of Subsidiaries to the Presentation Cash Dividends Paid (In Thousands) Amount and Associates Currency by Subsidiaries - $ - $ 16,145 $ 24,893 $ - - - (6,039) 5,054 - - 100 7,341 2,050 (4,042) - - 7,644 - - 2,000 30,000 (31,854) - - - - - - - $ 30,100 $ (6,763) $ 31,997 $ (4,042)	Equity Adjustment $ - - 10 - 15,316 - $ 15,326	Deferred Credits Adjustment $ 420 - - - - - $ 420	Balance, December 31, 2022 Number of Shares (In Thousands) % Amount 29,641 100 $ 1,777,761 10,300 100 73,868 - 100 84,814 1,275 51 53,366 11,713 23.43 47,772 2,523 21 - $ 2,037,581	Net Asset Value Remarks $ 1,780,018 Note 1 62,656 Note 1 84,814 Note 1 21,444 Note 1 47,772 Note 1 - Note 1 $ 1,996,704
	Number of Shares (In Thousands) 29,641 10,300 - 1,275 9,713 2,523	Number of Shares (In Thousands) - - - - 2,000 -			Number of Shares (In Thousands) % 29,641 100 10,300 100 - 100 1,275 51 11,713 23.43 2,523 21

Note 1: The net value was based on audited financial statements for the same period.

Note 2: The above investments accounted for using the equity method were not pledged as security.

71 -

STATEMENT 6

MIRLE AUTOMATION CORPORATION

STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS AND ACCUMULATED DEPRECIATION OF RIGHT-OF-USE ASSETS FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Cost Land Transportation equipment Total Accumulated depreciation Land Transportation equipment Total Total	January 1, 2022 $ 318,910 6,830 325,740 73,201 2,243 75,444 $ 250,296	Additions $ 1,933 - 1,933 24,772 2,277 27,049 $ (25,116)	Disposals December 31, 2022 $ - $ 320,843 - 6,830 - 327,673 - 97,973 - 4,520 - 102,493 $ - $ 225,180

72 -

STATEMENT 7

MIRLE AUTOMATION CORPORATION

STATEMENT OF NOTES PAYABLE DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Client Name Client A Others (Note)	Amount $ 30,616 2,615 $ 33,231

Note: The amount of individual client in others does not exceed 5% of the account balance.

73 -

STATEMENT 8

MIRLE AUTOMATION CORPORATION

STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Client Name Client B Others (Note)	Amount $ 135,090 2,467,183 $ 2,602,273

Note: The amount of individual client in others does not exceed 5% of the account balance.

74 -

STATEMENT 9

MIRLE AUTOMATION CORPORATION

STATEMENT OF LEASE LIABILITIES DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Rental Period Discount Rate Land From January 2019 to December 2038 1.92%-2.16% Transportation equipment From December 2020 to August 2024 1.44% Total Less: Lease liabilities - current Lease liabilities - non-current	Amount $ 233,191 2,338 235,529 (25,794) $ 209,735

75 -

STATEMENT 10

MIRLE AUTOMATION CORPORATION

STATEMENT OF NET SALES FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Item Sale Quantity LCD devices Note Automatic storage systems Note Semiconductor equipment Note Information product systems Note Industrial controllers 9,137 sets Robot operating systems Note Less: Sales returns and discounts	Amount $ 3,653,402 2,296,048 1,549,508 1,206,779 323,368 49,987 9,079,092 (3,690) $ 9,075,402

Note: Designed in response to customer needs. Each system requires different accessories and equipment, so the quantity cannot be calculated based on it.

76 -

STATEMENT 11

MIRLE AUTOMATION CORPORATION

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Item
Raw materials
Balance, beginning of year

Raw material purchased
Raw materials, end of year
Transferred to property, plant and equipment
Others

Raw materials used this year
Direct labor
Manufacturing expenses

Manufacturing cost
Work in process, beginning of year
Others
Work in process, end of year

Cost of finished goods
Finished goods, beginning of year
Finished goods, end of year

Cost of goods sold
Other operating costs

Total

Amount
$ 349,083
6,746,744
(427,232)
(296,406)

(224,926)
6,147,263
823,098

775,797
7,746,158
778,749
(179,112)

(940,645)
7,405,150
24,406

(14,878)
7,414,678

(2,059)
$ 7,412,619

77 -

STATEMENT 12

MIRLE AUTOMATION CORPORATION

STATEMENT OF MANUFACTURING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Item Outsourcing project Travel expenses Salary Depreciation Others (Note)	Amount $ 244,432 113,165 88,103 40,117 289,980 $ 775,797

Note: The amount of individual client in others does not exceed 5% of the account balance.

78 -

STATEMENT 13

MIRLE AUTOMATION CORPORATION

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

	Selling and	General and	Research and
	Marketing	Administrative	Development
Item	Expense	Expense	Expense
Personnel expenses	$ 161,173	$ 171,021	$ 141,648
Professional service fee	72,937	2,060	577
Depreciation	3,824	78,126	5,254
Repair and maintenance costs	323	24,359	2,166
Electricity bill	43	29,203	31
Material requisition	-	-	216,883
Others (Note)	195,641	141,687	64,435
	$ 433,941	$ 446,456	$ 430,994

Note: The amount of each item in others does not exceed 5% of the account balance.

79 -

STATEMENT 14

MIRLE AUTOMATION CORPORATION

SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

Employee benefits expenses Salary expense Employee insurance premium Pension Meal expenses Welfare Remuneration of directors Depreciation Amortization		For the Year Ended December 31, 2022 Classified as Classified as Cost of Revenue Operating Expenses Total $ 765,385 $ 473,842 $ 1,239,227 68,224 44,354 112,578 36,293 21,923 58,216 22,786 12,194 34,980 13,104 - 13,104 - 9,399 9,399 $ 905,792 $ 561,712 $ 1,467,504 $ 40,117 $ 87,204 $ 127,321 $ 9,870 $ 21,022 $ 30,892		For the Year Ended December 31, 2021	For the Year Ended December 31, 2021
		Classified as Classified as Cost of Revenue Operating Expenses $ 765,385 $ 473,842 68,224 44,354 36,293 21,923 22,786 12,194 13,104 - - 9,399 $ 905,792 $ 561,712 $ 40,117 $ 87,204 $ 9,870 $ 21,022		Classified as Classified as Cost of Revenue Operating Expenses $ 677,805 $ 559,996 56,515 47,013 28,473 22,985 19,153 13,435 13,441 - - 7,183 $ 795,387 $ 650,612 $ 34,436 $ 78,697 $ 7,224 $ 19,214	Total $ 1,237,801 103,528 51,458 32,588 13,441 7,183 $ 1,445,999 $ 113,133 $ 26,438

Note 1: As of December 31, 2022 and 2021, the number of employees was 1,227 and 1,144, respectively, including 8 and 4 directors who did not serve concurrently as employees, respectively,

Note 2: Companies whose stocks are listed on the Taiwan Stock Exchange or on the Taipei Exchange should disclose the following information:
1) The average employee benefits expense for the current year is $1,196 thousand (“Total employee benefits expenses for the current year-Total directors’ remuneration”/“Number of employees for the current year-Number of directors who have not served concurrently as employees”).
- The average employee benefits expense for the previous year is $1,262 thousand (“Total employee benefits expenses for the previous year-Total directors’ remuneration”/“Number of employees for the previous year-Number of directors who have not served concurrently as employees”).
2) The average employee payroll and related expense for the current year is $1,017 thousand (Total payroll and related expense for the current year/“Number of employees for the current year-Number of directors who have not served concurrently as employees”).

The average employee payroll and related expense for the previous year is $1,086 thousand (Total payroll and related expense of the previous year/“Number of employees for the previous year-Number of directors who have not served concurrently as employees”).

3) Changes in the average employee payroll and related expense adjustment (6.35)% (“Average employee payroll and related expense for the current year-Average employee payroll and related expense for the previous year”/Average employee payroll and related expense for the previous year).
4) The remuneration of supervisors for the current year is $75 thousand, and that for the previous year is $2,739 thousand. The Corporation has established an audit committee on June 9, 2022.
5) The Corporation’s compensation policy (include directors, managers and employees).

Article 43 of the Corporation’s charter stipulates that if the Corporation makes a profit each year, at least 1% shall be allocated for employees’ compensation, and no more than 2% shall be allocated as remuneration of directors. A reasonable amount of remuneration is given to employees based on the procedures for determining the remuneration, considering the Corporation’s operational results, and taking into account the employee’s contribution to the Corporation’s performance, as well as the Corporation’s “ Board of Directors Performance Evaluation Method”. The relevant performance appraisal and salary reasonableness have been reviewed by the Salary and Compensation Committee and the Board of Directors.

80 -

AI assistant

Mirle — Annual Report 2022

52102_rns_2022-11-30_e0c8deef-e57f-493f-a718-09392f33937f.pdf

Mirle Automation Corporation

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Recognition of income

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

MIRLE AUTOMATION CORPORATION

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

MIRLE AUTOMATION CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

MIRLE AUTOMATION CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

MIRLE AUTOMATION CORPORATION

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

MIRLE AUTOMATION CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

MIRLE AUTOMATION CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

MIRLE AUTOMATION CORPORATION

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

e. Inventories

f. Investments in subsidiaries

h. Property, plant and equipment

1) Financial assets

c) Derecognition of financial assets

2) Equity instruments

3) Financial liabilities

l. Provisions

Warranties

n. Leases

1) The Corporation as lessor

2) The Corporation as lessee

p. Government grants

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Key Sources of Estimation Uncertainty

b. Construction contracts

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. NOTES RECEIVABLE, ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

December 31, 2022

10. INVENTORIES

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

a. Investments in subsidiaries

12. PROPERTY, PLANT AND EQUIPMENT

13. LEASE ARRANGEMENTS

b. Lease liabilities

14. OTHER INTANGIBLE ASSETS

15. OTHER CURRENT ASSETS

16. BORROWINGS

a. Short-term bank loans

17. OTHER LIABILITIES

18. PROVISIONS - CURRENT

19. RETIREMENT BENEFIT PLANS

a. Defined contribution plan

b. Defined benefit plan

20. EQUITY

b. Capital surplus

d. Special reserve

e. Other equity items

2) Unrealized valuation gain (loss) on financial assets at FVTOCI

21. REVENUE

22. NET PROFIT FROM CONTINUING OPERATIONS

b. Interest income

c. Other income

Accrual rate

Amount

23. INCOME TAXES RELATING TO CONTINUING OPERATIONS

b. Current tax liabilities

c. Deferred tax assets and liabilities

24. EARNINGS PER SHARE

Mirle Annual Report 2022