PARPRO - Annual Report 2022 | FinancialReports.eu

Stock code: 4916

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PARPRO CORPORATION

2022 Annual report

Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw/ Company website: http://www.parpro.com/ Printed on May 5, 2023

Spokesperson and acting spokesperson of the company:

Spokesman: Name: Wu Hsiu Pi Job Title: Chief Financial Officer Tel: (03)457-5535 E-mail: [email protected]

Acting Spokesperson: Name: Lee Shen Lung Job Title: Finance Manager Tel: (03)457-5535 E-mail: [email protected]

Addresses and telephone numbers of the head office, branch offices and factories 4th Floor, No. 169, Jianxing Road, Zhongli District, Taoyuan City Factory address: no Tel: (03)457-5535
The name, address, website and telephone number of the institution handling the stock transfer Name: KGI Securities Co., Ltd. Stock Affairs Agency Department Address: 5th Floor, No. 2, Section 1, Chongqing South Road, Taipei City URL : https://www.kgi.com.tw/ Tel: (02)2389-2999
Name,addresses and contact number of Audit Firm:

Name of CPA Firm: Deloitte & Touche Audit Firm Name of CPAs: Chen Peide, Chen Junhong Address: Floor 20, No. 100, Songren Road, Xinyi District, Taipei City Website: www.deloitte.com.tw Tel : (02)2725-9988

Name of overseas securities exchange where the securities are listed and method of inquiry: Not applicable.
Company's website:

http://www.parpro.com/

I. Letter to Shareholders

II. Company Profile

Date of Establishment
Company History

III. Corporate Governance Report

Organizational System Chart
Information on Directors, Supervisors, General Managers, Deputy General Managers, Assistant Managers, Heads of Departments and Branches
Status of Corporate Governance
Information on CPA Professional Fees
Information on Replacement of CPA
The Company's Chairman, General Manager, and Manager in Charge of Financial or Accounting Officers holding Any Positions in the Company's CPA firm or its Affiliates in the Recent Year
Transfer of Equity and Changes to Equity pledge of Directors, Supervisors, Managerial Officers and Shareholders Representing More than 10% of Shares
Information on the Relationship among the Company's Top 10 shareholders.
Total Number of Shares and Total Equity held by the Same Investee by the Company, its Directors and Supervisors, Managerial Officers, and Any Companies Controlled Either Directly or Indirectly by the Company
IV. Fundraising situation
Capital and Shares
Corporate bonds
Preferred Shares
Global Depository Receipts (GDRs)
Employee Stock Options
New Employee Restricted Stock
New Share Issuance in Connection with Acquisition or Acceptance of Shares from Other Companies
Implementation of Capital Utilization Plan
V. Operational Overview
Business Activities
Market, and Production and Sales Overview
Employees
Disbursements for Environmental Protection
Labor Relationship
Important Contracts
VI. Financial overview

Financial Information for the Last Five Years
Financial Analysis for the Last Five Years
Audit Committee’s Review Report on the Financial Reports of the Recent Years
Parent Company Only Financial Report and Auditor’s Report of the Recent Years
Consolidated Financial Reports and Auditor’s Report of the Recent Years
Impact of Financial Difficulties of the Company and its Affiliates on the Company’s Financial Position during The Most Recent Years and Up To the Date of Publication of The Annual Report
VII Financial Status, and Financial Performance Analysis and Risks
Financial status
Financial Performance
Cash Flow
Significant Capital Expenditures and its Impact on the Financial Operations in the Most Recent Years
Reinvestment Policies for the Recent Years, Main Reasons for Profits or Losses, Improvement Plan, and Investment Plan for the Coming Year
Risk Analysis and Assessment
Other Important Matters
VIII. Special Disclosure
Overview of Affiliates
Private Placement Securities during the Most Recent Years and up to the Date of Publication of the Annual Report
Holding or Disposal of Shares in the Company by Subsidiaries during the Most Recent Years and up to the Date of Publication of Annual Report
Supplementary Disclosures
Occurrence of Any Events that have Significant Impact on the Shareholders’ Rights or Securities Prices as Stated in Item 2 of Paragraph 3 of Article 36 of the Securities and Exchange Act during the Most Recent Years and up to the Date of Publication of the Annual Report

I. Letter to Shareholders

Operating results of 2022, the summary of the business plan for 2023 and the future development strategy of the company, the impact of the external competition environment, regulatory environment and overall business environment are explained as follows:

1. Operating Results of 2022

(1)2022 business plan implementation results

In 2022, due to the global shortage of raw materials, the economic restart under the control of the COVID-19 epidemic and the Ukrainian-Russian war increased the demand for military market size, resulting in an increase of 678,732 thousand in 2022 compared with 2021, an increase of 32.35 % .The overall after-tax net profit for 2022 was 99,513 thousand, and the data of each major consolidated financial statement are listed below. Looking forward to 2023 , although uncertain factors such as high inflation, economic slowdown, geopolitics, and the overall economy may affect changes in market demand, this will also drive the expansion of new infrastructure and defense industry product demand in various countries. Papro Corporation is expected to benefit from the economic recovery after the epidemic, which will drive the shipment of aerospace, gaming and smart retail products. The threat of geopolitical risks will also expand countries' investment in defense industry products. Papro Corporation is cautiously optimistic about the 2023 operation and development of gaming, industrial computer, aerospace, defense industry, smart retail, medical, Internet and other product lines.

	Unit: NT$ thousand;%	Unit: NT$ thousand;%	Unit: NT$ thousand;%	Unit: NT$ thousand;%
Item	2021	2022	Increase/Decrease	Ratio of change
Operatingincome	2,097,948	2,776,680	678,732	32.35
Cost ofgoods sold	1,780,226	2,318,545	538,319	30.24
Operating profit	317,722	458,135	140,413	44.19
Operatingexpenses	348,901	369,217	20,316	5.82
Operatingnet(loss) profit	(31,179)	88,918	120,097	385.19
Net non-operatingincome	130,767	18,823	(111,944)	(85.61)
Netprofit before tax	99,588	107,741	8,153	8.19
Netprofit for theyear	106,306	99,513	(6,793)	(6.39)

(2)Budget execution status: Not applicable.

(3)Profitability Analysis

	Item	2021	2022
Financial Structure (%)	Liabilities to Assets Ratio	59.59	58.25
	Long-term funds to fixed assets Ratio	832.43	1,403.12
Solvency (%)	Current Ratio	100.20	147.29
	Quick Ratio	46.16	65.99
Profitability (%)	Return on assets	4.25	4.37
	Return on equity	8.78	7.41
	Earningsper share(NT$)	1.29	1.21

(4)Research Development Status

The main operations and products of Papro Corporation are divided into gaming and industrial computers, aerospace and defense industries and other fields. The operating bases are in Taiwan, Mexico and the United States. "Technology research and development, innovative development, global layout" and other strategies, through vertical and horizontal integration, continue to improve and optimize the group's production and manufacturing capacity, strengthen research and development capabilities, gradually form barriers to entry in the same industry, and develop new technologies and new products And industrial

applications, widely used in gaming, industrial computers, aerospace, defense industry, Netcom, medical, Internet of Things, smart retail, automotive and other industries/product fields.

2023 Annual Operation Plan
(1) Operating strategy
- A. Maintenance and improvement of customer relationship, deep cultivation and development of gaming, industrial computer, aerospace, defense industry and other industrial applications.
- B. Group operation integration, including order receiving and production arrangement, R&D cooperation/support and joint development, so as to achieve resource sharing, more efficient operation, and share results.
- C. Intensify research and development energy with innovation, and expand new or potential products and industrial applications in the future.
- D. Effectively control operating costs and improve the overall profitability of the group.
(2) Important Production and Marketing Policies
- A. Strengthen the relationship with existing customers, grasp existing orders and shipments, and then increase new or potential customers and orders.
- B. Strengthen the supply chain relationship and enhance the bargaining power of suppliers.
- C. To reduce material cost.
- D. Through the improvement of manufacturing process and yield rate, we can provide customers with high quality and shorten delivery time.
- E. Carry out cost control and maintain/improve stable profits.
Future company development strategy
(1) Maintenance and improvement of customer relationship.
(2) R&D energy and technology are continuously quenched to establish/enlarge the differentiated value with competitors in the same industry.
(3) Seek for mergers and acquisitions or strategic alliances, and gradually expand the group's operating scale and realize greater profit momentum for the group through horizontal and vertical operation integration models.
(4) Prudent financial strategy and implementation of corporate governance, strengthening and maintaining good investor relations.
(5) Cultivate global talents and build an international team.
Affected by the external competitive environment, regulatory environment and overall business environment

The competition in the external environment is fierce. The company will continue to recruit outstanding talents, increase the added value of products and expand product lines to increase market share, so as to maintain the stable growth of operations. At the same time, it will continue to integrate the operations of the various operating companies of the group Configuration, in order to achieve the effect of reducing costs and enhancing competitiveness.

In addition, in the face of increasingly strict laws and regulations on environmental protection, investors, consumers, intellectual property rights, and labor rights, the company will also implement the spirit of corporate governance, fulfill corporate social responsibilities, and implement relevant laws and regulations. Changes in important policies and regulations affect finances and business. In the future, we will also keep an eye on changes in important policies and regulations at home and abroad, and propose timely measures to respond to them.

Under the operation of a globalized, conglomerate, and specialized enterprise, Papro Corporation will continue to face challenges with more stable and practical management in

response to the trend of internationalization. Papro Corporation also believes that with the encouragement and encouragement of all colleagues and shareholders of the company .Under the guidance, Papro Corporation will be able to reach new heights and create greater benefits for shareholders.

II. Company Profile
Date of establishment: December 27, 2001
Company history

Company history
Time	Important note
December 2001	Parpro Corporation was registered and established with a paid-in
	capital of NT$10,000 thousand.
October 2003	In order to meet the needs of business development and operating,
	cash capital was increased by NT$5,000 thousand. The paid-in
	capital after increasing was NT$15,000 thousand.
February 2004	Invenstment project proposal of capital increase and expansion of
	production of computers and their peripheral equipment,
	communication machinery equipment, and audio-visual electronic
	products was approved by Industrial Development Bureau for the
	five year tax-free investment plan.
October 2006	In order to meet the needs of business development and operating,
	cash capital was increased by NT$5,000 thousand. The paid-in
	capital after increasing was NT$20,000 thousand.
October 2007	Obtained ISO-9001 qualified certification.
June 2008	Obtained ISO-13485 certification (management system for
	medical devices).
October 2008	Capitalized surplus reserve of NT$5,000 thousand and cash capital
	increase of NT$10,000 thousand. The paid-in capital after
	increasing was NT$35,000 thousand.
November 2008	Acquired Industrial Computer and Gaming Machine Sales
	Distributor EFA Technologies Corporation as a subsidiary.
August 2009	Capitalized surplus reserve of NT$31,600 thousand. The paid-in
	capital after increasing was NT$66,600 thousand.
October 2009	In order to meet the needs of business development and operating,
	cash capital was increased by NT$83,400 thousand. The paid-in
	capital after increasing was NT$150,000 thousand.
December 2009	Applied for IPO.
December 2009	Applied for stock registration and stock trading.Got approval from
	the governmental authority.
March 2010	Purchased a new plant in Zhongli.
May 2010	Obtained ISO-14001 certification (environmental management
	system).
August 2010	Capitalized surplus reserve of NT$45,000 thousand. The paid-in
	capital after increasing was NT$195,000 thousand.
September 2011	Capitalized surplus reserve of NT$19,500 thousand. The paid-in
	capital after increasing was NT$214,500 thousand.
April 2012	In order to meet the needs of business development and operating,

Time	Important note
	cash capital was increased by NT$25,000 thousand. The paid-in
	capital after increasing was NT$239,500 thousand.
August 2012	Capitalized surplus reserve of NT$11,975 thousand. The paid-in
	capital after increasing was NT$251,475 thousand.
October 2012	Invested in AP Parpro, Inc. (AP Parpro), an American company in
	the aerospace field, and acquired its Mexican production base.
January 2013	Moved to the new factory in Zhongli.
July 2013	Capitalized surplus reserve of NT$352,065 thousand. The paid-in
	capital after increasing was NT$603,540 thousand.
November 2013	The company was officially listed.
December 2013	Cash capital was increased by NT$75,450 thousand. The paid-in
	capital after increasing was NT$678,990 thousand.
December 2013	Invested in Parpro (Nevada), Inc. (PNV), an American company in
	the field of gaming, and acquired its Las Vegas production base.
October 2014	Obtained the main net assets, R&D team and customer base of the
	U.S. company JumeGen Systems LLC through investment by the
	U.S. subsidiary to strengthen and enhance the group's R&D
	capabilities.
October 2014	Issued the first deomestic unsecured convertible corporate bond of
	NT$280,000 thousand, and listed it on the OTC trading center.
April 2015	Invested and participated in the domestic listed company Anderson
	Industrial Corp.'s subscription, and obtained 13.33% of the
	company's equity.
March 2016	Jointly invested with Anderson Industrial Corp. to acquire 100%
	equity of Parpro Technologies, Inc., an American company.
June 2016	Invested to obtain 47% equity of Parpro Technologies, Inc., an
	American subsidiary held by Anderson Industrial Corp., and
	completely acquired 100% equity of Parpro Technologies, Inc.
June 2017	Obtained more than half of the directors of Anderson Industrial
	Corp., with substantial control, which to be included in the
	preparation of consolidated financial statements .
August 2018	Participated in the stock subscription case of investing in 2018
	Anderson Industrial Corp.'s cash capital increase and issuance of
	new shares project.
August 2019	Sell real estate such as land and buildings in Zhongli District,
	Taoyuan City, in order to revitalize assets and maximize
	shareholders' equity.
December 2019	Issued the second domestic unsecured convertible corporate bond
	of NT$500,000 thousand, and listed it on the OTC trading center.
May 2020	Since May 27, 2010, Parpro Group lost control of Anderson
	Industrial Corp. and its subsidiaries, which were excluded in the
	preparation of consolidated financial statements.
March 2022	Issued the third domestic unsecured convertible corporate bond of
	NT$500,000 thousand, and listed it on the OTC trading center.

III. Corporate Governance Report
Organization system Chart
(1) Organization system Chart

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(2) The business of each main department

Main Department	Take charge of the business
General Manager	A. Coordinate the company's business strategy, business planning, drafting of business policies, planning and control of investment. B. Evaluation and control of each department's operating status and internal control, and overall management of the company's overall business execution,planningand coordination.
Audit room	Evaluation and audit of the operating status and internal control of each department, suggestions and tracking for improvement of deficiencies, promotion of internal self-assessment, other related internal audits and assigned tasks.
Occupational Safety and Health Committee	Coordinate safety and health plans, coordinate promotion and supervision.
Administrative Office	General affairs management, administrative support planning and management, drafting and execution of annual manpower budget, human resource development, salary management operations, and other administrative related businesses.
Information technology office	ERP system planning, application program maintenance and development, database management and maintenance, network planning and management, other related information and network-related work.
Accounting& Finance Office	A. Establish and maintain relevant accounting management operations. B. Preparation and analysis of accounting information such as tax planning and filing. C. Coordinate financial fund allocation and usage, budget preparation and control management business. D. Preparation and analysis of financial information for management.
Operations Management Office	A. Grasp market products and development trends, and coordinate the group's annual operating goals. B. Coordinate the group's production, purchase and sales allocation and other tasks. C. Coordinate the allocation and improvement of the group's R&D resources and process technology.
Strategic Investment Office	Strategic investment matters such as operations and M&A projects .

Information on Directors, Supervisors, General Managers, Deputy General Managers, Assistant Managers, Heads of Departments and Branches
(1) Directors and supervisors:

A. Director:

																As of April 1, 2023	As of April 1, 2023	As of April 1, 2023	As of April 1, 2023	As of April 1, 2023
Job title	Nationality or place of registration	Name	Gender Age	Elect Date	Term s	Initial Election Date	When	elected	Cu Number o	rrent f shares held	Spouse and minor children currently hold shares		Holding s name	hares in the of others	Main experience (Education)	Current positions in the company and other companies	Other executives, or supervisors related to the sp within the secon		directors who are ouse or d degree	Note
							Number of shares	Shareholdi ng Ratio	Number of shares	Shareholdin g Ratio	Numbe r of shares	Shareholdin g Ratio	Number of shares	Shareholdin g Ratio			Job title	Name	Relation
Chairman	Taiwan	Liao, Wenjia	Male 41~50	2022/5/31	3	2004/10/1	8,071,942	9.13	8,071,942	9.13	0	0	9,585,014	10.85	Boston University/Master of Electronic Commerce National Taiwan University Bachelor	Parpro Corporation./General Manager Parpro Holdings Co., Ltd./Legal Person Director Representative AP Parpro, Inc./Legal Person Director Representative Efa Technologies Corporation /Legal Person Director Representative Paide Investment Co., Ltd. / Chairman Jieshi Investment Co., Ltd. / Chairman Yunyong Investment Co., Ltd./Chairman Anderson Industrial Corp. /Chairman Parpro (Nevada) Inc./Legal Person Director Representative Pilot(Las Vegas) Inc./Corporate Director Representative Parpro Technologies, Inc. / Legal Person Director Representative Parpro Quality Inc/Legal Person Director Representative Sogotec Precision Co., Ltd. / Chairman Shengde Co., Ltd. / Chairman Anderson Merchandise Corporation / Chairman Giben Holdings Ltd.(SAMOA)/Director Giben Holdings Ltd.(BVI)/Director	None	None	None	Note
Director	Taiwan	Zeng, Xueqing	Female 61~70	2022/5/31	3	2010/5/26	0	0	0	0	0	0	0	0	Shih Chien College/Fashion Design Department Head of Fangdeng International Trading Co., Ltd. Manager of Fufeng Engineering Company Anderson Industrial Corp./Legal person director representative	Changchi Co., Ltd./Consultant	None	None	None	None

Director	Taiwan	Wu, Hsiupi	Female 61~70	2022/5/31	3	2004/10/1	173,765	0.20	109,765	0.12	Shih Chien College Director of Materials, Yulin Technology Co., Ltd. Parpro Corporation/financial manager, special assistant Anderson Industrial Corp. /legal person director representative Parpro Corporation/Chief Financial Officer, Deputy General Manager	Parpro Corporation/Chief Financial Officer, Deputy General Manager AP Parpro, Inc./Legal Person Director Representative Parpro(Nevada) Inc./Representative of corporate director Pilot (Las Vegas) Inc./Corporate Director Representative Parpro Technologies, Inc. / Legal Person Director Representative Parpro Quality Inc/Legal Person Director Representative Efa Technologies Corporation/Legal Person Director Representative Shengde Co., Ltd./Director Anderson Merchandise Corporation/Director	None	None	None	None
Director	Taiwan	Jieshi Investmen t Co., Ltd Represent ative:Yu Shaoyin	Female 61~70	2022/5/31	3	2022/5/31	5,830,415	6.60	5,830,415	6.60	Shih Chien College Housheng Electronic Industry Co., Ltd./Accountant System Electronics Industry Co., Ltd./Accountant/Financia l Director/Assistant Manager of Management Department/Director of Audit Office/Supervisor Supervisor of Boji Electronics Co., Ltd.	None	None	None	None	None
Director	Taiwan	Shen, Zhenlin	Male 61~70	2022/5/31	3	2013/4/18	0	0.00	0	0.00	Master of Economics, National Chung Hsing University Motech Co., Ltd. / Chief Financial Officer Sincere Information (Shares) Company/Chief Financial Officer and Senior Deputy General Manager Taiwan Semiconductor Manufacturing Co., Ltd./Deputy Director of Finance Kanglian Holdings Limited / Independent Director	Spectrum Technology Co., Ltd./Independent Director	None	None	None	None
Independent Director	Taiwan	Zhang, Naiwen	Male 41~50	2022/5/31	3	2022/5/31	0	0.00	0	0.00	Chung Yuan University/Master of Accounting, Tunghai University/Bachelor of Business Administration, Financial Manager of Changyuan Technology Industrial Co., Ltd. Zhang Naiwen Certified Public Accountants	Zhang Naiwen Certified Public Accountants Director of Maiber Co., Ltd.	None	None	None	None

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National Taiwan
University/Master of
Accounting,
National Chengchi
University/Bachelor of
Accounting,
Associate Director of
Independent Taiwan Feng, Male 2022/5/31 3 2022/5/31 0 0.00 0 0.00 0 0 0 0 Deloitte & Touche Audit Accountants of Yuanshi Audit Frim None None None None
Director Zhiqing 41~50 Frim
Certified Public
Accountants of Deloitte
& Touche Audit Frim
Certified Public
Accountants of Yuanshi
Audit Frim
----- End of picture text -----

Note : The chairman and general manager of the company are currently held by the same person. The main reason is that the current customers and production capacity of the group's main operations are all from North America, and the actual overseas operations are authorized by Thomas Sparrvik, the general manager of overseas operations. The chairman and the board of directors report on the operation and performance situation. Therefore, based on the actual operation needs and full authorization considerations, and the fact that more than half of the directors do not concurrently serve as employees and managers, it should be reasonable for the general manager to be concurrently held by the chairman. In the future, it will make corresponding adjustments based on actual operational needs and compliance with laws and regulations.

B. Supervisor: The company has an audit committee, so it is not applicable.

(2) Directors and supervisors who are legal person shareholder representatives:

Table 1: Major Shareholders of Legal Person Shareholders

	April 1, 2023
Legal entity shareholder name	Major shareholders of corporate shareholders
Jieshi Investment Co., Ltd.	Liao Wenjia / shareholding ratio 99.66 %

(3) Disclosure of Directors' Professional Qualifications and Independent Directors' Independence
Directors' Professional Qualifications and Independent Directors' Independence Information

Information
Condition	Professional qualifications and experience	Independence situation	Article 30 of the Company Law	Number of Concurrent with other public offerings independent directors of the company
Liao, Wenjia	Boston University/Master of Electronic Commerce National Taiwan University Bachelor Please refer to page 7 for Directors' Information	Directors, without the circumstances specified in Items 3 and 4 of Article 26-3 of the Securities and Exchange Act.	None	0
Zeng, Xueqing	Shih Chien College/Fashion Design Department Head of Fangdeng International Trading Co., Ltd. Manager of Fufeng Engineering Company Anderson Industrial Corp./Legal person director representative Please refer to page 7 for Directors' Information	Directors, without the circumstances specified in Items 3 and 4 of Article 26-3 of the Securities and Exchange Act.	None	0
Wu,Hsiupi	Shih Chien College Director of Materials, Yulin Technology Co., Ltd. Parpro Corporation/financial manager, special assistant Anderson Industrial Corp. /legal person director representative Parpro Corporation/Chief Financial Officer, Deputy General Manager	Directors, without the circumstances specified in Items 3 and 4 of Article 26-3 of the Securities and Exchange Act.	None	0
Jieshi Investment Co., Ltd Representative:Yu Shaoyin	Shih Chien College Housheng Electronic Industry Co., Ltd./Accountant System Electronics Industry Co., Ltd./Accountant/Financial Director/Assistant Manager of Management Department/Director of Audit Office/Supervisor Supervisor of Boji Electronics Co., Ltd.	Directors, without the circumstances specified in Items 3 and 4 of Article 26-3 of the Securities and Exchange Act.	None	0
Shen, Zhenlin	Master of Economics, National Chung Hsing University Motech Co., Ltd. / Chief Financial Officer Sincere Information (Shares) Company/Chief Financial Officer and Senior Deputy General Manager Taiwan Semiconductor Manufacturing Co., Ltd./Deputy Director of Finance Kanglian Holdings Limited / Independent Director	Independent directors have obtained independent director declarations and qualification checklists to confirm their independence.	None	1
Zhang, Naiwen	Chung Yuan University/Master of Accounting, Tunghai University/Bachelor of Business Administration, Financial Manager of Changyuan Technology Industrial Co., Ltd. Zhang Naiwen Certified Public Accountants	Independent directors have obtained independent director declarations and qualification checklists to confirm their independence.	None	0
Feng, Zhiqing	National Taiwan University/Master of Accounting, National Chengchi University/Bachelor of Accounting, Associate Director of Deloitte & Touche Audit Frim Certified Public Accountants of Deloitte & Touche Audit Frim Certified Public Accountants of Yuanshi Audit Frim	Independent directors have obtained independent director declarations and qualification checklists to confirm their independence.	None	0

2.Board Diversity and Independence

The company's "Corporate Governance Code" and "Director Election Method" stipulate the diversity policy of board members: the board members should pay attention to gAnderson Industrial Corp.equality, and generally have the knowledge, skills and accomplishments necessary to perform their duties. In order to achieve the ideal goal of corporate governance, the board of directors as a whole should have the following abilities: operational judgment ability, accounting and financial analysis ability, operation management ability, crisis handling ability, industry knowledge, international market outlook, leadership ability, and decision-making ability.

The company has seven directors, who have relevant professional skills and experience in business management, leadership decision-making, industry knowledge, financial accounting, and law. The diversity and complementarity of the members are conducive to the company's operation, business model and development needs, which is in line with the diversity policy of the board of directors The objective of the Board Diversity is detailed in Table 1 on page 27 .

At present, the company's directors with employee status account for 29%, independent directors account for 43%, and female directors account for 43 %. The target for female directors is to maintain more than 30%. Among the members of the board of directors, they meet the independence norms specified in Items 3 and 4 of Article 26-3 of the Securities and Exchange Act, and the independent directors also meet the independence norms stipulated in Article 3 of the Regulations on the Appointment of Independent Directors and Matters to be Followed by Public Offering Companies.

( 4) General Manager, Deputy General Managers, Assistant Managers, Heads of Departments and Branches

													As of April 1, 2023	As of April 1, 2023	As of April 1, 2023	As of April 1, 2023
Job title	Country of Citizenship	Name	Gender	Assigned Date	Number	Current of shares held	Spouse and minor chil shar	dren currently hold es	Holding shares i	n the name of others	Main experience (Education)	Current positions in the company and other companies	Other executives, directors or supervisors who are related to the spouse or within the second degree			Note
					Number of shares	Shareholding Ratio	Number of shares	Shareholding Ratio	Number of shares	Shareholding Ratio			Job title	Name	Relation
General manager	Taiwan	Liao, Wenjia	Male	2010/4/14	8,071,942	9.13	-	-	9,585,014	10.85	Boston University/Master of Electronic Commerce National Taiwan University Bachelor	Parpro Corporation./General Manager Parpro Holdings Co., Ltd./Legal Person Director Representative AP Parpro, Inc./Legal Person Director Representative Efa Technologies Corporation /Legal Person Director Representative Paide Investment Co., Ltd. / Chairman Jieshi Investment Co., Ltd. / Chairman Yunyong Investment Co., Ltd./Chairman Anderson Industrial Corp. /Chairman Parpro (Nevada) Inc./Legal Person Director Representative Pilot(Las Vegas) Inc./Corporate Director Representative Parpro Technologies, Inc. / Legal Person Director Representative Parpro Quality Inc/Legal Person Director Representative Sogotec Precision Co., Ltd. / Chairman Shengde Co., Ltd. / Chairman Anderson Merchandise Corporation / Chairman Giben Holdings Ltd.(SAMOA)/Director Giben Holdings Ltd.(BVI)/Director	None	None	None	Note
Overseas Operate General Manager	United States	Thomas Sparrvik	Male	2014/1/1	-	-	-	-	-	-	Warwick Business School MBA Kontron AG, Munich, Germany Chief Operating Officer & Vice Chairman Field Works Inc., Eden Prairie, Minnesota CEO & President Laserstans AB, Malmoe, Sweden CEO & President Betech Components AB, Stockholm, Sweden CEO & President	Parpro(Nevada) Inc./Representative of corporate director Pilot (Las Vegas) Inc./Corporate Director Representative Parpro Technologies, Inc. / Legal Person Director Representative Parpro Quality Inc/Legal Person Director Representative	None	None	None	None
Deputy General Manager and Chief Financial Officer	Taiwan	Wu, Hsiupi	Female	2017/2/10	109,765	0.12	6,000.00	0.01	-	-	Shih Chien College Director of Materials, Yulin Technology Co., Ltd. Parpro Corporation/financial manager, special assistant Anderson Industrial Corp. /legal person director representative Parpro Corporation/Chief Financial Officer,	Parpro Corporation/Chief Financial Officer, Deputy General Manager AP Parpro, Inc./Legal Person Director Representative Parpro(Nevada) Inc./Representative of corporate director Pilot (Las Vegas) Inc./Corporate Director Representative Parpro Technologies, Inc. / Legal Person Director Representative Parpro Quality Inc/Legal Person Director Representative Efa Technologies Corporation/Legal Person Director Representative	None	None	None	None

											Deputy General Manager	Shengde Co., Ltd./Director Anderson Merchandise Corporation/Director
R & D Departmen t Manager	United States	Matthew Dharm	Male	2017/2/10	-	-	-	-	-	-	Parpro Technologies Chief Technology Officer JumpGen Systems Senior Software Engineer and CTO Mercury Computer Systems Principal SW Engineer Momentum Computer Senior SW Developer Qualcomm, Inc Senior Engineer HarveyMudd College	None	None	None	None	None
Senior Manager	Taiwan	Ye Jianshen	Male	2010/7/16	192	-	-	-	-	-	Jianxing Engineering College Engineering Purchasing Specialist of Hechang Xingye Co., Ltd.	None	None	None	None	None
Finance Departmen t Manager	Taiwan	Lee Shen-Lung	Male	2012/9/17	71,466	0.08	-	-	-	-	Ming Chuan University/Department of Accounting Auditor of the PricewaterhouseCoopers Audit firm Accounting Firm Assistant Manager of Underwriting Department of Taiwan Stock Exchange Deputy Manager of Capital Market Department of Polaris SecuritiesManager of Finance Department of Qizheng Optoelectronics Co., Ltd. Head of Accounting Department, Youwei TechnologyCo.,Ltd.	Hongyi Precision Industry Co., Ltd./Independent Director	None	None	None	None

Note: The chairman and general manager of the company are currently held by the same person. The main reason is that the current customers and production capacity of the main operations of the group are all from North America, and the actual overseas operations are authorized by Thomas Sparrvik, the general manager of overseas operations, to report to the directors regularly and irregularly about the operation and performance situation. Therefore, based on the actual operation needs and full authorization considerations, and at present, more than half of the directors do not concurrently serve as employees and managers. Therefore, it is reasonable and necessary for the general manager to be concurrently held by the chairman.In the future, corresponding adjustments will be made depending on actual operational needs and compliance with laws and regulations.

( 5) Remuneration paid to directors, supervisors, general manager and deputy general manager in the most recent year ( 2022) A. Remuneration of general directors and independent directors

Unit: NT$ thousand

Job title	Name			Director's remuneration	Director's remuneration	Director's remuneration	Director's remuneration			A, B, C and D, etc., the total amount of the four items and the proportion of the after-tax net profit	A, B, C and D, etc., the total amount of the four items and the proportion of the after-tax net profit	Part-time employees receive	Part-time employees receive	Part-time employees receive	Part-time employees receive	relevant remuneration	relevant remuneration	relevant remuneration	relevant remuneration	A, B, C, D, E, F, and G, etc., the total amount of the seven items and their proportions to the after-tax net profit	A, B, C, D, E, F, and G, etc., the total amount of the seven items and their proportions to the after-tax net profit	remuneration from reinvestment business outside the subsidiary or parent company
		remuneration (A)		retirement pension (B)		Directors ' remuneration (C) ( Note)		business execution cost (D)				Salary, bonus and special expenses, etc. (E)		retirement pension (F)		Employee Compensation (G) ( Note)
		The company	All companies in the financial report	The company	All companies in the financial report	The company	All companies in the financial report	The company	All companies in the financial report	The company	All companies in the financial report	The company	All companies in the financial report	The company	All companies in the financial report	Our co	mpany	All companies in the financial report		The company	All companies in the financial report
																cash amount	stock amount	cash amount	stock amount
Chairman	Liao, Wenjia	2,900	2,900	0	0	580	580	0	0	3,480 3.4975%	3,480 3.4975%	5,822	5,822	216	216	0	0	0	0	9,518 9.5655%	9,518 9.5655%	0
Director	Zeng, Xueqing
Director	Wu, Hsiupi
Director	Jieshi Investment Co., Ltd Representative:Yu Shaoyin
Director	Director(Note1)
Independent director	Shen, Zhenlin	2,130	2,130	0	0	480	480	0	0	2,610 2.6223%	2,610 2.6223%	0	0	0	0	0	0	0	0	2,610 2.6223%	2,610 2.6223%	0
Independent director	Zhang, Naiwen
Independent director	Feng, Zhiqing
Independent director	Director(Note2)
Independent director	Director(Note3)
A. Please describe the independent dir B. In addition to the disclosure in the		ector's remuneration paym above table, the remunerati		ent policy, system, stand on received by the direc		ards and stru tors of the co	cture, and describe the relationship with the amount of remuneration based on the responsibilities, risks, investment time and mpany for providing services to all companies in the financial report (such as serving as consultants who are not employees,									other factor etc.) in the	s: based on t most recent y	he actual at ear: 0.	tendance rat	e and considering the individual contribution of directors .

Note 1: On 2022/5/31, the directors were re-elected and resigned.

Note 2: On 2022/5/31, the directors were fully re-elected and transferred to legal person director representatives. Note 3: It refers to the number of distribution approved by the board of directors on March 9, 2023, not the actual distribution. Note 4: The actual transfer is made to the personal special account of the Labor Insurance Bureau.

Remuneration Grading Schedule

Remuneration GradingSchedule
Payment of remuneration levels for each director of the company		Direct	or name
	Total remuneration for the	first four items (A+B+C+D)	Total remuneration for the first s	even items (A+B+C+D+E+F+G)
	The company	All companies in the financial report	The company	All companies in the financial report
Less than NTD$ 1,000,000	Jieshi Investment Co., Ltd., Zeng Xueqing, Wu Hsiu Pi, Shen Tonglin, Zhang Naiwen, Feng Zhiqing, Xu Shanke, Shen Xiaoling, Yu Shaozhi	Jieshi Investment Co., Ltd., Zeng Xueqing, Wu Hsiu Pi, Shen Tonglin, Zhang Naiwen, Feng Zhiqing, Xu Shanke, Shen Xiaoling, Yu Shaozhi	Jieshi Investment Co., Ltd., Zeng Xueqing, Shen Tonglin, Zhang Naiwen, Feng Zhiqing, Xu Shanke, Shen Xiaoling, Yu Shaozhi	Jieshi Investment Co., Ltd., Zeng Xueqing, Shen Tonglin, Zhang Naiwen, Feng Zhiqing, Xu Shanke, Shen Xiaoling, Yu Shaozhi
NTD$ 1,000,000 (inclusive) to NTD$ 2,000,000 (exclusive)	Liao,Wenjia	Liao,Wenjia	—	—
NTD$ 2,000,000 (inclusive) to NTD$ 3,500,000 (exclusive)	—	—	Wu, Hsiupi	Wu, Hsiupi
NTD$ 3,500,000 (inclusive) to NTD$ 5,000,000 (exclusive)	—	—	Liao,Wenjia	Liao,Wenjia
NTD$ 5,000,000 (inclusive) to NTD$ 10,000,000 (exclusive)	—	—	—	—
NTD$ 10,000,000 (inclusive) to NTD$ 15,000,000 (exclusive)	—	—	—	—
NTD$ 15,000,000 (inclusive) to NTD$ 30,000,000 (exclusive)	—	—	—	—
NTD$ 30,000,000 (inclusive) to NTD$ 50,000,000 (exclusive)	—	—	—	—
NTD$ 50,000,000 (inclusive) to NTD$ 100,000,000 (exclusive)	—	—	—	—
More than NTD$ 100,000,000	—	—	—	—
Total	10 people	10 people	10 people	10 people

Note: Director Xu, Shanke and independent director Shen, Xiaoling resigned after the general re-election of directors on 2022/5/31, and independent director Yu, Shaoyin was re-elected as a legal person director representative on 2022/5/31.

B. Supervisor's remuneration: The company has an audit committee, so it is not applicable.

C. Remuneration for general manager and deputy general manager

													Unit:	NT$thousand
job title	Name	Salary (A)		Pension (B) ( Note 1)		Bonuses a expenses	nd special , etc. (C)	employee remuneration (D) (Note 2 )				A, B, C and amount of the proportion of profit (%)	D, etc., the total four items and the the after-tax net	remuneration from reinvestment business outside the subsidiary or parent company
		The company	All companies in the financial report	The company	All companies in the financial report	The company	All companies in the financial report	The co	mpany	All companies in the financial report		The company	All companies in the financial report
								cash the amount	stock the amount	cash the amount	stock the amount
General manager	Liao, Wenjia	5,822	13,274	216	216	0	0	0	0	0	0	6,038/6.07%	13,490/13.56%	0
General Manager of Overseas Operations	Thomas Sparrvik
Deputy General Manager and Chief Financial Officer	Wu, Hsiupi

Note 1 : The actual transfer is to the personal special account of the Labor Insurance Bureau . Note 2: It is the number of distribution approved by the board of directors on March 9, 2023, not the actual distribution.

Remuneration Grading Schedule

Remuneration GradingSchedule
Pay the Company's General Manager and Deputy General Manager remuneration grades	Name of General Manager an	d Deputy General Manager
	Our company	All companies in the financial report
less than NTD$1,000,000	-	-
NTD$ 1,000,000 (inclusive) to NTD$ 2,000,000 (exclusive)	-	-
NTD$ 2,000,000 (inclusive) to NTD$ 3,500,000 (exclusive)	Wu Hsiu Pi	Wu Hsiu Pi
NTD$ 3,500,000 (inclusive) to NTD$ 5,000,000 (exclusive)	Liao Wenjia	Liao Wenjia
NTD$ 5,000,000 (inclusive) to NTD$ 10,000,000 (exclusive)	Thomas Sparrvik	Thomas Sparrvik
NTD$ 10,000,000 (inclusive) to NTD$ 15,000,000 (exclusive)	-	-
NTD$ 15,000,000 (inclusive) to NTD$ 30,000,000 (exclusive)	-	-
NTD$ 30,000,000 (inclusive) to NTD$ 50,000,000 (exclusive)	-	-
NTD$ 50,000,000 (inclusive) to NTD$ 100,000,000 (exclusive)	-	-
More than NTD$ 100,000,000	-	-
Total	3	3

D.The name of the manager who distributes employee remuneration and the distribution situation:

					Unit: NT$thousand	Unit: NT$thousand
	Job title	Name	Stock amount	Cash amount	Total	Proportion of total amount to net profit after tax (%)
Manager	General manager	Liao, Wenjia	0	600	600	0.60
	General Manager of Overseas Operations	Thomas Sparrvik
	Deputy General Manager and Chief Financial Officer	Wu,Hsiupi
	Senior Manager	Ye,Jianshen
	Finance Manager	Lee, Shen-Lung

Note: These are estimates and have not yet been issued

(6) Analysis and explanation of the proportion of total remuneration paid to the company's directors, supervisors, general managers and deputy general managers in the last two years by the company and all companies in the consolidated statement to the after-tax profit of individual or individual financial reports The policy, standard and combination of payment of remuneration, the procedure of setting remuneration, and the correlation with business performance and future risks.
The total remuneration paid to the company's directors, supervisors, general managers and deputy general managers by the company and all companies with consolidated statements in the last two years to the after-tax profit of individual or individual financial reports :
- The company's total remuneration paid to directors in 2021 and 2022 accounted for 16.59% and 12.19% of the after-tax net profit, and the total remuneration paid to the general manager and deputy general manager accounted for 16.94% and 13.56% of the after-tax net profit , The proportion of the total remuneration paid in 2022 to the after-tax net profit of individual financial reports increased, mainly due to the loss of operations in 2021 and the increase in operating profits in2021.
The company's remuneration policy, standard and combination, the procedure for determining remuneration, and its relationship with business performance and future risks: According to Article 19 of the company's articles of association, the director's remuneration of the company should first allocate no more than 5% of the director's remuneration if the company makes a profit in the year, and consider the company's operating results and its contribution to the company's performance to give a reasonable amount. remuneration. The remuneration payment policy for the general manager and deputy general manager is based on the salary level of the position in the industry market, the scope of power and responsibility of the position in the company, and the achievement of personal goals and key results set by the company. The procedures for determining remuneration are based on the company's salary and labor management methods, performance management methods, annual employee performance appraisals, board performance evaluation methods, etc., in addition to referring to the company's overall operating performance, future business risks and development trends of the industry, We also give reasonable remuneration with reference to the achievement of individual performance. Relevant performance appraisal and remuneration rationality are reviewed by the remuneration committee and the board of directors, and the remuneration system is reviewed at any time depending on the actual

operating conditions and relevant laws and regulations, so as to achieve the company's sustainable operation and Balance of risk control.

Operation of corporate governance
(1) The operation of the board of directors: The board of directors held 8 meetings in 2022 (A), and the attendance of directors is as follows:

Job title	Name	The actual number of (column) seats (B)	Entrusted to attend frequency	Actual attendance rate (%) (B/A)	Remark
Chairman	Liao,Wenjia	7	1	88	2022/5/31 Renewal
Director	Zeng,Xueqing	8	0	100	2022/5/31 Renewal
Director	Wu,Hsiupi	8	0	100	2022/5/31 Renewal
Legal person director	Jieshi Investment Co., Ltd Representative:Yu Shaoyin	4	0	100	2022/5/31 New appointment
Director	Xu Shanke	2	1	50	2022/5/31 Resigned
Independent director	Shen Zhenlin	7	0	88	2022/5/31 Renewal
Independent director	Zhang Naiwen	4	0	100	2022/5/31 New appointment
Independent director	Feng Zhiqing	4	0	100	2022/5/31 New appointment
Independent director	Shen Xiaoling	4	0	100	2022/5/31 Resigned
Independent director	Yu Shaoyin	4	0	100	2022/5/31 re-elected and transferred to legal person director representative
Other matters to be recorded: A. If any of the following situations occurs in the operation of the board of directors, the date, period, content of the proposal, opinions of all independent directors, and the company's handling of the opinions of independent directors shall be stated: a. Matters listed in Article 14-3 of the Securities Exchange Act: Please refer to pages 40-41 of the annual report . b. Except for the above-mentioned matters, other resolutions of the board of directors that have been opposed or reserved by independent directors and have records or written statements: None. B. The director’s implementation of the recusal of the stakeholder proposal shall state the name of the director, the content of the proposal, the reason for the recusal and the voting status : none. C. Listed OTC companies should disclose information such as the evaluation cycle and period, evaluation scope, method, and evaluation content of the board of directors' self (or peer) evaluation: Please refer to Attachment 1 for details. D. The current and most recent year’s goal of strengthening the functions of the board of directors (such as the establishment of an audit committee, the improvement of information transparency, etc. ) and the evaluation of its implementation: Introduce independent directors to set up an audit committee and a remuneration committee to supervise the decision-making content of the board of directors. In addition, the board of directors shall be held at least quarterly and relevant information shall be disclosed to the investing public in accordance with the provisions of laws and regulations . E. Attendance of independent directors at each board meeting: Please refer to Attachment 2 for details.

Attached Table 1: Implementation of Board Evaluation

Evaluation period	Assessment scope	Evaluation method
2022/1/1 to 2022/12/31	Board Performance Evaluation	Internal self-assessment of the board of directors
2022/1/1 to 2022/12/31	Board Member Performance Evaluation	Board member self-assessment
2022/1/1 to 2022/12/31	Functional Committee Performance Evaluation	Board member self-assessment

Schedule 2: Attendance of independent directors at each board meeting in 2021:

◎: Attended in person ☆ : Attended by proxy ＊ : Did not attend

			◎: A	ttended in p	erson☆: A	ttended by p	roxy`＊`: Di	d not attend
Name	1st	2nd	3rd	4th	5th	6th	7th	8th
Shen Zhenlin	◎	◎	◎	◎	◎	◎	◎	☆
Zhang Naiwen (Note 1)	-	-	-	-	◎	◎	◎	◎
Feng Zhiqing (Note 1)	-	-	-	-	◎	◎	◎	◎
Shen Xiaoling (Note 2)	◎	◎	◎	◎	-	-	-	-
Yu Shaoyin (Note 2)	◎	◎	◎	◎	-	-	-	-

Note 1: On May 31, 2022, the directors were fully re-elected. Note 2: On May 31, 2022, the directors were re-elected and resigned.

(2) Operation of the Audit Committee: The Audit Committee held 6 meetings in 2022 (A), and the attendance of independent directors is as follows:

Job title	Name	Actual number of attendance (B)	Entrusted Attendance	Actual attendance rate (%) (B/A)(Note)	Remark
Independent director (convener)	Shen, Xiaoling	5	1	83	2022/5/31 Renewal
Independent director	Zhang Naiwen	3	0	100	2022/5/31 New appointment
Independent director	Feng Zhiqing	3	0	100	2022/5/31 New appointment
Independent director	Shen Xiaoling	3	0	100	2022/5/31 Resigned

Independent director	Yu, Shaoyin	3	0	100	2022/5/31 re-elected and transferred to legal person director representative
Other matters to be recorded: A. In case of any of the following situations in the operation of the audit committee, the audit committee meeting date, period, content of proposals, independent directors’ objections, reservations, or content of major proposals, audit committee resolution results, and the company’s response to the audit committee shall be stated. Handling of opinions. a. Matters listed in Article 14-5 of the Securities and Exchange Act: Attachment 1 . b. Except for the above-mentioned matters, other resolution matters that have not been approved by the audit committee and approved by more than two-thirds of all directors: None. B. Execution of independent directors’ recusal of interest-related proposals. The independent director’s name, content of the proposal, reasons for recusal of interests, and participation in voting shall be stated : None. C. Communications between independent directors and internal audit supervisors and accountants (should include major events, methods and results of communication on the company's financial and business conditions) : a. The company's internal audit supervisor submits the audit report to the independent directors every month, and regularly conducts two-way exchange of opinions and communication with the independent directors and accountants at the quarterly corporate governance meeting. Overall, the communication between the independent directors and the internal audit supervisor in 2011 should be sufficient . b. The company invites certified accountants to report on quarterly financial statement audit or audit results, internal control implementation, relevant legal requirements or updates, etc. in the quarterly corporate governance meeting for two-way exchange of opinions and communication. Overall, in 2022 the status of communication between independent directors and certified accountants should be sufficient . c. Independent directors, internal audit supervisors and accountants also communicate directly by email, telephone or face to face as needed. d. The communications between the company's independent directors, internal audit supervisors and accountants have been disclosed in the corporategovernance section of the company's website.

Schedule I	Schedule I	Schedule I	Schedule I
The Audit Committee	Proposal content and follow-up processing	Matters listed in Article 14-5 of the Securities and Exchange Act	Resolutions that have not been approved by the Audit Committee but have been agreed by more than two-thirds of all directors
1. Operational situation in 2022
1st (2022/3/16)	1. 2021Annual Business Report and Financial Statements	V	None
	2. 2021 Annual auditors’ independence and performance evaluation review case	V	None
	3. 2021 Annual "Internal Control Statement" case	V	None
	4. PARPRO HODLINGS capital loan to AP PARPRO case	V	None
	5. Exchange of convertible corporate bonds for new shares	V	None
	6. Amendments to some articles of the "Articles of Association"	V	None
	7. Amendments to some of the texts of the	V	None

"Procedures for Acquiring or Disposing of Assets" Result of the resolution of the Audit Committee: All members of the Audit Committee passed it without objection.

	"Procedures for Acquiringor Disposingof Assets"
	Result of the resolution of the Audit Committee: All membersof the Audit Committeepassed it without objection.
	The company's handling of the audit committee's opinion:All directors present passed without objection.
2nd (2022/4/12)	1. 2021 Earnings Distribution Proposal	V	None
	2. The case of paying cash dividends with capital reserves	V	None
	3. Amendments to some articles of the "Rules of Procedure for Shareholders' Meetings"	V	None
	4. The case of the company's capital loan to AP PARPRO	V	None
	Result of the resolution of the Audit Committee: All membersof the Audit Committeepassed it without objection.
	The company's handling of the audit committee's opinion:All directors present passed without objection.
3rd (2022/5/12)	1. Consolidated financial statements for the first quarter of 2022		None
	Result of the resolution of the Audit Committee: All membersof the Audit Committeepassed it without objection.
	The company's handling of the audit committee's opinion:All directors present passed without objection.
4th (2022/8/11)	1. Financial report for the first half of 2022	V	None
	Result of the resolution of the Audit Committee: All membersof the Audit Committeepassed it without objection.
	The company's handling of the audit committee's opinion:All directors present passed without objection.
5th (2022/11/10)	1. Financial report for the thirdquarter of 2022		None
	2. 2023 Annual auditplan	V	None
	3. Amendments to some articles of the company's fifth repurchase of shares and transfer of employee measures	V	None
	Result of the resolution of the Audit Committee: All membersof the Audit Committeepassed itwithout objection.
	The company's handling of the audit committee's opinion:All directors present passed without objection.
6th (2022/12/15)	1. 2023 Budget		None
	2. The case of the company's capital loan to an overseas subsidiary	V	None

PARPRO HOLDINGS capital loan to AP None V PARPRO case Result of the resolution of the Audit Committee: All members of the Audit Committee passed it without objection.

The company's handling of the audit committee's opinion: All directors present passed without objection.

2. Review the financial report

The board of directors prepared the company's 2022 annual business report, financial statements, and profit distribution proposals, among which the financial statements were audited by Deloitte & Touche Audit Firm, and an audit report was issued. The above-mentioned business report, financial statement and profit distribution case have been checked by the audit committee on March 9, 2023 and April 13, 2023 , and there is no discrepancy .

3. Evaluate the effectiveness of the internal control system

The audit committee evaluates the effectiveness of the policies and procedures of the company's internal control system (including control environment, risk assessment, control operations, information and communication, and supervision operations), and reviews the periodic reports of the company's audit department. The audit committee believes that the company's risk management and internal control systems are effective, and the company has adopted the necessary control mechanisms to monitor and correct violations.

(3) The operation of corporate governance and the differences between it and the Code of Practice for Corporate Governance of listed companies and the reasons:

evaluation items	Operation status (Note)	Operation status (Note)	Operation status (Note)	Differences from the Governance Code of Practice for Listed OTC Companies and Reasons
	yes	no	summary description
A. Does the company formulate and disclose the code of corporate governance practice in accordance with the Code of Practice for Corporate Governance of Listed OTC Companies?	V		The company has approved the "Corporate Governance Code" by the board of directors in 2014, and currently implements and operates in accordance with relevant regulations.	no major difference
B. Company Shareholding Structure and Shareholders' Equity (a) Does the company formulate internal operating procedures to deal with shareholders' suggestions, doubts, disputes and litigation matters, and implement them according to the procedures? (b) Does the company have a list of the major shareholders who actually control the company and the ultimate controllers of the major shareholders? (c) Does the company establish and implement risk control and firewall mechanisms with related companies?	V V V		The company has formulated the "Corporate Governance Code", and according to the regulations, the spokesperson is responsible for handling shareholders' suggestions or disputes. The company obtains the list of shareholders with a shareholding ratio of more than 5% or the top ten shareholders through a stock affairs agency. The company has formulated the "Supervision and Management of Subsidiaries" and "Procedures for Transactions of Group Enterprises, Specific	no major difference no major difference no major difference

evaluation items (d) Does the company have internal regulations to prohibit company insiders from using unpublished information in the market to buy and sell securities?	Operation status (Note)	Operation status (Note)	Operation status (Note)	Differences from the Governance Code of Practice for Listed OTC Companies and Reasons no major difference
	yes V	no	summary description Companies, and Related Persons", which are handled in accordance with the company's internal control system, and the risk management and control mechanism and firewall mechanism for related companies are actually implemented. The company has formulated the "Internal Material Information Handling Procedures" and the "Ethical Code of Conduct", which clearly stipulate that company personnel must not use the company's internal information for improperprofit.
C. Composition and Responsibilities of the Board of Directors (a) Does the board of directors formulate diversity policies, specific management objectives and implement them?	V		The company's "Corporate Governance Code" and "Director Election Method" stipulate the diversity policy of board members: the board members should pay attention to gAnderson Industrial Corp.equality, and generally have the knowledge, skills and accomplishments necessary to perform their duties. In order to achieve the ideal goal of corporate governance, the board of directors as a whole should have the following abilities: operational judgment ability, accounting and financial analysis ability, operation management ability, crisis handling ability, industry knowledge, international market outlook, leadership ability, and decision-making ability. The company has seven directors, who have relevant professional skills and experience in business management, leadership decision-making, industry knowledge, financial accounting, and law. The diversity and complementarity of the members are conducive to the company's operation, business model and development needs, which is in line with the diversity policy of the board of directors Goals of the Diversity of the Board of Directors are detailed on page 26 (Appendix 1). At present, the company's directors with employee status account for 29%, independent directors account for 43%, and female directors account for 57%. The target for the proportion of female directors is to maintain more than 30%. Among the members of the board of directors, they meet the independence norms specified in Items 3 and 4 of Article 26-3 of the Securities and Exchange Act, and the independent directors also meet the independence norms stipulated in Article 3 of the Regulations on the Appointment of Independent Directors and Matters to be Followed by Public Offering Companies.	no major difference
(b) Has the company voluntarily set up various other functional committees besides the remuneration committee and the audit committee in accordance with the law?		V	The company currently only has a salary and compensation committee and an audit committee, and there is no need to add other functional committees.	no major difference

evaluation items (c) Has the company formulated the performance evaluation method and evaluation method of the board of directors, conducts performance evaluation every year and regularly, and submits the results of the performance evaluation to the board of directors, and uses it as a reference for the salary and remuneration of individual directors and nomination for renewal?	Operation status (Note)	Operation status (Note)	Operation status (Note)	Differences from the Governance Code of Practice for Listed OTC Companies and Reasons no major difference
	yes V	no	summary description The company has formulated the "Performance Evaluation Method of the Board of Directors", and conducts performance evaluation every year according to the method. The most recent evaluation result was reported by the Board of Directors on March 16, 2022, in terms of the operational efficiency of the Board of Directors, internal relations, management and communication, and the composition and capabilities of members. Directors' self-assessment scores were all between satisfactory and verysatisfied.
(d) Does the company regularly assess the independence of CPA?	V		The company regularly evaluates the independence of certified accountants once a year, and submits the results to the Audit Committee and the Board of Directors for review and approval on March 16, 2022. After evaluation, the accountants Chen,Peide and Chen,Junhong of Deloitte & Touche CPA Firm both meet the company's independence evaluation criteria (Appendix 2), and are qualified to serve as the company's certified accountants.	no major difference
D. Whether the listed OTC company has a qualified and appropriate number of corporate governance personnel, and designates a corporate governance supervisor to be responsible for corporate governance -related affairs (including but not limited to providing directors and supervisors with information needed to perform business, assisting directors, supervising to follow the laws and regulations , handle matters related to the meetings of the board of directors and shareholders' meetings, make minutes of the board of directors and shareholders' meetings, etc.) ?	V		The company has a corporate governance team under the general manager's office. On August 13, 2019, the board of directors approved the appointment of Wu,Hsiupi, deputy general manager, as the corporate governance supervisor. Such as management work experience, 2021 annual training situation is detailed in Table 3. The duties of the corporate governance team are to provide directors and independent directors with the information they need to carry out their business, assist directors and independent directors to comply with laws and regulations, and handle matters related to the board of directors and shareholders' meetings according to the law.	no major difference
E. Whether the company has established a communication channel with stakeholders (including but not limited to shareholders, employees, customers, suppliers, etc.), set up a special area for stakeholders on the company website, and properly responded to important corporate social responsibility issues that stakeholders are concerned about ?	V		The company has set up a special section for interested parties on the company website to provide smooth communication channels for stakeholders such as employees, shareholders, suppliers, banks and other creditors, and to understand the company's operating conditions through the spokesperson.	no major difference
F. Does the company appoint a professional stock affairs agency to handle the affairs of the shareholders meeting?	V		The company appointed KGI Securities Co., Ltd. Stock Affairs Agency Department to handle matters related to the shareholders' meeting.	no major difference
G. Information Disclosure			The company has set up a company website and disclosed relevant information at the public information observation station in accordance with	no major difference
(a) Does the company set up a website to disclose financial business and corporategovernance information?	V

evaluation items	Operation status (Note)	Operation status (Note)	Operation status (Note)	Differences from the Governance Code of Practice for Listed OTC Companies and Reasons
	yes	no	summary description regulations.
(b) Does the company adopt other methods of information disclosure (such as setting up an English website, appointing a special person to be responsible for the collection and disclosure of company information, implementing the spokesperson system, placing the company website during the legal person briefing session, etc.)? (c) Whether the company announces and declares the annual financial report within two months after the end of the fiscal year, and announces and declares the first, second and third quarter financial reports and the operating conditions of each month before the prescribed deadline	V	V	The company designates a special person to be responsible for the collection and disclosure of company information, and implements the spokesperson system. In discussion.	no major difference no major difference
H. Does the company have other important information that is helpful to understand the operation of corporate governance (including but not limited to employee rights, employee care, investor relations, supplier relations, rights of interested parties, training of directors and supervisors, risk management The implementation of policies and risk measurement standards, the implementation of customer policies, the company’s purchase of liability insurance for directors and supervisors, etc.)?	V		1. Employees' rights and interests: In addition to handling employees' rights and interests in accordance with the Labor Standards Act and related laws and regulations, the company has established an employee welfare committee to allocate employee welfare funds and employee retirement funds according to law, and organize various employee welfare activities to connect employees. 2. Employee care: The company regularly organizes employee tours and subsidies, and protects the legitimate rights and interests of employees in accordance with the Labor Standards Act and other relevant laws and regulations. The website reveals various management methods, clearly stipulates the rights and obligations of employees and welfare items, and regularly reviews the content of benefits to protect the rights and interests of employees. 3. Investor relations: The company discloses information in the public information observatory according to the laws and regulations to protect the rights and interests of investors, and the investor's mailbox and spokesperson contact information are listed on the company's website to maintain a healthy and harmonious relationship between the company and shareholders. 4. Supplier relationship: The company attaches great importance to the rationality of purchase prices and the premise of cooperating with suppliers in the spirit of life community, mutual trust and reciprocity, and safeguards the due rights and interests of both parties. The transaction conditions are determined after mutual	no major difference

evaluation items	Operation status (Note)	Operation status (Note)	Operation status (Note)
	yes	no	summary description
			communication and coordination between the two parties. 5. Rights of interested parties: The company's website (http://www.parpro.com.tw) has an "Investor Zone", which discloses the company's financial and business-related information, and links to public information observation stations for interested parties refer to. In addition, the company's stock affairs agency, KGI Securities (Shares) Co., Ltd. Stock Affairs Agency Department, also assists in handling relevant issues and suggestions from shareholders and stakeholders of the company. If legal issues are involved, professional lawyers or legal personnel will be appointed Processing to protect the rights and interests of interested parties. 6. The situation of directors' further education: please refer to the attached table 4. 7. Implementation of risk management policies and risk measurement standards: Please refer to page 92 of this annual report . 8. Implementation of customer policies: The company and customers have designated special personnel to make regular contact, keep abreast of customer dynamics, and ensure the best interests of both parties through good communication and interaction. 9. Circumstances in which the company purchases liability insurance for directors: The company has purchased directors' liability insurance.
9. Please explain the improvement of the corporate governance evaluation results released by the Corporate Governance Center of Taiwan Stock Exchange Corporation in the most recent year, and propose priority strengthening matters and measures for those that have not been improved. (Companies not included in the evaluation do not need to fill in) The promotion items are as follows: 1. On 2023/5/31 ,after the overall re-election of directors, no more than half of the independent director's term of office shall not exceed three consecutive terms. 2. Formulate a policy on the diversity of board members, and disclose the specific management objectives and implementation of the diversity policy on the company's website and annual report . 3. Report the communication situation of each stakeholder to the board of directors once a year . Priorities and measures for improvement that have not yet been improved: 1. More than half of the independent directors shall serve no more than three consecutive terms . 2. Disclose the independent communication between independent directors, internal audit supervisors and accountants on the company website . 3. To be invited (bythemselves) to hold at least two legalperson briefingsessions eachyear .

Attached Table 1: Diversity of the Board of Directors

Diversified core projects Director name	Ggender	Management	Leadership decision	Industry knowledge	Financial Accounting
Liao Wenjia	Male	V	V	V
ZengXueqing	Female	V	V	V
Wu Hsiu Pi	Female	V	V	V	V
Jieshi Investment Co.,Ltd.	Female	V	V	V	V

Representative: Yu Shaoyin
Shen Zhenlin	Male	V	V	V	V	V
ZhangNaiwen	Male	V	V	V	V	V
FengZhiqing	Male	V	V	V	V	V

Schedule 2: Evaluation Criteria for Independence

Schedule 2: Evaluation Criteria for Independence
Evaluation items	Evaluation result	Whether it meets independence
1. As of the latest visa operation, there has been no change in seven years.	yes	yes
2. There is no significant financial interest relationship with the client.	yes	yes
3. Avoid any inappropriate relationship with the client.	yes	yes
4. Accountants should ensure the honesty, impartiality and independence of their assistants.	yes	yes
5. The financial statements of the service organization within the two years prior to thepractice shall not be checked for visas.	yes	yes
6. The name of the accountant shall not be used by others.	yes	yes
7. Does not hold shares in the company or affiliated companies.	yes	yes
8. Has not had any money loans with the company or affiliated companies.	yes	yes
9. Has no joint investment or interest-sharing relationship with the company or affiliated companies.	yes	yes
10. Does not concurrently hold the regular work of the company or affiliated enterprises, and receives a fixed salary.	yes	yes
11. Does not involve the management functions of the company or affiliated companies to make decisions.	yes	yes
12. Failure to concurrently operate other businesses that may lose their independence.	yes	yes
13. Has no relationship with the company's management personnel as a spouse, a direct blood relative, a direct blood relative, or a collateral blood relative within the second degree.	yes	yes
14. No commissions related to business are charged.	yes	yes
15. As of now, there has been no punishment or damage to the principle of independence.	yes	yes

Implementation of Advanced Training for Corporate Governance Supervisors in 2022.

Name	Study date	organizer	Course Title	study hours
Wu Hsiu Pi	2022/11/28-2022/11/2 9	Foundation for Accounting Research and Development of the Republic ofChina	Continuing training courses for accounting executives of issuers, securities firms and stock exchanges	6
	2022/12/07	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3
	2022/12/07	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3

Attachment 4: 2022 directors' training status

Job title	Name	Study date	Organizer	Course Title	Training hours
Chairman	Liao Wenjia	2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3
Director	Zeng Xueqing	2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3
Director	Wu Hsiu Pi	2022/11/28 to 2022/11/29	Foundation for Accounting Research and Development of the Republic of China	Continuing training courses for accounting executives of issuers, securities firms and stock exchanges	6
		2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3
Legal Person Director	Jieshi Investment Co., Ltd. Representative: Yu Shaoyin	2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3

Job title	Name	Study date	Organizer	Course Title	Training hours
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3
Independent Director	Shen Zhenlin	2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3
Independent Director	Zhang Naiwen	2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3
~~I~~ndependen~~t~~ Director	Feng Zhiqing	2022/10/21	National Federation of Certified Public Accountants of the Republic of China	Accounting and Financial Studies for Environment, Society and Governance	3
		2022/12/2	Chinese Corporate Governance Association	Positioning and changes of director functions under the ESG trend	3
		2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3

(4) If the company has established a remuneration committee or a nomination committee , it shall

disclose its composition, professional qualifications and experience, independence,

responsibilities, operating conditions, and other recorded items :

Up to now, the company has not set up a nomination committee, and the information about the remuneration committee is detailed in the follow-up instructions:

Information on members of the Remuneration Committee

Separate	Condition Name	Professional qualifications and experience	Independence situation	The number of members of the remuneration committee of other publicly issued companies
Independent director (convener)	Zhang Naiwen	Master of Accounting, Chung Yuan University Bachelor of Business Administration, Tunghai University Financial Manager of Changyuan Technology Industrial Co., Ltd. Certified Public Accountants Director of Maiber Co., Ltd. Please also refer to the relevant content under the information of directors onpage 7	Independent directors have obtained independent director declarations and qualification checklists to confirm their independence.	0
Independent director	Shen Zhenlin	Master of Economics, National Chung Hsing University Motech Co., Ltd. / Chief Financial Officer Sincere Information (Shares) Company/Chief Financial Officer and Senior Deputy General Manager Taiwan Semiconductor Manufacturing Co., Ltd./Deputy Director of Finance Kanglian Holdings Limited / Independent Director Spectrum Technology Co., Ltd./Independent Director Also refer topage 7 for Directors' Information	Independent directors have obtained independent director declarations and qualification checklists to confirm their independence.	1
Independent director	Feng Zhiqing	Master of Accounting, National Taiwan University Bachelor of Accountancy, National Chengchi University Qualified internal auditor Qualified as an enterprise appraiser Associate Director of Deloitte & Touche United Accounting Firm Certified public accountant of Zhongqin United Certified Public Accountants Certified Public Accountant of Yuanshi Certified Public Accountants Please also refer to the relevant content under the information of directors onpage 7	Independent directors have obtained independent director declarations and qualification checklists to confirm their independence.	0

Information on the operation of the Salary and Remuneration Committee
(1) The company's salary and compensation committee has 3 members.
(2) The term of office of the current committee members: from May 31 , 2022 to May 30 , 2024, the Salary and Remuneration Committee met twice in 2022 (A). The qualifications and attendance of the members are as follows:

Job title	Name	Actual attendance Times(B)	Entrusted Attendance	Actual attendance rate (%) (B/A)	Remark
Convener	Zhang Naiwen	0	0	Not applicable (No convening event)	2022/5/31 new appointment
	Shen				2022/5/31
Member		2	0	100
	Zhenlin				Renewal
Member	Feng Zhiqing	0	0	Not applicable (No convening event)	2022/5/31 new appointment
	Shen				2022/5/31
Member		2	0	100
	Xiaoling				Resigned
	Yu				2022/5/31
Member		2	0	100
	Shaoyin				Resigned

Other matters to be recorded:

If the board of directors does not adopt or revise the suggestion of the salary and compensation committee, it shall state the date, period, content of the proposal, the result of the resolution of the board of directors, and the company's handling of the opinions of the salary and compensation committee (such as the salary approved by the board of directors is better than that of the salary and compensation committee). Suggestions should describe the differences and reasons): None. (The operation of the Remuneration Committee in 2022 is detailed in Table 1).
For the resolutions of the salary and compensation committee, if members have objections or reservations and there are records or written statements, the date, period, content of the proposal, all members’ opinions and the handling of members’ opinions should be stated: None.

Attached Table 1: Operation of the Remuneration Committee in 2022.

Salary committee	Proposal content and resolution results	Proposal content and resolution results
	1. Year-end bonus case for managers	of	Parpro
	Corporation Groupin 2021
Fourth session	Resolution result:
1st	The chairman consulted with all the attending	members,
2022/1/27	and unanimously passed the resolution of handing		over to
	the board of directors .
	The company's handling of the opinions of	the

	remuneration committee : All directorspresent agreed topass.
Fourth session 2nd 2022/3/16	A. 2021 Annual employee remuneration and distribution of remuneration for directors and supervisors
	B. 2021 annual self- evaluation of directors
	Resolution result: The chairman consulted with all the attending members, and unanimously passed the resolution of handing over to the board of directors .
	The company's handling of the opinions of the remuneration committee : All directorspresent agreed topass.

(5) The implementation of sustainable development and the differences and reasons for the

implementation of sustainable development and the code of practice for listed OTC companies :

promote the project	Execution situation	Execution situation	Execution situation	Differences and Reasons for Differences from the Code of Practice for Sustainable Development of Listed OTC Companies
	yes	no	summary description
1. Has the company established a governance structure to promote sustainable development, has set up a full-time (part-time) unit to promote sustainable development , and has the board of directors authorize the senior management to handle it, and the situation of the board of directors ' supervision ?	V		The company has set up a sustainable operation and development group under the general manager's office to be responsible for promoting the development of sustainable environment and maintaining social welfare . The general manager serves as the convener. The work of this group is in charge of: 1. Formulating and reviewing sustainable development policies and systems . 2. Plan and promote the project, and deliver it to relevant departments for implementation after approval by the general manager, and report the implementation results to the board of directors once ayear, as detailed in Table 1.	No major differences.
2. Does the company conduct risk assessments on environmental, social and corporate governance issues related to the company's operations in accordance with the principle of materiality, and formulate relevant risk management policies or strategies?	V		Based on the materiality principle of sustainable development , the company conducts relevant risk assessments on important issues, and formulates relevant risk management policies or strategies based on the assessed risks, as detailed in Table 2.	No major differences.
3. Environmental Issues (`一`) Has the company established a suitable environmental management system according to its industrial characteristics? (`二`) Is the company committed to improving energy efficiency and using recycled materials with low impact on the environment? (`三`) Does the company assess the current and future potential risks and	V V V		The company has established the ISO-14001 environmental management system according to the characteristics of its industry. The company's products are dedicated to the design of energy saving and carbon reduction, and strive to reduce the generation of waste products and improve the recycling rate of waste products. The company has assessed the potential risks and opportunities of climate change on the	No major differences. No major differences. No major differences.

promote the project			Execution situation	Differences and Reasons for Differences from the Code of Practice for Sustainable Development of Listed OTC Companies
	yes	no	summary description
opportunities of climate change, and take relevant countermeasures? (`四`) Has the company made statistics on greenhouse gas emissions, water consumption and total waste weight in the past two years, and formulated policies for greenhouse gas reduction, water reduction or other waste management?	V		company, and has taken corresponding measures, which are announced on the company website. The company has set the goal of reducing greenhouse gas emissions, water consumption and waste by 1-2% compared with the previous year. Self-inspection of carbon dioxide emissions in 2020 and 2021 was 216 metric tons and 20 metric tons , a reduction of about 90 %. In addition, according to the characteristics of the industry and the ISO-14001 environmental management system, the company has taken into account the impact caused by the environment in all manufacturing processes and formulated various response strategies. In the "Environmental Protection and Management Practices", formulate greenhouse gas, water consumption and waste reduction strategies in order to minimize the impact on the environment and ecology.	No major differences.
4. Social Issues (`一`) Does the company formulate relevant management policies and procedures in accordance with relevant laws and regulations and international human rights conventions?	V		The company refers to international human rights conventions, conducts risk assessments on human rights issues in accordance with the "United Nations Universal Declaration of Human Rights", incorporates external expectations and communicates with stakeholders, identifies important human rights issues, and formulates the company's human rights policies. In addition, the company complies with the "Labor Standards Law", "GAnderson Industrial Corp.Work Equality Law", "Labor Pension Regulations", "Labor Leave Rules", "Employee Safety and Health Law", "Labor Insurance Regulations", "Employment Service Law" and Relevant laws and regulations formulate "work rules".	No major differences.
(`二`) Does the company formulate and implement reasonable employee welfare measures (including salary, vacation and other benefits, etc.), and properly reflect business performance or results in employee compensation?	V		The company has working rules and related personnel management regulations, which cover the basic wages, working hours, vacations, pension payments, labor and health insurance payments, occupational accident compensation, etc. of the employees employed by the company, all of which comply with the relevant provisions of the Labor Standards Law. The company pays year-end bonuses every year depending on the operating results and the employees' contribution to the company, performance, etc. Dependingon the operatingconditions	No major differences.

promote the project			Execution situation	Differences and Reasons for Differences from the Code of Practice for Sustainable Development of Listed OTC Companies
	yes	no	summary description
			and the price index, the company regularly adjusts the salaries of employees with outstanding performance. In addition, the company stipulates the employee remuneration policy in the company's articles of association, and distributes cash or stocks according to the company's annual operating results. In addition, the company has established an employee welfare committee to operate and handle various welfare activities through the welfare committee elected by employees. Other employee welfare measures and retirement systems are detailed onpages 72 ~ 73 .
(`三`) Does the company provide employees with a safe and healthy working environment, and regularly implement safety and health education for employees?	V		The company provides employees with a safe and healthy working environment, regularly implements environmental safety and health testing, including equipment and working environment, and organizes monthly employee safety and health education and training.	No major differences.
(`四`) Has the company established an effective career development training program for employees?	V		All departments of the company formulate education and training plans, including job skills testing, and the results are used as the basis for career development.	No major differences.
(`五`) For issues such as customer health and safety, customer privacy, marketing and labeling of products and services, does the company follow relevant laws and international standards, and formulate relevant consumer or customer rights protection policies and complaintprocedures?	V		In order to improve customer service satisfaction, the company has established a "customer complaint handling procedure", establishes a customer-oriented feedback system, and comprehensively evaluates customer complaints and satisfaction with the company's products or services to understand customer needs and expectations.	No major differences.
(`六`) Does the company formulate supplier management policies, requiring suppliers to follow relevant norms on issues such as environmental protection, occupational safety and health, or labor rights, and their implementation?	V		The company has a "supplier management operation" that requires suppliers to abide by the commitments of sustainable development responsibilities, including issues such as environmental protection, occupational safety and health, or labor rights. This management operation also includes a supplier assessment mechanism, and suppliers are expected to understand and cooperate with the company's determination to fulfill the responsibility for sustainable development . If any violation of the company's established policies is found, the transaction will be suspended or the relationshipwill be terminated.	No major differences.

promote the project	Execution situation	Execution situation	Execution situation	Differences and Reasons for Differences from the Code of Practice for Sustainable Development of Listed OTC Companies
	yes	no	summary description
5. Does the company refer to internationally accepted standards or guidelines for preparing reports, and prepare reports such as sustainability reports that disclose non-financial information of the company? Has the previous disclosure report obtained the confirmation or guarantee opinion of a third-partyverification unit?		V	In discussion.	In discussion.
6. If the company has its own sustainable development code based on the "Code of Practice for Sustainable Development of Listed OTC Companies", please describe the differences between its operation and the established code: The company has formulated a code of practice for sustainable development , which is currently implemented and operated in accordance with relevant regulations, and there is no major difference from the "Code of Practice for Sustainable Development of Listed OTC Companies".
7. Other important information that helps to understand the implementation of sustainable development: Please refer to Attachment 2.

Attached Table 1: Implementation Results of Promoting Sustainable Development

Social Responsibility Project	Specific description of the implemented situation or planned situation
Environmental friendly	Actively promote environmental protection and care for the environment. The management department is responsible for promoting environmental protection matters, and complying with environmental protection related laws and regulations, advocating energy saving, formulating lighting plans to distinguish between day and night, saving unnecessary lighting; controlling the use of air conditioners to save unnecessary power expenditure. Carry out waste paper, publicize and reduce the use of disposable tableware, and continue to reduce and sort garbage to contribute to environmentalprotection.
Social Contribution and Service	The company is located in Zhongli District, Taoyuan City. The main consideration for the company's recruitment is to live near the company. At present, most of the employees come from towns and cities near the company's location, creating more job opportunities for the local area. In addition, it responds to public welfare activities initiated by various circles from time to time, donates money or materials to charitable organizations, and regularly donates to Taoyuan Friends of Rehabilitation Association and Mingpei Medical Culture and Education Foundation and othergroups every year. The total donation amount in 2022 is NT$500,000.
Customer / Consumer Rights	The company has full-time staff to serve customers.
Human rights	The relationship between the company and its employees follows the Labor Standards Act and other labor-related laws and regulations. It has established "work rules" and holds regular labor-management meetings. After the newcomers report to work, they will conduct newcomer education and training, so that the newcomers can understand the current work norms and protect the rights of employees. According to the work needs and career planning of employees, the company provides various training courses such as management training, professional skills and self-development, so as to provide employees with sufficient education and training. When recruiting employees, the company fully considers whether their character and expertise meet the needs,regardless of theirgender,age,ethnicgroup...etc. We will do our best to take care of

the disabled and other vulnerable people, safeguard the rights and interests of all people, and follow laws and regulations to prevent sexual harassment, and do our best to ensure that employees are free from harassment and discrimination. Pay attention to environmental sanitation and green landscaping to provide employees with a safe and comfortable working environment. To have interaction, the parent-child one-day tour of the Spring Festival, which was originally held regularly, was temporarily suspended due to the epidemic prevention policy . Subsidize employees to travel on their own. The number of subsidized people and the amount of subsidy are 11 people and NT$110,000. The company has carried out supervision and management operations in accordance with the labor safety and health laws and regulations, so that colleagues understand the importance of safety and health, understand the environmental situation of the workplace, occupational Health and Safety hazards, labor safety and health related laws and regulations, and various safety and health protection The correct use of the tool is used to prevent the occurrence of occupational accidents and ensure the safety and health of workers.

Schedule II: Risk Management Policy or Strategy

major issues	Risk Assessment Project	Risk Management Policyor Strategy
Environment	Environmental Protection and Ecological Conservation	In accordance with the ISO14001 environmental management system specification, the company is committed to environmental protection, responds to green and clean production, and effectively reduces pollution emissions and the impact on the environment; at the same time, it formulates implementation plans and programs every year, and regularly tracks and reviews them The progress of each goal to ensure the achievement of thegoal.
Society	Occupational safety	In accordance with the ISO14001 environmental management system specification, the company conducts various industrial safety inspections and checks on a daily basis to implement the occupational safety and health management system; secondly, regularly holds fire drills and industrial safety education and training every year to cultivate employees' abilityto respond to emergencies and self-safetymanagement ability.
	Product Safety	The company's products comply with various government product and service laws and regulations, and do not contain any hazardous substances. And through strict quality system management, we provide customers with stable product quality. At the same time, in order to ensure customer service quality and improve customer satisfaction, we set up customer service hotlines and communication websites, and actively conduct customer service satisfaction surveys every year to strengthen the relationship with customers. The cooperative relationship with customers has become the cornerstone of the sustainable development of the enterprise through the mutual benefit and co-prosperity relationship with customers.
Corporate Governance	Socioeconomic and Legal Compliance	Through the establishment of a governance organization and the implementation of an internal control mechanism, it is ensured that all personnel and operations of the company truly comply with relevant laws and regulations.

(6) The performance of integrity management and the differences and reasons from the integrity management code of listed OTC companies :

evaluation items	Operating situation	Operating situation	Operating situation	The situation and reasons for the differences with the Code of Integrity Management of listed OTC companies
	yes	no	summary description
1. Formulate integrity management policies and plans (1) Does the company formulate an honest management policy approved by the board of directors, and clearly state the policy and practices of honest management in regulations and external documents, as well as the commitment of the board of directors and senior management to actively implement the business policy? (2) Whether the company has established a risk assessment mechanism for dishonesty, regularly analyzes and evaluates business activities with relatively high risks of dishonesty within the scope of business, and formulates a plan to prevent dishonesty based on this, and at least covers "listing on the OTC market" What are the preventive measures for the behaviors in the second paragraph of Article 7 of the company's code of integrity management ? (3) Does the company clearly define operating procedures, behavior guidelines, punishment and appeal systems for violations in the dishonesty prevention plan, and implement them, and regularly review and revise the previous disclosure plan?	V V V		The company has established the "Code of Integrity Management" and "Code of Ethical Conduct", which have been approved by the board of directors and announced in the company's internal regulations and company website. The board of directors and senior management are committed to implementing them. The company has established the "Code of Integrity Management" and "Code of Ethical Conduct", and conducts a risk assessment of dishonesty behavior once a year. For bribery and bribery, illegal political donations, improper charitable donations or sponsorships, etc. 7 items that affect business Develop preventive measures for dishonest activities and announce them to directors and employees. In order to prevent any dishonest behavior, the company has formulated the "Code of Integrity Management" and "Code of Ethical Conduct"; the punishment for violations is implemented in accordance with the "reward and punishment" stipulated in the work rules; Handling Measures for Cases of Dishonest Behavior” to appeal in the “Stakeholder Zone” of the company’s website, and regularly review the implementation and implementation status once ayear.	no major difference no major difference no major difference
2. Implement integrity management			Currently, before a transaction with a manufacturer, the organizer will review the past transaction records and search for the information of the company on the Internet to confirm whether the manufacturer has a record of dishonest behavior and obtain a letter of commitment to honest operation.	no major difference
(1) Does the company evaluate the integrity records of its counterparties, and specify the terms of honest behavior in the contracts it signs with its counterparties ?	V

evaluation items			Operating situation	The situation and reasons for the differences with the Code of Integrity Management of listed OTC companies
	yes	no	summary description
(2) Has the company set up a unit responsible for promoting corporate integrity management under the board of directors, and regularly (at least once a year) report to the board of directors its integrity management policies, plans for preventing dishonest behavior, and supervision and implementation?	V		An integrity management group is set up under the chairman's office, with the chairman as the convener. This group's job duties are to ensure the implementation of the integrity management code, and report to the board of directors once a year on the integrity management policy and the plan to prevent dishonest behavior and supervise the implementation.	no major difference
(3) Does the company formulate policies to prevent conflicts of interest, provide appropriate channels for statements, and implement them? (4) Whether the company has established an effective accounting system and internal control system in order to implement honest management, and the internal audit unit draws up relevant audit plans based on the assessment results of dishonesty risks, and checks the plan for preventing dishonesty Follow the situation, or commission an accountant to perform the check? (5) Does the company hold regular internal and external education and training on integrity management?	V V V		The company formulates the policy of preventing conflicts of interest in the "Code of Ethical Conduct", and provides employees with the opportunity to report to managers, internal audit supervisors or other appropriate personnel when they suspect or discover violations of laws and regulations or the "Code of Ethical Conduct". In addition, the company has set up a reporting system on the website to provide employees and related personnel to report any improper business practices, which will be directly handled by the chairman. The company has established an effective accounting system and internal control system to ensure the implementation of honest management, and the audit office prepares an annual audit plan based on the assessment results of the risk of dishonesty, and checks the compliance with the preceding system. The company has organized internal and external integrity management education and training related to integrity management issues for 2022, with a total of 18 person-times and a total of 36 hours.	no major difference no major difference no major difference
3. The operation of the whistleblowing system of the company (1) Has the company established a specific whistleblowing and reward system, established channels to facilitate whistleblowing, and assigned appropriate specialists to handle whistleblowers?	V		The company has formulated the "Measures for Handling Cases of Reporting Illegal, Unethical or Dishonest Behaviors" to specify the reporting, reward system and reporting channels; it also has an employee suggestion box so that employees have a complaint mechanism and channels. There are complaint mailboxes for customers, suppliers and employees on the company website, which are handled by the chairman's office.	no major difference

evaluation items	Operating situation	Operating situation	Operating situation	The situation and reasons for the differences with the Code of Integrity Management of listed OTC companies
	yes	no	summary description
(2) Has the company established a standard operating procedure for the investigation of the reported matter, the follow-up measures to be taken after the investigation is completed, and the relevant confidentiality mechanism? (3) Has the company adopted measures to protect the whistleblower from being improperly dealt with due to whistleblowing?	V V		The company's "Handling Measures for Reporting Illegal, Unethical or Dishonest Behavior Cases" has investigation procedures and a confidentiality mechanism. In the above measures, the company guarantees that the colleague will not be dealt with improperly due to reporting.	no major difference no major difference
4. Strengthen information disclosure the content of its integrity management code and promote its effectiveness on its website and public information observation station ?	V		The "Code of Integrity Management", "Code of Ethical Conduct" and "Measures for Reporting Illegal, Unethical or Dishonest Behavior Cases" have been disclosed on the company website and public information observation station, and a "Corporate Integrity Management Zone" has been established on the company website Exposure drives results. In 2022, there has been no dishonesty and no reportingincidents	no major difference
of Integrity Management for Listed OTC Companies" , please describe the differences between its operation and the established code: No major differences.
6. Other important information that is helpful to understand the company's integrity management and operation: (such as the company's review and revision of its integrity management code, etc.) On March 17, 2015, the company's board of directors resolved to revise the "Code of Integrity Management". On March 17, 2015, the company's board of directors passed a resolution to formulate the "Code of Ethical Conduct". On August 15, 2016, the company approved and formulated the "Measures for Handling Cases of Reporting Illegal, Unethical or Dishonest Behaviors".

(7) If the company has formulated corporate governance codes and related regulations, it shall disclose its inquiry method:

The company has "Investor Relations" on the company website for inquiries.

(8) Other important information sufficient to enhance the understanding of the operation of corporate governance may be disclosed together:
The company has an "Investor Relations" on the company website for inquiries.

2 .2022 manager training situation:

Job title	Name	Study date	organizer	Course Title	Training hours
Chairman	Liao Wenjia	2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3

Job title	Name	Study date	organizer	Course Title	Training hours
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3
Deputy General Manager and Chief Financial Officer	Wu Hsiu Pi	2022/11/28 To 2022/11/29	Foundation for Accounting Research and Development of the Republic ofChina	Continuing training courses for accounting executives of issuers, securities firms and stock exchanges	12
		2022/12/7	Chinese Corporate Governance Association	How does the board of directors supervise the establishment of post-merger integration and management mechanism	3
		2022/12/7	Chinese Corporate Governance Association	Net-zero emissions, carbon neutrality and corporate compliance	3
Finance Department manager	Lee Shenlung	2022/4/22	Taiwan Sustainable Energy Research Foundation	Taixin Thirty Sustainable Net Zero Summit Forum - Seriously Net Zero	3
		2022/11/17	Taiwan Institute of Financial Incorporation	Corporate Governance Forum No. 16	3
		2022/12/22	Foundation for Accounting Research and Development of the Republic ofChina	Continuing training courses for accounting executives of issuers, securities firms and stock exchanges	6
		2022/12/23	Foundation for Accounting Research and Development of the Republic ofChina	Continuing training courses for accounting executives of issuers, securities firms and stock exchanges	6
Audit Manager	Cai Shuhua	2022/12/7	Internal Audit Association of the Republic of China	How to use digital technology to explore and improve operating procedures and fraud detection — Discussion on audit practice	6
		2022/12/19	Internal Audit Association of the Republic of China	In the face of climate change and the wave of sustainable development, explore the impact on corporate internal control and countermeasures from the perspective of ESG risk	6

(9) Implementation status of internal control system
Statement of Internal Control System: Please refer to page 103 .
Those who entrust an accountant to review the internal control system shall disclose the accountant's review report: Not applicable .
(10) In the most recent year and as of the date of publication of the annual report, the company and its internal personnel have been punished according to law, or the company has punished its internal personnel for violating the provisions of the internal control system, and the punishment result may have a significant impact on shareholders' rights and interests or securities prices, The content of the punishment, main deficiencies and improvements should be listed : none.
(11) Important resolutions of the shareholders' meeting and the board of directors in the most

recent year and up to the date of publication of the annual report

Important resolutions and implementation of shareholders' meeting in 2022 :

Meeting date		Important Resolutions and Implementation Status
2022/5/31	1. 2. 3. 4. 5. 6. 7. 8.	Acknowledge the 2021 annual business report and financial statement . Acknowledge the 2021 Earnings distribution case. Approved the revision of some articles of the "Articles of Association". Execution status: After the 2022 shareholders' general meeting passed the change registration with the Ministry of Economic Affairs within 15 days, and the approval was obtained on 2022/6/16 . Approved the revision of some articles in the "Procedures for Acquisition or Disposal of Assets". Implementation status :Applied immediately after the approval of the 2022 annual shareholders' meeting. Passed the case of issuing cash dividends from capital reserves. Execution status: NT$8,222,939 was appropriated from the capital reserve, and NT$0.1 was distributed per share. The aforementioned cash dividend was paid on August 31, 2022. Approved the revision of some articles of the "Rules of Procedure for the Shareholders' Meeting". Implementation status :Applied immediately after the approval of the 2022 annual shareholders' meeting. Completed and approved the re-election of directors (including independent directors). Approved the case of lifting the non-compete restriction of newly elected directors (including independent directors) and their representatives.

Important resolutions of the board of directors in the most recent year and as of the publication date of the annual report:

Meeting date	Important Resolutions	Matters listed in Article 14-3 of the Securities and Exchange Act	Independent directors object or reserve opinions
2022/1/27	Year-end bonus case for the managers of Parpro Groupin 2021 .	-	None
2022/3/16	2021 annual business report and financial statements.	-	None
	The2021 Auditors independence and performance evaluation review case.	V	None
	2021 "InternalControlStatement" case.	V	None

Meeting date	Important Resolutions	Matters listed in Article 14-3 of the Securities and Exchange Act	Independent directors object or reserve opinions
	PARPRO HOLDINGS capital loan and AP PARPROcase.	V	None
	Exchange of convertible corporate bonds for newshares.	V	None
	Amend some articles of the "Articles of Association".	V	None
	Amended part of the text of "Procedures for Acquisition or Disposal of Assets".	V	None
	The 2022 Annual General Meeting of Shareholders was convened.	-	None
	Amended the provisions of the "Corporate Social Responsibility Code of Practice" and some of the texts of the "Corporate Governance Code".	-	None
	2021 annual employee remuneration and distribution of remuneration for directors and supervisors.	-	None
	2021 Annual self-evaluation of directors.	-	None
2022/4/12	2021 Annual Earnings distribution case.	V	None
	The case of issuing cash dividends from capital reserves.	V	None
	Amended some texts of the "Rules of Procedures for Shareholders' Meetings".	-	None
	Nomination of directors and independent director candidates.	V	None
	The case of lifting the non-compete restriction of newly elected directors (including independent directors) and their representatives.	V	None
	The 2022 Annual General Meeting of Shareholders was convened.	-	None
	The company's capital loan and AP PARPRO case.	V	None
2022/5/12	2022 1stQuarter FinancialStatements.	-	None
	Bank line credit case.	-	None
	The company's greenhouse gas inventory andverification schedule.	-	None
2022/5/31	The election of the chairman of the board.	V	None
	Appointment of members of the Audit Committee.	-	None
	Appointment of members of the remuneration committee.	-	None
2022/8/11	Financial report for the first half of 2022.	-	None
	Bank line credit case.	-	None
2022/11/10	Financial report for the third quarter of 2022.	-	None
	2023 Annual auditplan.	V	None

Meeting date	Important Resolutions	Matters listed in Article 14-3 of the Securities and Exchange Act	Independent directors object or reserve opinions
	Amend the text of some articles of the fifth repurchase share transfer employee method.	-	None
	Bank line credit case.	-	None
2022/12/15	2023 annual budget.	-	None
	The case of the company's capital loan to an overseas subsidiary.	V	None
	PARPRO HOLDINGS capital loan and AP PARPRO case.	V	None
2023/1/16	2022 year-end bonus case for group managers.	-	None
2023/3/9	2022 annual business report and financial statements.	-	None
	The 2022 annual audit independence and performance evaluation review case.	V	None
	2022 "InternalControlStatement" case.	V	None
	Amend some articles of the "Articles of Association".	V	None
	Amended part of the text of the "Operating Procedures for LoaningFunds to Others".	V	None
	The convening of the 2023 Annual General Meetingof Shareholders.	-	None
	The company's greenhouse gas inventory and verification schedule.	-	None
	PARPRO TECHNOLOGIES capital loan and AP PARPRO case.	V	None
	It plans to issue the fourth domestic unsecured convertible corporate bond.	V	None
	Proposed 2022 annual employee remuneration and remuneration of directors and supervisors.	-	None
	2022annualself-assessment ofdirectors.	-	None
2023/4/13	2022 Earnings distribution case.	V	None
	Amended part of the text of the "Rules of Procedure for the Shareholders' Meeting".	-	None
	Bank line credit case.	-	None
	The convening of the 2023 Annual General MeetingofShareholders.	-	None

(12) In the most recent year and as of the date of publication of the annual report , if directors or supervisors have different opinions on important resolutions passed by the board of directors and there are records or written statements, the main content: None.

(13) Summary of the resignations and dismissals of the company's chairman, general manager, accounting supervisor, financial supervisor, internal audit supervisor, corporate governance supervisor, and R&D supervisor in the most recent year and as of the publication date of the annual report : None .

4. Public independent auditors information

				Amount	unit : NT$thousand	unit : NT$thousand
Audit Firm	CPAs Name	Audit period	Audit fees	Non-audit fees (Note)	Total	Remark
Deloitte& Touche United Audit Firm	Chen Peide	2022/1/1 To 2022/12/31	4,550	30	4,580	Note
	Chen Junhong

Note: The content of the non-audit service at public expense refers to the salary review public

expense of full-time employees who are not in supervisory positions.
If the audit firm is changed and the audit fee paid in the replacement year is less than the audit fee in the previous year, the amount of audit fees before and after the change and the reasons shall be disclosed : there is no such case.
If the audit public fee has decreased by more than 10% compared with the previous year, the amount, proportion and reason of the audit public fee reduction shall be disclosed: there is no such case.
Change of CPA information: No such case.
The company's chairman , general manager, and manager in charge of financial or accounting affairs, who have worked in a certification auditors firm or its affiliated companies in the past year, shall disclose their names, titles, and employment status in a certification accounting firm or its affiliates . The period of the affiliated enterprise. The term "affiliated enterprises of the certified auditor firm" refers to the accountants of the certified accounting firm holding more than 50% of the shares or obtaining more than half of the directors' seats, or listed as affiliated enterprises in the materials released or published by the certified auditor firm Company or institution: None .

In the most recent year and as of the date of publication of the annual report, directors, supervisors, managers, and shareholders holding more than 10% of the shares have been transferred and pledged:
(1) Changes in equity

(1) Changes	in equity
Job title	name	2022		As of April 1,2023
		Number of shares held increase (decrease) number	Pledged shares increase (decrease) number	Number of shares held increase (decrease) number	Pledged shares increase (decrease) number
Chairman and General Manager (Major shareholder)	Liao,Wenjia	0	0	0	0
Director	Zeng, Xueqing	0	0	0	0
Director and Chief Financial Officer	Wu,Hsiupi	(64,000)	0	0	0
Legal Person Director	Jieshi Investment Co., Ltd.	0	0	0	0
Independent Director	Shen,Xiaoling	0	0	0	0
Independent Director	Zhang, Naiwen	0	0	0	0
Independent Director	Feng, Zhiqing	0	0	0	0
Major shareholder	Yunyong Investment Co., Ltd.	(2,255,000)	(22,580)	0	0
General Manager of Overseas Operations	Thomas Sparrvik	0	0	0	0
Senior Manager	Ye Jianshen	0	0	0	0
Finance Manager	Lee,Shen-Lung	0	0	0	0
Director	Xu Shanke (Note)	(25,600)	0	0	0
Independent Director	Shen Xiaoling (Note)	0	0	0	0
Independent Director	Yu Shaoyin (Note)	0	0	0	0

Note:2023/5/31 Director re-elected and resigned.

(2) If the relative of the equity transfer is a related party: None.
(3) If the counterparty of the equity pledge is a related party: None.

Information on the relationship between the top ten shareholders who hold the largest shareholding ratio, and whether they are related parties in the Financial Accounting Standards Bulletin No. 6 or spouses or relatives within the second degree:

Unit : share; April 1 , 2023

Name	Cur	rent	Shares held by spouse and minor children	Shares held by spouse and minor children	Holding shares oth	in the name of ers	For the top ten shareholders who have financial and accounting standards bulletin No. 6 related persons or relatives within the spouse or second degree, their names or names and relationships	For the top ten shareholders who have financial and accounting standards bulletin No. 6 related persons or relatives within the spouse or second degree, their names or names and relationships	Note
	Share	holding
	Number of shares	Share-	Number of shares	Share-	Number of shares	Share-	Name	Relaionship
		holding ratio (%)		holding ratio (%)		holding ratio (%)
Liao Wenjia	8,071,942	9.13	0	0	9,585,014	10.85	Yunyong Investment Co., Ltd. Jieshi Investment Co., Ltd. Paide Investment Co., Ltd.	The chairman of the company and Yunyong Investment, Jieshi Investment, Paide Investment and other four companies are the same person.	None
									None
									None
Yunyong Investment Co., Ltd.	7,500,865	8.49	0	0	0	0	Liao,Wenjia Jieshi Investment Co., Ltd. Paide Investment Co., Ltd.		None
									None
Representative: Liao Wenjia	8,071,942	9.13	0	0	9,585,014	10.85			None
Jieshi Investment Co., Ltd.	5,830,415	6.6	0	0	0	0	Liao,Wenjia Yunyong Investment Co., Ltd. Paide Investment Co., Ltd.		None
									None
Representative: Liao Wenjia	8,071,942	9.13	0	0	9,585,014	10.85			None
Paide Investment Co., Ltd.	3,754,599	4.25	0	0	0	0	Liao,Wenjia Yunyong Investment Co., Ltd. Jieshi Investment Co., Ltd.		None
									None
Representative: Liao Wenjia	8,071,942	9.13	0	0	9,585,014	10.85			None
Standard Chartered Managed Standard Chartered-External Account Manager JP Morgan	1,055,000	1.19	0	0	0	0	None	None	None
Citi Trustee Berkeley Capital SBL/PB Investment Account	867,000	0.98	0	0	0	0	None	None	None
HSBC Bank Custody Goldman Sachs International Investment Special Account	688,000	0.78	0	0	0	0	None	None	None
Chen Lili	630,000	0.71	0	0	0	0	None	None	None
Chase Custodian JP Morgan Securities Co., Ltd. investment account	569,400	0.64	0	0	0	0	None	None	None
Citi Trustee UBS European SE Investment Account	539,257	0.61	0	0	0	0	None	None	None

The number of shares held by the company, its directors, supervisors, managers, and enterprises directly or indirectly controlled by the company in the same reinvested enterprise, and calculate the comprehensive shareholding ratio:

March 31 , 2023 ; unit: thousand shares; %

Invest in business	The company invests	The company invests	Investments of directors, supervisors, managers, and directly or indirectly controlled enterprises	Investments of directors, supervisors, managers, and directly or indirectly controlled enterprises	Comprehensive investment	Comprehensive investment
	Number of shares(thousand shares)	Shareholding ratio	Number of shares(thousand shares)	Shareholding ratio	Number of shares(thousand shares)	Shareholding ratio
Efa Technologies Corporation	3,272	100%	-	-	3,272	100%
Parpro Holdings Co., Ltd	36	100%	-	-	36	100%
Anderson Industrial Corp..	39,904	20.86%	-	-	39,904	20.86%
Sogotec Precision Co., Ltd.	960	4.73%	485	2.39%	1,445	7.12%
AP Parpro, Inc.	7	100%	-	-	7	100%
Pilot (Las Vegas), Inc.	1	100%	-	-	1	100%
Parpro (Nevada), Inc.	1	100%	-	-	1	100%
Parpro Quality, Inc.	23,500	100%	-	-	23,500	100%
Parpro Technologies, Inc.	13	100%	-	-	13	100%

IV. Fundraising situation

1. Capital and shares

(1) Source of share capital

A. Source of equity

Unit : NT$ thousand/thousand shares

years	Issued p r i c e	Approved share capital	Approved share capital	Paid-in share capital	Paid-in share capital	Remark	Remark	Remark	Remark
		Number of shares	Amount	Number of shares	Amount	Source of equity		Using property other than cash to offset the share capital	Other
Dec., 2 0 01	10	3, 0 00	30 , 00 0	1, 0 00	10 , 00 0	Set up Capital		-	N o t e 1
Oct. ,2 0 0 3	10	3, 0 00	30 , 00 0	1, 5 00	15 , 00 0	Cash capital increase	5 , 0 0 0 t h o u s a n d	-	N o t e 2
Oct. ,2 0 0 6	10	3, 0 00	30 , 00 0	2, 0 00	20 , 00 0	Cash capital increase	5 , 0 0 0 t h o u s a n d	-	N o t e 3
Oct. ,2 0 0 8	10	8, 0 00	80 , 00 0	3, 5 00	35 , 00 0	Cash capital increase Surplus capital increase	1 0 , 0 0 0 t h o u s a n d 5 , 0 0 0 t h o u s a n d	-	N o t e 4
Au g. ,2 0 0 9	10	8, 0 00	80 , 00 0	6, 6 60	66 , 60 0	Surplus capital increase	3 1 , 6 0 0 t h o u s a n d	-	N o t e 5
Oct. ,2 0 0 9	10	30 , 00 0	30 0 ,0 0 0	15 , 00 0	15 0 ,0 0 0	Cash capital increase	8 3 , 4 0 0 t h o u s a n d	-	N o t e 6
Au g. ,2 0 1 0	10	30 , 00 0	30 0 ,0 0 0	19 , 50 0	19 5 ,0 0 0	Surplus capital increase	4 5 , 0 0 0 t h o u s a n d	-	N o t e 7
Sep., 2 011	10	30 , 00 0	30 0 ,0 0 0	21 , 45 0	21 4 ,5 0 0	Surplus capital increase	1 9 , 5 0 0 t h o u s a n d	-	N o t e 8
Ap r., 2 01 2	10	30 , 00 0	30 0 ,0 0 0	23 , 95 0	23 9 ,5 0 0	Cash capital increase	2 5 , 0 0 0 t h o u s a n d	-	N o t e 9
Au g. ,2 0 1 2	10	30 , 00 0	30 0 ,0 0 0	25 , 14 7	25 1 ,4 7 5	Surplus capital increase	1 1 , 9 7 5 t h o u s a n d	-	N o t e 1 0
Ju l., 2 0 13	10	65 , 00 0	65 0 ,0 0 0	60 , 35 4	60 3 ,5 4 0	Surplus capital increase	3 5 2 , 0 6 5 t h o u s a n d	-	N o t e 1 1
Dec., 2 0 13	10	10 0 ,0 0 0	1, 0 00 , 00 0	67 , 89 9	67 8 ,9 9 0	Cash capital increase	7 5 , 4 5 0 t h o u s a n d	-	N o t e 1 2
J an ., 2 0 17	10	10 0 ,0 0 0	1, 0 00 , 00 0	69 , 40 7	69 4 ,0 6 5	Corporate bond conversion	1 5 , 0 7 5 t h o u s a n d	-	N o t e 1 3
Mar., 2 0 17	10	10 0 ,0 0 0	1, 0 00 , 00 0	70 , 89 9	70 8 ,9 9 0	Corporate bond conversion	1 4 , 9 2 5 t h o u s a n d	-	N o t e 1 4
Ju l., 2 0 17	10	10 0 ,0 0 0	1, 0 00 , 00 0	71 , 85 7	71 8 ,5 6 7	Corporate bond conversion	9 , 5 7 7 t h o u s a n d	-	N o t e 1 5
Ju l., 2 0 17	10	10 0 ,0 0 0	1, 0 00 , 00 0	78 , 83 0	78 8 ,3 0 1	Surplus capital increase	6 9 , 7 3 4 t h o u s a n d	-	N o t e 1 6
Dec., 2 0 17	10	10 0 ,0 0 0	1, 0 00 , 00 0	80 , 57 2	80 5 ,7 2 3	Corporate bond conversion	1 7 , 4 2 2 t h o u s a n d	-	N o t e 1 7
Mar., 2 0 18	10	10 0 ,0 0 0	1, 0 00 , 00 0	81 , 26 0	81 2 ,5 9 6	Corporate bond conversion	6 , 8 7 3 t h o u s a n d	-	N o t e 1 8
Ju n. , 20 1 8	10	10 0 ,0 0 0	1, 0 00 , 00 0	81 , 95 4	81 9 ,5 3 7	Corporate bond conversion	6 , 9 4 1 t h o u s a n d	-	N o t e 1 9
Oct. ,2 0 1 8	10	10 0 ,0 0 0	1, 0 00 , 00 0	82 , 18 1	82 1 ,8 0 5	Corporate bond conversion	2 , 2 6 8 t h o u s a n d	-	N o t e 2 0
Dec., 2 0 18	10	10 0 ,0 0 0	1, 0 00 , 00 0	82 , 18 7	82 1 ,8 7 5	Corporate bond conversion	7 0 t h o u s a n d	-	N o t e 2 1
Ju l., 2 0 19	10	10 0 ,0 0 0	1, 0 00 , 00 0	82 , 27 9	82 2 ,7 9 4	Corporate bond conversion	9 1 9 t h o u s a n d	-	N o t e 2 2
Oct. ,2 0 1 9	10	10 0 ,0 0 0	1, 0 00 , 00 0	83 , 07 4	83 0 ,7 4 4	Corporate bond conversion	7 , 9 5 1 t h o u s a n d	-	N o t e 2 3
Dec., 2 0 19	12	10 0 ,0 0 0	1, 0 00 , 00 0	83 , 45 2	83 4 ,5 1 6	Corporate bond conversion Treasury stock cancellation	3 , 7 7 2 t h o u s a n d	-	N o t e 2 4
Feb ., 2 02 2	02	12 0 ,0 0 0	1, 2 00 , 00 0	83 , 35 2	83 3 ,5 1 6	Treasury stock cancellation	1 , 0 0 0 t h o u s a n d	-	N o t e 2 5
Ap r., 2 02 2	04	12 0 ,0 0 0	1, 2 00 , 00 0	83 , 35 4	83 3 ,5 4 4	Corporate bond conversion	2 8 t h o u s a n d	-	N o t e 2 6

Note 1: 90.12.27 Jing (90) No. 09033279280

Note 2: 92.10.27 Jingshou Zhongzi No. 09232861870

Note 3: 95.10.03 Jingshou Zhongzi No. 09532926440 Note 4: 97.10.15 Jingshou Zhongzi No. 09733261020 Note 5: No. 09832777800 of Jingshouzhongzi on 98.08.03 Note 6: 98.10.28 Jingshou Zhongzi No. 09833329390

Note 7: No. 09932490060 of Jingshou Zhongzi on 99.08.23 Note 8: 100.09.06 Jingshou Zhongzi No. 10032481050 Note 9: 101.04.18 Jingshou Zhongzi No. 10131902020 Note 10: 101.08.27 Jingshou Zhongzi No. 10132419010 Note 11: 102.07.17 Jingshang Zi No. 10201139110 Note 12: 102.12.18 Jingshang Zi No. 10201256770 Note 13: 106.01.04 Jingshang Zi No. 10501300750

Note 14: 106.03.09 Jingshang Zi No. 10601028470

Note 15: 106.07.13 Jingshang Zi No. 10601092960

Note 16: 106.07.25 Jingshang Zi No. 10601106180

Note 17: 106.12.14 Jingshang Zi No. 10601171020 Note 18: Jingshangzi No. 10701026080 on 107.03.15 Note 19: 107.06.22 Jingshang Zi No. 10701067400 Note 20: 107.10.03 Jingshang Zi No. 10701119640 Note 21: 107.12.26 Jingshang Zi No. 10701157950 Note 22: 108.07.08 Jingshang Zi No. 10801071380 Note 23: 108.10.24 Jingshang Zi No. 10801148670 Note 24 : 108.12.31 Jingshang Zi No. 10801181060 Note 2 5 : 111.02.10 Jingshangzi No. 11101014470 _ _ _ Note 2 6 : 111.04.19 Jingshang Zi No. 11101058240

B. General class of shares

				Unit:share
Type of shares	Approved share capital			Remark
	Shares outstanding	Unissued shares	total
Common shares	88,375,353 (Note)	31,624,647	120,000,000	listing

Note: Including 1,125,000 treasury shares as of April 1, 2023 and 5,021,000 new shares of converted corporate bonds that have not been registered for change.

C. Information related to the comprehensive declaration system: there is no such case, so it is not applicable.

(2) Shareholder structure

hareholder structure	hareholder structure
				April 1,2023;unit : share
Shareholder structure Quantity	Government agency	Financial institution	Other legal persons	Individual	Foreign institution and outsiders	Total
Numbers ofpeople	-	-	194	28,835	34	29,063
Number of shares held	-	-	19,454,832	64,304,102	4,616,419	88,375,353
Shareholding ratio	-	-	22.01%	72.77%	5.22%	100.00%

(3) Shareholding dispersion

A. Common share:

hareholding dispersion . Common share:
		April 1,	2023; Unit:share
Shareholding classification	Number of shareholders	Number of shares held	Shareholding ratio
1 to 999	19,221	292,133	0.33%
1,000 to 5,000	7,807	15,440,408	17.47%
5,001 to 10,000	1,056	8,342,554	9.44%
10,001 to 15,000	281	3,557,988	4.03%
15,001 to 20,000	214	3,964,154	4.49%
20,001 to 30,000	187	4,781,539	5.41%
30,001 to 40,000	94	3,381,033	3.83%
4 0,001 to 5 0,000	48	2,270,127	2.57%
50,001 to 100,000	88	6,267,541	7.09%
100,001 to 200,000	41	5,621,683	6.36%
200,001 to 400,000	15	3,824,715	4.33%
400,001 to 600,000	2	1,108,657	1.25%
600,001 to 800,000	2	1,318,000	1.49%
800,001 to 1,000,000	1	867,000	0.98%
1,000,001 or more	6	27,337,821	30.93%
Total	29,063	88,375,353	100.00%

B. Special share: No special share has been issued, so it is not applicable.

(4) List of major shareholders: shareholders whose shareholding ratio is more than 5% or whose shareholding ratio accounts for the top ten shareholders

lding ratio accounts for the top ten shareholders	lding ratio accounts for the top ten shareholders	lding ratio accounts for the top ten shareholders
April 1,2023 ; unit : share
Share Major shareholder Name	Number of shares held	Shareholding ratio
Liao Wenjia	8,071,942	9.13
YunyongInvestmentCo.,Ltd.	7,500,865	8.49
Jieshi InvestmentCo.,Ltd.	5,830,415	6.60
Paide InvestmentCo.,Ltd.	3,754,599	4.25
Standard Chartered Managed Standard Chartered-External Account Manager JP Morgan	1,055,000	1.19
Citi Trustee Berkeley CapitalSBL/PB Investment Account	867,000	0.98
HSBC Bank Custody Goldman Sachs International Investment Special Account	688,000	0.78
Chen Lili	630,000	0.71
Chase Custodian JP Morgan Securities Co., Ltd. investment account	569,400	0.64
Citi TrusteeUBSEuropeanSE Investment Account	539,257	0.61

(5) Share price, net worth, earnings and dividend information per share for the last two years

and as of the date of publication of the annual report

Unit: NT$; thousand shares

Item	Year	Year	2021	2022	As of March 31,2023
Per share market price	The highest		39.55	33.70	36.15
	The lowest		20.00	20.50	26.20
	The average		25.58	25.50	32.80
Per share net worth	Before allocation		14.75	17.93	Not applicable
	After allocation		13.78	17.50(Note 4)	Not applicable
Per share Surplus	Weighted average number of shares		82,227	82,229	Not applicable
	Earningsper share		1.29	1.21	Not applicable
Per share dividend	Cash dividend		0.5	0.4(Note 4)	Not applicable
	Gratuitous allotment	Surplus allotment	0	Not applicable	Not applicable
		Capital reserve allotment	0	Not applicable	Not applicable
	Accumulated unpaid dividends		0	0	Not applicable
ROI Analysis	PE Ratio (Note 1)		19.83	21.07	Not applicable
	Cost -to-earnings ratio (Note 2)		51.16	63.75(Note 4)	Not applicable
	Cash dividendyield (Note 3)		1.95%	1.57%(Note 4)	Not applicable

Note 1: P/E ratio = average closing price per share in the current year/earnings per share. Note 2: Cost to profit ratio = average closing price per share in the current year/cash dividend per share.
Note 3: Cash dividend yield = cash dividend per share/average closing price per share for the current year.
Note 4: Once the resolution of the board of directors of the company is passed, it is planned to submit the report of the regular meeting of shareholders and handle it in accordance with relevant regulations.
(6) Dividend policy and implementation status of the company:
- A. Dividend policy stipulated in the articles of association of the company
  - The company will consider the company's environment and growth stage, respond

to future capital needs and long-term financial planning, and meet shareholders' needs for cash inflow. If there is a surplus in the annual final accounts, it should first pay taxes to make up for previous years' losses, Ten percent shall be raised as the statutory surplus reserve, except when the statutory surplus reserve has reached the total capital, and another special surplus reserve may be raised according to business needs or regulations, and the board of directors shall prepare a distribution plan according to the following proportions, It is proposed to be distributed after approval by the general meeting of shareholders.

Shareholder dividends are based on the consideration of the current year's after-tax surplus and the accumulated undistributed surplus in the previous period. The amount of surplus to be distributed should not be less than 10% of the current year's after-tax surplus. Cash dividends should not be lower than the total amount of cash dividends and stock dividends. However, if the cash dividend per share is less than NT$0.1, it can be paid as stock dividend instead, but the distribution ratio can be adjusted depending on the company's future earnings and capital status. When the company has no profit, no dividends and bonuses will be distributed.

B. Situation of dividend distribution proposed by this year's shareholders' meeting The resolution of the board of directors of the company on April 13, 2023 was passed, and it was resolved to distribute NT$34,900,141 in surplus, and NT$0.4 per share. It is planned to submit the report of the regular meeting of shareholders on May 30, 2023 and handle it in accordance with relevant regulations.
C. Expected major changes in the dividend policy : None .
(7) The impact of the gratuitous allotment of shares proposed at this shareholders' meeting on the company's operating performance and earnings per share:
There’s no gratuitous allotment of shares proposed at this shareholders' meeting , so it is not applicable.
( 8) Remuneration of employees, directors and supervisors
A. The ratio or range of remuneration for employees, directors and supervisors as stated in the company's articles of association:
- According to the company's articles of association, if the company makes a profit in the year, it should allocate 1% to 15% as employee remuneration, which is distributed by the board of directors in the form of stock or cash distribution, and the distribution targets include employees of subordinate companies who meet certain conditions; the company The above-mentioned profit amount can be allocated, and the board of directors decides to allocate no more than 5% as remuneration for directors and supervisors. Proposals on employee remuneration and distribution of remuneration to directors

and supervisors shall be reported to the shareholders' meeting. However, if the company still has accumulated losses, it shall reserve the compensation amount in advance, and then allocate employee remuneration and director and supervisor remuneration according to the proportion mentioned in the preceding paragraph.

The proportion of remuneration distributed by directors is based on the overall evaluation and consideration of their participation in the company's operations and personal performance contributions. The considerations include, for example, the company's operational management capabilities, financial and business operating performance indicators, and comprehensive management indicators, and measure other special contributions or Major negative events ... etc. In addition, independent directors still receive fixed monthly remuneration.

The manager's remuneration includes salary and bonus. The salary is evaluated with reference to the industry standard and items such as professional title, rank, education (experience), professional ability and responsibility. The bonus is also based on the target achievement rate, profit rate, and operating efficiency. , contribution and other comprehensive project evaluation considerations.

Relevant managers receive employee remuneration and director remuneration must be reviewed by the remuneration committee, and then submitted to the board of directors for resolution.

B. The estimation basis for the estimated remuneration of employees, directors and supervisors in the current period, the basis for calculating the number of shares of employee compensation based on stock distribution, and the accounting treatment when the actual distribution amount is different from the estimated amount: The company's estimated employee and director remuneration is calculated in accordance with the company's articles of association, with 1% to 15% as employee remuneration and no higher than 5% as director remuneration. If the actual distribution amount is different from the estimated amount, it will be included in the next year profit and loss .
C. The distribution of remuneration approved by the board of directors
(a) The amount of employee remuneration distributed in cash or stock and the remuneration of directors and supervisors . If there is any discrepancy from the estimated amount of recognized expenses in the year, the discrepancy, reason and treatment shall be disclosed :

The company's pre-tax net profit in 2022 and estimated employee

remuneration of 2,119,983 and directors' remuneration of 1,059,991 in accordance with the company's articles of association were submitted to the resolution of the board of directors on March 9, 2023, and were all paid in cash. The annual recognized expenses and There is no difference in the amount of remuneration distributed by the board of directors.

(b) The ratio of the amount of employee remuneration distributed by stock to the total after-tax net profit and total employee remuneration in the individual or individual financial report of the current period: None.
D. The actual distribution of the remuneration of employees, directors and supervisors in the previous year (including the number of shares distributed, amount, and stock price), and if there is any difference between the remuneration of employees, directors and supervisors recognized, the difference, reason and Processing situation:

The 2022 annual shareholders' meeting resolution passed the 2021 year profit distribution plan. The employee remuneration was NT$2,227,997, and the director's compensation was NT$1,113,999. All of them were distributed in cash.

( 9) Repurchase of the company's shares:
Those who have completed:

purchase of the company's shares: . Those who have completed:
	March 31 , 2023
Buyback session	5th time
Buybackpurpose	Transfer employee
Buybackperiod	2018/10/30~2018/12/29
Buyback intervalprice(dollar)	20~40
Type and quantity of shares bought back (thousand shares)	Common stock
	1,125
Amount of shares repurchased(thousand)	32,679
The ratio of thepurchasedquantityto theplannedquantity (%)	75%
Number of shares that have been canceled and transferred (thousand shares)	0
Cumulative number of shares held in the company (thousand shares)	1,125
The ratio of the cumulative number of shares held in the company to the total number of issued shares(%)	1.35%

Those still in implementation: None.

2. The handling of corporate bonds:

(1) Issuance and conversion

Types of corporate bonds	Types of corporate bonds	The 2nd domestic unsecured conversion of corporate bonds	The 3rd domestic unsecured conversion of corporate bonds
Issue (processing) date		December 13 , 2019	March 10, 2022
Denomination		NT$ (the same below) 100 thousand	NT$ (the same below) 100 thousand
Issue and trading place		Not applicable (non-overseas corporate bonds)	Not applicable (non-overseas corporate bonds)
Issue price		NT$100.50	NT$100.00
Lump sum		NT$500,000 thousand	NT$500,000 thousand
Interest rate		0%	0%
Term		5-year term ; Maturity Date :Dec.13,2024	5-year term ; Maturity Date :Mar.10,2027
Guarantee agency		None	None
Trustee		Taishin International Bank	Chang Hwa Commercial Bank, Ltd. Trust Office
Underwriting agency		Taishin Securities Co.,Ltd.	President Securities Corporation
Attorney		Qiu,Yawen	Qiu, Yawen
CPA		Chen, Peide; Lin, Wenqin	Chen, Peide, Chen, Junhong
Repayment method		Repayment once due	Repayment once due
Outstanding principal		NT$74,400 thousand	NT$356,400 thousand
Redeem or advance terms of settlement		Detailed issuance and conversion method	Detailed issuance and conversion method
Restrictions		Detailed issuance and conversion method	Detailed issuance and conversion method
Credit rating agency name, rating date, corporate bond rating results		Not applicable	Not applicable
Other right attached	Amount of converted (exchanged or subscribed) ordinary shares, overseas depositary receipts or other securities as of the publication date of the annual report	None	None
	Issuance and conversion (exchange or subscription) method	Detailed issuance and conversion method	Detailed issuance and conversion method
Issuance and conversion, exchange or subscription methods, issuance conditions on possible dilution of equity and impact on existing shareholders' rights and interests		Based on the current conversion price of NT$34.70 and the issuance balance of NT$74,400 thousand, the equity dilution ratio is about 2.37 %.	Based on the current conversion price of NT$28.60 and the issuance balance of NT$356,400 thousand, the equity dilution ratio is about 12.36 %.
The name of the entrusted custodian of the exchange target		Not applicable	Not applicable

Types of corporate bonds	Types of corporate bonds	The 4th domestic unsecured conversion of corporate bonds (processing)
Issue ( processing ) date		April 17, 2023
Denomination		NT$ (the same below) 100,000
Issue and trading place		Not applicable (non-overseas corporate bonds)
Issue price		NT$100.00
Lump sum		400,000 thousand
Interest rate		0%
Term		5 years
Guarantee agency		None
Trustee		Changhua Commercial Bank Co., Ltd. Trust Office
Underwriting agency		Uni-President Securities Co., Ltd.
Attorney		Qiu Yawen
CPA		Chen Peide, Chen Junhong
Repayment method		Repayment once due
Outstanding principal		400,000 thousand
Redeem or advance terms of settlement		Detailed issuance and conversion method
Restrictions		Detailed issuance and conversion method
Credit rating agency name, rating date, corporate bond rating results		Not applicable
Other right attached	Amount of converted (exchanged or subscribed) ordinary shares, overseas depositary receipts or other securities as of the publication date of the annual report	None
	Issuance and conversion (exchange or subscription) method	Detailed issuance and conversion method
Issuance and conversion, exchange or subscription methods, issuance conditions on possible dilution of equity and impact on existing shareholders' rights and interests		Not applicable
The name of the entrusted custodian of the exchange target		Not applicable

(2) Conversion of corporate bond information

Types of corporate bonds	Types of corporate bonds	The 2nddomestic unsecured conversion of corporate bonds	The 2nddomestic unsecured conversion of corporate bonds	The 2nddomestic unsecured conversion of corporate bonds	The 2nddomestic unsecured conversion of corporate bonds	The 2nddomestic unsecured conversion of corporate bonds
	Year	2019	2020	2021	2022	As of
Item						2023/3/31
Convert the market price of corporate bonds	Highest	92.70	98.20	109.90	103.75	107.00
	Lowest	86.20	77.05	91.85	100.15	101.5
	Average	91.19	89.15	100.50	101.79	102.86
Conversion price		39.00	36.10	35.40	34.70	34.70
Issue (processing) date		Issued date : December 13 , 2019
Conversion price at the time of issue		Conversion price at the time of issuance: NT$ 39.00
Fulfillment of conversion obligations		Issuance of new shares

Types of corporate bonds	Types of corporate bonds
	Year	2022	As of
Item			2023/3/31
Convert the market price of corporate bonds	Highest	107.00	123.00
	Lowest	93.20	100.20
	Average	102.81	110.01
Conversion price		28.60	28.60
Issue (processing) date		Issued date : March 10 , 2022
Conversion price at the time of issue		Conversion price at the time of issuance: NT$ 29.20
Fulfillment of conversion obligations		Issuance of new shares

Handling status of special shares: None.
Handling status of overseas depositary receipts: None.
Handling of employee stock option certificates: None.
Handling of new shares with restrictions on employee rights: None.
Handling of mergers and acquisitions or transfer of shares from other companies to issue new shares: None.

Fund utilization plan and implementation:
(1) The third domestic unsecured conversion of corporate bonds in 2022:
- This project is all used to repay the bank loan. The debt was fully collected on March 8, 2022, and the bank loan of 500,000 thousand was repaid in the first quarter of 2022.
(2) The fourth domestic unsecured conversion of corporate bonds in 2023 (in process):
- A. Total funds required for this project: NT$ 400,000 thousand.
- B. Source of funds: Issue of the fourth unsecured convertible corporate bond. It is expected to issue 4,000 bonds, each with a denomination of NT$100,000, issued in full face value, with a coupon rate of 0% . The issuance period is five years, and it is expected to raise funds NT$ 400,000 thousand.
- C. Project planning and estimated progress

			Unit: NT$thousand
Project / Plan	Expected Completion Date	Total funding required	Estimated Fund Utilization Progress
			2023
			Firstquarter
Repay bank loan	Second quarter of 2023	400,000	400,000
Total		400,000	400,000

D. Expected benefits

This project is expected to be completed in the second quarter of 2023. The total amount of funds required is NT$400,000 thousand, all of which will be used to repay bank loans. In addition to effectively reducing the company's financial burden, reducing bank dependence and improving the financial structure In addition, it can improve solvency, reduce operational risks, and increase the space for flexible use of funds, which is beneficial to the overall operational development. In addition, if the interest rate of the bank loan to be repaid this time is 1.73%~2.18%, it is estimated that after the repayment of the loan, the interest expense can be saved about 4,585 thousand in 2023, and the interest expense can be saved about 7,860 thousand per year starting from 2024.

V. Operation Overview
Business Activities
(1) Business scope:
- A. The main activities of the company's business:

The company's current main business is the manufacture and sale of industrial computers and gaming machines. At the same time, it also provides motherboard processing business for security control and communication. The business items listed in the profit-seeking enterprise registration certificate are as follows:

CC01060 Manufacturing of wired communication machinery and equipment CC01070 Manufacturing of wireless communication machinery and equipment. CC01080 Manufacturing of electronic components. F401010 International trade industry. F113020 Wholesale of electrical equipment. F213010 Retailing of electrical equipment. F113070 Wholesale of telecommunications equipment. F213060 Retailing of telecommunications equipment. CC01101 Manufacturing of telecommunications control the radio frequency equipment

B. Operating ratio of main products

erating ratio of main products	erating ratio of main products	erating ratio of main products
B. Unit: NT$ thousand
Year value Items	2022
	Revenue	Proportion of business (%)
Gaming and Industrial Computers	841,118	30
Aerospace and Defense Industry	1,935,562	70
Total	2,776,680	100

C. The company's current commodity (service) items

At present, the company is mainly specialized in the manufacturing and sales of gaming machines, industrial computers, aerospace ancillary equipment and spare parts. The main product items include the following:

(a) Gaming machines: gaming machines and their components such as gaming boards, barebone systems, player tracking systems, and machine frames.
(b) Industrial computer: all kinds of industrial computer motherboards and their components.
(c) Aerospace products: various wiring harnesses, customized cables, chassis wiring for the aerospace industry, etc.
D. New product (service) items planned to be developed
(a) Mechanisms: Develop power supply frames for light and thin intelligent system products, mainly used in gaming and intelligent system products.
(b) Electronics: the development of thin and light low-power embedded computers

and peripheral products, mainly used in gaming, industrial computers and peripheral products. Development of ultra-thin gaming machine frame .

(2) Industry overview
A. Current status and development of the industry
- (a) Gaming industry:

Gaming business is composed of casinos, lottery ticket companies, sports and other gaming companies, online gaming that has grown rapidly in recent years, and software and hardware suppliers that rely on gaming games for profit, such as gaming machine integration manufacturers, software developers and upstream systems Composed of manufacturers, etc. In the past, the gaming industry suffered from the negative perception of the public, making it strictly regulated and prohibited by government laws and regulations. However, in recent years, the gaming industry has driven the development of related tourism industries, such as tourist hotel industry, entertainment industry, travel industry, and conferences. The exhibition industry, shipping industry and catering industry, etc., coupled with the economic uncertainty around the world and the reduction of government revenue, many governments hope to use the open game market as a means of developing tourism peripheral industries or revitalizing the economy, and will legally Gaming activities are regarded as one of the important policy tools to assist the government in balancing the budget.

The so-called gaming entertainment (Casino) is a "game" that is licensed by the government or has legal protection. It is a legal and strictly regulated gambling behavior. Gaming entertainment”, the current global land-based gaming market is mainly located in Las Vegas, Atlantic City, Macau, Singapore, etc., and the latter is like a casino attached to a cruise ship . Gaming entertainment is roughly divided into two categories according to the differences in gameplay: slots and table games (including baccarat, blackjack, roulette machines, dice machines, bingo machines, bobbins, etc.) Among them, the slot machine is very popular among players because of its enduring design and simple gameplay. Therefore, it has become a must-have classic machine for every gaming casino, and it is also one of the main sources of income for the gaming industry .

At present, the main development direction of the global tourism industry is the combination of recreation, leisure, sightseeing, shopping, amusement parks and casinos. Among them, the tourism mode of casinos combined with leisure and sightseeing has become a future development trend, such as the Venetian Hotel in Macau, Genting Sentosa in Singapore and Marina Bay Sands Hotel, etc. The business model of this complex leisure resort has transformed casinos from pure casino games into modern commercial, leisure and entertainment activities, and has become an important part of the tourism industry. In the future, the Asia-Pacific region is expected to become the largest gaming market in the world,

with huge market opportunities.

The gaming industry has gradually become a common development trend in all countries around the world. The main reason is that in the past, the public had a negative perception of the gaming industry and the industry was strictly regulated by government laws and regulations. However, the recent development of the gaming industry has driven local economic growth and development. Tax contribution, and drive the economic benefits of surrounding industries ( sightseeing, transportation, aviation construction, etc. ) It is regarded as a part of Leisure Industry .

In addition, the gaming equipment requires high stability and safety, and considering its cost, most gaming operators outsource the manufacturing of gaming machines. Taiwan has a very complete supply chain for gaming-related components and electronic components, and can meet the requirements Foreign manufacturers require customization, so Taiwanese manufacturers occupy a considerable proportion of the global gaming console market. To sum up, the combination of sightseeing and recreation in the gaming business is the future development trend of the world. As long as the service quality and characteristics are established and improved, it will definitely bring economic benefits and value to the country.

B. Industrial computer industry:

==> picture [405 x 232] intentionally omitted <==

Observing the production and sales performance of China's industrial computer manufacturing industry (see the table above), in the third quarter of 2022, it will benefit from the growth in demand for industrial Internet of Things, transportation, smart medical care, and smart finance, as well as the ferment of unblocked business opportunities, entertainment, gaming, etc. Customers’ demand for lottery machines, self-service, smart retail and other related products has increased strongly, and the shortage of parts and components has gradually eased, and the improvement in

shipping time will help drive shipments. However, some manufacturers are indirectly affected by the war between Russia and Ukraine. The shipment performance in the European market, as well as China's adherence to the general policy of "dynamic clearing" in order to control the epidemic. Under the upgrade of epidemic prevention measures and the adjustment of dealers' inventory, the order receiving situation continues to be weak. The overall sales growth is strong. Therefore, in the third quarter of 2022, the sales value of China's domestic industrial computer manufacturing industry will be 14.67 billion, with an annual growth rate of 31.57%.

Entering the fourth quarter of 2022, although customers from the manufacturing, retail, financial and gaming industries are replacing old ones with new ones, digital transformation, etc., the demand for industrial computers has increased, and the shortage of parts and components has eased significantly. Coupled with the injection of new orders, the strength of shipments continues to grow. However, geopolitical risks still exist, inflation and interest rate hikes will affect the global economy, which will further cause some customers to turn conservative in purchasing goods, and the base period in the same period in 2021 will be at a high point. Therefore, it is estimated that in the fourth quarter of 2022, the prosperity of my country's domestic industrial computer manufacturing industry will show a slowdown in growth.

The application fields of industrial computers are diverse, covering industrial control, retail, medical care, gaming, and network communications. In the field of ESG (Environment Social Governance, environmental protection, social responsibility, and corporate governance), countries have successively announced net-zero carbon emission plans. my country The European Union will compulsorily disclose carbon emissions from 2023 to drive all industries towards carbon-neutral and net-zero goals, and the AIoT (Artificial Intelligence Internet of Things) technology of industrial computers must conduct carbon emissions for IoT terminal devices and sensors Collecting and tracking, and implementing data analysis through artificial intelligence will help achieve the goal of carbon reduction and emission reduction, and thus drive manufacturers in this industry to invest in ESG-related fields one after another. To sum up, manufacturers in this industry are actively deploying ESG business opportunities, reducing energy and costs to achieve ESG goals by expanding and promoting ESG solutions, and creating new growth momentum for operations.

C. Aerospace industry:

As the world continues to loosen epidemic prevention policies and border controls in 2022, people around the world will rapidly increase their willingness to travel across borders, prompting a strong recovery in passenger capacity on domestic and international routes in North America, Europe and other regions. According to the International Air Transport Association ( According to statistics from IATA, global air passenger traffic in the first 10 months of 2022 has recovered to 74% of 2019 (before the epidemic), driving demand for new passenger aircraft to pick up. The annual growth rate also reached 35% and 8%, which effectively boosted the order volume of related parts manufacturers in China and injected strong growth momentum into the sales value of this industry. The sales value of this industry from January to October 2022 will reach 260.03 billion, a significant increase of 31.58% over the same period in 2021 (see Table 1 below for details).

==> picture [411 x 194] intentionally omitted <==

Looking at the fourth quarter of 2022, as the demand for civil aircraft continues to rise, it will help OEMs increase production capacity and push up orders for related parts in this industry, which will continue to inject strong sales value into the industry. At the same time, domestic military aircraft and The related maintenance business is also conducive to the increase in the procurement of peripheral parts. Therefore, it is estimated that in the fourth quarter of 2022, the prosperity of my country's aircraft and its parts manufacturing industry will show a pattern of substantial growth.

In addition, with regard to the current status of the low-orbit satellite industry in the aerospace industry, my country's entry into the low-orbit satellite industry is mainly through the existing advantages of the information and communication industry, mainly based on hardware equipment manufacturing. The low-orbit satellite industry can be divided into satellite The main body and the ground equipment are two parts. At present, the regional market of the satellite Internet of Things is still mainly in North America, while the low-orbit satellites are mainly used for communication tasks, and the future market development trend is towards large quantities, miniaturization, light weight, and low-cost deployment.

With the loosening of national epidemic prevention policies and border control, the number of cross-border tourists has gradually recovered. The International Air Transport Association (IATA) predicts that the global passenger capacity will exceed the pre-epidemic level in 2023, which will help the demand for civil aviation aircraft to rise ; Furthermore, in order to implement carbon reduction targets and implement ESG responsibilities, various airlines have driven the demand for replacement of old

aircraft and promoted the willingness of many companies to actively order new aircraft, thus keeping the orders of international OEMs at a high level, resulting in the The order visibility of most manufacturers in the industry is clear.

As for upstream raw materials, although it is estimated that the demand for raw materials such as aluminum metal will maintain a situation of slightly more than the supply in the short term, which will drive the price of raw materials to fluctuate at a high level. Parts manufacturers in this industry have relatively advantages in terms of price negotiation, and are expected to gradually increase their selling prices, which will help transfer operating costs to downstream manufacturers. Therefore, the operating environment of this industry is in a relatively favorable pattern, and it is estimated that in the first half of 2023 The prosperity of my country's aircraft and its parts manufacturing industry will continue to show growth.

In addition, the number of aerospace satellites launched in low and medium orbits has grown rapidly after 2017. After the launch of the SpaceX Starlink project in 2019, there has been a leap-forward growth. According to the sources of NSR and the International Institute of Obstetrics and Sciences of the Industrial Technology Research Institute, in 2022 The global satellite IoT and M2M output value is expected to reach US$1 billion, and it is estimated that it will reach US$2.26 billion in 2030, with a CAGR of about 10.7% in 2022-2030

The relationship between the upper, middle and lower reaches of the industry A. Gaming industry:

In the ecosystem of the gaming industry, operators such as casinos or amusement parks put forward the procurement requirements of gaming machines to the system integrator (SI). However, because the system integrator mainly focuses on software manufacturing, the hardware part of the machine is entrusted to the upstream Mainboard or hardware manufacturers, and finally sold to downstream casino operators by system integrators after combining hardware and software (details below), and Parpro Corporation Company is a manufacturer of gaming machines and related components. It is located upstream of the gaming industry. The upper, middle and lower reaches of the gaming industry are listed below:

==> picture [400 x 231] intentionally omitted <==

B. Industrial computer industry:

Industrial computer products are mainly computer-centric. The upstream component suppliers provide components such as IC, CPU, PCB board, liquid crystal display and casing, and the midstream is industrial control cards, single-board computers, embedded computers and bare-bones products. , domestic industrial computer manufacturers are mostly located in the middle reaches of the industrial chain, while the downstream sales part is to meet the needs of various markets, and because industrial computer products have a high degree of system integration and a wide range of product applications, most industrial computers are sold through system integrators (SI) ) or distributors to develop local potential customers, provide technical support nearby, or sell to relevant academic research institutes for system integration or testing. The correlation between the upper, middle and lower reaches of the industry can be illustrated as follows:

==> picture [419 x 158] intentionally omitted <==

C. Aerospace industry:

The company's main products are aerospace accessory equipment and its components . Its main product, electronic wiring harness, is used in aerospace equipment. It is in the middle reaches of the industrial chain, and its upstream is the raw material industry. It is mainly divided into metal materials, plastic materials, Electroplating materials and copper wire are the four major parts, and the downstream is the application products of various electronic wiring harnesses and integrated assembled products. Its application fields span aerospace, automobile and defense industries and other industries.

==> picture [402 x 179] intentionally omitted <==

Various development trends and competition situations of products A. Gaming industry:

As more casinos (CASINOs) in Genting Casino in Malaysia, South Korea, Singapore and Vietnam in the communist country , and there are currently 140 locations in the world. The above countries are used as one of the important policy tools to develop or revitalize the tourism market and to assist the government in balancing the budget. In addition, the Golden Triangle area bordering Japan, Myanmar, Thailand and Laos (Laos) is also planning and building a modern casino to reap the huge benefits brought by gaming activities. In the future, the Asia-Pacific region is expected to become the largest gaming market in the world . For example, the Singapore government has attracted the Genting Group of Malaysia and the Sands Group of the United States to build the "Resorts World Sentosa" (Resorts World Sentosa) and "Marina Bay Sands" (Marina Bay Sands) has two integrated resorts with casinos; Macau is benefiting from the fact that Chinese VIP customers have leapt to the world's largest casino (CASINO) , and its gaming revenue has already surpassed that of Latin America. Las Vegas is more than six times; In addition to the above, the Philippines and Vietnam are also competing to carve up the Asian market with a number of large casinos. The tourism and gaming industry (casino or gaming industry) is not just about gaming, but also includes tourist hotels, entertainment, tourism, convention and exhibition, shipping, catering, etc. The development of the gaming industry will bring many surrounding business opportunities and create jobs. Chance.

B. Industrial computer industry:

Looking forward to the performance of the industry in the first half of 2023, various regional markets are actively promoting new infrastructure construction, and the visibility of orders in fields such as the Industrial Internet of Things and enterprise digital transformation is clear, which will help drive the shipment of smart application products such as automation, 5G, and AIoT, and solve the problem. Business closure opportunities continue to ferment, which also boosts the shipment performance of lottery machines, self-service, smart retail and other related products, as well as the accelerated production capacity optimization and carbon emission management of various enterprises, which are expected to drive ESG business opportunities, coupled with delays affected by material shortages Orders are shipped one after another, all of which will boost the growth of industrial computer shipments.

However, the world continues to face challenges such as inflation, interest rate hikes, and geopolitical risks. The cooling of the international economy will affect customers' willingness to place orders or adjust orders, thereby depressing the overall growth momentum. To sum up, benefiting from the increase in demand in

most downstream application markets, it will help drive the growth of shipments in this industry, but the cooling of the international economy will cause some customer orders to show signs of slowing down. Therefore, it is estimated that in the first half of 2023, my country's The prosperity of the industrial computer manufacturing industry will show a trend of slowing down.

(3) Aerospace industry:

Looking forward to the first half of 2023, as the global aviation industry has gradually recovered and will continue to grow, it will help increase the demand for civil aviation aircraft and drive manufacturers in this industry to invest in engines and related parts, aircraft fuselages, landing gear and other structural parts. Orders are rising, and although raw material prices are not likely to fall back in the short term, as aircraft-related parts are still in short supply, domestic suppliers are expected to increase product prices and pass on operating costs to downstream manufacturers. Therefore, in the first half of 2023, my country's The prosperity of the aircraft and its parts manufacturing industry can be regarded as the growth trend.

(3) Overview of Technology and R&D
A. Research and development expenses invested in the most recent year up to the date of publication of the annual report

publication of the annual report	publication of the annual report
Unit: NT$thousand
Year Item	2022
A. Research and development costs	7,594
B. Net Operating Income	2,776,680
A/B	0.27%

B. Technologies or products successfully developed in the most recent year and as of the publication date of the annual report

The company attaches great importance to research and development. In addition to investing manpower in Taiwan to be responsible for product research and development, there is also a research and development team in the United States to accelerate the speed of integrated product development and grasp the pulse of the market. So far, the company has launched Intel Bay Trail and Haswell platform and other architecture system platforms, as the application of intelligent systems and aerospace peripheral products, and also launched new versions of thin and light intelligent Single Stand and Extend Stand and other system products, which shows that the company has invested in key Efforts in the development of innovative components, and the strength of new product research and development.

controls the progress of research and development by project, and always pays attention to the development of science and technology, product trends, the situation of competitors in the same industry, changes in the supply and demand of the sales market and material supply market, etc. Factors that may affect the success of research and development , to ensure that the R&D plans can meet market demands and be completed on schedule.

(4) Long-term and short-term business development plans

Since its establishment, the company has focused on the excellent quality and stability of products, and actively contacted customers and the market. With the expansion of customers and the growth of the market, the company has successfully laid the foundation for product quality and company image in customer evaluations. Gradually occupy a place in the market . In response to industry development trends and domestic and foreign market competition, we hope to enrich the company's strength and enhance overall production capacity and competitiveness through the practice of the following long-term and short-term development plans.

Short-term business development plan
Fully understand customer needs and market information, and actively communicate product specifications and quality requirements with customers to improve the consistency of production in the factory to improve quality stability.
Provide customers with convenient and fast services, consolidate existing customer relationships, and actively start the development of new customers, and continue to expand sales and market share.
Actively maintain a good partnership with upstream and downstream manufacturers, so that the cooperative manufacturers can fully cooperate, the product cost is more competitive, and the sales network is more smooth.
Deeply cultivate the three major fields of gaming, industrial computers, aerospace and national defense , and diversify the risk of concentrating on a single industry.
Strengthen the research and development of key components and new product lines, such as high-speed spindle, high-speed feed and other products.
Strengthen inventory and accounts receivable management, reduce capital demand, and reduce capital costs.
Long-term business development plan
Actively set up other overseas bases to improve the timeliness and quality of after-sales service and the functions of real-time technical support. Actively establish distributor channels for undeveloped countries or regions.
Cultivate international marketing talents and fully grasp international market information to achieve the goal of internationalization.
Utilizing the funds in the capital market allows the company to have more sufficient resources for the company's financial and capital use in the face of market competition, so as to obtain the company's continuous growth.

Through acquisitions or strategic alliances, go deep into the upstream and downstream supply chains, and actively seek a vertical integration model to effectively develop new products and new business areas.
Strengthen the research and development of key components and new product lines.
Develop the Taiwan head office to be upgraded to a research and development, manufacturing and financial control center. In addition, it can quickly grasp market information, new product design and technology, and market strategy information in response to the changing environment of the global economy. This management model can Pave the way for future multinational enterprise management.
Market and Production and Sales Overview

(1) Market analysis

Sales (supply) regions of main products (services)

	Unit: NT$thousand	Unit: NT$thousand
Year Sales regions	2022
	Sales	Ratio(%)
Domestic sales	455	0.02
Asia	5,298	0.19
Europe	45,813	1.65
America	2,725,114	98.14
Total	2,776,680	100.00

2. Market share

The gaming, industrial computer and aerospace products of the company and its subsidiaries are industries with a small amount of variety and a high degree of customization. The R&D team gradually obtains and maintains the trust relationship of major customers, and continuously introduces new products and develops new markets, upholds innovative technology, improves customer satisfaction, and expects to become a world-class leader in its industry field. However, because there is no statistical data from institutions with credibility in China for reference, it is impossible to clearly know the market share of the company. However, the industry prospects of the three fields in the future are promising, so it is expected that the company and its subsidiaries will continue to improve Market position in the industry.

The future supply and demand situation and growth of the market
(1) Gaming Industry

to reap the huge benefits brought by gaming activities. In the future, the Asia-Pacific region is expected to become the largest gaming market in the world . For example, the Singapore government has attracted the Genting Group of Malaysia and the Sands Group of the United States to build the "Resorts World Sentosa" (Resorts World Sentosa) and "Marina Bay Sands" (Marina Bay Sands) are two integrated resorts with casinos; Macau is benefiting from the fact that Chinese VIP customers have jumped to the world's largest casino (CASINO) . In addition to the above, the Philippines and Vietnam Many large casinos are also competing to carve up the Asian market; and the Japanese government has passed the "Comprehensive Resort Development Law" including the construction of casinos. Japan can set up casinos in up to 3 integrated resorts in Japan, including Osaka, Tokyo, and Yokohama. Local governments are eager to try. It is expected that the first casino will be opened before 2025 at the earliest. They also hope that by setting up casinos to increase revenue, it will be used for the operation of large-scale international conference venues and theaters to boost the growth strategy of the Japanese economy. , in order to attract more foreign tourists visiting Japan. The tourism and gaming industry (casino or gaming industry) is not just about gaming, but also includes tourist hotels, entertainment, tourism, convention and exhibition, shipping, catering, etc. The development of the gaming industry will bring many surrounding business opportunities and create jobs. Chance.

(2) Industrial computer industry

Observing the operating situation of major manufacturers in this industry in 2022, benefiting from the increase in demand for industrial computers , the injection of new orders and the alleviation of the shortage of parts and components , the industry is actively digesting the orders in hand, coupled with foreign exchange benefits and other non-industry contributions, resulting in the revenue of most manufacturers And profits show a growth trend. Although some customers have become more conservative in purchasing goods, and the increase in the base period and the Russia-Ukraine war have indirectly affected the shipment performance in the European market, but the demand for factory automation, smart retail, self-service, gaming or infrastructure-related fields has increased, which still drives up the cost. The consolidated revenue of major manufacturers in the industry is generally showing a growth trend , which shows that Chinese manufacturers in this industry continue to optimize their production lines in Taiwan, and they are optimistic about the future growth of industrial computers .

(3) Aerospace industry

In 2021 , due to the impact of the epidemic, the international civil aviation business has not yet fully recovered its momentum. However, due to the steady demand for military orders such as "national aircraft and national manufacturing" in China, and the strong rebound in global trade volume in the post-epidemic period, the demand

for conversion of passenger aircraft to cargo aircraft has increased significantly. At the same time, major international machine manufacturers are optimistic about the future of aviation and gradually increase their production capacity, which is conducive to the recovery of orders from related suppliers in this industry, which will promote the prosperity of China's aircraft and its parts manufacturing industry in 2021 compared with 2020. (see details Table 1 below) In addition, in 2022 , border controls around the world will become increasingly loose, which will drive people's willingness to travel internationally, and the recovery of passenger load on North American and European routes will be the strongest, prompting international OEMs and Tier-1 parts manufacturers to increase their interest in this industry The rapid increase in the strength of the goods, coupled with the fact that domestic higher education aircraft have entered the mass production stage, and the demand for military aircraft is stable, will make the prosperity of China's aircraft and its parts manufacturing industry show a growth trend in 2022 .

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Competitive Niche
Industry business opportunities continue to be optimistic.
The market positioning is clear and the product line is complete.
Planned and flexible production to grasp market opportunities.
With strong research and development capabilities, the products have been repeatedly recognized.
Flexible, fast and stable quality customized technology.
Professional marketing, R&D, and manufacturing teams.
With "process design and innovation, manufacturing and pragmatism, service and quality first", we will stick to our commitments to customers, suppliers, employees, shareholders and all stakeholders.
Favorable and unfavorable factors and countermeasures for development prospects
(1) Favorable factors:

A. Targeting a niche product market
B. Fast delivery and stable quality
C. Have a well-organized excellent R&D, marketing and manufacturing team
D. Capacity utilization is flexible and efficient , and has a small amount of diverse mass production capacity
E. Diversified product management, reducing operational risks
F. Tailor-made customer service, attach importance to customer commitments and establish a good cooperative relationship
(2) Unfavorable factors:
A. Customized production is characterized by a small amount of variety. The production scale of a single product cannot be compared with a large number of standardized products. The production cost and parts procurement cost will be relatively high.

Countermeasures:

Tailor-made high-value-added application products with market advantages for customers, and provide technical solutions to expand the differences with market standard products and avoid the vicious circle of low-cost competition in the same industry. In addition , through strategic procurement, the cost and inventory of key components are controlled.

B. The scale of competitors in the same industry is getting bigger and bigger, and there is a tendency to combine or strategic alliance with international manufacturers to seize the market.

Countermeasures:

To strengthen cooperation with customers, in addition to being committed to improving yields and shortening delivery times to meet customer requirements, we also look forward to strategic alliances and cooperation with international major manufacturers to strengthen our company's competitiveness.

(2) Important uses and production processes of main products
Important uses of main products

mportant uses of	main products
Main product	Important purpose
Gaming machine	It is widely used in the manufacture of complete machines and parts of international first-line gaming machines (mainly slot machines), including single-board boards, barebone systems,machines,andplayer trackingsystems.
Industrial computer	Including the manufacture of various industrial computer motherboards, the products are widely used in security control , testing , transportation and other industrial purposes, with the characteristics of high stability and strongenvironmental endurance.
Aerospace related products	Including the manufacture and sales of components for communication, control, and signal transmission harnesses in the aerospace industry.

Production process

A. Gaming and industrial computer

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SMT
目檢
DIP
Touch Up
OK
OK
組裝
燒機 Burn-In
NG
OK
測試 Testing
維修
NG OK
維修
成品檢驗
入庫
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B. Aerospace and Defense Industry

(a)Electrical

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(c)Metals
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(3) Supply status of main raw materials

The company's current supply of main raw materials is as follows:

raw material	source of supply	Availability
SSD & DDR	APACER	Stable supply
IC	AVNET,ARROW	Stable supply
VIDEO CARD	AVNET	Stable supply
POWER SUPPLY	FSP	Stable supply

(4) List of major purchase and sales customers in the last two years

Names of customers who accounted for more than 10% of the total purchase (sales) in any of the most recent two years, their purchase (sales) amount and proportion, and reasons for their increase or decrease:

(1) Major purchasers:

Company A is one of the main purchasers of the company. The increase in its purchase amount in 2022 was mainly due to the fact that the new crown epidemic has gradually slowed down and the global market has gradually unblocked, which has driven the increase in demand for our company's product shipments.

Unit: NT$ thousand

							Unit: NT$thousand	Unit: NT$thousand
Item			2021				2022
	Name	Amount	Accounted for the whole year	Relationship with Issuer	name	the amount	Accounted for the whole year	Relationship with Issuer
			Net sales ratio (%)				Net sales ratio (%)
1	Company I	47,807	3.44	-	Company I	185,323	10.04	None
Other	Other	1,340,434	96.56	-	other	1,659,872	89.96	-
	Net Purchase	1,388,241	100	-	Net Purchase	1,845,195	100	-

(2) Main sales customers:

In 2 years, these 3 customers were all listed as the top 3 customers of the company, and they have been one of the main cooperative customers of the company for many years. In 2022, due to the unblocking of the epidemic, the shortage of raw materials eased, and the recovery of industrial demand led to a steady increase in sales .

Unit: NT$ thousand

							Unit: NT$thousand	Unit: NT$thousand
project			2021				2022
	Name	Amount	Accounted for the whole year	Relationship with Issuer	name	the amount	Accounted for the whole year Net sales ratio(%)	Relationship with Issuer
			Net sales ratio (%)
1	Company A	420,278	20.03	None	Company A	708,026	25.50	None

2	Company D	339,095	16.16	None	Company D	348,575	12.55	None
3	Company P	288,473	13.75	None	Company P	299,284	10.78	None
Other	Other	1,050,102	50.06	-	Other	1,420,795	51.17	-
	Net sales	2,097,948	100	-	Net sales	2,776,680	100	-

(5) Production value in the last two years

Numerical unit: NT$ thousand Quantity unit: thousand units; thousand PCS; thousand pieces

Year Production value Major Products	2021	2021	2022	2022
	Output	Output value	Output	Output value
Gaming and Industrial Computers	919	445,469	3,316	885,950
Aerospace and Defense Industry	776	1,663,221	6,364	2,260,371
Total	1,695	2,108,690	9,680	3,146,321

(6) Sales value in the last two years

Numerical unit: NT$ thousand Quantity unit: thousand units; thousand PCS; thousand pieces

					Numerical unit: NT$ thousand Quantity unit: thousand units; thousand PCS;thousandpieces	Numerical unit: NT$ thousand Quantity unit: thousand units; thousand PCS;thousandpieces	Numerical unit: NT$ thousand Quantity unit: thousand units; thousand PCS;thousandpieces	Numerical unit: NT$ thousand Quantity unit: thousand units; thousand PCS;thousandpieces
Year Major Products	2021				2022
	Domestic sales		Export		Domestic sales		Export
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
Gaming and Industrial Computers	0	0	249	466,567	0	0	377	841,118
Aerospace and Defense Industry	0	0	747	1,631,381	0	455	6,322	1,935,107
Total	0	0	996	2,097,948	0	455	6,699	2,776,225

The number of employees employed in the last two years and as of the date of publication of the annual report, the average length of service, average age, and educational background distribution ratio

				Unit: person; %
Item	Year	2021	2022	As of March31,2023
Employee numbers (people)	Direct employees	423	449	454
	Indirect employee	240	281	285
	R & D personnel	6	1	1
	total	669	731	740
Average age( years old)		41	40	40
Average years of service (years)		9	8	6
Educational distribution ratio (%)	Doctor	0	0	0
	Master	0	1	1
	College	13	15	15
	Highschool	42	40	41
	Below high school	45	44	43
	Total	100	100	100

Environmental protection expenditure information

In the most recent year and up to the date of publication of the annual report, the losses suffered due to environmental pollution (including compensation and environmental protection audit results in violation of environmental protection laws and regulations, the date of punishment, the name of the punishment, the violation of laws and regulations, the content of violations of laws and regulations, and the content of punishment should be listed), And disclose the estimated amount and countermeasures that may occur at present and in the future. If it cannot be reasonably estimated, the fact that it cannot be reasonably estimated should be explained: None.

5. Labor relations

A.List the company's various employee welfare measures, advanced education, training, and retirement systems and their implementation, as well as the agreement between labor and management and the protection measures for employees' rights and interests:
(1) Procrastination and implementation of employee welfare measures:

In order to improve employee welfare, the company has established an employee

welfare committee according to law to allocate welfare funds on a regular basis. At present, the main points of the company's welfare measures are as follows:

(a) The company's statutory welfare measures:

National health insurance, labor insurance, allocation of labor retirement reserves, contribution of labor pensions, etc.

(b) The company specifically provides:

Allocate and allocate employee remuneration, share subscription when capital increase, annual festival and performance bonus, employee education and training plan , and regular health checkup in accordance with the company's articles of association every year.

Gift money for three festivals, birthday gift money, wedding and funeral celebration subsidy, injury and sickness condolences, regular employee travel activities and other various activities, etc.

(2) Further study, training and implementation :

The company has formulated the "Education and Training Procedures" as the basis for planning employee development and implementing training operations. In order to enable all employees of the company to understand the company's history, goals and missions, and to be familiar with the working environment and related rules and regulations, the company provides pre-employment training for new employees; Professional training is implemented for personnel, so that all employees can have the ability to perform various tasks. In addition, in order to continuously improve the performance and professional ability of employees, in addition to formulating annual education and training plans and implementing internal training according to the company's development goals, each department also sends employees to participate in external training related to business, so that experience and knowledge can be passed on. And absorb the latest information in time .

(3) Employee retirement system and its implementation:

In order to improve the security of workers' retirement life and strengthen the relationship between labor and employment, the company implements pension allocation according to law.

(a) Applicable to old employees:

The company's retirement system is handled in accordance with the relevant provisions of the Labor Standards Act, and the retirement funds are deposited in the Bank of Taiwan on a monthly basis according to the law, and the Labor Retirement Reserve Supervision Committee is responsible for the management and use of the retirement reserve. In 2016 , through the labor agreement, the company chose to settle the working years before the labor pension regulations were applied to the employees, and settled the labor retirement reserve account.

80-
(b) Applicable to new employees:

The Labor Pension Regulations came into effect on July 1, 2005, and adopted a definite appropriation system. After the implementation, employees can choose to apply the pension provisions related to the "Labor Standards Act", or apply the pension system of the Act and retain the working years before the Act. For employees to whom this regulation applies, the company's monthly contribution to employee pensions shall not be lower than 6% of the employee's monthly salary.

(4) Protection measures for working environment and personal safety of employees :
(a) Through regular maintenance and overhaul, ensure the safety and sanitation of the company's various facilities and equipment, so as to protect the health and safety of employees.
(b) In order to improve the efficiency of safety and health management and to be in line with international standards, the company continues to promote the introduction of occupational safety and health management in overseas production bases, with systematic management and continuous improvement to prevent work-related injuries and create a high-quality safety and health environment.
(5) The agreement between labor and management and various measures to protect the rights and interests of employees:

The company has safeguarded the legitimate rights and interests of workers in accordance with the Labor Standards Act and other relevant laws and regulations. In order to create a harmonious labor-management relationship, the company holds regular labor-management meetings and provides channels for employees to complain, so that the channels for employees to complain are smooth. Since its establishment, the company has a harmonious labor-management relationship, and there have been no disputes in recent years .

The company has established comprehensive welfare measures and various management measures, which clearly stipulate the rights and obligations of employees and welfare items, and regularly review the content of welfare to protect the rights and interests of employees.

B. List the losses suffered due to labor disputes in the most recent year and up to the date of publication of the annual report (including labor inspection results that violate the Labor Standards Act, and the date of punishment, the name of the punishment, the violation of laws and regulations, the content of violations of laws and regulations, and the content of punishment should be listed), And disclose the estimated amount and countermeasures that may occur at present and in the future. If it cannot be reasonably estimated, the fact that it cannot be reasonably estimated should be explained:

Since the establishment of the company, the relationship between labor and capital

has been harmonious, and no loss has occurred due to labor disputes. It is estimated that the possibility of losses due to labor disputes in the future is extremely low.

Information security management
(1) Describe the information security risk management framework, information security policies, specific management plans, and resources invested in information security management, etc.:
1. Information Communication Security Risk Management Framework

In the future, the company will establish a dedicated information security unit in accordance with the information security risk management framework, set up information security supervisors and specialists, regularly review information security policies and implementation, and regularly report to the board of directors.

Information Security Policy

Establish a safe and normal operating environment to ensure the company's computer data, system equipment and network security to ensure the company's sustainable business operations, including the company's personnel safety management and education and training, computer equipment safety management, data security management , Network security management, network access security control, system and network intrusion processing, physical environment security management and other work items.

Specific management plan
(1) Network security : set up an enterprise-level firewall with strict control rules and apply a network behavior management mechanism to monitor abnormal network behavior.
(2) Device security : Computer devices are equipped with anti-virus and endpoint protection software, which is the last layer of protection for network terminals.
(3) Data security : There is an account and password management mechanism, and special access rights are set up according to business duties to control data access.
(4) System security : important information systems are built with high availability and backup backup mechanisms to ensure the continuous operation of the company's business.
(5) E-mail security : Import a comprehensive e-mail filtering mechanism to actively defend against various phishing and malicious threat e-mails.
Invest resources in information security management

Regularly inspect the overall information system security and submit an inspection report ( completed on October 20, 2022) .

Inspection of computers and software for personal use (executed on October 2022 to December 2022) .

Annual information security education and training ( December 23 , 2022 ) .

(2) List the losses suffered due to major information security incidents in the most recent year and as of the date of publication of the annual report, the possible impacts and countermeasures. If it cannot be reasonably estimated, the fact that it cannot be reasonably estimated should be stated: None.

7. Important contracts:

Contract nature	Parties	Contract Term	Main content	Limit terms
Medium term loan	Shanghai Bank	2021/09/03~2024/09/03	medium-term unsecured loan	None
Medium term loan	Banxin Bank	2022/09/28~2025/09/28	medium-term unsecured loan	None
Lease	Liu Shihui/You Xianjin/Ye Fengqin	2022/07/10~2023/07/09	office lease	None
Lease	Proyectos y Construcciones Musa SA de CV	2018/06/14~2029/12/13	Tijuana Factory	None
Lease	BKM Pacific North LLC	2019/01/01-2024/03/31	Nevada Factory	None
Lease	2722 S. FAIRVIEW PROPERTIES, LLC	2021/11/01~2028/10/30	Santa Ana Factory	None
Lease	PACIFIC SOTHEBY'S INTERNATIONAL REALTY	2022/03/15~2025/12/31	San Diego Office	None

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VI. Financial overview
Financial information for the last five years
(1) Condensed balance sheet and comprehensive income statement for the last five years
- A. Condensed un-consolidated balance sheet

Unit: NT$thousand Year Item 2018 2019 2020 2021 2022 Current assets 675,419 589,179 419,746 259,704 387,396 Financial assets at fair value through other comprehensive income - - - - 10,160 Investments using the equitymethod 2,175,387 2,233,392 2,080,806 2,098,268 2,328,589 Property, plant and equipment 247,585 31,211 32,599 23,585 16,309 Intangible assets 556 - - - - Other assets 57,285 14,228 14,666 7,502 3,671 Totalassets 3,156,232 2,868,010 2,547,817 2,389,059 2,746,125 Current liabilities before allocation 1,476,489 725,644 780,423 1,128,622 758,557 after allocation 1,677,348 890,097 821,536 1,169,737 Note 2 Non-current liabilities 247,263 523,567 558,466 47,395 513,389 Total liabilities before allocation 1,723,752 1,249,211 1,338,889 1,176,017 1,271,946 after allocation 1,924,611 1,413,664 1,380,002 1,217,132 Note 2 Attributable to the parent company Owner's rights 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 Share capital 821,875 834,516 834,516 834,544 833,544 Capital reserve before allocation 303,623 369,961 351,925 310,881 329,808 after allocation 303,623 369,961 310,812 302,658 329,808 Retained earnings before allocation 408,533 522,583 197,426 303,400 373,012 after allocation 207,674 358,130 197,426 270,508 Note 2 Other interests (29,610) (76,537) (143,215) (204,059) (33,051) Treasurystock (71,941) (31,724) (31,724) (31,724) (29,134) Non-controllinginterest - - - - - Shareholders' equity total amount before allocation 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 after allocation 1,231,621 1,454,346 1,167,815 1,171,927 Note 2	Unit: NT$thousand Year Item 2018 2019 2020 2021 2022 Current assets 675,419 589,179 419,746 259,704 387,396 Financial assets at fair value through other comprehensive income - - - - 10,160 Investments using the equitymethod 2,175,387 2,233,392 2,080,806 2,098,268 2,328,589 Property, plant and equipment 247,585 31,211 32,599 23,585 16,309 Intangible assets 556 - - - - Other assets 57,285 14,228 14,666 7,502 3,671 Totalassets 3,156,232 2,868,010 2,547,817 2,389,059 2,746,125 Current liabilities before allocation 1,476,489 725,644 780,423 1,128,622 758,557 after allocation 1,677,348 890,097 821,536 1,169,737 Note 2 Non-current liabilities 247,263 523,567 558,466 47,395 513,389 Total liabilities before allocation 1,723,752 1,249,211 1,338,889 1,176,017 1,271,946 after allocation 1,924,611 1,413,664 1,380,002 1,217,132 Note 2 Attributable to the parent company Owner's rights 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 Share capital 821,875 834,516 834,516 834,544 833,544 Capital reserve before allocation 303,623 369,961 351,925 310,881 329,808 after allocation 303,623 369,961 310,812 302,658 329,808 Retained earnings before allocation 408,533 522,583 197,426 303,400 373,012 after allocation 207,674 358,130 197,426 270,508 Note 2 Other interests (29,610) (76,537) (143,215) (204,059) (33,051) Treasurystock (71,941) (31,724) (31,724) (31,724) (29,134) Non-controllinginterest - - - - - Shareholders' equity total amount before allocation 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 after allocation 1,231,621 1,454,346 1,167,815 1,171,927 Note 2	Unit: NT$thousand Year Item 2018 2019 2020 2021 2022 Current assets 675,419 589,179 419,746 259,704 387,396 Financial assets at fair value through other comprehensive income - - - - 10,160 Investments using the equitymethod 2,175,387 2,233,392 2,080,806 2,098,268 2,328,589 Property, plant and equipment 247,585 31,211 32,599 23,585 16,309 Intangible assets 556 - - - - Other assets 57,285 14,228 14,666 7,502 3,671 Totalassets 3,156,232 2,868,010 2,547,817 2,389,059 2,746,125 Current liabilities before allocation 1,476,489 725,644 780,423 1,128,622 758,557 after allocation 1,677,348 890,097 821,536 1,169,737 Note 2 Non-current liabilities 247,263 523,567 558,466 47,395 513,389 Total liabilities before allocation 1,723,752 1,249,211 1,338,889 1,176,017 1,271,946 after allocation 1,924,611 1,413,664 1,380,002 1,217,132 Note 2 Attributable to the parent company Owner's rights 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 Share capital 821,875 834,516 834,516 834,544 833,544 Capital reserve before allocation 303,623 369,961 351,925 310,881 329,808 after allocation 303,623 369,961 310,812 302,658 329,808 Retained earnings before allocation 408,533 522,583 197,426 303,400 373,012 after allocation 207,674 358,130 197,426 270,508 Note 2 Other interests (29,610) (76,537) (143,215) (204,059) (33,051) Treasurystock (71,941) (31,724) (31,724) (31,724) (29,134) Non-controllinginterest - - - - - Shareholders' equity total amount before allocation 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 after allocation 1,231,621 1,454,346 1,167,815 1,171,927 Note 2	Unit: NT$thousand Year Item 2018 2019 2020 2021 2022 Current assets 675,419 589,179 419,746 259,704 387,396 Financial assets at fair value through other comprehensive income - - - - 10,160 Investments using the equitymethod 2,175,387 2,233,392 2,080,806 2,098,268 2,328,589 Property, plant and equipment 247,585 31,211 32,599 23,585 16,309 Intangible assets 556 - - - - Other assets 57,285 14,228 14,666 7,502 3,671 Totalassets 3,156,232 2,868,010 2,547,817 2,389,059 2,746,125 Current liabilities before allocation 1,476,489 725,644 780,423 1,128,622 758,557 after allocation 1,677,348 890,097 821,536 1,169,737 Note 2 Non-current liabilities 247,263 523,567 558,466 47,395 513,389 Total liabilities before allocation 1,723,752 1,249,211 1,338,889 1,176,017 1,271,946 after allocation 1,924,611 1,413,664 1,380,002 1,217,132 Note 2 Attributable to the parent company Owner's rights 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 Share capital 821,875 834,516 834,516 834,544 833,544 Capital reserve before allocation 303,623 369,961 351,925 310,881 329,808 after allocation 303,623 369,961 310,812 302,658 329,808 Retained earnings before allocation 408,533 522,583 197,426 303,400 373,012 after allocation 207,674 358,130 197,426 270,508 Note 2 Other interests (29,610) (76,537) (143,215) (204,059) (33,051) Treasurystock (71,941) (31,724) (31,724) (31,724) (29,134) Non-controllinginterest - - - - - Shareholders' equity total amount before allocation 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 after allocation 1,231,621 1,454,346 1,167,815 1,171,927 Note 2	Unit: NT$thousand Year Item 2018 2019 2020 2021 2022 Current assets 675,419 589,179 419,746 259,704 387,396 Financial assets at fair value through other comprehensive income - - - - 10,160 Investments using the equitymethod 2,175,387 2,233,392 2,080,806 2,098,268 2,328,589 Property, plant and equipment 247,585 31,211 32,599 23,585 16,309 Intangible assets 556 - - - - Other assets 57,285 14,228 14,666 7,502 3,671 Totalassets 3,156,232 2,868,010 2,547,817 2,389,059 2,746,125 Current liabilities before allocation 1,476,489 725,644 780,423 1,128,622 758,557 after allocation 1,677,348 890,097 821,536 1,169,737 Note 2 Non-current liabilities 247,263 523,567 558,466 47,395 513,389 Total liabilities before allocation 1,723,752 1,249,211 1,338,889 1,176,017 1,271,946 after allocation 1,924,611 1,413,664 1,380,002 1,217,132 Note 2 Attributable to the parent company Owner's rights 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 Share capital 821,875 834,516 834,516 834,544 833,544 Capital reserve before allocation 303,623 369,961 351,925 310,881 329,808 after allocation 303,623 369,961 310,812 302,658 329,808 Retained earnings before allocation 408,533 522,583 197,426 303,400 373,012 after allocation 207,674 358,130 197,426 270,508 Note 2 Other interests (29,610) (76,537) (143,215) (204,059) (33,051) Treasurystock (71,941) (31,724) (31,724) (31,724) (29,134) Non-controllinginterest - - - - - Shareholders' equity total amount before allocation 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 after allocation 1,231,621 1,454,346 1,167,815 1,171,927 Note 2	Unit: NT$thousand Year Item 2018 2019 2020 2021 2022 Current assets 675,419 589,179 419,746 259,704 387,396 Financial assets at fair value through other comprehensive income - - - - 10,160 Investments using the equitymethod 2,175,387 2,233,392 2,080,806 2,098,268 2,328,589 Property, plant and equipment 247,585 31,211 32,599 23,585 16,309 Intangible assets 556 - - - - Other assets 57,285 14,228 14,666 7,502 3,671 Totalassets 3,156,232 2,868,010 2,547,817 2,389,059 2,746,125 Current liabilities before allocation 1,476,489 725,644 780,423 1,128,622 758,557 after allocation 1,677,348 890,097 821,536 1,169,737 Note 2 Non-current liabilities 247,263 523,567 558,466 47,395 513,389 Total liabilities before allocation 1,723,752 1,249,211 1,338,889 1,176,017 1,271,946 after allocation 1,924,611 1,413,664 1,380,002 1,217,132 Note 2 Attributable to the parent company Owner's rights 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 Share capital 821,875 834,516 834,516 834,544 833,544 Capital reserve before allocation 303,623 369,961 351,925 310,881 329,808 after allocation 303,623 369,961 310,812 302,658 329,808 Retained earnings before allocation 408,533 522,583 197,426 303,400 373,012 after allocation 207,674 358,130 197,426 270,508 Note 2 Other interests (29,610) (76,537) (143,215) (204,059) (33,051) Treasurystock (71,941) (31,724) (31,724) (31,724) (29,134) Non-controllinginterest - - - - - Shareholders' equity total amount before allocation 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 after allocation 1,231,621 1,454,346 1,167,815 1,171,927 Note 2	Unit: NT$thousand Year Item 2018 2019 2020 2021 2022 Current assets 675,419 589,179 419,746 259,704 387,396 Financial assets at fair value through other comprehensive income - - - - 10,160 Investments using the equitymethod 2,175,387 2,233,392 2,080,806 2,098,268 2,328,589 Property, plant and equipment 247,585 31,211 32,599 23,585 16,309 Intangible assets 556 - - - - Other assets 57,285 14,228 14,666 7,502 3,671 Totalassets 3,156,232 2,868,010 2,547,817 2,389,059 2,746,125 Current liabilities before allocation 1,476,489 725,644 780,423 1,128,622 758,557 after allocation 1,677,348 890,097 821,536 1,169,737 Note 2 Non-current liabilities 247,263 523,567 558,466 47,395 513,389 Total liabilities before allocation 1,723,752 1,249,211 1,338,889 1,176,017 1,271,946 after allocation 1,924,611 1,413,664 1,380,002 1,217,132 Note 2 Attributable to the parent company Owner's rights 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 Share capital 821,875 834,516 834,516 834,544 833,544 Capital reserve before allocation 303,623 369,961 351,925 310,881 329,808 after allocation 303,623 369,961 310,812 302,658 329,808 Retained earnings before allocation 408,533 522,583 197,426 303,400 373,012 after allocation 207,674 358,130 197,426 270,508 Note 2 Other interests (29,610) (76,537) (143,215) (204,059) (33,051) Treasurystock (71,941) (31,724) (31,724) (31,724) (29,134) Non-controllinginterest - - - - - Shareholders' equity total amount before allocation 1,432,480 1,618,799 1,208,928 1,213,042 1,474,179 after allocation 1,231,621 1,454,346 1,167,815 1,171,927 Note 2
Year Item		2018	2019	2020	2021	2022
Current assets		675,419	589,179	419,746	259,704	387,396
Financial assets at fair value through other comprehensive income		-	-	-	-	10,160
Investments using the equitymethod		2,175,387	2,233,392	2,080,806	2,098,268	2,328,589
Property, plant and equipment		247,585	31,211	32,599	23,585	16,309
Intangible assets		556	-	-	-	-
Other assets		57,285	14,228	14,666	7,502	3,671
Totalassets		3,156,232	2,868,010	2,547,817	2,389,059	2,746,125
Current liabilities	before allocation	1,476,489	725,644	780,423	1,128,622	758,557
	after allocation	1,677,348	890,097	821,536	1,169,737	Note 2
Non-current liabilities		247,263	523,567	558,466	47,395	513,389
Total liabilities	before allocation	1,723,752	1,249,211	1,338,889	1,176,017	1,271,946
	after allocation	1,924,611	1,413,664	1,380,002	1,217,132	Note 2
Attributable to the parent company Owner's rights		1,432,480	1,618,799	1,208,928	1,213,042	1,474,179
Share capital		821,875	834,516	834,516	834,544	833,544
Capital reserve	before allocation	303,623	369,961	351,925	310,881	329,808
	after allocation	303,623	369,961	310,812	302,658	329,808
Retained earnings	before allocation	408,533	522,583	197,426	303,400	373,012
	after allocation	207,674	358,130	197,426	270,508	Note 2
Other interests		(29,610)	(76,537)	(143,215)	(204,059)	(33,051)
Treasurystock		(71,941)	(31,724)	(31,724)	(31,724)	(29,134)
Non-controllinginterest		-	-	-	-	-
Shareholders' equity total amount	before allocation	1,432,480	1,618,799	1,208,928	1,213,042	1,474,179
	after allocation	1,231,621	1,454,346	1,167,815	1,171,927	Note 2

Note 1: Reviewed/audited by independent auditors. Note 2 : As soon as the earnings distribution proposal is passed by the resolution of the 2023 Annual General Meeting of Shareholders.

B. Condensed consolidated balance sheet

B. Condensed consolidated balance sheet	B. Condensed consolidated balance sheet	B. Condensed consolidated balance sheet	B. Condensed consolidated balance sheet	B. Condensed consolidated balance sheet	B. Condensed consolidated balance sheet	B. Condensed consolidated balance sheet
Unit: NT$thousand
Year Item		2018	2019	2020	2021	2022
Current assets		6,245,671	5,339,949	1,602,851	1,526,637	1,999,206
Financial assets at fair value through other comprehensive income		-	-	-	-	10,160
Investments using the equitymethod		8,561	8,975	562,449	552,882	594,576
Property, plant and equipment		1,886,230	1,775,379	179,967	177,594	154,899
Intangible assets		662,110	619,745	522,010	497,282	540,550
Other assets		274,733	489,190	171,323	247,575	231,339
Total assets		9,077,305	8,233,238	3,038,600	3,001,970	3,530,730
Current liabilities	before allocation	4,472,521	3,362,896	1,153,258	1,523,616	1,357,307
	after allocation	4,673,380	3,527,349	1,194,371	1,564,731	Note 2
Non-current liabilities		739,629	1,023,352	676,414	265,312	699,244
Total liabilities	before allocation	5,212,150	4,386,248	1,829,672	1,788,928	2,056,551
	after allocation	5,413,009	4,550,701	1,870,785	1,830,043	Note 2
Attributable to the parent company Owner's rights		1,432,480	1,618,799	1,208,928	1,213,042	1,474,179
Share capital		821,875	834,516	834,516	834,544	833,544
Capital reserve	before allocation	303,623	369,961	351,925	310,881	329,808
	after allocation	303,623	369,961	310,812	302,658	329,808
Retained earnings	before allocation	408,533	522,583	197,426	303,400	373,012
	after allocation	207,674	358,130	197,426	270,508	Note 2
Other interests		(29,610)	(76,537)	(143,215)	(204,059)	(33,051)
Treasurystock		(71,941)	(31,724)	(31,724)	(31,724)	(29,134)
non-controlling interest		2,432,675	2,228,191	-	-	-
Sharehold ers' equity total amount	before allocation	3,865,155	3,846,990	1,208,928	1,213,042	1,474,179
	after allocation	3,664,296	3,682,537	1,167,815	1,171,927	Note 2

Note 1: Reviewed/audited by independent auditors. Note 2: As soon as the earnings distribution proposal is passed by the resolution of 2023 Annual General Meeting of Shareholders.

(3) Condensed un-consolidated comprehensive income statement

(3) Condensed un-consolidated comprehensive income statement	(3) Condensed un-consolidated comprehensive income statement	(3) Condensed un-consolidated comprehensive income statement	(3) Condensed un-consolidated comprehensive income statement	(3) Condensed un-consolidated comprehensive income statement	(3) Condensed un-consolidated comprehensive income statement
Unit: NT$ thousand
Year Item	2018	2019	2020	2021	2022
Operating income	904,330	943,270	360,033	208,730	82,345
Operating profit	120,602	123,306	30,085	7,491	(244)
Operating ( loss ) gain	14,751	13,195	(29,385)	(39,786)	(61,430)
Non-operating income and expenses	228,554	331,147	(112,599)	147,843	164,249
(Loss) before tax	243,305	344,342	(141,984)	108,057	102,819
Continuing business unit Net (loss) profit for the period	245,215	326,325	(146,141)	106,306	99,513
Loss of closed units	-	-	-	-	-
Net (loss) profit for the period	245,215	326,325	(146,141)	106,306	99,513
Other comprehensive profit and loss for the period	42,341	(46,645)	(78,214)	(61,176)	173,999
Total comprehensive profit and loss for the period	287,556	279,680	(224,355)	45,130	273,512
Net profit (loss) attributable to parent companyowner	287,556	279,680	(224,355)	45,130	273,512
Net profit (loss) attributable to non-controlling interests	-	-	-	-	-
The total comprehensive profit and loss is attributable to the owner of the parent company	287,556	279,680	(224,355)	45,130	273,512
Total comprehensive profit or loss attributable to non-controlling interests	-	-	-	-	-
Earnings (loss) per share	3.06	4.02	(1.78)	1.29	1.21

Note: Reviewed/audited by independent auditors.

(4) Condensed consolidated statement of comprehensive income

(4) Condensed consolidated statement of comprehensive income	(4) Condensed consolidated statement of comprehensive income	(4) Condensed consolidated statement of comprehensive income	(4) Condensed consolidated statement of comprehensive income	(4) Condensed consolidated statement of comprehensive income	(4) Condensed consolidated statement of comprehensive income
Unit: NT$ thousand
Year Item	2018	2019	2020	2021	2022
Operating income	8,502,426	7,794,299	3,377,878	2,097,948	2,776,680
Operating profit	1,969,687	1,770,429	657,351	317,722	458,135
Operating ( loss ) gain	394,821	(32,589)	(111,611)	(31,179)	88,918
Non-operating income and expenses	(14,138)	230,420	(53,878)	130,767	18,823
(Loss) before tax	380,683	197,831	(165,489)	99,588	107,741
Continuing business unit Net (loss) profit for the period	291,175	121,017	(180,876)	106,306	99,513
Loss of closed units	-	-	-	-	-
Net (loss) profit for the period	291,175	121,017	(180,876)	106,306	99,513
Other comprehensive profit and loss for the period	30,760	(67,302)	(91,171)	(61,176)	173,999
Total comprehensive profit and loss for the period	321,935	53,715	(272,047)	45,130	273,512
Net profit (loss) attributable to parent companyowner	245,215	326,325	(146,141)	106,306	99,513
Net profit (loss) attributable to non-controllinginterest	45,960	(205,308)	(34,735)	-	-
The total comprehensive profit and loss is attributable to the owner of theparent company	287,556	279,680	(224,355)	45,130	273,512
Total comprehensive profit or loss attributable to non-controlling interests	34,379	(225,965)	(47,692)	-	-
Earnings (loss) per share	3.06	4.02	(1.78)	1.29	1.21

Audited by independent auditors .

87-
(2) The name and audit opinion of the certified auditors in the last five years
The name and audit opinion of the CPAs in the last five years

Year	Audit firm	CPA name	Opinion
2018	Deloitte & Touche United Audit Firm	Lin Wenqin Guo Liwen	Unqualified Opinion Annotated Other Matters Paragraph
2019	Deloitte & Touche United AccountingFirm	Chen Peide Lin Wenqin	Unqualified Opinion Annotated Other Matters Paragraph
2020	Deloitte & Touche United AccountingFirm	Chen Peide Lin Wenqin	Unqualified Opinion Annotated Other Matters Paragraph
2021	Deloitte & Touche United AccountingFirm	Chen Peide Chen Junhong	Unqualified Opinion
2022	Deloitte & Touche United AccountingFirm	Chen Peide Chen Junhong	Unqualified Opinion

Instructions for changing accountants in the last five years:

The replacement of certified auditors is mainly due to the adjustment of the rotation mechanism for the independence of Deloitte & Touche United Audit Firm .

2. Financial analysis for the last five years

1. Unconsolidated financial analysis

Item	Year	Year	2018	2019	2020	2021	2022
Financial structure (%)	Liabilities to Assets Ratio		54.61	43.56	52.55	49.23	46.32
	Ratio of long-term funds to real estate, plant and equipment		678.45	6,864.14	5,421.62	5,344.23	12,186.94
Solvency (%)	Current Ratio		45.74	81.19	53.78	23.01	51.07
	Quick ratio		26.18	62.97	32.82	22.16	50.89
	Interest coverage ratio		16.34	18.38	(12.05)	12.32	7.16
Manageme nt capacity	Accounts receivable turnover rate (times)		4.33	3.47	2.27	6.22	1.97
	Average cash collection days		84	105	160	59	185
	Inventoryturnover(times)		3.09	3.63	2.21	2.26	12.33
	Payable turnover ratio (times)		7.17	8.74	7.60	67.46	6.83
	Average sales days		118	100	165	162	29
	Turnover rate of real estate, plant and equipment(times)		3.54	6.77	11.28	7.43	4.13
	Total asset turnover(times)		0.32	0.31	0.13	0.08	0.03
Profitability	Return on Assets(%)		9.18	11.38	(4.82)	4.93	4.97
	Return on Equity (%)		18.57	21.39	(10.34)	8.78	7.41
	Ratio of paid-in capital (%)	business interest	1.79	1.58	(3.52)	(4.77)	(7.37)
		net profit before tax	29.60	41.26	(17.01)	12.95	12.34
	Profit rate(%)		27.12	34.60	(40.59)	50.93	120.85
	Earnings(loss) per share		3.06	4.02	(1.78)	1.29	1.21
Cash flow	Cash flow ratio (%)		(10.97)	29.84	2.81	19.53	2.41
	Cash flow allowable ratio (%)		-	-	16.26	43.31	43.85
	Cash reinvestment ratio(%)		-	0.69	-	12.90	-
Leverage	Operatingleverage		2.52	2.33	0.36	0.69	0.83
	Financial leverage		(5.29)	(1.80)	0.60	0.67	0.64

Reasons for changes in various financial ratios of more than 20% in the last two years:

The ratio of long-term funds to real estate, plant and equipment has increased: mainly due to the issuance of the third domestic unsecured convertible corporate bond of 500,000 thousand in 2022 , and the increase in non-current liabilities compared with 2021 .
Increase in current ratio: mainly due to the increase in other receivables and the decrease in current liabilities in the current period.
Increase in quick ratio: mainly due to the increase in other receivables and the decrease in current liabilities in the current period.
Decrease in interest coverage ratio: mainly due to the relatively stable profit in the current period and the increase in financial costs.
Decrease in receivable turnover rate: mainly due to the decrease in current revenue and the relative increase in receivables.
Increase in the average number of cash collection days: mainly due to the decrease in revenue and the relative increase in receivables in the current period.
Increase in inventory turnover : mainly due to decrease in inventory.
Payable turnover ratio (times) decreased: mainly due to the increase in average payables in the current period.
The decrease in the average number of sales days : mainly due to the decrease in inventory.
Real estate, equipment and equipment turnover (times) decreased: mainly due to the decrease in individual revenue in the current period.
in total asset turnover ( times ) : mainly due to the decrease in revenue in the current period.
Increase in net profit margin: mainly due to the decrease in revenue and relatively stable net profit before tax.
Decrease in cash flow ratio: mainly due to the decrease in net cash inflow from operating activities in the current period.
The decrease in cash reinvestment ratio: mainly due to the net cash outflow from operating activities in the current period.
Increase in operating leverage: mainly reflects the changes in the operating profit of the current period.
90-

2. Consolidated Financial Analysis

Item	Year	Year	2018	2019	2020	2021	2022
Financial structure (%)	Liabilities to Assets Ratio		57.42	53.27	60.21	59.59	58.25
	Ratio of long-term funds to real estate, plant and equipment		244.13	274.33	1,047.60	832.43	1,403.12
Solvency (%)	Current Ratio		139.65	158.79	138.98	100.20	147.29
	Quick ratio		77.15	89.82	74.51	46.16	65.99
	Interest coverage ratio		7.97	4.09	(3.73)	6.79	4.23
Manageme nt capacity	Accounts receivable turnover rate (times)		4.19	3.83	2.94	5.39	4.96
	Average cash collection days		87	95	124	68	73
	Inventoryturnover(times)		2.42	2.23	1.64	2.12	2.18
	Payable turnover ratio (times)		8.57	9.85	7.97	12.97	10.23
	Average sales days		151	164	222	172	167
	Turnover rate of real estate, plant and equipment(times)		4.46	4.26	3.46	11.73	16.70
	Total asset turnover(times)		0.97	0.90	0.60	0.69	0.85
Profitability	Return on Assets(%)		3.84	1.99	(2.61)	4.25	4.37
	Return on Equity (%)		7.87	3.14	(7.16)	8.78	7.41
	Ratio of paid-in capital (%)	business interest	48.04	(3.91)	(13.37)	(3.74)	10.67
		net profit before tax	46.32	23.71	(19.83)	11.93	12.93
	Profit rate(%)		3.42	1.55	(5.35)	5.07	3.58
	Earnings(loss) per share		3.06	4.02	(1.78)	1.29	1.21
Cash flow	Cash flow ratio (%)		(11.33)	22.37	19.62	(4.84)	(11.47)
	Cash flow allowable ratio (%)		-	27.39	46.39	34.76	14.91
	Cash reinvestment ratio(%)		-	14.52	4.13	(10.79)	(11.03)
Leverage	Operatingleverage		1.42	(5.76)	(0.25)	(1.61)	2.04
	Financial leverage		1.17	0.34	0.73	0.53	2.55

Reasons for changes in various financial ratios of more than 20% in the last two years:	Reasons for changes in various financial ratios of more than 20% in the last two years:
1.	The ratio of long-term funds to real estate, plant and equipment has increased: mainly due
	to the issuance of the third domestic unsecured convertible corporate bond of 500,000
	thousand in 2022 , and the increase in non-current liabilities compared with 2021 .
2.	Increase in current ratio: Mainly due to the increase in current assets due to the increase in
	accounts receivable and inventory in the current period, resulting in an increase in current
	ratio.
3.	Increase in quick ratio: mainly due to the increase in current assets due to the increase in
	accounts receivable and inventories in the current period, resulting in an increase in quick
	ratio.
4.	Decrease in interest coverage ratio: mainly due to the relatively stable profit in the current
	period and the increase in financial costs.
5.	The (times) decrease in payables turnover rate: mainly due to the increase in the average
	payables in the current period.
6.	Increase in the turnover rate of real estate, plant and equipment (times): mainly due to the
	increase in revenue in the current period.
7.	Increase in total asset turnover: mainly due to the increase in revenue in the current period.
8.	Decline in net profit ratio: mainly due to the increase in revenue and relatively stable profits
	in the current period.
9.	Decrease in cash flow ratio: mainly due to the increase in net cash outflow from operating
	activities in the current period.
10.	Decrease in the cash flow allowable ratio: mainly due to the decrease in net cash inflow
	from operating activities
11.	The decrease in cash reinvestment ratio: mainly due to the increase in net cash outflow from
	operating activities in the current period.
12.	Increased operating leverage: mainly reflects the changes in the operating profit of the
	current period.
13.	Increase in financial leverage: mainly reflects the changes in the operating profit and
	financial cost of the current period.

The formula for calculating financial analysis items is as follows:

Financial structure
(1) Ratio of liabilities to assets = total liabilities / total assets.
(2) The ratio of long-term funds to real estate, plant and equipment = (total equity + non-current liabilities) / net real estate, plant and equipment.
Solvency
(1) Current ratio = current assets/current liabilities.
(2) Quick ratio = (current assets - inventory - prepaid expenses) / current liabilities.
(3) Interest coverage ratio = net profit before income tax and interest expenses / interest expenses for the current period.
Operating ability
(1) Turnover rate of accounts receivable (including accounts receivable and notes receivable arising from business operations) = net sales/average accounts receivable of each period (including accounts receivable and notes receivable arising from operations) Notes receivable) balance.
(2) Average cash collection days = 365/receivable turnover rate.
(3) Inventory turnover = cost of goods sold / average inventory.
(4) Turnover rate of accounts payable (including accounts payable and notes payable arising from business operations) = cost of goods sold/balance of average payables (including accounts payable and notes payable arising from operations) in each period.
(5) Average days of sales = 365/inventory turnover.
(6) Turnover rate of real estate, plant and equipment = net sales/average net real estate, plant and equipment.
(7) Total asset turnover = net sales/average total assets.
Profitability
(1) Return on assets = [after-tax profit and loss + interest expense x (1 - tax rate)] / total average assets.
(2) Return on equity = after-tax profit/loss/average total equity.
(3) Profit rate = profit and loss after tax / net sales.
(4) Earnings per share = (Profit or loss attributable to owners of the parent company - special stock dividends) / weighted average number of issued shares.
Cash flow
(1) Cash flow ratio = net cash flow from operating activities / current liabilities.
(2) Allowable ratio of net cash flow = net cash flow from operating activities in the last five years / (capital expenditure + increase in inventory + cash dividends) in the last five years.
(3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends) / (gross real estate, plant and equipment + long-term investment + other non-current assets + working capital).
Leverage:
(1) Operating leverage = (net operating income - variable operating costs and expenses) / operating profit.
(2) Financial leverage = operating profit / (operating profit - interest expense).
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3. Review report of the audit committee for the most recent annual financial report

Audit Committee Review Report

The board of directors formulated the company's 2022 annual business report, financial statements (including consolidated financial statements) and profit distribution proposals, among which the financial statements (including consolidated financial statements) were audited and certified by accountants Chen Peide and Chen Junhong of Deloitte & Touche United Audit Firm Completed and a review report issued. The above-mentioned business report, financial statements (including consolidated financial statements) and profit distribution proposals have been reviewed by the audit committee and found to be inconsistency, and reported in accordance with the provisions of Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. As above, please review.

Sincerely,

Parpro Corporation

2023 Annual General Meeting of Shareholders

Convener of Audit Committee:

Shen Zhenlin

Individual financial report of the most recent year audited and certified by an accountant: Please refer to pages 104 to 155 .
Consolidated financial report audited and certified by an accountant for the most recent year: Please refer to pages 156 to 213 .
If the company and its affiliated companies had financial turnover difficulties in the most recent year and up to the date of publication of the annual report, the impact on the company's financial status should be listed: None.
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Review and Analysis of Financial Status and Financial Performance and Risk Matters
Financial status
- (1) The main reason and impact of major changes in consolidated assets, liabilities, and equity in the last two years . If the impact is significant, the future response plan should be explained:

Financial status (1) The main reason and impact of major changes in consolidated assets, liabilities, and equity in the last two years . If the impact is significant, the future response plan should be explained:	Financial status (1) The main reason and impact of major changes in consolidated assets, liabilities, and equity in the last two years . If the impact is significant, the future response plan should be explained:	Financial status (1) The main reason and impact of major changes in consolidated assets, liabilities, and equity in the last two years . If the impact is significant, the future response plan should be explained:	Financial status (1) The main reason and impact of major changes in consolidated assets, liabilities, and equity in the last two years . If the impact is significant, the future response plan should be explained:	Financial status (1) The main reason and impact of major changes in consolidated assets, liabilities, and equity in the last two years . If the impact is significant, the future response plan should be explained:
Unit: NT$thousand
Year	2021	2022	Increase or decrease
Item	Amount	Amount	Amount	%
Current Assets	1,526,637	1,999,206	472,569	30.95
Financial Assets Measured At Fair Value throughOtherComprehensive Income	-	10,160	10,160	100.00
InvestmentsUsingThe EquityMethod	552,882	594,576	41,694	7.54
Property,Plant and Equipment	177,594	154,899	(22,695)	(12.78)
Intangible Assets	497,282	540,550	43,268	8.70
Other Assets	247,575	231,339	(16,236)	(6.56)
Total Assets	3,001,970	3,530,730	528,760	17.61
Current Liabilities	1,523,616	1,357,307	(166,309)	(10.92)
Non-Current Liabilities	265,312	699,244	433,932	163.56
Total Liabilities	1,788,928	2,056,551	267,623	14.96
Share Capital	834,544	833,544	(1,000)	(0.12)
Capital Reserve	310,881	329,808	18,927	6.09
Retained Earnings	303,400	373,012	69,612	22.94
Other Interests	(204,059)	(33,051)	171,008	83.80
Treasury Stock	(31,724)	(29,134)	2,590	8.16
Non-ControllingInterest	0	0	0	0
Total Shareholders' Equity	1,213,042	1,474,179	261,137	21.53
Explanation for analysis of changes in increase or decrease ratio: (if the increase or decrease is more than 20%, and the amount of change is 10,000,000) 1.Increase in current assets: mainly due to the increase in receivables and inventory due to revenue growth in 2022. 2.Increase in financial assets measured at fair value through other comprehensive income: mainly due to investment in stocks. 3.Increase in non-current liabilities: mainly due to the issuance of the third domestic convertible corporate bond in 2022. 4.Increase in retained earnings: mainly due to the increase in profit in the current period. 5. Decrease in other rights and interests: mainly due to the appreciation trend of US dollars exchanged into New Taiwan dollars in 2022, which resulted in a substantial increase in the exchange benefits from the conversion of financial statements of foreign operatinginstitutions in thatyear.

Explanation for analysis of changes in increase or decrease ratio: (if the increase or decrease is more than 20%, and the amount of change is 10,000,000)

1.Increase in current assets: mainly due to the increase in receivables and inventory due to revenue growth in 2022.

2.Increase in financial assets measured at fair value through other comprehensive income: mainly due to investment in stocks.
3.Increase in non-current liabilities: mainly due to the issuance of the third domestic convertible corporate bond in 2022.
4.Increase in retained earnings: mainly due to the increase in profit in the current period.
Decrease in other rights and interests: mainly due to the appreciation trend of US dollars exchanged into New Taiwan dollars in 2022, which resulted in a substantial increase in the exchange benefits from the conversion of financial statements of foreign operating institutions in that year.

(2) Future coping plans:

There is no major abnormality in the overall performance of the company, so there is no need for a response plan. In the future, we will continue to focus on the improvement of business performance and the stable growth of profits, and improve the company's financial structure to reduce financial burdens.

2. Financial performance:

Financial performance analysis for the last two years:

Unit: NT$ thousand

Item	2021	2022	Increase (decrease) Amount	Change ratio%
Operating income	2,097,948	2,776,680	678,732	32.35
Operating profit	317,722	458,135	140,413	44.19
Operating expenses	348,901	369,217	20,316	5.82
Operating (loss)	(31,179)	88,918	120,097	385.19
Non-operating income and expenses	130,767	18,823	(111,944)	(85.61)
Net (loss) profit before tax	99,588	107,741	8,153	8.19
Income tax	6,718	(8,228)	(14,946)	(222.48)
Net (loss) profit for theyear	106,306	99,513	(6,793)	(6.39)
Explanation for analysis of changes in increase or decrease ratio: (if the increase or decrease is more than 20%, and the amount of change is 10,000,000) A. Increase in operating income, operating gross profit and operating expenses : Mainly due to the gradual unblocking of the world in 2022, the alleviation of material shortages, and the increase in demand from downstream customers, resulting in growth in revenue, cost, gross profit, and expenses. B. Operating net profit : mainly due to the increase in profit driven by revenue growth in the current period , and the industry turned from loss to profit . C. Decrease in non-operating income and expenses : Mainly due to the fact that the U.S. subsidiary received government bailout subsidies due to the new crown epidemic in 2021, which greatly increased the base period . D. Income tax expenses : mainly due to the income tax benefits of the US subsidiary obtained tax refunds in 2021 .

The expected sales volume and its basis, the possible impact on the company's future financial business and the response plan:

The company has not announced the financial forecast for 2023, so it does not intend to disclose the expected sales volume.

3. Cash flow

(1) Analysis of cash flow changes in the most recent year:

				Unit: NT$ thousand	Unit: NT$ thousand
Opening cash balance	Annual net cash flow from operating activities	Net cash flow from other activities for theyear	Cash surplus (Insufficient) amount	Remedial Measures for Cash Insufficiency
				investment plan	financial plan
314,524	(155,737)	(14,959)	143,828	Not applicable	Not applicable

(1) Business activities:

The net cash outflow was 155,737 thousand, mainly due to the increase in various operating expenses such as inventories due to the gradual recovery of operations in the current period .

(2) Net cash flow from other activities for the year:

The net cash outflow was 14,959 thousand, which was mainly due to investment in stocks, repayment of bank loans and payment of cash dividends in the current period. However, although the third domestic convertible corporate bond was issued in the current period, the overall net cash outflow was small.

(2) Improvement plan for insufficient liquidity : None.
(3) Analysis of cash flow in the coming year:

				Unit: NT$ thousand	Unit: NT$ thousand
Opening cash balance	Annual net cash flow from operating activities	Net cash flow from other activities for the year	cash surplus (Insufficient) amount	Remedial Measures for Cash Insufficiency
				investment plan	financial plan
143,828	205,358	( 65,260 )	283,926	-	-

The net cash inflow from operating activities in 2023 will be 205,358 thousand, and the net cash outflow from other activities in the whole year is expected to be 65,260 thousand . The estimated remaining cash amount is 283,926 thousand, and there is no expected cash shortage in 2023.

The impact of major capital expenditures on financial business in the most recent year: None.
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Reinvestment policy for the most recent year, main reasons for its profit or loss, improvement plan, and investment plan for the next year:
Reinvestment policy

Depending on the company's business development and sustainable operation needs, in line with the group's goals of operating expansion, ensuring production capacity, and serving customers nearby, it is mainly for long-term holding. If there is any transfer of investment, it will follow the "investment cycle" of the company's internal control system and "Procedures for Acquiring or Disposing of Assets".

Gain or loss from reinvestment:

December 31, 2022; unit: thousands of NT dollars/thousands of foreign currency

Reinvestment company	Investment cost	Book value	Profit and loss
Efa TechnologyCo., Ltd.	-	20,840	1,847
Parpro Holdings Co., Ltd.	USD 36,190	1,726,575	60,533
Anderson Industrial Corp.	470,758	554,651	155,667
Sogotec Precision Co., Ltd.	85,304	39,925	(8,864)
AP Parpro, Inc.	USD 12,722	456,010	47,204
Pilot(Las Vegas), Inc.	USD 735	25,758	16,096
Parpro(Nevada), Inc.	USD 3,676	128,802	80,482
ParproQuality, Inc.	USD 23,955	1,141,669	27,702
Parpro Technologies, Inc.	USD 23,500	1,141,669	27,702

Note: The visa has been verified by an accountant.

Investment plan for the next year: Appropriately evaluate the investment funds for each reinvestment business according to the needs of the group's operation and development.
Analysis and evaluation of risk management
(1) The impact of interest rate, exchange rate changes, and inflation on the company's profit and loss in the most recent year and as of the date of publication of the annual report, and future response measures:
- A. Impact on the company's profit and loss

Unit: NT$ thousand

Iem	2022
Interest(income)expense	53,581
Exchange(loss) gain	29,354
Ratio of net interest income to net revenue	1.93%
Ratio of net interest income to net profit before tax	49.73%
Ratio of net exchange gain and loss to net revenue	1.06%
Ratio of net exchange gain and loss to net profit before tax	27.24%

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B.The company's future response measures
A. Changes in interest rates:

Net interest income and expenses to net revenue and the ratio of net profit before tax in 2022 were 1.93 % and 49.73 % respectively .

The financial department of the company pays attention to the changes in interest rates at any time, and keeps in close contact with the bank to obtain more favorable loan interest rates, so as to minimize the impact of interest rate changes on the company. In addition, we will also comprehensively consider the capital cost of various financing tools and the company's financial situation, select the most suitable working capital structure, and evaluate the increase in the ratio of self-owned funds in a timely manner.

B. Exchange rate changes:

The company's 2022 net exchange profit and loss accounted for the net revenue ratio and pre-tax net profit ratio were 1.06 % and 27.24 %, and the company took the following possible countermeasures:

①Foreign exchange fund dispatching, using self-owned foreign exchange income to cover foreign exchange expenditures, reducing exchange risk.
②Collect information about exchange rate changes at any time, and fully grasp the exchange rate trend, so as to decide the time to convert currency or keep it in the foreign exchange account .
③Improve product quality and its added value, reflect the cost in a timely manner when the exchange rate fluctuates, and adjust the selling price .
C. Inflation:

The recent annual price index is still within a reasonable range, and inflation will not have a significant impact on the company's profit and loss.

(2) Policies for engaging in high-risk, high-leverage investments, capital lending to others, endorsement guarantees, and derivatives transactions in the most recent year and as of the date of publication of the annual report , the main reasons for profit or loss, and future countermeasures:

A. Engage in high-risk, high-leverage investment: no such case.
B. Fund loan to others:

Our company has established the "Operating Procedures for Capital Loans to Others", and the relevant capital loans to others are handled in accordance with the operating procedures. As of the date of publication of the annual report, the circumstances of the Company’s board of directors’ approval of capital loans to others are as follows:

(a) The company's capital loan is USD 2,000,000 to its subsidiary AP Parpro , Inc.
(b) The company's capital loan is USD 1,000,000 to its subsidiary Parpro ( Nevada ) , Inc.
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- (c) The company's capital loan is USD 1,000,000 to its subsidiary Parpro Technologies , Inc.
- (d) Subsidiary Parpro Holdings Co., Ltd capital loan to subsidiary AP Parpro , Inc. USD 2,200,000 .
- (e) Subsidiary Parpro Technologies, Inc. capital loan to subsidiary Parpro (Nevada), Inc. USD 1,800,000.
- (f) Subsidiary Parpro Technologies, Inc. capital loan to subsidiary AP Parpro, Inc. USD 9,100,000 .
- (g) Subsidiary Parpro (Nevada) borrowed USD 1,000,000 from subsidiary AP Parpro, Inc.
C. Endorsement Guarantee : No such case.
D. Derivative commodity trading: no such case.
(3) Future R&D plans and estimated R&D expenses

In addition to continuing the current unfinished products and extending the existing series to expand product specifications, the company will continue to develop new/old product series with high added value and market competitiveness for different market segments and application fields, and actively expand emerging demand markets , innovation and development of diversified application fields; in addition, the company controls the progress of research and development by project, and always pays attention to the development of science and technology, product trends, the situation of competitors in the same industry, changes in the supply and demand of the sales market and material supply market, etc. Factors that may affect the success of research and development , to ensure that the R&D plans can meet market demands and be completed on schedule.

The company's research and development is based on customer needs, product categories and market trends . The research and development progress is adjusted according to the time of customer needs, operating conditions and industry trends .

(4) The impact of major policy and legal changes at home and abroad on the company's financial business and countermeasures

The global COVID-19 epidemic has been raging for more than three years. As the number of virus tests has been improved and the coverage of vaccines has increased, the number of severe cases and deaths has dropped sharply. Major countries have gradually loosened various epidemic prevention measures, which will help the global recovery of the economic situation.

With the rise of the Sino-US trade war and even the current US technology blockade against China, it is expected that the Chinese semiconductor market will gradually decline in the future, and relevant semiconductor industry research institutions have also confirmed this prediction. Taiwan is the world's largest semiconductor supply and demand market, and the strong industrial demand brought by advanced manufacturing processes is expected to boost the momentum of industrial development.

In addition, climate issues have attracted international attention in recent years. The Financial Supervisory Commission has required listed companies in the Corporate

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Governance Blueprint 3.0 to list sustainable operations as a key plan item. The goal is to complete the greenhouse gas inventory of all listed companies by 2027. The verification has been completed before 2029, and the company will also devote considerable resources to implement this plan . In the future, the company will keep abreast of domestic and foreign epidemic prevention, other important policies, legal changes, and changes in laws and regulations of competent authorities, and cooperate with the implementation and proactively propose countermeasures in a timely manner.

(5) The impact of technological changes ( including information security risks) and industrial changes on the company's financial business and countermeasures
The company's products are mainly exported directly to world-class manufacturers in Europe and the United States. Through close strategic cooperation with world-class manufacturers and self-developed capabilities, it can quickly grasp industry trends. In addition, the company also pays attention to the changes in technology related to the industry in which it is located at any time, and assigns personnel to evaluate and study the impact of technology changes on the company's future development and financial business and the corresponding measures as appropriate. There have been no recent major technological changes that have had a major impact on the company's financial operations.

In addition, with the rapid development of international financial technology, it is very important to the development of the company and its industries. So far, after evaluation, there is no risk of having a major impact on the company, but the company will still pay close attention to the development of international financial technology. Development and changes, when necessary, respond and improve supporting measures in a timely manner.

(6) The impact of corporate image changes on corporate crisis management and countermeasures
The company adheres to the operating principles of professionalism and integrity, and attaches great importance to corporate image and risk control. Therefore, the corporate image is still good, and there are no illegal incidents or changes in corporate image, and there is no violation of laws and principles of integrity to affect corporate image Things happen.
(7) Expected benefits, possible risks and countermeasures of mergers and acquisitions . The company will still regard mergers and acquisitions as one of the main axes of future business strategy development. Comprehensively consider whether the merger and acquisition can bring long-term and specific benefits to the company/group to ensure the maximum interests of shareholders.
(8) Expected benefits, possible risks and countermeasures of plant expansion : None.
(9) Risks and countermeasures faced by centralized purchase or sales
In order to maintain product quality and ensure that the sources of raw materials are not in short supply, the company purchases main raw materials from several suppliers and
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maintains a good cooperative relationship with suppliers . The proportion of the total purchase amount in each period is only about 10% at most, so there should be no excessive concentration of purchases .

Most of the company's main sales customers are listed companies in North America . In addition, it has established a very deep cooperative relationship with customers . For the company, the quality of orders and revenue is relatively stable . In addition, in order to disperse the risk that sales may be concentrated in a single industry, the company will still actively invest in the development of product application fields, such as medical care, Internet communication, satellite network, cloud computing, etc., and will invest more resources in the future to continue to develop new models and new customer.

(10) Directors, supervisors or major shareholders holding more than 10% of the shares, the impact, risk and countermeasures of a large number of equity transfers or replacements on the company: None.
(11) Impacts, risks and countermeasures of the change of management rights on the company : None.
(12) Litigation or non- litigation events : None.
(13) Other important risks and countermeasures: None.
Other important matters : None.
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VIII. Special records

Relevant information of related enterprises:
(1) Affiliated business merger business report
1. Relational enterprise map (January 11 , 2023)


				Parpro Corporation.

	100%					100%				20.86 %		4.73 %
									Anderson Industrial Corp.		Sogotec
				Parpro Holdings. Co., Ltd.							Precision
Efa Technologies											Co.,Ltd.
Corporation.			100%		Sogotec Precision Co.,Ltd.			100%

	2.39 %	AP Parpro, Inc.		Pilot (Las Vegas), Inc.
							Parpro Quality,
							Inc.

Sogotec Precision			80%		20%			100%
Co.,Ltd.
		Parpro (Nevada), Inc.					Parpro
							Technologies,Inc.

2. Basic information of each affiliated enterprise

Unit: Thousands of New Taiwan Dollars/Thousands of Foreign Currencies

Company Name	Date of establishment	address	Paid-in capital	Main business or production items
Efa Technologies Corporation	2004.01.07	Taipei City	32,719	Industrial computers andgamingmachines.
Parpro Holdings Co., Ltd.	2012.09.24	British virgin islands	USD36,190	Investment holding company.
Anderson Industrial Corp.	1972.07.21	Taipei City	1,943,310	Non-metallic computer numerical control machining center.
Sogotec Precision Co., Ltd.	1990.10.02	Taiwan	204,000	Manufacturing and trading of electronic machinery and peripheralproducts
AP Parpro, Inc.	2012.10.31(Note)	U.S.	USD6,870	aerospace , national defense , Netcom , smart retail and medical care .
Pilot (Las Vegas), Inc.	2013.12.13	U.S.	USD982	Investment holding company.
Parpro (Nevada), Inc.	2013.12.13(Note)	U.S.	USD3,796	industrial computers andgamingmachines.
Parpro Quality, Inc.	2016.04.01	U.S.	USD23,500	Investment holding company.
Parpro Technologies, Inc.	2016.04.01	U.S.	USD23,500	Aerospace , national defense , Netcom , and medical.

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Note: It is the date when the company invested and purchased the company.

(1) Affiliated companies directly or indirectly controlled by the company in terms of personnel, finance, or business operations in accordance with Article 369-2 of the Company Law : None.
(2) According to Article 369-3 of the Company Law, it is presumed to have control and affiliated companies: None.
The industries and division of labor covered by the overall related enterprises
- (1 ) Efa Technologies Corporation: responsible for the sales of industrial computers and gaming machines.
- (2 ) Parpro Holdings Co., Ltd.: Investment holding company.
- (3 ) Anderson Industrial Corp.: a strategic investment for the company.
- ( 4) Sogotec Precision Co., Ltd.: manufacturing and trading of electronic machinery and peripheral products.
- (5 ) AP Parpro, Inc.: Production and sales of electronic components such as aerospace , national defense , Netcom , smart retail and medical care .
- (6 ) Pilot (Las Vegas), Inc.: Investment holding company.
- (7 ) Parpro (Nevada), Inc.: responsible for the sales of industrial computers and gaming machines.
- (8 ) Parpro Quality , Inc.: Investment holding company.
- ( 9) Parpro Technologies , Inc.: Production and sales of electronic components such as aerospace , national defense , Netcom , and medical care
The names of the directors, supervisors and general managers of each affiliated

company and their shareholding or capital contribution to the company

Unit: thousand shares/1 March 31 , 2023

Company Name	Job title	name or representative	Hold	shares
			Number of shares (thousand shares)	shareholding ratio
Efa Technologies Corporation	Director	Parpro Corporation Technology Co., Ltd. Representative: Liao Wenjia	3,272	100%
	Director	Parpro Corporation Technology Co., Ltd. Representative: Wu Hsiu Pi	3,272	100%
	Director	Parpro Corporation Technology Co., Ltd. Representative: SongXinda	3,272	100%

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	Supervisor	Parpro Corporation Technology Co., Ltd. Representative: Yan Congqian	3,272	100%
Parpro Holdings Co., Ltd.	Director	Parpro Corporation Technology Co., Ltd. Representative: Liao Wenjia	36	100%
Anderson Industrial Corp.	Chairman	Yunyong Investment Co., Ltd. Representative : Liao Wenjia	20,000	10.45%
	Director	Yunyong Investment Co., Ltd. Representative : LinQiquan	20,000	10.45%
	Director	Yunyong Investment Co., Ltd. Representative : Xu Yonghao	20,000	10.45%
	Director	Yunyong Investment Co., Ltd. Representative : Huang Yixian	20,000	10.45%
	Independent director	Wu Qingsong	-	-
	Independent director	Lai Junliang	-	-
	Independent director	Liang Yihong	-	-
Sogotec Precision Co., Ltd. (Note)	Chairman	Anderson Industrial Corp. Representative: Liao Wenjia	11,796	58.11%
	Director	Anderson Industrial Corp. Representative: Huang Yixian	11,796	58.11%
	Director and General manager	Anderson Industrial Corp. Representative: Hou Jianfu	11,796	58.11%
	Director	Deng Chuanjin	-	-
	Independent director	Lin Shaoyuan	-	-
	Independent director	Liu Fuyun	-	-
	Independent director	Lai Wenxiang	-	-

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AP Parpro, Inc.	Director	Parpro Holdings Co., Ltd. Representative: Liao Wenjia	7	100%
	Director	Parpro Holdings Co., Ltd. Representative: Wu Hsiu Pi	7	100%
	Director	Parpro Holdings Co., Ltd. Representative: Thomas Sparrvik	7	100%
Pilot (Las Vegas), Inc.	Director	Parpro Holdings Co., Ltd. Representative: Liao Wenjia	1	100%
	Director	Parpro Holdings Co., Ltd. Representative: Thomas Sparrvik	1	100%
	Director	Parpro Holdings Co., Ltd. Representative: Wu Hsiu Pi	1	100%
Parpro (Nevada), Inc.	Director	AP Parpro, Inc. Representative: Liao Wenjia	1	80%
	Director	AP Parpro, Inc. Representative: Thomas Sparrvik	1	80%
	Director	Pilot (Las Vegas), Inc. Representative: Wu Hsiu Pi	1	20%
Parpro Quality, Inc.	Director	Parpro Holdings Co., Ltd. Representative: Liao Wenjia	23,500	100%
	Director	Parpro Holdings Co., Ltd. Representative: Thomas Sparrvik	23,500	100%
	Director	Parpro Holdings Co., Ltd. Representative: Wu Hsiu Pi	23,500	100%
Parpro Technologies, Inc.	Director	Parpro Quality, Inc Representative: Liao Wenjia	13	100%
	Director	Parpro Quality, Inc. Representative: Thomas Sparrvik	13	100%

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		Director	Parpro Quality, Inc. Representative: Wu Hsiu Pi	13	100%

Note: Sogotec Co., Ltd.changed its name to Sogotec Precision Co., Ltd. after the change registration was completed on January 9, 2015.

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5. Overview of the operation of each affiliated company

December 31, 2022; unit: thousands of NT dollars/thousands of foreign currency

Company Name	Capital amount	Total assets	Total liabilities	Net worth	Operating income	Operating profit and loss	Profit and loss for the period (after tax)	Earnings per share (dollar) (after tax)
Efa Technologies Corporation	32,719	20,991	150	20,841	0	(904)	1,847	Not applicable
Anderson IndustrialCorp..	1,943,310	4,005,821	1,618,558	2,387,263	1,222,098	48,307	155,667	0.81
Sogotec Precision Co.,Ltd.	204,000	1,353,246	792,265	560,981	458,168	(34,110)	(8,864)	(0.44)
Parpro Holdings Co.,Ltd.	USD36,190	USD57,066	USD844	USD56,222	0	(1,067)	USD2,031	Not applicable
Pilot (Las Vegas), Inc.	USD982	USD844	USD5	USD839	0	0	USD540	Not applicable
Parpro Quality, Inc.	USD23,500	USD37,176	0	USD37,176	0	0	USD929	Not applicable
Parpro Technologies,Inc.	USD23,500	USD44,145	USD6,969	USD37,176	USD34,085	USD1,285	USD929	Not applicable
AP Parpro, Inc.	USD6,870	USD40,935	USD26,190	USD14,745	USD50,621	(USD270)	USD1,584	Not applicable
Parpro (Nevada), Inc.	USD3,796	USD12,169	USD7,975	USD4,194	USD28,722	USD2,244	USD2,700	Not applicable

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(2) Consolidated financial statements of affiliated enterprises:

In 2022 (from January 1, 2022 to December 31, 2022), our company should be included in the preparation of related company mergers in accordance with the "Relationship Enterprise Merger Business Report, Related Enterprise Consolidated Financial Statements, and Relationship Report Preparation Guidelines " The company for the financial statements is the same as the company that should be included in the preparation of the parent-subsidiary consolidated financial statements in accordance with International Accounting Standards No. 10, and the relevant information that should be disclosed in the parent-subsidiary consolidated financial statements has been disclosed in the previously disclosed parent-subsidiary consolidated financial statements. The consolidated financial statements of affiliated enterprises will no longer be prepared separately.

(3) Affiliated Enterprise Report: Not applicable.
Handling of private placement of securities in the most recent year and as of the date of publication of the annual report: None.
In the most recent year and as of the publication date of the annual report, the holding or disposal of the company's stoc ks by subsidiaries: None.
Other necessary supplementary explanations: None.
In the most recent year and as of the date of publication of the annual report, any event that had a material impact on shareholders' equity or securities prices as specified in Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act: None.
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PARPRO CORPORATION

Statement of Internal Control System

The company knows that it is the responsibility of the board of directors and managers of the company to establish, implement and maintain an internal control system, and the company has already established such a system. Its purpose is to achieve the goals of operational effectiveness and efficiency (including profit, performance, and asset security, etc.), report reliability, timeliness, transparency, and compliance with relevant norms and compliance with relevant laws and regulations, and provide reasonable ensure.
The internal control system has its inherent limitations. No matter how perfect the design is, an effective internal control system can only provide reasonable assurance for the achievement of the above three objectives; moreover, due to changes in the environment and circumstances, the effectiveness of the internal control system may vary change. However, the company's internal control system has a self-monitoring mechanism. Once a defect is identified, the company will take corrective action.
The company judges whether the design and implementation of the internal control system are effective based on the items for judging the effectiveness of the internal control system stipulated in the "Guidelines for the Establishment of Internal Control Systems for Publicly Issued Companies" (hereinafter referred to as "the Guidelines"). The internal control system judgment items adopted in the "Processing Criteria" are based on the process of management control, and the internal control system is divided into five components: A. Control environment, B. Risk assessment, C. Control operations, D. Information Communicate with and E. Supervise operations. Each constituent element in turn includes several items. For the aforementioned items, please refer to the provisions of the "Handling Guidelines".
The company has adopted the above-mentioned internal control system to judge projects and evaluate the effectiveness of the design and implementation of the internal control system.
Based on the evaluation results in the preceding paragraph, the company believes that the company's internal control system (including the supervision and management of subsidiaries) on December 31, 2022 includes understanding the effect of operations and the degree of achievement of efficiency goals, The reporting is reliable, timely, transparent and in compliance with relevant norms and relevant laws and regulations, and the design and implementation of the relevant internal control system are effective, which can reasonably ensure the achievement of the above goals.
This statement will become the main content of the company's annual report and prospectus, and will be made public. If there are falsehoods, concealment, or other illegal matters in the above-mentioned disclosed content, it will involve legal liabilities under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.
This statement was approved by the company's board of directors on March 9, 2023. Among the seven directors present, no director held an objection, and the rest agreed with the content of this statement, and hereby declare it.

Very truly yours, Parpro Corporation By

WEN JIA LIAO Chairman

WEN JIA LIAO CEO

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Parpro Corporation

Opinion

We have audited the accompanying financial statements of Parpro Corporation (the “Company”), 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 the notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, based on our audits and the report of other auditors (refer to the other matter paragraph) the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key check items

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 matters identified in the Company’s financial statements for the year ended December 31, 2022 are stated as follows:

Investments using the equity method Authenticity of Revenue Occurrence

Parpro Corporation mainly sells gaming and industrial computers, as well as aerospace and defense industry products. In 2022, the amount of product revenue from some customers has changed significantly compared with the amount in the same period last year. Considering that the revenue recognition has a high innate risk of fraud, and the management may be under pressure to achieve the expected financial goals, because the authenticity of such income is listed as a key verification item.

The main verification procedures performed by our auditors on the above matters are as follows:

Understand and test the main internal control system of these revenues, and evaluate its design and implementation effectiveness.
Obtain the detailed accounts of these incomes, select samples to perform detailed tests, and review documents such as orders, shipping orders, and invoices to confirm the authenticity of such incomes.
Obtain the sub-accounts of these incomes, and select samples to test whether there are major differences in the recipients and amounts of receivables and offsets, so as to confirm the authenticity of such incomes.

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 IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of 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 Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committees, are responsible for overseeing the Company’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 auditing standards generally accepted in the Republic of China will always detect a

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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 auditing standards generally accepted in 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 Company’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 Company’s ability to continue as a going concern.
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 Company to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the Company 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 Pei De Chen and Jun Hong Chen.

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Parpro Corporation

Balance Sheets

December 31, 2022 and 2021

(In Thousands of New Taiwan Dollars) Unit: NT$ thousand

Assets	December 31,2022 December 31,2021	December 31,2022 December 31,2021	December 31,2022 December 31,2021
	Amount % Amount %
Current assets Cash (Notes 4 and 6) Accounts receivable (Notes 4, 9 and 24) Other receivables (Notes 4 and 24) Current tax assets Inventories (Notes 4 and 10) Prepayments Total Current Assets Non-current assets Financial assets at fair value through other comprehensive income (Notes 4 and 8) Investments accounted for using the equity method (Notes 4, 5 and 11) Property, plant and equipment (Notes 4 and 12) Right-of-use asset Deferred tax assets (Notes 4 and 20) Other non-current assets Total non-current assets Total assets Liabilities and equity	$ 47,896 2 $ 145,488 6 49,986 2 32,681 1 286,267 10 71,877 3 3 - 9 - 454 - 9,076 1 2,790 - 573 -
	387,396 14		259,704 11
	10,160 - 2,328,589 85 16,309 1 521 - 1,211 - 1,939 -		- - 2,098,268 88 23,585 1 3,784 - 1,431 - 2,287 -
	2,358,729 86		2,129,355 89
	$ 2,746,125 100 $470,000 17 11,954 - 18,218 - 80,669 3 1,113 - 532 - 130,041 5 46,030 2		$ 2,389,059 100 $530,000 22 7,948 - 5,966 - 17,442 1 1,113 - 3,308 - 562,575 24 270 -
Current liabilities Short-term borrowings (Note 13) Financial liabilities at fair value through profit or loss (Notes 4 and 7) Accounts payable Other payables (Notes 15 and 24) Provisions Short-term lease liabilities Current portion of Long-term liabilities (Notes 13 and 14) Other current liabilities (Notes 18 and 24) Total current liabilities Non-current liabilities Corporate bonds payable (Notes 4 and 14) Long-term borrowings (Note 13) Deferred tax liabilities (Notes 4 and 20) Long-term lease liabilities Total non-current liabilities Total liabilities Equity (Notes 4 and 17) Share capital Ordinary shares Share capital to be registered Total share capital Capital surplus Retained earnings Legal surplus reserve Special surplus reserve Unappropriated earnings total retained earnings Other equity Treasury shares Total equity Total liabilities and equity
		758,557 27	1,128,622 47
		463,567 17 47,827 2 1,995 - - -	- - 46,843 2 20 - 532 -
		513,389 19	47,395 2
		1,271,946 46	1,176,017 49
		833,544 30 - -	834,516 35 28 -
		833,544 30	834,544 35
		329,808 12	310,881 13
		131,486 5 137,381 5 104,145 4	120,889 5 76,537 3 105,974 5
		373,012 14	303,400 13
		(33,051) (1)	(204,059) (9)
		(29,134) (1)	(31,724) (1)
		1,474,179 54	1,213,042 51
		$ 2,746,125 100	$ 2,389,059 100

The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 9, 2023)

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Parpro Corporation

Statements of Comprehensive Income

For The Years Ended December 31, 2022 And 2021

(In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

Operating Revenue (Notes 4, 18 and 24) Operating Cost (Notes 10, 19 and 24) Gross (loss) profit Operating expenses (Notes 9 and 19) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses Total operating expenses Non-operating income and expenses (Notes 19 and 24) Interest income Other income Other gains and losses Financial costs Share of profits (losses) of subsidiaries accounted for using the equity method Total non-operating income and expenses Net profit before tax Income tax expenses (Notes 4 and 20) Net profit for the year	2022 2021
	Amount % Amount %
	$82,345 100 $208,730 100 82,589 100 201,239 96
	(244) - 7,491 4
	13 - 1,008 1 62,008 76 46,346 22 - - 124 - (835) (1) (201) -
	61,186 75 47,277 23
	(61,430) (75) (39,786) (19)
	1,506 2 1,527 1 88,299 107 82,898 39 16,445 20 (410) - (35,013) (42) (19,280) (9) 93,012 113 83,108 40
	164,249 200 147,843 71
	102,819 125 108,057 52 (3,306) (4) (1,751) (1) 99,513 121 106,306 51

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(Continued from previous page)

Other comprehensive income Items that will not be reclassified subsequently to profit or loss: Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive (loss) income of subsidiaries accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Other comprehensive income (loss) for the year, net of income tax Total comprehensive profit and loss for the year Earnings per share (Note 21) Basic Dilution	2022	2021
	Amount %	Amount %
	($ 7,300) (9) 9,144 11 172,155 209	$ - - (10,856) (5) (50,320) (24)
	173,999 211	(61,176) (29)
	$ 273,512 332 $ 1.21 $ 1.07	$ 45,130 22 $ 1.29 $ 1.13

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

(With Deloitte & Touche auditors’ report dated March 9, 2023) (Concluded)

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Parpro Corporation

Statements of Changes In Equity

For The Years Ended December 31, 2022 And 2021 (In Thousands of New Taiwan Dollars)

		Share capital Shares Share capital to be registered Capital surplus	Share capital Shares Share capital to be registered Capital surplus	Share capital Shares Share capital to be registered Capital surplus	Share capital Shares Share capital to be registered Capital surplus	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Equity
Ordinary
$		834,516 $ - - - -	- $ - - - -		351,925 $ - (41,113) - -		148,508 $ (27,619) - - -		76,537 - - - -	($	27,619) ($ 27,619 - 106,306 (332)		143,644) - - - (50,320)	$	429 - - - (10,524)	($	31,724) $ - - - -		1,208,928 - (41,113) 106,306 (61,176)
		-	-		-		-		-		105,974		(50,320)		(10,524)		-		45,130
		-	28		69		-		-		-		-		-		-		97
		834,516 - - -	28 - - -		310,881 - - -		120,889 10,597 - -		76,537 - 60,844 -		105,974 (10,597) (60,844) (32,892)		(193,964) - - -		(10,095) - - -		(31,724) - - -		1,213,042 - - (32,892)
		-	-		-		10,597		60,844	(104,333)			-		-		-		(32,892)
		- -	- -		- -		- -		- -	99,513 2,991			- 172,155		- (1,147)		- -		99,513 173,999
		-	-		-		-		-	102,504			172,155		(1,147)		-		273,512
		- - 28 (1,000)	- - (28) -		28,740 (8,223) - (1,590)		- - - -		- - - -	- - - -			- - - -		- - - -		- - - 2,590		28,740 (8,223) - -
	$	833,544	$-	$	329,808	$	131,486	$ 137,381		$ 104,145		($	21,809)	($	11,242)	($	29,134)	$	1,474,179

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

(With Deloitte & Touche auditors’ report dated March 9, 2023)

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Parpro Corporation

Statements Of Cash Flows

For The Years Ended December 31, 2022 And 2021

(In Thousands of New Taiwan Dollars)

	2022	2021
Cash flows from operating activities
Income before income tax	$ 102,819 $ 108,057
Adjustments for:
Depreciation expense	10,539	12,424
Expected credit loss recognized on accounts receivable	(835)	(201)
Net gain (loss) on fair value changes of financial assets at fair value through profit or loss	4,003	(6,099)
Financial costs	35,013	19,280
Interest income	(1,506)	(1,527)
Profit and loss shares of subsidiaries and affiliated enterprises using the equity method	(93,012)	(83,108)
Gain on disposal of property, plant and equipment	(108)	-
(Reversal) Write-downs of inventories	(2,367)	383
Unrealized foreign exchange (benefit) losses	(27,377)	6,751
Losses on repayment of convertible corporate bonds	6,175	-
Changes in operating assets and liabilities
Accounts receivable	(12,424)	(1,135)
Other receivables	(49,799)	17,469
Inventories	10,989	153,939
Prepayments	(2,217)	(366)
accounts payable	12,170	5,978
Other payables	(1,945)	(1,059)
Other current liabilities	45,760	(75)
Cash generated from operations	35,878	230,711
Interest received	1,651	52
Interest paid	(19,247)	(10,337)
Income tax returned	13	-
Net cash generated from operating activities	18,295	220,426
Cash flows from investing activities
Acquisition of financial assets at fair value through other comprehensive income	(17,460)	-
Payments for property, plant and equipment	-	(147)

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(continued from previous page)

2022	2022	2021
$ 108 - (150,862) 348 3,990		$ - 753 - 1,397 4,470
	(163,876)	6,473
	(60,000) 494,409 (425,500) 70,000 (101,036) 65,000 (3,308) (41,115) 40,000	(110,000) - - 50,000 (107,197) - (3,254) (41,113) -
	38,450	(211,564)
	9,539	(3,302)
	(97,592) 145,488	12,033 133,455
	$ 47,896	$ 145,488

The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 9, 2023) (Concluded)

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Parpro Corporation

Notes to Financial Statements For The Years Ended December 31, 2022 and 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Parpro Corporation (hereinafter referred to as "the company") was established on December 27, 2001. The company engaged in the manufacturing and selling of motherboards for security control and communication, industrial computers and gaming machines.

Since November 21, 2013, the Company’s shares have been listed on the Taiwan Stock Exchange (TWSE).

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

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Company’s board of directors on March 9, 2023.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS, AMENDMENTS 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 material impact on the Company’s accounting policies

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

New IFRSs

Effective Date Announced by IASB

Amendments to IAS 1 “Disclosure of Accounting January 1 , 2023 ( Note 1 ) _ Policies”

Amendments to IAS 8 “Definition of Accounting January 1 , 2023 ( Note 2 ) Estimates”

Amendments to IAS 12 “Deferred Tax related to Assets January 1 , 2023 ( Note 3 ) _ and Liabilities arising from a Single Transaction”

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Note1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

Note2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

Note3: The amendments are 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.

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

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

NewIFRSs
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 "Lease Liability in 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 “Disclosure of Accounting
Policies”

Effective Date Announced
byIASB(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

Note1 : Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2 : The seller and lessee shall apply IFRS retroactively to the sale and leaseback transactions signed after 16 days after the initial application of IFRS Amendments to 16 .
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As of the release date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’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 financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.
b. Basis of preparation The financial statements have been prepared on the historical co st basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.
The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3 inputs are unobservable inputs for the asset or liability.
c. Classification of current and non-current assets and liabilities Current assets include:
(1)Assets held primarily for the purpose of trading;
(2) Assets expected to be realized within twelve months after the reporting period; and
(3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
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Current liabilities include:

(1)Liabilities held primarily for the purpose of trading;
(2) Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue; and
(3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

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

d. Foreign currency

In preparing the financial statements of each individual entity, transactions in currencies other than the entity’s functional currency (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.

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

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e. Inventory

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

f. Investing in affiliated companies

An associate is an entity over which the Company has significant influence and which is neither a subsidiary nor an interest in a joint venture. The Company uses the equity method to account for its investments in associates.

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

When the Company 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 Company’s proportionate interest in the associate. The Company 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 and joint ventures accounted for using the equity method. If the Company’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 ad justment 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.

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

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized 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.

g. Real estate, plant and equipment

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

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

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

h. Impairment of property, plant and equipment, right-of-use asset and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right -of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered any impairment loss. If any such

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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 Company 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. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the assets may be impaired.

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.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit 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 or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

i. Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets a nd 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.

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(a) Measurement categories
- Financial assets are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost and equity instruments at fair value through other comprehensive income (FVTOCI). A. Financial assets measured at amortized cost
i. Financial assets at FVTPL Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria. Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset.
ii. Financial assets at amortized cost

ii.

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.

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recognized in profit or loss. Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset. Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

(iii) Investments in equity instruments at FVTOCI

On initial recognition, the Company 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 a n 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 Company’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

The Company recognizes a loss allowance for expected credit losses (ECLs) on financial assets at amortized cost, including accounts receivables.

The Company always recognizes lifetime ECLs for accounts receivable. For all other financial instruments, the Company

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

ECLs 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 o f a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

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

The Company 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.

(2) 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 the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

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(c) Convertible corporate bonds

The convertible corporate bonds issued by the merged company are based on the substance of the contract agreement and the definition of financial liabilities and equity instruments, and its components are classified as financial liabilities and equity at the time of original recognition.

On original recognition, the fair value of the liability component is estimated using prevailing market interest rates for similar non-convertible instruments and measured at amortized cost using the effective interest method until the date of conversion or maturity. The liability component that is embedded in a non-equity derivative is measured at fair value.

The conversion right classified as equity is equal to the remaining amount of the overall fair value of the compound instrument minus the separately determined fair value of the liability component, which is recognized as equity after deducting the impact of income tax, and will not be measured subsequently. When the conversion right is exercised, its related liability components and the amount in equity will be transferred to share capital and capital reserve - issue premium. If the conversion right of the convertible corporate bonds has not been exercised on the maturity date, the amount recognized in equity will be transferred to capital reserve - others.

Transaction costs related to the issuance of convertible corporate bonds are apportioned to the liabilities and equity components of the instrument in proportion to the apportioned total price.

j. Revenue recognition

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

Merchandise sales revenue

Merchandise sales revenue comes from the sales of gaming and industrial computers, and aerospace and defense industry components. The products sold by the merged company are recognized as revenue when the products are shipped according to the contract, and the merged company recognizes accounts receivable at that point in time .

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When processing without materials, the control of the ownership of the processed products has not been transferred, so revenue is not recognized when the materials are removed.

k. Borrowing costs

Borrowing costs are recognized in profit or loss as incurred.

l. Employee benefits
(1) Short-term employee benefits

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

(2) Retirement benefits

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

Defined benefit costs (including service costs, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service costs (including current service costs) and net interest on a net defined benefit liability (asset) are recognized as employee benefits expenses in the period that they occur. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling 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.

The net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan. 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.

m. Income tax

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

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

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

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

(2) Deferred tax

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

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for deductible temporary differences or unused loss carryforward 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 Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and that they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset 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.

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Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which a liability is settled or an asset is 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 Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

(3) Current tax and deferred tax for the year

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

CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF

ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimatesand 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 Company considers the possible impact of the recent development of the COVID-19 in Taiwan and its economic environment implications when making its critical accounting estimates on cash flow projections,g rowth 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 estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Key Sources of Estimation Uncertainty

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shareholders, other shareholders are not very scattered, and the voting pattern of the previous shareholders' meeting shows that other shareholders Shareholders are not passive, and the merged company cannot appoint more than half of the members of the governance unit, so it cannot dominate the relevant activities of Ender Company and therefore has no control. The management of the merged company believes that it only has a significant impact on Ende, so it is listed as an affiliated company of the merged company.

Major Sources of Uncertainty in Estimates and Assumptions

Estimated goodwill impairment

Determining whether goodwill is impaired requires an estimate o f the value in use of the cash-generating units to which the goodwill is allocated. To calculate value in use, management should estimate the future cash flows expected to be generated from the cash-generating unit and determine the appropriate discount rate to use in calculating the present value. If the actual cash flow is less than expected, or if the facts and circumstances change and the future cash flow is revised downward or the discount rate is revised upward, significant impairment losses may occur.

6. CASH

ASH
Bank Check and Demand Deposit Cash on hand and working capital	December 31 2022 2021
	$ 47,783 113 $ 47,896	$ 145,378 110 $ 145,488

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

period were as follows:
Bank balance	December 31 2022 2021
	0.39 %~1.05% 0.01%~0.05%

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7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

December 31

Financial liabilities Held for trading Derivatives -Right of redemption		2022	2021
		$ 11,954	$ 7,948

8. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER

COMPREHENSIVE INCOME

December 31

Equity instrument investment Domestic listed stocks		2022	2021
		$ 10,160	$-

The company invests in the above-mentioned ordinary shares for medium and long-term strategic purposes, and expects to make profits through long -term investment. The management of the company believes that if the short -term fair value fluctuations of these investments are included in the profit and loss, it is inconsistent with the aforementioned long-term investment plan, so it chooses to designate the investment to be measured at fair value through other comprehensive profits and losses.

9. ACCOUNTS RECEIVABLE

Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss	December 31 2022 2021	December 31 2022 2021
	$ 49,986 -	$ 33,516 (835)
	$ 49,986	$ 32,681

The average credit period of the company for commodity sales is 30 to 180 days.

The company recognizes the allowance loss of accounts receivable according to the expected credit loss during the existence period. The expected credit loss during the duration is based on the consideration of the customer's past collection experience, the increase in delayed payment exceeding the average credit period, and at the same time the customer's past default record, current financial situation and industrial economic situation. According to the credit

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loss historical experience of the merged company, there is no significant difference in the loss patterns of different customer groups, so no further distinction is made between customer groups, and the expected credit loss rate is determined only by the days of accounts receivable.

If there is evidence that the counterparty is facing serious financial difficulties and the company cannot reasonably expect the recoverable amount, the company will write off the relevant accounts receivab le directly, but will continue to pursue activities, and the recovered amount due to the recovery will be recognized in profit or loss.

The allowance for accounts receivable of the company is as follows:

December 31,2022

ecember 31,2022
Gross carrying amount Loss allowance ( Lifetime ECLs) Amortized cost ecember 31,2021 Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost		Less than 180 days	181`～`365 days		More than 366 days		Total
		$ 25,060 -	$ 6,193 -		$ 18,733 -		$ 49,986 -
		$ 25,060 Less than 180 days	$ 6,193 181`～`365 days		$ 18,733 More than 366 days		$ 49,986
								Total
	$ 31,799 -		$ 1,717 (835)			$ - -		$ 33,516 (835)
	$ 31,799			$ 882		$-		$ 32,681

December 31,2021

The above is an aging analysis based on the invoice date.

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

ollows:
Balance at January 1 Add: Net remeasurement of loss allowance Balance at December 31		2022 2021 $ 835 $ 1,036 (835) (201) $- $ 835

		$-

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10. INVENTORIES

INVENTORIES
Finished goods Raw materials	December 31 2022 2021
	$ 454 -	$ - 9,076
	$ 454	$ 9,076

The cost of goods sold related to inventory for the years ended December 31, 2022 and 2021 was $82,589 thousand and $201,239 thousand.

The cost of goods sold for the years ended December 31, 2022 and 2021, including inventory depreciation and sluggish loss, was ($2,367) thousand and $383 thousand respectively.

11. INVESTMENTS USING THE EQUITY METHOD

Investments in subsidiaries Investments in associates Invest in subsidiaries Unlisted company Efa Technologies Corporation (hereinafter referred to as Efa Company) Parpro Holdings Co., Ltd.		December 31 2022 2021 $ 1,747,415 $ 1,558,997 581,174 539,271 $ 2,328,589 $ 2,098,268 December 31 2022 2021 $ 20,840 $ 58,991 1,726,575 1,500,006 $ 1,747,415 $ 1,558,997	December 31 2022 2021 $ 1,747,415 $ 1,558,997 581,174 539,271 $ 2,328,589 $ 2,098,268 December 31 2022 2021 $ 20,840 $ 58,991 1,726,575 1,500,006 $ 1,747,415 $ 1,558,997
			$ 1,747,415

The company's ownership and voting rights percentages in subsidiaries at the balance sheet date are as follows:

balance sheet date are as follows:
Efa Company Parpro Holdings Co., Ltd.	December 31 2022 2021
	100% 100% 100% 100%

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a. Investing in associates

esting in associates
Significant associate company Anderson Industrial Corp. Individually insignificant associate company	December 31 2022 2021
	$ 554,651 26,523	$ 512,334 26,937
	$ 581,174	$ 539,271

Significant associate companies are as follows:

			Shareholding and voting rights	Shareholding and voting rights	Shareholding and voting rights
				ratio
Company Name	Nature of Activities	Principal place of business	December 2022	31,	December 31, 2021
	Non-metallic computer
Anderson Industrial Corporation	numerical control machining centers, PCB electronic machinery,	Taiwan	20.86%		20.86%
	cutting tools, plates, etc.

(1) Investments using the equity method and the combined company's share of profits and losses and other comprehensive profits and losses are recognized in accordance with the financial reports audited by accountants for the same period.
(2) Level 1 fair value information of affiliated companies with open market quotations is as follows:

Company Name	December 31 2022	2021
Anderson Industrial Corporation	$ 405,031	$ 476,859

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12. PROPERTY, PLANT AND EQUIPMENT

Machinery Other Equipment	Machinery Other Equipment	Machinery Other Equipment	Total
$ 148,169 - (320)		$ 10,464 147 -	$ 158,633 147 (320)
$ 147,849 $ 117,005 (320) 8,417		$ 10,611 $ 9,029 - 744	$ 158,460 $ 126,034 (320) 9,161
$ 125,102 $ 22,747 $ 147,849 -	$ 9,773 $ 838 $ 10,611 (850)		$ 134,875 $ 23,585 $ 158,460 (850)

$ 147,849 $ 125,102 - 6,694		$ 9,761 $ 9,773 (850) 582	$ 157,610 $ 134,875 (850) 7,276
$ 131,796 $ 16,053	$ 9,505 $ 256		$ 141,301 $ 16,309

The above items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives as follows: Machinery 3 to 8 years Other Equipment 3 to 8 years

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13. BORROWINGS

a. Short-term loans

hort-term loans
Unsecured borrowings Bank loan Interest rate range		December 31 2022 2021
		$ 470,000 1.80%-2.18%	$ 530,000 1.04%-1.53%

b. Long-term loans

ong-term loans
Unsecured borrowing Bank loan Less: Current portion Long term loan Interest rate range Loan due date		December 2022	31 2021
		$ 106,338 (58,511)	$ 137,373 (90,530)
	$ 47,827 $ 46,843 2.01% -2.47% 1.45%- 1.60% September 2025 September 2024

14. CORPORATE BONDS PAYABLE

CORPORATE BONDS PAYABLE
Domestic Unsecured Convertible Corporate Bonds Less: Discount of corporate bonds payable Less: Current portion Total corporate bonds payable	December 31 2022 2021
	$ 574,400 (39,303) (71,530)	$ 499,900 (27,855) (472,045)
	$ 463,567	$-

The company issued the second domestic unsecured convertible corporate bond with a coupon rate of 0% on December 13, 2019, and it was listed for trading on the counter trading center on the same day, with a total principal amount of 502,500 thousand and a face value of 100 thousand, issued according to 100.50% of the face value, the issuance terms is 5 years, and the conversion period is from March 14, 2020 to December 13, 2024. The conversion price at the time of issuance was $39 per share. Due to the distribution of dividends, the conversion price has been adjusted to $34.7 since August 23, 2022.

Following the issuance of the convertible corporate bonds 3 months to 40 days before the expiration of the issuance period, if the closing price of the

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company’s common stock in the centralized trading market exceeds the current conversion price by 30% (inclusive) for 30 consecutive business days or when the outstanding balance of the convertible bonds is less than 10% of the original issued total amount, the company may take back all the bonds in cash according to the face value of the bonds.

As of December 31, 2022, the bondholders exercised the right to sell back, and the company has paid $438,393 thousand (including interest compensation of $12,893 thousand, the book value of corporate bonds $409,369 thousand and financial liabilities measured at fair value through profit and loss $9,956 thousand), and $6,175 thousand was recognized as a repayment loss.

repayment loss.
Issue price (less transaction costs of $5,406 thousand) Equity components Deferred tax assets Financial liabilities Components of Liabilities at Issue Date Components of Liabilities as at January 1 ,2021 Interest calculated at an effective rate of 1.9452% (Note 22 ) Corporate bonds payable convert into ordinary shares Components of Liabilities as at December 31 ,2021 Interest calculated at an effective rate of 1.9452% (Note 22 ) Repay corporate debt Components of Liabilities as at December 31 ,2022		$ 497,094 (31,774) 1,081 (12,739)
		$ 453,662 $ 463,066 9,073 (94)
		472,045 8,854 (409,369)
		$ 71,530

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conversion period is from June 11, 2022 to March 10, 2027. The conversion price at the time of issuance was $29.2 per share. Due to the distribution of dividends, the conversion price has been adjusted to $28.6 since August 23, 2022.

Following the issuance of the convertible corporate bonds 3 months to 40 days before the expiration of the issuance period , if the closing price of the company’s common stock in the centralized trading market exceeds the current conversion price by 30% (inclusive) for 30 consecutive business days or when the outstanding balance of the convertible bonds is less than 10% of the original issued total amount , the company may take back all the bonds in cash according to the face value of the bonds.

After the issuance of the convertible corporate bonds for 3 and 4 years, the
bondholders may request the company to redeem the convertible bonds they
hold in cash at the face value of the bonds plus interest compensation.
This convertible corporate bond includes liabilities and equity components,
and the equity component is expressed as "capital reserves - stock options"
under the equity item. The liability component was originally recognized
with an effective interest rate of 1.8061%.
Issue price (less transaction costs of $5,591 thousand) $ 494,409
Equity components (28,740)
Deferred tax assets 1,118
Financial liabilities (9,960)
Components of Liabilities at Issue Date $ 456,827
Issue date liability components on 2022 $ 456,827
Interest calculated at an effective rate of 1.8061% (Note 22 ) 6,740
Components of Liabilities as at December 31 ,2022 $ 463,567

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15. OTHER PAYABLES

.OTHER PAYABLES
Payables to related parties (Note 24) Payables for salaries and bonuses Payables for compensation of employees and remuneration to directors and supervisors Other	December 31 2022 2021
	$ 65,189 6,343 5,408 3,729	$ 5,661 5,263 3,342 3,176
	$ 80,669	$ 17,442

16. RETIREMENT BENEFIT PLANS

Defined contribution plans

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

17. EQUITY

a. Share capital

Number of shares authorized (in thousand) Shares authorized Number of shares issued and fully paid (in thousand) Shares issued		December 31 2022 2021	December 31 2022 2021
		120,000 $ 1,200,000 83,354 $ 833,544	120,000
			$ 1,200,000
			83,452
			$ 834,516

As of December 31, 2021, there were still 3,000 shares that had not yet been registered for change due to the conversion of convertible corporate bonds, and were listed as pending registration share capital.

Among the authorized share, 500 thousand shares are reserved for the issuance of employee stock option certificates.

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b. Capital reserves

pital reserves
May be used to offset a deficit, distributed as cash	December 31 2022 2021
	$ 268,383 27,957 33,468	$ 278,196 917 31,768
dividends, or transferred to share capital (Note) Issuance of ordinary shares Lapsed stock option May not be used for any purpose Convertible corporate bond warrants
	$ 329,808	$ 310,881

Note: Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s number of shares fully paid).

c. Retained earnings and dividend policy

On May 31, 2022, the company passed the resolution of the shareholders' meeting to amend the Articles of Association, stipulating that when the company distributes surplus, statutory surplus reserves and capital reserves in cash, the board of directors is authorized to have more than two-thirds of the directors present and Distributed by a resolution of more than half of the directors present, and reported to the shareholders' meeting.

According to the surplus distribution polic y stipulated in the company's revised Articles of Association, the company will consider the company's environment and growth stage, respond to future capital needs and long-term financial planning, and meet shareholders' needs for cash inflow. If there is a surplus in the annual final accounts, Taxes should be paid first to make up for the losses of previous years, and 10% should be set aside as the legal surplus reserve, except when the legal surplus reserve has reached the total capital, and it can be allocated or reversed special surplus reserve according to business needs or regulations of the competent authority.

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Shareholder dividends are based on the consideration of the current year's after-tax surplus and the accumulated undistributed surplus in the previous period. The principle of distributing the surplus amount shall not be less than 10% of the current year's after-tax surplus. Cash dividends shall not be less than 10% of the total dividends. If it is less than 0.1 yuan per share, it can be distributed as stock dividends, but the distribution ratio can be adjusted depending on the company's future earnings and capital status. When the company has no profit, no dividends and bonuses will be distributed. For employee and director remuneration distrib ution policy, please refer to Note 22 (6) Employee and Director Remuneration. The statutory surplus reserve shall be appropriated until its balance reaches the total paid-in share capital of the company. The statutory surplus reserve can be used to make up for losses. When the company has no losses, the portion of the statutory surplus reserve exceeding 25% of the total paid-in share capital may be allocated to share capital and distributed in cash.

The company's general meeting of shareholders on July 2, 2021 resolved to make up the loss of 27,619 thousand with the legal surplus reserve, and distributed $0.5 per share in cash with the capital reserve of $41,113 thousand.

On May 31, 2022, the company's shareholders' general meeting resolved to approve the 2021 profit distribution plan as follows:

Legal reserve Special reserve Cash dividend	Surplus Distribution Proposal Dividend per share (Dollar)
	$10,597 60,844 32,892 $0.40

The Company’s shareholders resolved to issue $0.1 per share of cash dividends from capital surplus of $8,223 thousand.

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d. Treasury share

Purpose of Buy-back Number of Shares at January 1,2021 Shares Transferred to Employees Number of Shares at December 31,2021 Shares Cancelled Number of Shares at December 31,2022		Shares transferred to employees (in thousands of shares) 1,225 -
		1,225 (100)
		1,125

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote.21.

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18. INCOME

a.Description of customer revenue

Revenue from the sale of goods

Sales revenue comes from the sales of gaming and industrial computers, and aerospace and defense industry components. The products sold by the company are recognized as revenue when the products are shipped according to the contract, and the company recognizes accounts receivable at the same time.

When processing without materials, the control of the ownership of the processed products has not been transferred, so revenue is not recognized when the materials are removed.

b.Contract Balance

Contract Balance
Accounts receivable (Note 9) Contract liabilities (accounted for other current liabilities) (Note 24)	December 31 2022 2021		January 1 2021
	$ 49,986 $ 45,810	$ 32,681	$ 32,517 $-
		$ 63

Changes in contract liabilities are primarily attributable to differences in the timing of satisfaction of performance obligations and the timing of payment by customers.

c.For the breakdown of customer revenue, please refer to Statement 4.

19. NET INCOME

Net income for the year includes the following items:

a. Other income

Other income
Management income ( Note 16 ) Rental income Others	2022	2021
	$ 62,983 24,170 1,146	$ 58,962 22,783 1,153
	$ 88,299	$ 82,898

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b. Other gains and losses

b. Other gains and losses
Net foreign exchange gain ( loss ) Net gain(loss) on financial instruments at FVTPL Disposal gain on property, plant and equipment Losses on repayment of convertible corporate bonds Other c. Finance cost Interest on Convertible Corporate Bonds Compensation interest for repayment of convertible corporate bonds Interest on bank loans Interest on lease liabilities d. Depreciation Property, plant and equipment Right-of-use assets An analysis of depreciation by function Operating cost Operating expenses e. Employee benefits expense Short-term benefits Salary Labor health insurance Other employment expenses Post-employment benefits (Note 19 ) Defined contribution plans An analysis of employee benefits expense by function Operating cost Operating expenses	2022			2021 ($ 6,474) 6,099 - - (35) ($ 410) 2021 $ 9,073 - 10,121 86 $ 19,280 2021 $ 9,161 3,263 $ 12,424 $ 8,417 4,007 $ 12,424 2021
	$ 26,515 (4,003) 108 (6,175) -
	$ 16,445 2022
	$ 15,594 12,893 6,497 29
	$ 35,013 2022 $ 7,276 3,263 $ 10,539 $ - 10,539 $ 10,539 2022 $ 21,571 944 766 23,281 486 $ 23,767 $ - 23,767 $ 23,767

		$ 7,276 3,263
		$ 10,539 $ - 10,539

			$ 10,539 2022
			$ 21,571 944 766	$ 24,606 889 586
			23,281	26,081
			486	456
			$ 23,767	$ 26,537 $ 692 25,845
			$ - 23,767
			$ 23,767		$ 26,537

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f. Remuneration of employees and directors

If the company makes profits in the year, it should allocate 1% to 15% as employee remuneration, which is distributed by the board of directors in the form of stocks or cash. The distribution objects include employees of subordinate companies who meet certain conditions; the company can increase the profit, the resolution of the board of directors shall allocate no more than 5% as director remuneration. Proposals on employee and director remuneration distribution should be reported to the shareholders' meeting. However, if the company still has accumulated losses, it shall reserve the compensation amount in advance, and then appropriate the remuneration of employees and directors in accordance with the proportion mentioned in the preceding paragraph.

On March 9, 2023 and March 16, 2022, the remuneration of employees and directors in 2022 and 2021 were resolved by the board of directors as follows:

as follows:
Accrual rate Compensation of employees Remuneration of directors Amount Compensation of employees Remuneration of directors	2022 2% 1% 2022 Cash Stock $ 2,120 $ - 1,060 -	2022	2021
			2% 1% 2021
			Cash Stock
			$ 2,228 $ - 1,114 -

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

There is no difference between the actual distribution amount of employee and director and supervisor remuneration in 2021 and the recognized amount in the 2021 financial report. Due to the loss in 2020, the remuneration of employees and directors was not estimated.

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

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20. INCOME TAX

a. Income tax recognized in profit or loss:

Major components of income tax expense (benefit) are as follows:

A reconciliation of accounting profit and income tax expense (benefit) is as follows: 2022 2021 Net profit (loss) before income tax $ 102,819 $ 108,057 Income tax expense calculated at the statutory rate $20,564 $21,611 Nondeductible expenses in determining taxable income 7,402 1,817 Tax-exempt income (6,596) (3,743) Unrecognized temporary differences (12,106) (14,138) Unrecognized loss carryforwards (5,951) (3,796) Adjustments for prior years’ tax (7) - Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751 2022 2021 Current tax Adjustments for prior years ($ 7) - Deferred tax In respect of the current yea 3,313 1,751 Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751	A reconciliation of accounting profit and income tax expense (benefit) is as follows: 2022 2021 Net profit (loss) before income tax $ 102,819 $ 108,057 Income tax expense calculated at the statutory rate $20,564 $21,611 Nondeductible expenses in determining taxable income 7,402 1,817 Tax-exempt income (6,596) (3,743) Unrecognized temporary differences (12,106) (14,138) Unrecognized loss carryforwards (5,951) (3,796) Adjustments for prior years’ tax (7) - Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751 2022 2021 Current tax Adjustments for prior years ($ 7) - Deferred tax In respect of the current yea 3,313 1,751 Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751	A reconciliation of accounting profit and income tax expense (benefit) is as follows: 2022 2021 Net profit (loss) before income tax $ 102,819 $ 108,057 Income tax expense calculated at the statutory rate $20,564 $21,611 Nondeductible expenses in determining taxable income 7,402 1,817 Tax-exempt income (6,596) (3,743) Unrecognized temporary differences (12,106) (14,138) Unrecognized loss carryforwards (5,951) (3,796) Adjustments for prior years’ tax (7) - Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751 2022 2021 Current tax Adjustments for prior years ($ 7) - Deferred tax In respect of the current yea 3,313 1,751 Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751	A reconciliation of accounting profit and income tax expense (benefit) is as follows: 2022 2021 Net profit (loss) before income tax $ 102,819 $ 108,057 Income tax expense calculated at the statutory rate $20,564 $21,611 Nondeductible expenses in determining taxable income 7,402 1,817 Tax-exempt income (6,596) (3,743) Unrecognized temporary differences (12,106) (14,138) Unrecognized loss carryforwards (5,951) (3,796) Adjustments for prior years’ tax (7) - Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751 2022 2021 Current tax Adjustments for prior years ($ 7) - Deferred tax In respect of the current yea 3,313 1,751 Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751	A reconciliation of accounting profit and income tax expense (benefit) is as follows: 2022 2021 Net profit (loss) before income tax $ 102,819 $ 108,057 Income tax expense calculated at the statutory rate $20,564 $21,611 Nondeductible expenses in determining taxable income 7,402 1,817 Tax-exempt income (6,596) (3,743) Unrecognized temporary differences (12,106) (14,138) Unrecognized loss carryforwards (5,951) (3,796) Adjustments for prior years’ tax (7) - Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751 2022 2021 Current tax Adjustments for prior years ($ 7) - Deferred tax In respect of the current yea 3,313 1,751 Income tax expense (benefit) recognized in profit or loss $ 3,306 $ 1,751
		$ 102,819 $20,564 7,402 (6,596) (12,106) (5,951) (7)		$ 108,057 $21,611 1,817 (3,743) (14,138) (3,796) -
		$ 3,306	$ 1,751

b. Deferred income tax assets and liabilities

Changes in deferred tax assets and liabilities are as follows:

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2022 Deferred tax assets	Opening Balance Recognized in Profit or Loss Recognized in equity	Opening Balance Recognized in Profit or Loss Recognized in equity	Opening Balance Recognized in Profit or Loss Recognized in equity	Closing Balance $ - 839 149 223 $ 1 ,211 $ 1,975 20 $ 1,995 Closing Balance	Closing Balance $ - 839 149 223 $ 1 ,211 $ 1,975 20 $ 1,995 Closing Balance
	$ 224 ($ 224) 361 (640) 623 (474) 223 -		$ - 1118 - -
Unrealized exchange loss Issuance cost of convertible corporate bonds Inventory write-downs Others Deferred tax liabilities
	$ 1,431 $ - 20	($ 1,338) $ 1,975 -	$ 1,118 $ - -
	$ 20 Opening Balance	$ 1,975 Recognized in Profit or Loss	$- Recognized in equity

	$ 1,692 721 546 223	($ 1,468) (360) 77 -	$ - - - -	$ 224 361 623 223
	$ 3,182 $ 20	($ 1,751) $-	$- $-	$	1,431 $ 20

c. Unused and unrecognized loss carryforwards information

Unused and unrecognized loss carryforwards information	Unused and unrecognized loss carryforwards information
Company Unused Amount ExpiryYear
The company	$6,097 2030

d. Income tax assessments

The Company’s income tax returns through 20 20 were examined and cleared by the tax authorities.

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21. EARNINGS PER SHARE

Unit: NT$ Per Share

Unit: NT$ Per Share	Unit: NT$ Per Share	Unit: NT$ Per Share
2022 2021 Basic earnings per share $ 1.21 $ 1.29 Diluted earnings per share $ 1.07 $ 1.13 The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows: Net Income for the Year 2022 2021 Net income of ordinary shares in computation of basic earnings per share $ 99,513 $ 106,306 Effect of potentially dilutive ordinary shares Compensation of employees: Convert corporate bonds 7,030 2,974 Net income of ordinary shares used in the computation of diluted earnings per share $ 106,543 $ 109,280 Unit: thousand shares Number of ordinary shares 2022 2021 Weighted average number of ordinary shares in computation of basic earnings (loss) per share $ 82,327 $ 82,227 Effect of potentially dilutive ordinary shares Compensation of employees: Convert corporate bonds 17,483 14,124 Employee compensation 96 69 Weighted average number of ordinary shares used in the computation of diluted earnings (loss) per share $ 99,906 $ 96,420
	$ 99,513 7,030	$ 106,306 2,974
	$ 106,543 $ 109,280 Unit: thousand shares 2022 2021
	$ 82,327 17,483 96	$ 82,227 14,124 69
	$ 99,906	$ 96,420

The second domestic unsecured conversion corporate bond in 2022 was not included in the calculation of diluted earnings per share due to anti-dilution. If the company may settle the compensation of employees in cash or shares; therefore, the Company assumed 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

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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.

22. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Company (comprising issued capital, reserves, retained earnings, other equity and non-controlling interests).

The Company is not subject to any externally imposed capital requirements. Key management personnel of the Company review the capital structure on a quarterly basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Company may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed.

23. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value Except as listed in the table below, the Company’s management considers the carrying amounts recognized in the financial statements for financial assets and financial liabilities not carried at fair value to approximate their fair values or their fair values cannot be reliably measured:

Financial liabilities Convertible corporate bonds - The second domestic convertible bonds - The third domestic convertible bonds	December 31,2022 December 31,2021
	Carrying amount Fair Value Carrying amount Fair Value
	$ 71,530 $ 75,479 $ 472,045 $ 512,597 463,567 497,500 - -

The fair value of convertible corporate bonds is measured by Level 2 input values. The valuation is based on the weighted average $100 price in the OTC trading center on the reporting date to calculate the fair value.

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

Fair value hierarchy
December 31,2022 Financial assets at FVTOCI Equity instruments Domestic listed stocks Financial liabilities at FVTPL Beneficiary certificates Derivatives December 31,2021 Financial liabilities at FVTPL Beneficiary certificates Derivatives	Level 1	Level 2	Level 3	Total
	$ 10,160 $- Level 1	$- $ 11,954 Level 2	$- $- Level 3	$ 10,160 $ 11,954 Total

	$-	$ 7,948	$-		$ 7,948

There were no transfers between Levels 1 and 2 in the 2022 and 2021.

(2) Valuation techniques and inputs applied for Level 2 fair value

measurement

Financial Instrument Valuation Technique and Inputs The fair value of financial assets or liabilities Derivatives - convertible of convertible corporate bonds based on corporate bond redemption observable stock prices, risk-free interest option rates, and risk discount rates at the end of the period.

c. Categories of financial instruments

period. ategories of financial instruments
Financial assets Financial assets at amortized cost (Note1) Financial assets at FVTOCI Equity instruments	December 31 2022 2021
	$ 384,149 $ 250,055 10,160 -

(Continued on next page)

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(Continued from previous page)

Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities at amortized cost (Note2)	December 31 2022 2021
	11,954 7,948 1,210,322 1,162,826

Note 1: The balance includes financial assets such as cash, accounts receivable and other receivables measured at amortized cost.
Note 2: The balance includes short-term loans, accounts payable, other payables, long-term liabilities due within one year, corporate bonds payable, long-term loans and other financial liabilities measured at amortized cost.
d. Financial risk management objectives and policies

The main financial instruments of the merged company include accounts receivable, accounts payable, corporate bonds payable, borrowings and lease liabilities. The Company’s corporate treasury function provides services to the business, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

(1) Market risk

The Company’s activities are exposed primarily to the financial risks of changes in foreign currency exchange rates and interest rates.

(a) Foreign currency risk

The Company had foreign currency sales and purchases, which were exposed to foreign currency risk.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) and of the derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 26.

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Sensitivity analysis

The Company was mainly exposed to the USD.

The following details the effects of a 10% increase or decrease in New Taiwan dollars (the functional currency) against the relevant foreign currencies. The rate of 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 10% change in foreign currency rates. For a 10% strengthening of NTD against the relevant currency, the net profit before tax would be a decrease of $32,451 thousand for the year ended December 31, 2022, and the net loss before tax would be an decrease of $22,504 thousand for the year ended December 31, 2021.

(b) Interest rate risk

The Company was exposed to interest rate risk because entities in the Company borrowed funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate borrowings.

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

Fair value interest rate risk - Financial liabilities Cash flow interest rate risk - Financial assets - Financial liabilities	December 31 2022 2021
	$ 535,629 $ 475,885 47,666 145,260 576,338 667,373

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Sensitivity analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. The sensitivity analyses were determined based on the Company’s exposure to interest rates at the end of the reporting period. A 10 basis points increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 10 basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2022 would have decreased/ increased by $529 thousand and the Company’s pre-tax loss for the year ended December 31, 2021 would have increased/decreased by $522 thousand, which was mainly attributable to the Company’s exposure to cash flow on its variable-rate bank borrowings.

(2)

Credit risk

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

The Company adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company only transacts with entities that are rated the equivalent of excellent grade. This information is supplied by a rating agency

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where available and, if not available, the Company uses other publicly available financial information to rate its major customers. The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

Financial assets are potentially affected by the co unterparty of the merging company or other parties failing to perform the contract, and the merging company takes the contract with a positive fair value on the balance sheet date as the evaluation object. The transaction partners of the merged company are all reputable financial institutions and manufacturers, so no significant credit risk is expected.

(3)

The Company did transactions with a large number of unrelated customers and, thus, no concentration of credit risk was observed. Liquidity risk

The company manages and maintains sufficient cash to support operations and mitigate the impact of cash flow fluctuations. The management of the merged company regularly supervises the use of bank financing lines and ensures compliance with the terms of the loan contract.

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

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. 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 repayment dates.

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December 31, 2022 Non-derivative financial liabilities	Demand immediate payment or less than 1 month	Demand immediate payment or less than 1 month	1 to 3 months 3 months to 1 year	1 to 3 months 3 months to 1 year	1 to 3 months 3 months to 1 year	1 to 3 months 3 months to 1 year	1 to 5 years	1 to 5 years
	$ - 108,036 278 -		$ 33,887 $ - 206,548 217,584 170 85 - 74,400				$ - 48,447 - 500,000
Non-interest bearing Variable interest rate liabilities Lease liabilities Corporate bonds payable December 31, 2021 Non-derivative financial liabilities
	$ 108,314 Demand immediate payment or less than 1 month		$ 240,605 1 to 3 months 3			$ 292,069 months to 1 year		$ 548,447
								1 to 5 years
		$ - 130,163 278 -		$ 23,408 230,620 557 -	$ - 262,596 2,505 499,900		$ - 47,259 533 -
Non-interest bearing Variable interest rate liabilities Lease liabilities Corporate bonds payable
		$ 130,441		$ 254,585	$ 765,001		$ 47,792

The above amount of variable interest rate instruments for both non-derivative financial assets and liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

(b) Financing facilities

Financing facilities
Unsecured bank overdraft facility - Amount used - Unused amount	December 31 2022 2021
	$ 576,338 220,000	$ 667,373 110,000
	$ 796,338	$ 777,373

24. TRANSACTIONS WITH RELATED PARTIES

Besides information disclosed elsewhere in the other notes, details of transactions between the Company and other related parties are disclosed below:

(a) Related parties and their relationships with the Company:

Related Party	Relationship with the Company
Liao,Wen Jia	Chairman of the Company
Anderson Industrial Corp.	Associate
Sogotec Precision Co., Ltd.	Associate
Giben do Brasil Maqs. e Equips.	Other related party
Anderson Logistics Corporation	Other related party

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Anderson Merchandise Corporation	Other related party
Verite Corporation	Other related party
Efa Technologies Corporation	Subsidiary
Parpro Holdings Co., Ltd.	Second-tier Subsidiary
AP Parpro, Inc.	Second-tier Subsidiary
Pilot (Las Vegas), Inc.	Second-tier Subsidiary
Parpro Quality Inc.	Second-tier Subsidiary
Parpro (Nevada), Inc.	Second-tier Subsidiary
Parpro Technologies Inc.	Second-tier Subsidiary

(b) Sales

Sales
Line Items Related PartyCategory/Name	2022	2021
Sales revenue Other related party Giben do Brasil Maqs. Second-tier Subsidiary AP Parpro, Inc. Parpro Technologies Inc.	$ 55,774 19,569 37	$ - 24,899 3
	$ 75,380	$ 24,902

For major transactions between the company and related parties, the transaction price is considerably the same as those of non-related parties.

Operating costs
Line Items Related PartyCategory/Name Purchase Second-tier Subsidiary AP Parpro, Inc. Processing Fee Second-tier Subsidiary AP Parpro, Inc.	2022	2021
	$ 19,111 $ 4,130	$- $12,079

For major transactions between the company and related parties, the transaction price is considerably the same as those of non-related parties.

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(d) Accounts receivable (excluding loans to related parties)

Accounts receivable (excluding loans to related parties)
Line Items Related Party Category/Name	December 31 2022 2021
Accounts receivable Second-tier Subsidiary AP Parpro, Inc. Parpro Technologies Inc. Other related party Giben do Brasil Maqs. e Equips. Other receivables Second-tier Subsidiary Parpro Technologies Inc. AP Parpro, Inc. Parpro (Nevada), Inc. Other related party Associate	$ 38,821 $ 24,834 39 3 10,450 -
	$ 49,310 $ 24,837 $ 55,800 $ 29,147 45,211 32,038 17,781 8,221 488 - 55 -
	$ 119,335	$ 69,406

Outstanding receivables from related parties have not received guarantee. The amount receivable from related parties in 2022 and 2021 have not been provided as a provision for loss.

(e) Contract liabilities (accounted for other current liabilities)

Related PartyCategory/Name	December 31 2022 2021	December 31 2022 2021
Associate Anderson Industrial Corp.	$ 45,810	$-

(f) Amount payable to related parties (excluding loans from related parties)

Line Items Related PartyCategory/Name	2022	2021
Accounts payable Second-tier Subsidiary AP Parpro, Inc. Other payable Second-tier Subsidiary AP Parpro, Inc.	$ 18,218 $ 189	$- $ 5,661

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(g) Borrowing from related parties (accounted for other payables)

	December	31
Related PartyCategory/Name	2022		2021
Chairman of the Company	$ 65,000	$	-

The interest rate of the company's borrowing from related parties is equivalent to the market interest rate.

(h) Loans to related parties

Loans to related parties
Line Items Related PartyCategory/Name		2022		2021 $ - - - $- $ 1,489 2021
Other receivables Second-tier Subsidiary AP Parpro, Inc. Parpro Technologies Inc. Parpro (Nevada), Inc. Interest income Second-tier Subsidiary Other income Line Items Related PartyCategory/Name	$	161,626 2,303 1,566
	$	165,495 1,334 2022
	$

Management charge income Second-tier Subsidiary Parpro Technologies Inc. AP Parpro, Inc. Parpro (Nevada), Inc. Rental income Second-tier Subsidiary AP Parpro, Inc. Parpro Technologies Inc. Parpro (Nevada), Inc. Associate Other related party Accounting Processing Income Others Associate Other related party		$ 32,212 20,030 10,741			$ 29,160 20,772 9,030
		$ 62,983			$ 58,962 $ 11,406 8,722 671 1,114 797
		$ 12,167 9,304 716 1,114 797
		$ 24,098			$ 22,710 $ 720 $ 132 120 $ 252
			$ 720 $ 132 140
			$ 272

(i) Other income
(j) Compensation of key management personnel

mpensation of key management personnel
Short-term employee benefits Post-employment benefits	2022	2021
	$ 9,584 328	$ 9,561 328
	$ 9,912	$ 9,889

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The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

25. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED

COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Company were as follows:

As of December 31, 2022, the amount of guarantee notes issued by the company in order to obtain a bank line of credit was 970,000 thousand.

26. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN

FOREIGN CURRENCIES

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

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December 31, 2022 Financial assets Monetary items USD Non-monetary items Investments using the equity method USD Financial liabilities Monetary items USD December 31, 2021 Financial assets Monetary items USD Non-monetary items Investments using the equity method USD Financial liabilities Monetary items USD	Foreign Currencies Exchange Rate Carrying Amount $ 11,174 30.71(USD:NTD) $ 343,154 56,222 30.71(USD:NTD) 1,726,575 607 30.71(USD:NTD) 18,641 Foreign Currencies Exchange Rate Carrying Amount $ 8,163 27.68(USD:NTD) $ 225,952 53,883 27.68(USD:NTD) 1,500,006 33 27.68(USD:NTD) 913

Foreign exchange gains and losses with significant impact (realized and unrealized) are as follows:

unrealized) are as follows:
Functional currency	2022 2021
	Exchange rateNet exchange (loss) loss Exchange rate Net exchange (loss)loss
NTD	(NTD:NTD)	$26,515 (NTD:NTD)	($ 6,474)

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27. SEPARATELY DISCLOSED ITEMS

(a) Information about significant transactions
(1) Financing provided to others. (Table 1)
(2) Endorsements/guarantees provided. (None)
(3) Marketable securities held (excluding investment in subsidiaries, associates and joint ventures).(Table 2)
(4) Marketable securities acquired and disposed at costs or prices 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. (Table 3)
(8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4)
(9) Trading in derivative instruments. (None)
(b) Information on investees: Table 5
(c) Information on investments in mainland China: None.
(d) Information of major shareholders:

List all shareholders with ownership of 5% or greater showing the name of the shares and percentage of ownership of each shareholder (Table 6)

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Table 1

Parpro Corporation

Financing Provided To Others

For The Year Ended December 31, 2022

(In Thousands of New Taiwan Dollars)

No	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending balance	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limits
													Item	Value
0	The Company	AP Parpro, Inc.	Other receivables	yes	$214,970	$214,970	$161,626	2.5%-3%	Short-term financing	$ -	Operation requirements	$ -	-	$ -	$294,836 The loan limit should not exceed 20% of total equity of the Company.	$737,090 The loan limit should not exceed 50% of total equity of the Company.
		Parpro (Nevada), Inc.	Other receivables	yes	30,710	30,710	1,566	3%	Short-term financing	-	Operation requirements	-	-	-	294,836 The loan limit should not exceed 20% of total equity of the Company.	737,090 The loan limit should not exceed 50% of total equity of the Company.
		Parpro Technologies, Inc.	Other receivables	yes	30,710	30,710	2,303	3%	Short-term financing	-	Operation requirements	-	-	-	294,836 The loan limit should not exceed 20% of total equity of the Company.	737,090 The loan limit should not exceed 50% of total equity of the Company.
1	Parpro Holdings Co., Ltd.	AP Parpro, Inc.	Other receivables	yes	67,562	67,562	67,562	2.75%-3%	Short-term financing	-	Operation requirements	-	-	-	1,726,575 The loan limit should not exceed 100% of total equity of the Company.	1,726,575 The loan limit should not exceed 100% of total equity of the Company.
2	Parpro Technologies, Inc.	Parpro (Nevada), Inc.	Other receivables	yes	57,987	55,278	55,278	2.75%	Short-term financing	-	Operation requirements	-	-	-	1,141,669 The loan limit should not exceed 100% of total equity of the Company.	1,141,669 The loan limit should not exceed 100% of total equity of the Company.
		AP Parpro, Inc.	Other receivables	yes	132,082	125,911	96,644	2.5%-2.75%	Short-term financing	-	Operation requirements	-	-	-	1,141,669 The loan limit should not exceed 100% of total equity of the Company.	1,141,669 The loan limit should not exceed 100% of total equity of the Company.
3	Parpro (Nevada), Inc.	AP Parpro, Inc.	Other receivables	yes	32,215	30,710	-	2.75%	Short-term financing	-	Operation requirements	-	-	-	128,802 The loan limit should not exceed 100% of total equity of the Company.	128,802 The loan limit should not exceed 100% of total equity of the Company.

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Table 2

Parpro Corporation

Marketable Securities Held

December 31, 2022

(In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account	December 31,2022	December 31,2022	December 31,2022		Note
				Shares (In Thousands of Shares)	Carrying Amount	Percentage of Ownership (%)	Fair Value
The company	iCatch Technology, Inc.	-	Financial assets at fair value through other comprehensive income - non-current	254,000	$10,160	-	$10,160	-

Note 1: Marketable securities in the table refer to shares, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 “Financial Instruments”. Note 2: Information on investments in subsidiaries and associates, see Table 6 for details.

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Table 3

Parpro Corporation

Total Purchases From Or Sales To Related Parties Amounting To At Least $100 Million Or 20% Of The Paid-In Capital For The Year Ended December 31, 2022

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable(Payable)	Notes/Accounts Receivable(Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
AP Parpro, Inc.	Parpro Nevada, Inc.	Subsidiary	Sale	($575,995)	(38%)	NET 30 days	Agreed	None	$61,908	17%	-

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Table 4

Parpro Corporation

Receivables from Related Parties Amounting To At Least NT$100 Million Or 20% of The Paid-In Capital December 31, 2022

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
The company	AP Parpro,Inc.	Subsidiary	Other receivables $208,088	-	$ -	-	$40,756	$ -

Note: As of March 3, 2023.

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Table 5

Parpro Corporation

Information on Investees (Excluding Information On Investment In Mainland China)

For The Year Ended December 31, 2022

(In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31, 2022	As of December 31, 2022	As of December 31, 2022	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2022	December 31, 2021	Shares (In Thousands of Shares)	%	Carrying Amount
The Company	Efa Technologies Corporation	Taiwan	Sales of industrial computers and gaming machines, etc.	$ -	$20,000	3,271,945	100	$20,840	$1,847	$1,847	Subsidiary
	Parpro Holdings Co., Ltd.	British Virgin Islands	Investment	USD36,190	USD36,190	36,190	100	1,726,575	60,533	60,533	Subsidiary
	Anderson Industrial Corp.	Taiwan	Non-metallic computer numerical control machining center	470,758	470,758	39,904,488	20.86	554,651	155,667	31,051	Associate
	Sogotec Precision Co., Ltd.	Taiwan	Manufacturing and sales of machinery	56,507	56,507	959,880	4.73	26,523	(8,864)	(419)	Associate
Efa Technologies Corporation	Sogotec Precision Co., Ltd.	Taiwan	Manufacturing and sales of machinery	28,797	28,797	485,000	2.39	13,402	(8,864)	Not applicable	Associate
Parpro Holdings Co., Ltd.	AP Parpro, Inc.	USA	Production and sales of aerospace industry parts	USD12,722	USD12,722	6,765	100	456,010	47,204	Not applicable	Second-tier Subsidiary
	Pilot(Las Vegas), Inc.	USA	Investment	USD735	USD735	735	100	25,758	16,096	Not applicable	Second-tier Subsidiary
	ParproQualityInc.	USA	Investment	USD23,955	USD23,955	23,500,000	100	1,141,669	27,702	Not applicable	Second-tier Subsidiary
AP Parpro, Inc.	Parpro (Nevada), Inc.	USA	Sales of industrial computers and gaming machines, etc.	USD2,941	USD2,941	510	80	103,044	80,482	Not applicable	Second-tier Subsidiary
Pilot (Las Vegas), Inc.	Parpro (Nevada), Inc.	USA	Sales of industrial computers and gaming machines, etc.	USD735	USD735	490	20	25,758	80,482	Not applicable	Second-tier Subsidiary
Parpro Quality Inc.	Parpro Technologies Inc.	USA	Production and sales of netcom, aerospace and defense industry components	USD23,500	USD23,500	12,859	100	1,141,669	27,702	Not applicable	Second-tier Subsidiary

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Table 6

Parpro Corporation

Information of Major Shareholders December 31, 2022

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Liao, Wen Jia	8,071,942	9.68%
Yunyong Investment Co., Ltd.	7,500,865	8.99%
Jieshi Investment Co., Ltd.	5,830,415	6.99%

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 Company as of the last business day for the current quarter. The share capital in the financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

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DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The entities that are required to be included in the consolidated financial statements of Parpro Corporation as of and for the year ended December 31, 2022 under the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No. 10 “Consolidated Financial statements”. In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, Parpro Corporation and subsidiaries did not prepare a separate set of consolidated financial statements.

Very truly yours, Parpro Corporation By

WEN JIA LIAO Chairman March 9, 2023

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

Parpro Corporation

Opinion

We have audited the accompanying consolidated financial statements of Parpro Corporation and its subsidiaries (collectively referred to as the “Group”) which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”). In our opinion, based on our audits and the report of other auditors (refer to the other matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated

cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis of Audit Opinion

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

Key check items

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

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

Authenticity of Revenue Occurrence

Parpro Group mainly sells gaming and industrial computers, as well as aerospace and defense industry products. In 2022, the amount of product revenue from some customers has changed significantly compared with the amount in the same period last year. Considering that the revenue recognition has a high innate risk of fraud, and the management may be under pressure to achieve the expected financial goals, because the authenticity of such income is listed as a key verification item.

The main verification procedures performed by our auditors on the above matters are as follows:

Understand and test the main internal control system of these revenues, and evaluate its design and implementation effectiveness.
Obtain the detailed accounts of these incomes, select samples to perform detailed tests, and review documents such as orders, shipping orders, and invoices to confirm the authenticity of such incomes.
Obtain the sub-accounts of these incomes, and select samples to test whether there are major differences in the recipients and amounts of receivables and offsets, so as to confirm the authenticity of such incomes.

Other Matter

Parpro Corporation has prepared the individual financial statements of year 2022 and 2021, we have audited and the audit report issued with unmodified opinions.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the

preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

172-

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
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 Group’s ability to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partners on the audits resulting in this independent auditors’ report are Pei De Chen and Jun Hong Chen.

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Parpro Corporation and its subsidiaries

Consolidated Balance Sheets December 31, 2022 And 2021

(In Thousands of New Taiwan Dollars)

(In Thousands of New Taiwan Dollars)
Asset	December 31,2022			December 31,2021
	Amount %			Amount %
Current assets Cash (Notes 4 and 6) Accounts receivable (Notes 4, 9 and 27) Other receivables (Notes 4, 9 and 27) Current income tax assets Inventories (Notes 4 and 10) Prepayments Total Current Assets Non-current assets Financial assets at fair value through other comprehensive income (Notes 4 and 8) Investments accounted for using the equity method (Notes 4, 5 and 12) Property, plant and equipment (Notes 4 and 13) Right-of-use assets (Notes 4 and 14) Goodwill (Notes 4, 5 and 15) Intangible assets (Notes 4 and 15) Deferred tax assets (Notes 4 and 23) Other non-current assets Total non-current assets Total assets Liabilitiesand equity	$ 143,828 4 688,004 20 49,501 2 2,616 - 1,066,199 30 49,058 1			$ 314,524 11 361,371 12 1,673 - 978 - 775,409 26 72,682 2
		1,999,206 57		1,526,637 51
		10,160 - 594,576 17 154,899 5 217,931 6 462,379 13 78,171 2 1,211 - 12,197 -		- - 552,882 18 177,594 6 234,802 8 416,758 14 80,524 3 1,431 - 11,342 -
		1,531,524 43		1,475,333 49
		$ 3,530,730 100 620,479 17 11,954 - 282,266 8 166,584 5 10,979 - 1,113 - 37,083 1 130,041 4 96,808 3		$ 3,001,970 100 654,560 22 7,948 - 170,829 6 62,253 2 12,467 - 1,113 - 34,571 1 562,575 19 17,300 1
Current liabilities Short-term borrowings (Note 16) Financial liabilities at fair value through profit or loss (Notes 4 and 7) Accounts payable Other payables (Notes 18 and 27) Current tax liabilities Provisions Lease liabilities (Notes 4 and 14) Current portion of long-term borrowings(Notes 16 and 17) Other current liabilities (Notes 21 and 27) Total current liabilities Non-current liabilities Corporate bonds payable (Notes 4 and 17) Long-term borrowings (Note 16) Deferred tax liabilities (Notes 4 and 23) Lease liabilities (Notes 4 and 14) Total non-current liabilities Total liabilities Equity (Notes 4 and 20) Share capital Ordinary shares Share capital to be registered Total share capital Capital surplus Retained earnings Legal surplus reserve Special surplus reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity Total liabilities and equity
		1,357,307 38		1,523,616 51
		463,567 13 47,827 2 1,995 - 185,855 5		- - 64,298 2 20 - 200,994 7
		699,244 20		265,312 9
		2,056,551 58		1,788,928 60
		833,544 24 - -		834,516 28 28 -
		833,544 24		834,544 28
		329,808 9		310,881 10
		131,486 4 137,381 4 104,145 3		120,889 4 76,537 3 105,974 3
		373,012 11		303,400 10
		(33,051) (1)		(204,059) (7)
		(29,134) (1)		(31,724) (1)
		1,474,179 42		1,213,042 40
	$ 3,530,730 100		$ 3,001,970 100

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 9, 2023)

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Parpro Corporation and its subsidiaries

Consolidated Statements of Comprehensive Income

For The Years Ended December 31, 2022 And 2021

(In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

Operating revenue (Notes 4, 21 and 27) Operating costs (Notes 9, 10 and 22) Operating profit Operating expenses (Notes 9 and 22) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses Net operating profit (loss) Non-operating income and expenses (Notes 22 and 27) Interest income Other income Other gains and losses Financial costs Share of profits (losses) of subsidiaries accounted for using the equity method Total non-operating income and expenses Net profit before tax Income tax (expense) benefit (Notes 4 and 23) Net profit for the year (continued on next page)	2022 2021
	Amount % Amount %
	$ 2,776,680 100 $2,097,948 100 2,318,545 84 1,780,226 85
	458,135 16 317,722 15
	31,433 1 36,307 2 319,434 12 282,978 13 7,594 - 20,374 1 10,756 - 9,242 -
	369,217 13 348,901 16
	88,918 3 (31,179) (1)
	428 - 66 - 23,003 1 145,578 7 18,981 1 (1,353) - (54,009) (2) (27,683) (1) 30,420 1 14,159 -
	18,823 1 130,767 6
	107,741 4 99,588 5 (8,228) - 6,718 -
	99,513 4 106,306 5

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(continued from previous page)

2022	2022	2022	2021	2021
Amount		%	Amount	%
($ 7,300) 9,144 172,155		- - 6	$ - (10,856) (50,320)	- (1) (2)
	173,999	6	(61,176)	(3)
	$ 273,512 $ 1.21 $ 1.07	10	$ 45,130 $ 1.29 $ 1.13	2

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 9, 2023) (Concluded)

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Parpro Corporation and its subsidiaries

Consolidated Statements of Changes In Equity

For The Years Ended December 31, 2022 And 2021 (In Thousands of New Taiwan Dollars)

		Share capital Shares Share capital to be registered Capital surplus	Share capital Shares Share capital to be registered Capital surplus	Share capital Shares Share capital to be registered Capital surplus	Share capital Shares Share capital to be registered Capital surplus	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Retained earnings Other equity Legal surplus reserve Special surplus reserve Unappropriated earnings Exchange Differences on Translation of the Financial Statements of Foreign Operation Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income Treasury Shares Total	Equity
Ordinary
$		834,516 $ - - - -	- $ - - - -		351,925 $ - (41,113) - -		148,508 $ (27,619) - - -		76,537 - - - -	($	27,619) ($ 27,619 - 106,306 (332)		143,644) - - - (50,320)	$	429 - - - (10,524)	($	31,724) $ - - - -		1,208,928 - (41,113) 106,306 (61,176)
		-	-		-		-		-		105,974		(50,320)		(10,524)		-		45,130
		-	28		69		-		-		-		-		-		-		97
		834,516 - - -	28 - - -		310,881 - - -		120,889 10,597 - -		76,537 - 60,844 -		105,974 (10,597) (60,844) (32,892)		(193,964) - - -		(10,095) - - -		(31,724) - - -		1,213,042 - - (32,892)
		-	-		-		10,597		60,844	(104,333)			-		-		-		(32,892)
		- -	- -		- -		- -		- -	99,513 2,991			- 172,155		- (1,147)		- -		99,513 173,999
		-	-		-		-		-	102,504			172,155		(1,147)		-		273,512
		- - 28 (1,000)	- - (28) -		28,740 (8,223) - (1,590)		- - - -		- - - -	- - - -			- - - -		- - - -		- - - 2,590		28,740 (8,223) - -
	$	833,544	$-	$	329,808	$	131,486	$ 137,381		$ 104,145		($	21,809)	($	11,242)	($	29,134)	$	1,474,179

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 9, 2023)

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Parpro Corporation and its subsidiaries

Consolidated Statements of Cash Flows

For The Years Ended December 31, 2022 And 2021

(In Thousands of New Taiwan Dollars)

(In Thousands of New Taiwan Dollars)
	2022	2021
Cash flows from operating activities
Income before income tax	$107,741	$99,588
Adjustments for:
Depreciation expense	81,919	71,079
Amortization expense	10,838	10,185
Expected credit loss recognized on accounts receivable	10,756	9,242
Net gain (loss) on fair value changes of financial assets at fair value through profit or loss	4,003	(6,099)
Financial costs	54,009	27,683
Interest income	(428)	(66)
Profit and loss shares of subsidiaries and affiliated enterprises using the equity method	(30,420)	(14,159)
Gain on disposal of property, plant and equipment	(108)	-
Write-downs of inventories	34,362	17,884
Unrealized foreign exchange (benefit) losses	(3,261)	1,005
Losses on repayment of convertible corporate bonds	6,175	-
Government grant income	(18,113)	(141,321)
Changes in operating assets and liabilities
Accounts receivable	(285,266)	(34,001)
Other receivables	(46,342)	2,197
Inventories	(236,871)	(131,988)
Prepayments	6,323	(3,520)
Accounts payable	88,357	55,041
Other payables	28,772	(26,121)
Other current liabilities	78,119	(1,497)
Cash generated from (used in) operations	(109,435)	(64,868)
Interest received	428	66
Interest paid	(38,243)	(18,740)
Income tax returned	(8,487)	9,738
Net cash used in operating activities	(155,737)	(73,804)

(Continued on next page)

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(Continued from previous page)

Cash flows from investing activities Acquisition of financial assets at fair value through other comprehensive income Payments for property, plant and equipment Disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Decrease in other non-current assets Dividends received from associates Net cash generated from (used in) investing activities Cash flows from financing activities Decrease in short-term borrowings Issuance of convertible corporate bonds Repayment of convertible corporate bonds Proceeds from long-term borrowings Repayment of long-term borrowings Increase in other payables Repayment of the principal portion of lease liabilities Cash dividends paid Net cash generated from (used in) from financing activities Effects of exchange rate changes on the balance of cash held in foreign currencies Net (decrease) increase in cash Cash at the beginning of the year Cash at the end of the year		2022	2021
		($ 17,460) (2,302) 108 (206) - 349 3,990	$ - (37,817) - - 636 1,396 4,713
		(15,521)	(31,072)
		(48,078) 494,409 (425,500) 70,000 (101,036) 65,000 (36,971) (41,115)	(10,896) - - 123,767 (107,197) - (34,434) (41,113)
		(23,291)	(69,873)
		23,853	(10,886)
		(170,696) 314,524	(185,635) 500,159
		$ 143,828	$ 314,524

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

(With Deloitte & Touche auditors’ report dated March 9, 2023) (Concluded)

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Parpro Corporation and its subsidiaries

Notes to Financial Statements for The Years Ended December 31, 2022 and 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

GENERAL INFORMATION

Since November 21, 2013, the Company’s shares have been listed on the Taiwan Stock Exchange (TWSE).

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

APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on March 9, 2023.

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

d. 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 material impact on the Group’s accounting policies.

e. The IFRSs endorsed by the FSC for application starting from 2023
- Effective Date
- New IFRSs Announced by IASB
Amendments to IAS 1 “Disclosure of Accounting January 1 , 2023 ( Note 1 ) Policies”
Amendments to IAS 8 “Definition of Accounting January 1 , 2023 ( Note 2 ) Estimates”
Amendments to IAS 12 “Deferred Tax related to Assets January 1 , 2023 ( Note 3 ) and Liabilities arising from a Single Transaction”
180-
Note1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note3: The amendments are 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.

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

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

Effective Date Announced
byIASB(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

Note1 : Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2 : The seller and lessee shall apply IFRS retroactively to the sale and leaseback transactions signed after 16 days after the initial application of IFRS Amendments to 16 .
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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

n. Statement of compliance
The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.
o. Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.
The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:
(3) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
(4) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
(5) Level 3 inputs are unobservable inputs for the asset or liability.
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p. Classification of current and non-current assets and liabilities Current assets include:
(4)Assets held primarily for the purpose of trading;
(5) Assets expected to be realized within twelve months after the reporting period; and
(6) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

(4)Liabilities held primarily for the purpose of trading;
(5) Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
(6) Liabilities for which the Group does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

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

Basis of consolidation
q. This consolidated financial report includes the financial reports of the company and entities (subsidiaries) controlled by the company. The subsidiaries' financial reports have been adjusted to bring their accounting policies into line with those of the consolidated company. When preparing the consolidated financial report, all transactions, account balances, income and expenses between entities have been eliminated.

For details of subsidiaries, shareholding ratios and business items, please refer to Note 11 and Table 6.

r. Foreign currency
In preparing the financial statements of each individual entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
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t.
Investing in affiliated companies

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture. The Group uses the equity method to account for its investments in associates. Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. T he Group also recognizes the changes in the Group’s share of the equity of associates and joint ventures.

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charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Group’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.

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

u. Real estate, plant and equipment

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

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reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

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

v. Goodwill

Goodwill arising from the acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized on goodwill is not reversed in subsequent periods.

w. 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 value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in

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estimate accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

(2) Intangible assets acquired in a business combination Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.
(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.
x. Impairment of property, plant and equipment, right -of-use asset and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right -of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the assets may be impaired.

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When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit 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 lo ss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

y. Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss (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.

(3) Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.
(d) Measurement categories
```
 - Financial assets are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost and equity instruments at fair value through other comprehensive income (FVTOCI). A. Financial assets measured at amortized cost
```
- iii. Financial assets at FVTPL Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria. Financial assets at FVTPL are subsequently measured at fair value, with any gains or
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iv.

losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset. Financial assets at amortized cost

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

(iv) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
(v) 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, financial assets at amortized cost, notes and accounts receivable (including long-term receivables) and other receivables, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss. Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset. Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

(vi) Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading

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or if it is contingent consideration recognized by an acquirer in a business combination.

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

(e) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses (ECLs) on financial assets at amortized cost, including accounts receivables.

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

ECLs 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.

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

(f) Derecognition of financial assets

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

(4) Financial liabilities
(d) Subsequent measurement

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

(e) Derecognition of financial liabilities

(f) Convertible corporate bonds

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subsequently. When the conversion right is exercised, its related liability components and the amount in equity will be transferred to share capital and capital reserve - issue premium. If the conversion right of the convertible corporate bonds has not been exercised on the maturity date, the amount recognized in equity will be transferred to capital reserve - others.

Transaction costs related to the issuance of convertible corporate bonds are apportioned to the liabilities and equity components of the instrument in proportion to the apportioned total price.

z. Revenue recognition

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

Merchandise sales revenue

When processing without materials, the control of the ownership of the processed products has not been transferred, so revenue is not recognized when the materials are removed.

aa. Leasing

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

(1) The Group as lessor

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

Lease payments from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

(2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short -term leases and low-value asset leases accounted for applying a recognition

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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. 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 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. 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 Gro up uses the lessee’s incremental borrowing rate.

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

bb. Borrowing costs

Borrowing costs are recognized in profit or loss as incurred.

cc. Government grants

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

Government grants related to income are recognized in other income on a systematic basis over the periods in which the Group recognizes as expenses the related costs that the grants intend to compensate. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial

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support to the Group with no future related costs are recognized in profit or loss in the period in which they are received.

dd. Employee benefits
(3) Short-term employee benefits

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

(4) Retirement benefits

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

The net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s defined benefit plan. 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.

ee. Income tax

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

(4) Current tax

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

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According to the Income Tax Law in the ROC, and 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.

(5) Deferred tax

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

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for deductible temporary differences or unused loss carryforward 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 Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and that they are expected to reverse in the foreseeable future.

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enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or set tle the carrying amount of its assets and liabilities.

(6) Current tax and deferred tax for the year

CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF

ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimates 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 Group considers the possible impact of the recent development of the COVID-19 in Taiwan and its economic environment implications when making its critical accounting estimates on cash flow projections, 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 est imate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Key Sources of Estimation Uncertainty

The merged company holds 20.86% of the voting right s of Anderson Industrial Corporation and is the single largest shareholder. After considering the number and distribution of voting rights held by other shareholders, other shareholders are not very scattered, and the voting pattern of the previous shareho lders' meeting shows that other shareholders are not passive, and the merged company cannot appoint more than half of

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the members of the governance unit, so it cannot dominate the relevant activities of Ender Company and therefore has no control. The manag ement of the merged company believes that it only has a significant impact on Anderson Industrial Corporation, so it is listed as an affiliated company of the merged company.

Major Sources of Uncertainty in Estimates and Assumptions Estimated goodwill impairment

Determining whether goodwill is impaired requires an estimate of the value in use of the cash-generating units to which the goodwill is allocated. To calculate value in use, management should estimate the future cash flows expected to be generated from the cash-generating unit and determine the appropriate discount rate to use in calculating the present value. If the actual cash flow is less than expected, or if the facts and circumstances change and the future cash flow is revised downward or the discount rate is revised upward, significant impairment losses may occur.

6. CASH AND CASH EQUIVALENTS

Cash on hand and working capital Bank Check and Demand Deposit			December 31 2022		2021
			$ 455 143,373 $ 143,828		$ 418 314,106 $ 314,524

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

Bank balance	December 31 2022 2021
	0%`～`1.05% 0%`～`0.05%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial liabilities Held for trading Derivatives -Right of redemption		December 31 2022 2021	December 31 2022 2021
		$ 11,954	$ 7,948

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8. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER

COMPREHENSIVE INCOME

December 31

Equity instrument investment Domestic listed stocks		2022	2021
		$ 10,160	$-

The group invests in the above-mentioned ordinary shares for medium and long-term strategic purposes, and expects to make profits through long -term investment. The management of the group believes that if the short-term fair value fluctuations of these investments are included in the profit and loss, it is inconsistent with the aforementioned long-term investment plan, so it chooses to designate the investment to be measured at fair value through other comprehensive profits and losses.

9. ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Tax Refund Receivable (Note) Other		December 31 2022 2021	December 31 2022 2021
		$ 730,234 (42,230)	$ 389,504 (28,133)
		$ 688,004 $ 47,902 1,599	$ 361,371 $ - 1,673
		$ 49,501	$ 1,673

Note:Affected by the novel coronavirus pneumonia epidemic, the U.S. federal government passed the "New Crown Virus Aid, Relief, and Economic Security Act (CARES Act)" and provided an employee retention tax credit program (Employee Retention Credit, hereinafter referred to as ERC ) , It aims to assist small and medium-sized enterprises to maintain their ability to continue operating during the economic shutdown due to the spread of the epidemic, so as to continue to pay employees' salaries and provide employment.

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December 31, 2022, the U.S. subsidiary of the Group applied to the U.S. Federal Revenue Service (Internal Revenue Service) for the application of the ERC plan, and the business cost and business expense deduction of USD 1,634,000 has been approved and transferred.

The average credit period of the company for commodity sales is 30 to 180 days.

The group recognizes the allowance loss of accounts receivable according to the expected credit loss during the existence period. The expected credit loss during the duration is based on the consideration of the customer's past collection experience, the increase in delayed payment exceeding the average credit period, and at the same time the customer's past default record, current financial situation and industrial economic situation. According to the credit loss historical experience of the merged company, there is no significant difference in the loss patterns of different customer groups, so no further distinction is made between customer groups, and the expected credit loss rate is determined only by the days of accounts receivable.

If there is evidence that the counterparty is facing serious financial difficulties and the company cannot reasonably expect the recoverable amount, the company will write off the relevant accounts receivable directly, but will continue to pursue activities, and the recovered amount due to the recove ry will be recognized in profit or loss.

The allowance for accounts receivable of the consolidated company is as follows:

December 31,2022

ecember 31,2022
Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Less than 180 days 181`～`365 days More than 366 days Total
	$ 687,974 $ 4,454 - (4,424)		$ 37,806 $ 730,234 (37,806) (42,230)
	$ 687,974	$ 30	$-	$ 688,004

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December 31,2021

cember 31,2021
Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Less than 180 days 181`～`365 days More than 366 days Total
		$358,115 $9,991 - (6,735)		$21,398 (21,398)	$389,504 (28,133)
		$358,115	$3,256	$-	$361,371

The above is an aging analysis based on the invoice date.

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

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Foreign exchange gains and losses Balance at December 31		2022	2021
		$ 28,133 10,756 - 3,341	$ 43,338 9,242 (23,423) (1,024)
		$ 42,230	$ 28,133

10. INVENTORIES

NVENTORIES
Raw materials Work in progress Finished goods	December 31 2022 2021
	$ 556,175 492,607 17,417		$ 365,194 402,903 7,312
		$ 1,066,199	$ 775,409

The cost of goods sold related to inventory for the years ended December 31, 2022 and 2021 was $ 2,318,545 thousand and $1,780,226 thousand respectively.

The cost of goods sold for the years ended December 31, 2022 and 2021, including inventory depreciation and sluggish loss, was $34,362 thousand and $17,884 thousand respectively.

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11. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements:

Investor
Investee
Nature of Activities

Proportion of Ownership
December 31
2022
2021
Remark

The company
Efa Technologies
Corporation
Sales of industrial
computers and gaming
machines, etc.
Parpro Holdings Co., Ltd. Investment
Parpro Holdings Co., Ltd.
AP Parpro, Inc.
Production and sales of
aerospace industry parts
Pilot (Las Vagas), Inc.
Investment
Parpro Quality Inc.
Investment
AP Parpro, Inc.
Parpro (Nevada), Inc.
Sales of industrial
computers and gaming
machines, etc.
Pilot (Las Vagas), Inc.
Parpro (Nevada), Inc.
Sales of industrial
computers and gaming
machines, etc.
Parpro Quality Inc.
Parpro Technologies Inc.
Production and sales of
Netcom, aerospace and
defense industry
components

100%
100%
-
100%
100%
-
100%
100%
-
100%
100%
-
100%
100%
-
80%
80%
-
20%
20%
-
100%
100%
-

b. Subsidiaries not included in the consolidated financial report: None.

12. INVESTMENTS USING THE EQUITY METHOD

Invest in affiliated companies

vest in affiliated companies
Significant affiliated enterprises Anderson Industrial Corporation Individually insignificant affiliated enterprises	December 31 2022 2021
	$ 554,651 39,925	$ 512,334 40,548
	$ 594,576	$ 552,882

Significant affiliated enterprises are as follows:

			Shareholding and voting rights ratio
Company Name	Nature of Activities	Principal place of business	December 31, 2022 December 31, 2021
	Non-metallic computer
Anderson Industrial Corporation	numerical control machining centers, PCB electronic machinery,	Taiwan	20.86% 20.86%
	cutting tools, plates, etc.

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a. Investments using the equity method and the combined company's share of profits and losses and other comprehensive profits and losses are recognized in accordance with the financial reports audited by auditors for the same period.
b. Level 1 fair value information of affiliated companies with open market quotations is as follows:

arket quotations is as follows:
Company Name	December 31 2022 2021
Anderson Industrial Corporation	$ 405,031	$ 476,859

13. PROPERTY, PLANT AND EQUIPMENT

Buildings Machinery Other Equipment	Buildings Machinery Other Equipment	Buildings Machinery Other Equipment	Total
$ 86,670 14,464 - (2,605)	$ 304,941 11,486 (320) (4,538)	$ 80,703 11,867 (2,905) (2,050)	$ 472,314 37,817 (3,225) (9,193)
$ 98,529 $ 16,070 5,441 - (516)	$ 311,569 $ 214,863 24,477 (320) (2,937)	$ 87,615 $ 61,414 6,003 (2,905) (1,471)	$ 497,713 $ 292,347 35,921 (3,225) (4,924)
$ 20,995 $ 77,534	$ 236,083 $ 75,486	$ 63,041 $ 24,574	$ 320,119 $ 177,594

(Continued on next page)

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(Continued from previous page)

Buildings	Machinery	Other Equipment	Total
$ 98,529 1,118 - 10,820	$ 311,569 135 - 17,925	$ 87,615 1,049 (850) 8,353	$ 497,713 2,302 (850) 37,098
$ 110,467 $ 20,995 8,768 - 2,565	$ 329,629 $ 236,083 25,323 - 12,692	$ 96,167 $ 63,041 6,815 (850) 5,932	$ 536,263 $ 320,119 40,906 (850) 21,189
$ 32,328 $ 78,139	$ 274,098 $ 55,531	$ 74,938 $ 21,229	$ 381,364 $ 154,899

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

Buildings	3 to 50 years
Machinery	5 to 8 years
Other Equipment	3 to 8 years

14. LEASE ARRANGEMENTS

a. Right-of-use assets

A Carrying amount Buildings Transportation equipment		December 31 2022 2021	December 31 2022 2021
		$ 217,599 332	$ 233,473 1,329
		$ 217,931	$ 234,802

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Addition of right-of-use assets Depreciation charge for right-of-use assets Buildings Transportation equipment	December 31 2022 2021	December 31 2022 2021
	$- $ 120,638 December 31 2022 2021
	$ 40,016 997	$ 34,161 997
	$ 41,013	$ 35,158

Aside from the additions and depreciation expenses listed above, there were no major subleases and impairments of the right -of-use assets of the company in 2022 and 2021.

b. Lease liabilities

Carrying amount Current Non-current		December 31 2022 2021	December 31 2022 2021
		$ 37,083 $ 185,855	$ 34,571
			$ 200,994

Range of discount rate for lease liabilities was 1.38% to 4.75% on December 31, 2022 and 2021.

15. GOODWILL AND INTANGIBLE ASSETS

Goodwill	Intangible assets Customer relations	Total
$ 428,803 (12,045)	$ 150,004 (4,213)	$ 578,807 (16,258)
$ 416,758 $ - - -	$ 145,791 $ 56,797 10,185 (1,715)	$ 562,549 $ 56,797 10,185 (1,715)
$- $ 416,758	$ 65,267 $ 80,524	$ 65,267 $ 497,282

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Goodwill	Intangible assets Customer relations	Total
$ 416,758 45,621	$ 145,791 15,959	$ 562,549 61,580
$ 462,379 $ - - -	$ 161,750 $ 65,267 10,838 7,474	$ 624,129 $ 65,267 10,838 7,474
$- $ 462,379	$ 83,579 $ 78,171	$ 83,579 $ 540,550

The above items of intangible asset are amortized on a straight -line basis over the estimated useful lives as follows:

Customer relations

14 years

The management believes that the key assumptions on which the cash-generating unit's recoverable amount is based, any reasonable possible changes in it will not cause the book value of the above-mentioned intangible assets to exceed the recoverable amount, so there was no asset impairment in 2022 and 2021.

16. BORROWINGS

a. Short-term loans

Short-term loans
Unsecured borrowings Bank loan Interest rate range	December 31 2022 2021
	$ 620,479 1.80%-8.00%	$ 654,560 1.04%- 4.25%

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b. Long-term loans

Unsecured borrowing Bank loan Less: Current portion Long term loan Interest rate range Loan due date	December 31 2022 2021	December 31 2022 2021
	$ 106,338 (58,511)	$ 154,828 (90,530)
	$ 47,827 2.01%-2.47% September 2025	$ 64,298
		1.00%-1.60% May 2026

Affected by the novel coronavirus pneumonia epidemic, the U.S. federal government passed the "New Crown Virus Aid, Relief, and Economic Security Act (CARES Act)" and established the Paycheck Protection Program (Paycheck Protection Program), which aims to assist small and medium-sized enterprises in the economic spread of the epidemic Maintain the ability to continue operating during the shutdown period, and then continue to pay employee salaries and provide employment.

As of December 31, 2022 and 2021, the US subsidiary of the merged company obtained a loan balance (accounted for long-term loan) approved by a bank authorized by the US Small Business Administration (Small Business Administration) of US $ 0 and USD $ 630 thousand , mainly used to pay employee salaries and related welfare expenses. This loan can be exempted if it meets all specific conditions. The principal of the loan that has not been exempted must be repaid at a fixed rate of 1% plus interest within a specific period Clearly, the US subsidiary of the company has applied for a loan exemption, which has been appro ved in 2022 and 2021 and has been transferred to the government subsidy income of US$ 630 thousand and US$5,003 thousand respectively.

17. CORPORATE BONDS PAYABLE

ORPORATE BONDS PAYABLE
Domestic Unsecured Convertible Corporate Bonds Less: Discount of corporate bonds payable Less: Current portion Total corporate bonds payable		December 31 2022 2021 $ 574,400 $ 499,900 (39,303) (27,855) (71,530) (472,045) $ 463,567 $-
		$ 574,400 (39,303) (71,530)
		$ 463,567

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Following the issuance of the convertible corporate bonds 3 months to 40 days before the expiration of the issuance period, if the closing price of the company’s common stock in the centralized trading market exceeds the current conversion price by 30% (inclusive) for 30 consecutive business days or when the outstanding balance of the convertible bonds is less than 10% of the original issued total amount, the company may take back all the bonds in cash according to the face value of the bonds.

This convertible corporate bond includes liabilities and equity components, and the equity component is expressed as "capital reserves - stock options" under the equity item. The liability component was originally recognized with an effective interest rate of 1.9452%. As of December 31, 2022, the bondholders exercised the right to sell back, and the company has paid $438,393 thousand (including interest compensation of $12,893 thousand, the book value of corporate bonds $409,369 thousand and financial liabilities measured at fair value throug h profit and loss $9,956 thousand), and $6,175 thousand was recognized as a repayment loss.

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Issue price (less transaction costs of $5,406 thousand) Equity components Deferred tax assets Financial liabilities Components of Liabilities at Issue Date Components of Liabilities as at January 1 ,2021 Interest calculated at an effective rate of 1.9452% (Note 22 ) Corporate bonds payable convert into ordinary shares Components of Liabilities as at December 31 ,2021 Interest calculated at an effective rate of 1.9452% (Note 22 ) Repay corporate debt Components of Liabilities as at December 31 ,2022		$ 497,094 (31,774) 1,081 (12,739)
		$ 453,662 $ 463,066 9,073 (94)
		472,045 8,854 (409,369)
		$ 71,530

The company issued the third domestic unsecured convertible corporate bond with a coupon rate of 0% on March 10, 2022, and it was listed for trading on the counter trading center on the same day. It is issued according to 100.00% of the face value, the issuance term is 5 years, and the conversion period is from June 11, 2022 to March 10, 2027. The conversion price at the time of issuance was $29.2 per share. Due to the distribution of dividends, the conversion price has been adjusted to $28.6 since August 23, 2022.

After the issuance of the convertible corporate bonds for 3 and 4 years, the bondholders may request the company to redeem the convertible bonds they hold in cash at the face value of the bonds plus interest compensation. This convertible corporate bond includes liabilities and eq uity components, and the equity component is expressed as "capital reserves - stock options" under the equity item. The liability component was originally recognized with an effective interest rate of 1.8061%.

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Issue price (less transaction costs of $5,591 thousand) Equity components Deferred tax assets Financial liabilities Components of Liabilities at Issue Date Issue date liability components on 2022 Interest calculated at an effective rate of 1.8061% (Note 22 ) Components of Liabilities as at December 31 ,2022		$ 494,409 (28,740) 1,118 (9,960)
		$ 456,827 $ 456,827 6,740
		$ 463,567

18. OTHER PAYABLES

Payables for salaries and bonuses Payables for compensation of employees and remuneration to directors and supervisors Payables to related parties (Note 27 ) Other		December 31 2022 2021	December 31 2022 2021
		$ 52,818 5,408 65,000 43,358	$ 16,963 3,342 - 41,948
		$ 166,584	$ 62,253

19. RETIREMENT BENEFIT PLANS

Defined contribution plans

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

The employees of the Group’s subsidiaries in other countries are members of state-managed retirement benefit plans operated by the local government. The subsidiary is required to contribute amounts equal to a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

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20. EQUITY

e. Share capital

Number of shares authorized (in thousand) Shares authorized Number of shares issued and fully paid (in thousand) Shares issued		December 31 2022 2021	December 31 2022 2021
		120,000 $ 1,200,000 83,354 $ 833,544	120,000
			$ 1,200,000
			83,452
			$ 834,516

Among the authorized share, 500 thousand shares are reserved for the issuance of employee stock option certificates.

f. Capital reserves

pital reserves
May be used to offset a deficit, distributed as cash	December 31 2022 2021
	$ 268,383 27,957 33,468	$ 278,196 917 31,768
dividends, or transferred to share capital (Note) Issuance of ordinary shares Lapsed stock option May not be used for any purpose Convertible corporate bond warrants
	$ 329,808	$ 310,881

g. Retained earnings and dividend policy

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reserves in cash, the board of directors is authorized to have more than two-thirds of the directors present and Distributed by a resolution of more than half of the directors present, and reported to the shareholders' meeting.

According to the earnings distribution policy stipulated in the company's revised Articles of Association, the company will consider the company's environment and growth stage, respond to future capital needs and long-term financial planning, and meet shareholders' needs for cash inflow. If there is a surplus in the annual final accounts, Taxes should be paid first to make up for the losses of previous years, and 10% should be set aside as the legal surplus reserve, except when the legal surplus reserve has reached the total capital, and it can be allocated or reversed the special surplus reserve according to business needs or regulations of the competent authority.

Shareholder dividends are based on the consideration of the current year's after-tax surplus and the accumulated undistributed surplus in the previous period. The principle of distributing the surplus amount shall not be less than 10% of the current year's after-tax surplus. Cash dividends shall not be less than 10% of the total dividends. If it is less than 0.1 yuan per share, it can be distributed as stock dividends, but the distribution ratio can be adjusted depending on the company's future earnings and capital status. When the company has no profit, no dividends and bonuses will be distributed. For employee and director remuneration distribution policy, please refer to Note 22 (6) Employee and Director Remuneration. The statutory surplus reserve shall be appropriated until its balance reaches the total paid-in share capital of the company. The statutory surplus reserve can be used to make up for losses. When the company has no losses, the portion of the statutory surplus reserve exceeding 25% of the total paid-in share capital may be allocated to share capital and distributed in cash.

The company's general meeting of shareholders on July 2, 202 1 resolved to make up the loss of 27,619 thousand with the legal surplus reserve, and distributed $0.5 per share in cash with the capital reserve of $41,113 thousand.

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On May 31, 2022, the company's shareholders' general meeting resolved to approve the 2021 profit distribution plan as follows:

Legal reserve Special reserve Cash dividend	Surplus Distribution Proposal Dividend per share (Dollar)
	$10,597 60,844 32,892 $0.40

The Company’s shareholders resolved to issue $0.1 per share of cash dividends from capital surplus of $8,223 thousand.

h. Treasury share

	Shares transferred	to
Purpose of Buy-back	employees
	(in thousands of shares)
Number of Shares at January 1,2021		1,225
Shares Transferred to Employees		-
Number of Shares at December 31,2021		1,225
Shares Cancelled		(100)
Number of Shares at December 31,2022		1,125

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote.21.

21. INCOME

NCOME
Revenue from the sale of goods Others	2022	2021
	$ 2,776,680 -	$ 2,097,927 21
	$ 2,776,680	$ 2,097,948

d.Description of customer revenue

Revenue from the sale of goods

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according to the contract, and the company recognizes accounts receivable at the same time.

When processing without materials, the control of the ownership of the processed products has not been transferred, so revenue is not recognized when the materials are removed.

e.Contract Balance

ontract Balance
Accounts receivable (Note 9) Contract liabilities (accounted for other current liabilities) (Note 27)	December 31 January 1 2022 2021 2021
		$688,004 $ 63,136	$361,371 $ 16,118	$346,173
				$ 16,663

Changes in contract liabilities are primarily attributable to differences in the timing of satisfaction of performance obligations and the timing of payment by customers.

f. For the breakdown of customer revenue, please refer to Note 31.

22. NET INCOME

Net income for the year includes the following items:

g. Other income

. Other income
Government grant income ( Note 16 ) Rental income Others . Other gains and losses Net foreign exchange gain ( loss ) Net gain(loss) on financial instruments at FVTPL Disposal gain on property, plant and equipment Losses on repayment of convertible corporate bonds other	2022
	$ 18,113 1,995 2,895
	$ 23,003 2022
	$	18,981

h. Other gains and losses
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	2022		2021 $ 9,073 11,164 - 7,446 $ 27,683 2021 $ 35,921 35,158 10,185 $ 81,264 $ 51,409 19,670 $ 71,079 $ 10,185 2021
	$ 15,594 14,844 12,893 10,678
	$ 54,009 2022
$ 40,906 41,013 10,838
$ 92,757 $ 61,621 20,298
$ 81,919 $ 10,838 2022

$ 511,826 25,285 13,670			$ 432,451 33,091 21,064
550,781			486,606
3,204			3,381
$ 553,985 $ 365,788 188,197		$ 489,987 $ 290,714 199,273
$ 553,985		$ 489,987

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l. Remuneration of employees and directors

On March 9, 2023 and March 16, 2022, the remuneration of employees and directors in 2022 and 2021 were resolved by the board of directors as follows:

as follows:
Accrual rate Compensation of employees Remuneration of directors	2022 2021
	2% 2% 1% 1%

Amount Compensation of employees Remuneration of directors	2022 Cash Stock $ 2,120 $ - 1,060 -	2021
		Cash Stock
		$ 2,228 $ - 1,114 -

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

There is no difference between the actual distribution amount of employee and director and supervisor remuneration in 2021 and the recognized amount in the 2021 consolidated financial report. Due to the loss in 2020, the remuneration of employees and directors was not estimated.

Information on the compensation of employees and remuneration of directors resolved by the Company’s board of directors is available at

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the Market Observation Post System website of the Taiwan Stock Exchange.

23. INCOME TAX

e. Income tax recognized in profit or loss:

Major components of income tax expense (benefit) are as follows:

Current tax In respect of the current year Adjustments for prior years Deferred tax In respect of the current yea Income tax expense (benefit) recognized in profit or loss		2022	2021 $ 149 (8,618) 1,751 ($ 6,718)
		$ 4,922 (7) 3,313
		$ 8,228

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

as follows:
Net profit (loss) before income tax Income tax expense calculated at the statutory rate Effect of different tax rate of entities in the Group operating in other jurisdictions Nondeductible expenses in determining taxable income Tax-exempt income Unrecognized temporary differences Unrecognized loss carryforwards Adjustments for prior years’ tax Income tax expense (benefit) recognized in profit or loss	2022	2021
	$ 107,741 $ 21,548 3,938 7,444 (6,596) (12,201) (5,898) (7)	$ 99,588 $ 19,918 1,512 1,817 (3,761) (13,976) (3,610) (8,618)
	$ 8,228	($ 6,718)

f. Deferred income tax assets and liabilities

Changes in deferred tax assets and liabilities are as follows:

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2022 Deferred tax assets	Opening Balance Recognized in Profit or Loss Recognized in equity	Opening Balance Recognized in Profit or Loss Recognized in equity	Opening Balance Recognized in Profit or Loss Recognized in equity	Opening Balance Recognized in Profit or Loss Recognized in equity	Closing Balance $ - 839 149 223 $ 1,211 $ 1,975 20 $ 1,995 Closing Balance
	$ 224 ($ 224) 361 (640) 623 (474) 223 -			$ - 1118 - -
Unrealized exchange loss Issuance cost of convertible corporate bonds Inventory write-downs Others Deferred tax liabilities
	$ 1,431 $ - 20		($ 1,338) $ 1,975 -	$ 1,118 $ - -
	$ 20 Opening Balance		$ 1,975 Recognized in Profit or Loss	$- Recognized in equity

	$ 1,692 721 546 223		($ 1,468) (360) 77 -	$ - - - -	$ 224 361 623 223
		$ 3,182 $ 20	($ 1,751) $-	$- $-	$ 1,431 $ 20

g. Unused and unrecognized loss carryforwards information

Company Unused	Amount ExpiryYear
The company Efa Technologies Corporation	$ 6,097 2030 $ 14,724 2027-2032

h. Income tax assessments

The latest annual income tax returns that have been assessed by the tax authorities were as follows:

authorities were as follows:
Company	Year
The company	2020
Efa Technologies Corporation	2020

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24. EARNINGS PER SHARE

EARNINGS PER SHARE	EARNINGS PER SHARE	EARNINGS PER SHARE
Unit: NT$ Per Share 2022 2021 Basic earnings per share $ 1.21 $ 1.29 Diluted earnings per share $ 1.07 $ 1.13 The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:: Net Income for the Year 2022 2021 Net income of ordinary shares in computation of basic earnings per share $ 99,513 $ 106,306 Effect of potentially dilutive ordinary shares Compensation of employees: Convert corporate bonds 7,030 2,974 Net income of ordinary shares used in the computation of diluted earnings per share $ 106,543 $ 109,280 Unit: thousand shares Number of ordinary shares 2022 2021 Weighted average number of ordinary shares in computation of basic earnings (loss) per share $ 82,327 $ 82,227 Effect of potentially dilutive ordinary shares Compensation of employees: Convert corporate bonds 17,483 14,124 Employee compensation 96 69 Weighted average number of ordinary shares used in the computation of diluted earnings (loss) per share $ 99,906 $ 96,420
	$ 99,513 7,030	$ 106,306 2,974
	$ 106,543 $ 109,280 Unit: thousand shares 2022 2021
	$ 82,327 17,483 96	$ 82,227 14,124 69
	$ 99,906	$ 96,420

The second domestic unsecured conversion corporate bond in 2022 was not included in the calculation of diluted earnings per share due to anti-dilution. If the company may settle the compensation of employees in cash or shares; therefore, the Group assumed that the entire amount of the compensation will be settled in shares, and the resulting potential share s 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

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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.

25. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Group (comprising issued capital, reserves, retained earnings, other equity and non-controlling interests). The Group is not subject to any externally imposed capital requireme nts.

Key management personnel of the Group review the capital structure on a quarterly basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed .

26. FINANCIAL INSTRUMENTS

e. Fair value of financial instruments that are not measured at fair value Except as listed in the table below, the Group’s management considers the carrying amounts recognized in the consolidated financial statements for financial assets and financial liabilities not carried at fair value to approximate their fair values or their fair values cannot be reliably measured:

Financial liabilities Convertible corporate bonds - The second domestic convertible bonds - The third domestic convertible bonds	December 31,2022 December 31,2021
	Carrying amount Fair Value Carrying amount Fair Value
	$ 71,530 $ 75,479 $ 472,045 $ 512,597 463,567 497,500 - -

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f. Fair value of financial instruments that are measured at fair value on a
recurring basis
(1) Fair value hierarchy

Fair value hierarchy
December 31,2022 Financial assets at FVTOCI Equity instruments Domestic listed stocks Financial liabilities at FVTPL Beneficiary certificates Derivatives December 31,2021 Financial liabilities at FVTPL Beneficiary certificates Derivatives	Level 1	Level 2	Level 3	Total $ 10,160 $ 11,954 Total $ 7,948
	$ 10,160 $- Level 1	$- $ 11,954 Level 2	$- $- Level 3

	$-	$ 7,948	$-

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

(2) Valuation techniques and inputs applied for Level 2 fair value measurement

g. Categories of financial instruments

gories of financial instruments
Financial assets Financial assets at amortized cost (Note1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities at amortized cost (Note2)	December 31 2022 2021
	$ 881,333 $ 677,568 10,160 - 11,954 7,948 1,710,764 1,514,515

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- Note 1: The balance includes financial assets such as cash, accounts receivable and other receivables measured at amortized cost.
- Note 2: The balance includes short-term loans, accounts payable, other payables, long-term liabilities due within one year, corporate bonds payable, long-term loans and other financial liabilities measured at amortized cost.
h. Financial risk management objectives and policies
The main financial instruments of the merged company include a ccounts receivable, accounts payable, corporate bonds payable, borrowings and lease liabilities. The Group’s corporate treasury function provides services to the business, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
(1) Market risk

The Group’s activities are exposed primarily to the financial risks of changes in foreign currency exchange rates and interest rates.

(a) Foreign currency risk

The Group had foreign currency sales and purchases, which were exposed to foreign currency risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) and of the derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 29.

Sensitivity analysis

The Group was mainly exposed to the USD.

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of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 10% change in foreign currency rates. For a 10% strengthening of NTD against the relevant currency, the net profit before tax would be a decrease of $32,464 thousand for the year ended December 31, 2022, and the net loss before tax would be an decrease of $25,302 thousand for the year ended December 31, 2021.

(b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at t he end of the reporting period were as follows:

Fair value interest rate risk - Financial liabilities Cash flow interest rate risk - Financial assets - Financial liabilities	December 31 2022 2021
	$ 758,035 $ 725,065 90,331 299,923 726,817 791,933

Sensitivity Analysis

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease was used when reporting interest rate risk internally to key management personnel and represents

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management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 10 basis points higher or lower and all other variables were held constant, the Group’s pre-tax profit for the year ended December 31, 2022 would have decreased or increased by $636 thousand and the Group’s pre-tax loss for the year ended December 31, 2021 would have increased or decreased by $492 thousand, which was mainly attributable to the Group’s exposure to cash flow on its variable-rate bank borrowings.

(2) Credit risk

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

The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of excellent grade. This information is supplied by a rating agency where available and, if not available, the Group uses other publicly available financial information to rate its major customers. The Group’s exposure and the credit ratings of its count erparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

Financial assets are potentially affected by the counterparty of the merging company or other parties failing to perform the contract, and the merging company takes the contract with a positive fair value on the balance sheet date as the evaluation object. The transaction partners of the merged company are all reputable

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financial institutions and manufacturers, so no significant credit risk is expected.

The Group did transactions with a large number of unrelated customers and, thus, no concentration of credit risk was observed.

(3) Liquidity risk

The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. 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 fo r other non-derivative financial liabilities were based on the agreed repayment dates.

December 31, 2022 Non-derivative financial liabilities Non-interest bearing Variable interest rate liabilities Lease liabilities Corporate bonds payable		Demand immediate payment or less than 1 month	1 to 3 months	3 months to 1 year	1 to 5 years	Over 5 years
		$ - 108,036 4,180 -	$ 383,850 206,548 7,973 -	$ - 368,063 35,304 74,400	$ - 48,447 178,732 500,000	$ - - 43,139 -
		$ 112,216	$ 598,371	$ 477,767	$ 727,179	$ 43,139

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December 31, 2021 Non-derivative financial liabilities Non-interest bearing Variable interest rate liabilities Lease liabilities Corporate bonds payable	Demand immediate payment or less than 1 month	Demand immediate payment or less than 1 month	1 to 3 months	3 months to 1 year	1 to 5 years	Over 5 years
	$ - 130,163 3,700 -		$ 233,082 230,620 7,400 -	$ - 387,156 33,390 499,900	$ - 64,714 183,826 -	$ - - 58,981 -
		$ 133,863	$ 471,102	$ 920,446	$ 248,540	$ 58,981

(d) Financing facilities

Unsecured bank overdraft facility - Amount used - Unused amount		December 31 2022 2021	December 31 2022 2021
		$726,817 220,000	$809,388 110,000
		$946,817	$919,388

27. TRANSACTIONS WITH RELATED PARTIES

The Company is the ultimate controller of the group.

Transactions, account balances, income and expenses between the Company and its subsidiaries (related parties of the Company) are all eliminated upon consolidation, so they are not disclosed in this note.

(k) Related parties and their relationships with the Company:

Related Party	Relationship with the Company
Liao,Wen Jia	Chairman of the Company
Anderson Industrial Corp.	Associate
Sogotec Precision Co., Ltd.	Associate
Giben do Brasil Maqs. e Equips.	Other related party
Giben Holdings Co., Ltd. (SAMOA) (Giben SAMOA)	Other related party
Anderson Logistics Corporation	Other related party
Anderson Merchandise Corporation	Other related party
Verite Corporation	Other related party

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(l) Sales

ales
Related PartyCategory/Name	2022	2021 $-
Other related parties	$ 55,774

For major transactions between the Group and related parties, the transaction price is considerably the same as those of non-related parties.

(m) Accounts receivable

Accounts receivable
Related PartyCategory/Name	December 31 2022 2021
Other related parties	$ 10,450	$-

Outstanding receivables from related parties have not received guarantee. The amount receivable from related parties in 2022 has not been provided as a provision for loss.

(n) Other receivables

Other receivables
Related PartyCategory/Name	December 31 2022 2021
Other related parties Associate	$ 488 55	$ - -
	$ 543	$-

(o) Temporary collection (accounted for other current liabilities)

Related PartyCategory/Name	December 31 2022 2021	December 31 2022 2021
Other related party Giben SAMOA	$ 30,710	$-

(p) Contract liabilities (accounted for other current liabilities)

Related PartyCategory/Name	December 31 2022 2021	December 31 2022 2021
Associate Anderson Industrial Corp.	$ 45,810	$-

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(q) Borrowing from related parties (accounted for other payables)

Related PartyCategory/Name	December 31 2022 2021 $ 65,000 $-
Chairman of the Company	$ 65,000

The interest rate of the company's borrowing from related parties is equivalent to the market interest rate.

(r) Other income

Other income
Account Related PartyCategory/Name	2022	2021
Rental income Associate Other related parties Other Associate Other related parties	$ 1,114 797	$ 1,114 797
	$ 1,911 132 140	$ 1,911 132 120
	$ 272	$ 252

(s) Compensation of key management personnel

mpensation of key management personnel
Short-term employee benefits Post-employment benefits	2022	2021
	$ 43,506 328	$ 38,469 328
	$ 43,834	$ 38,797

The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

28. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

As of December 31, 2022, the amount of guarantee notes issued by the company in order to obtain a bank line of credit was 970,000 thousa nd.

29. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN

FOREIGN CURRENCIES

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

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December 31, 2022 Financial assets Monetary items USD Financial liabilities Monetary items USD December 31, 2021 Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies Exchange Rate Carrying Amount $ 11,177 30.71(USD:NTD) $ 343,246 606 30.71(USD:NTD) 18,610 Foreign Currencies Exchange Rate Carrying Amount
	$ 9,174 27.68(USD:NTD) $ 253,936 33 27.68(USD:NTD) 913

Foreign exchange gains and losses with significant impact (realized and unrealized) are as follows:

unrealized) are as follows:
Functional currency	2022 2021
	Exchange rateNet exchange (loss) gain Exchange rateNet exchange (loss) gain
NTD	(NTD:NTD)	$29,354 (NTD:NTD)	($ 7,282)

30. SEPARATELY DISCLOSED ITEMS

(e) Information about significant transactions
(10)Financing provided to others. (Table 1)
(11)Endorsements/guarantees provided. (None)
(12)Marketable securities held (excluding investment in subsidiaries, associates and joint ventures).(Table 2)
(13)Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital. (None)
(14)Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (None)
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(15)Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None)
(16)Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 3)
(17)Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4)
(18)Trading in derivative instruments. (None)
(19) Intercompany relationships and significant intercompany transactions formation on investees. (Table 5)
(f) Information on investees: Table 6
(g) Information on investments in mainland China: None.
(h) Information of major shareholders:

List all shareholders with ownership of 5% or greater showing the name of the shares and percentage of ownership of each shareholder (Table 7)

31. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group’s reportable segments were as follows:

(a) Segments revenues and results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segment.

Segment	revenue	Segment income (loss)	Segment income (loss)
2022	2021	2022	2021
$ 841,118 1,935,562	$ 466,567 1,631,381	$ 29,423 59,495	($ 15,877) ( 15,302)
$ 2,776,680	$ 2,097,948	88,918 18,823	( 31,179) 130,767

		$ 107,741	$ 99,588

(b) Segment total assets and liabilities

The Group’s segment total assets and liabilities and other segment information were not provided to the chief operating decision maker; therefore, disclosure was not necessary.

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(c) Geographic information

The main place of operation and non-current assets of the Company is the United States.

(d) Main customer information

The income from a single customer accounts for more than 10% of the total income of the company as follows:

A customer B customer C customer	2022 2021	2022 2021	2022 2021
	$ 708,026 $ 420,278 348,575 339,095 299,284 288,473
		$ 1,355,885	$ 1,047,846

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Table 1

Parpro Corporation and its subsidiaries

Financing Provided To Others

For The Year Ended December 31, 2022

(In Thousands of New Taiwan Dollars)

No	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending balance	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limits
													Item	Value
0	The Company	AP Parpro, Inc.	Other receivables	yes	$214,970	$214,970	$161,626	2.5%-3%	Short-term financing	$ -	Operation requirements	$ -	-	$ -	$294,836 The loan limit should not exceed 20% of total equity of the Company.	$737,090 The loan limit should not exceed 50% of total equity of the Company.
		Parpro (Nevada), Inc.	Other receivables	yes	30,710	30,710	1,566	3%	Short-term financing	-	Operation requirements	-	-	-	294,836 The loan limit should not exceed 20% of total equity of the Company.	737,090 The loan limit should not exceed 50% of total equity of the Company.
		Parpro Technologies, Inc.	Other receivables	yes	30,710	30,710	2,303	3%	Short-term financing	-	Operation requirements	-	-	-	294,836 The loan limit should not exceed 20% of total equity of the Company.	737,090 The loan limit should not exceed 50% of total equity of the Company.
1	Parpro Holdings Co., Ltd.	AP Parpro, Inc.	Other receivables	yes	67,562	67,562	67,562	2.75%-3%	Short-term financing	-	Operation requirements	-	-	-	1,726,575 The loan limit should not exceed 100% of total equity of the Company.	1,726,575 The loan limit should not exceed 100% of total equity of the Company.
2	Parpro Technologies, Inc.	Parpro (Nevada), Inc.	Other receivables	yes	57,987	55,278	55,278	2.75%	Short-term financing	-	Operation requirements	-	-	-	1,141,669 The loan limit should not exceed 100% of total equity of the Company.	1,141,669 The loan limit should not exceed 100% of total equity of the Company.
		AP Parpro, Inc.	Other receivables	yes	132,082	125,911	96,644	2.5%-2.75%	Short-term financing	-	Operation requirements	-	-	-	1,141,669 The loan limit should not exceed 100% of total equity of the Company.	1,141,669 The loan limit should not exceed 100% of total equity of the Company.
3	Parpro (Nevada), Inc.	AP Parpro, Inc.	Other receivables	yes	32,215	30,710	-	2.75%	Short-term financing	-	Operation requirements	-	-	-	128,802 The loan limit should not exceed 100% of total equity of the Company.	128,802 The loan limit should not exceed 100% of total equity of the Company.

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Table 2

Parpro Corporation and its subsidiaries

Marketable Securities Held

December 31, 2022

(In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account	December 31,2022	December 31,2022	December 31,2022		Note
				Shares (In Thousands of Shares)	Carrying Amount	Percentage of Ownership (%)	Fair Value
The company	iCatch Technology, Inc.	-	Financial assets at fair value through other comprehensive income - non-current	254,000	$10,160	-	$10,160	-

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Table 3

Parpro Corporation and its subsidiaries

Total Purchases From or Sales To Related Parties Amounting To At Least $100 Million Or 20% of The Paid-In Capital For The Year Ended December 31, 2022

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable(Payable)	Notes/Accounts Receivable(Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
AP Parpro, Inc.	Parpro Nevada, Inc.	Subsidiary	Sale	($575,995)	(38%)	NET 30 days	Agreed	None	$61,908	17%	-

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Table 4

Parpro Corporation and its subsidiaries

Receivables From Related Parties Amounting To At Least Nt$100 Million Or 20% Of The Paid -In Capital December 31, 2022

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
The company	AP Parpro,Inc.	Subsidiary	Other receivables $208,088	-	$ -	-	$40,756	$ -

Note: As of March 3, 2023.

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Table 5

Parpro Corporation and its subsidiaries

Business Relationship and Significant Intercompany Transaction For The Year Ended December 31, 2022

(In Thousands of New Taiwan Dollars)

Number	Company Name	Counterparty	Relationship (Note1)		Transaction Details	Transaction Details
				Financial Account	Amount	Transaction Terms	% to Total Revenue or Assets
0	The Company	AP Parpro,Inc.	1	Sales revenue	$19,569	Accordingto the conditions agreed bybothparties	1%
				Accounts receivable	38,821	Accordingto the conditions agreed bybothparties	1%
				Other income	32,189	Accordingto the conditions agreed bybothparties	1%
				Other receivables	208,088	Accordingto the conditions agreed bybothparties	6%
		Parpro Nevada,Inc.	1	Other income	11,445	Accordingto the conditions agreed bybothparties	-
				Other receivables	19,352	Accordingto the conditions agreed bybothparties	1%
		Parpro Technologies Inc.	1	Other income	41,489	Accordingto the conditions agreed bybothparties	1%
				Other receivables	58,132	Accordingto the conditions agreed bybothparties	2%
1	Parpro Holdings Co.,Ltd.	AP Parpro,Inc.	3	Other receivables	69,698	Accordingto the conditions agreed bybothparties	2%
2	AP Parpro,Inc.	Our company	1	Sales revenue	12,332	Accordingto the conditions agreed bybothparties	-
				Accounts receivable	18,816	Accordingto the conditions agreed bybothparties	1%
		Parpro Nevada,Inc.	3	Sales revenue	575,995	Accordingto the conditions agreed bybothparties	21%
				Accounts receivable	61,908	Accordingto the conditions agreed bybothparties	2%
		Parpro Technologies Inc.	3	Other receivables	21,071	Accordingto the conditions agreed bybothparties	1%
3	Parpro Technologies Inc.	Parpro Nevada,Inc.	3	Other receivables	55,278	Accordingto the conditions agreed bybothparties	2%
		AP Parpro,Inc.	3	Other receivables	96,644	Accordingto the conditions agreed bybothparties	3%
4	Parpro Nevada,Inc.	AP Parpro,Inc.	3	Sales revenue	77,671	Accordingto the conditions agreed bybothparties	3%
				Accounts receivable	27,499	Accordingto the conditions agreed bybothparties	1%
		Parpro Technologies Inc.	3	Other receivables	11,918	Accordingto the conditions agreed bybothparties	-

Note 1:

Parent to subsidiary.
Subsidiary to parent.
Between subsidiaries

Note 2: The disclosed amount is at least NT$10,000 thousand.

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Table 6

Parpro Corporation and its subsidiaries

Information On Investees (Excluding Information On Investment In Mainland China) For The Year Ended December 31, 2022

(In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31, 2022	As of December 31, 2022	As of December 31, 2022	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2022	December 31, 2021	Shares (In Thousands of Shares)	%	Carrying Amount
The Company	Efa Technologies Corporation	Taiwan	Sales of industrial computers and gaming machines, etc.	$ -	$20,000	3,271,945	100	$20,840	$1,847	$1,847	Subsidiary
	Parpro Holdings Co., Ltd.	British Virgin Islands	Investment	USD36,190	USD36,190	36,190	100	1,726,575	60,533	60,533	Subsidiary
	Anderson Industrial Corp.	Taiwan	Non-metallic computer numerical control machining center	470,758	470,758	39,904,488	20.86	554,651	155,667	31,051	Associate
	Sogotec Precision Co., Ltd.	Taiwan	Manufacturing and sales of machinery	56,507	56,507	959,880	4.73	26,523	(8,864)	(419)	Associate
Efa Technologies Corporation	Sogotec Precision Co., Ltd.	Taiwan	Manufacturing and sales of machinery	28,797	28,797	485,000	2.39	13,402	(8,864)	Not applicable	Associate
Parpro Holdings Co., Ltd.	AP Parpro, Inc.	USA	Production and sales of aerospace industry parts	USD12,722	USD12,722	6,765	100	456,010	47,204	Not applicable	Second-tier Subsidiary
	Pilot(Las Vegas), Inc.	USA	Investment	USD735	USD735	735	100	25,758	16,096	Not applicable	Second-tier Subsidiary
	ParproQualityInc.	USA	Investment	USD23,955	USD23,955	23,500,000	100	1,141,669	27,702	Not applicable	Second-tier Subsidiary
AP Parpro, Inc.	Parpro (Nevada), Inc.	USA	Sales of industrial computers and gaming machines, etc.	USD2,941	USD2,941	510	80	103,044	80,482	Not applicable	Second-tier Subsidiary
Pilot (Las Vegas), Inc.	Parpro (Nevada), Inc.	USA	Sales of industrial computers and gaming machines, etc.	USD735	USD735	490	20	25,758	80,482	Not applicable	Second-tier Subsidiary
Parpro Quality Inc.	Parpro Technologies Inc.	USA	Production and sales of netcom, aerospace and defense industry components	USD23,500	USD23,500	12,859	100	1,141,669	27,702	Not applicable	Second-tier Subsidiary

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Table 7

Parpro Corporation

Information Of Major Shareholders

December 31, 2022

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Liao, Wen Jia	8,071,942	9.68%
Yunyong Investment Co., Ltd.	7,500,865	8.99%
Jieshi Investment Co., Ltd.	5,830,415	6.99%

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 Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis

237-

PARPRO CORPORATION

2022 Annual report

Chairman

Liao, Wen Jia

238-

AI assistant

PARPRO — Annual Report 2022

52437_rns_2023-05-31_ed359d74-165a-4f8c-92e9-aeb8167bb32c.pdf

PARPRO CORPORATION

2022 Annual report

Contents

I. Letter to Shareholders

1. Operating Results of 2022

(1)2022 business plan implementation results

(3)Profitability Analysis

A. Director:

2.Board Diversity and Independence

( 4) General Manager, Deputy General Managers, Assistant Managers, Heads of Departments and Branches

Remuneration Grading Schedule

C. Remuneration for general manager and deputy general manager

Remuneration Grading Schedule

2. Review the financial report

3. Evaluate the effectiveness of the internal control system

Attached Table 1: Diversity of the Board of Directors

Implementation of Advanced Training for Corporate Governance Supervisors in 2022.

Attached Table 1: Implementation Results of Promoting Sustainable Development

Schedule II: Risk Management Policy or Strategy

4. Public independent auditors information

IV. Fundraising situation

1. Capital and shares

(1) Source of share capital

A. Source of equity

B. General class of shares

(2) Shareholder structure

A. Common share:

2. The handling of corporate bonds:

D. Expected benefits

B. Industrial computer industry:

C. Aerospace industry:

B. Industrial computer industry:

C. Aerospace industry:

(3) Aerospace industry:

(1) Market analysis

2. Market share

Countermeasures:

Countermeasures:

A. Gaming and industrial computer

B. Aerospace and Defense Industry

5. Labor relations

7. Important contracts:

B. Condensed consolidated balance sheet

(4) Condensed consolidated statement of comprehensive income

2. Financial analysis for the last five years

1. Unconsolidated financial analysis

2. Consolidated Financial Analysis

The formula for calculating financial analysis items is as follows:

3. Review report of the audit committee for the most recent annual financial report

Audit Committee Review Report

(2) Future coping plans:

2. Financial performance:

3. Cash flow

Unit: NT$ thousand

VIII. Special records

2. Basic information of each affiliated enterprise

5. Overview of the operation of each affiliated company

PARPRO CORPORATION

Statement of Internal Control System

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key check items

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Parpro Corporation

Balance Sheets

Parpro Corporation

Statements of Comprehensive Income

Parpro Corporation

Statements of Changes In Equity

Parpro Corporation

Statements Of Cash Flows

Parpro Corporation

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

PARPRO Annual Report 2022