SINBON Electronics - Audit Report / Information 2022

SINBON ELECTRONICS CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT AUDITORS

FOR THE YEARS ENDED 31 DECEMBER 2022 AND 2021

Address: No.582, Kuo-Hwa Rd., Miaoli 360, Taiwan, R.O.C. Telephone: 886-37-330-099

The reader is advised that parent company only financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

Independent Auditors’ Report Translated from Chinese

To SINBON Electronics Co., Ltd.

Opinion

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

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

Basis for Opinion

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

Key Audit Matters

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

1. Valuation for inventories (Including inventories of the subsidiaries under the equity method)

The amount of inventories of the Company and its subsidiaries was significant to the financial statements. As the fluctuation in market demand and the fast-changing technology could cause losses of obsolete and slow-moving inventories, the assessment of the inventory write-downs require significant management judgement. We therefore determined this a key audit matter.

Our audit procedures included, but not limited to, understanding and testing the adequacy of accounting policy around obsolete and slow-moving inventories, evaluating stocktaking plan and selecting important storage locations to observe inventory counts to ensure inventory quantities and status; obtaining inventory aging schedule to test whether inbound and outbound records are accurate; re-calculating the unit cost of inventories; and evaluating and testing net realizable value adopted by management. We also assessed the adequacy of disclosures of financial assets. Please refer to Notes 5 and 6 to the parent company only financial statements.

2. Impairment of accounts receivable

As of 31 December 2022, gross accounts receivable and loss allowance by the Company amounted to NT$1,806,158 thousand and NT$1,166 thousand, respectively. Net accounts receivable accounted for 9% of total assets. Since the loss allowance of account receivables is measured by the expected credit loss for the duration of the account receivables, it is necessary to divide account receivables into groups in the process of measurement and analyze the application of related assumptions, including appropriate aging intervals and their respective loss rate. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a key audit matter.

Our audit procedures included, but not limited to, analyzing the appropriateness of the grouping of account receivables and confirming whether customers with significantly different credit loss types are grouped by similar risk characteristics. The Company is tested by provision matrix, including evaluating the appropriateness of the aging intervals and the accuracy of the basic data by reviewing the original certificates; testing the related statistics information of loss rate based on the rolling rate within one year, including the average loss rate and standard deviation; considering the reasonableness of the forward-looking information which takes into account loss rate, such as economic growth rate and unemployment rate; assessing whether such forward-looking information affected the loss rate. We also assessed the adequacy of disclosures of financial assets. Please refer to Notes 5 and 6 to the parent company only financial statements.

Other Matter– Making Reference to the Audits of Component Auditors

As explained in Note 6(6), we did not audit the financial statements of certain subsidiaries, associates and joint ventures accounted for under the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the reports of other auditors. These subsidiaries, associates and joint ventures under equity method amounted to NT$2,711,169 thousand and NT$2,399,257 thousand, representing 13% and 14% of the total assets as of 31 December 2022 and 2021, respectively. The related shares of profits from the subsidiaries, associates and joint ventures under the equity method amounted to NT$1,122,405 thousand and NT$1,114,335 thousand, representing 33% and 41% of the income before tax for the years ended 31 December 2022 and 2021, respectively, and the related shares of other comprehensive (loss) income from the subsidiaries, associates and joint ventures under the equity method amounted to NT$(22,062) thousand and NT$59,102 thousand, representing (19)% and 309% of the comprehensive (loss) income for the years ended 31 December 2022 and 2021, respectively.

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

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of the Company.

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Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company.
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 ability to continue as a going concern of the Company. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the accompanying notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

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

Lo,Wen Chen

Chen, Ming Hung

Ernst & Young, Taiwan

9 March 2023

Notice to Readers

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

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

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes	As of31 December	As of31 December
		2022	2021
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss, current Notes receivable, net Accounts receivable, net Accounts receivable-related parties, net Other receivables Inventories Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Investments accounted for under the equity method Property, plant and equipment Right-of-use assets Deferred tax assets Other non-current assets Total non-current assets	4,6(1) 4,6(2) 4,6(3) 4,6(3),7 7 4,6(4) 4,6(2) 4,6(5) 4,6(6) 4,6(7) 4,6(16),7 4,6(20) 4,6(8)	$2,075,527 296,927 19,887 1,311,592 493,400 167,334 3,142,369 299,257	$1,451,590 247,358 23,550 1,046,853 472,476 227,349 2,375,294 236,587
		7,806,293	6,081,057
		- 313,758 11,104,193 786,077 234,595 98,597 106,096	2,333 321,734 9,454,470 704,798 255,644 129,199 198,328
		12,643,316	11,066,506

Total assets

(continued)

$20,449,609

$17,147,563

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Notes	As of31 December	As of31 December
	2022	2021
4,6(9) 4,6(10) 4,6(14) 7 7 4 4,6(16),7 4,6(11) 4,6(10) 4,6(11) 4,6(20) 4,6(16),7 4,6(12) 6(13) 6(13) 4	$1,516,620 - 2,165,366 462 718,639 610,531 751,525 204,008 49,212 176,281 - 35,319	$1,952,450 241 1,009,680 568 903,856 401,136 558,826 108,120 45,532 - 300,000 2,829
	6,227,963	5,283,238
	5,100 945,648 396,361 186,995 53,501 542	- 994,351 233,557 211,048 67,561 62
	1,588,147	1,506,579
	7,816,110	6,789,817
	2,365,841 19,200	2,333,770 8,290
	2,385,041	2,342,060
	3,067,205	2,190,472
	1,727,300 381,975 5,342,675	1,493,995 399,729 4,313,466
	7,451,950	6,207,190
	(359,257) 88,560	(561,279) 179,303
	(270,697)	(381,976)
	12,633,499	10,357,746
	$20,449,609	$17,147,563

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

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the years ended 31 December 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Notes	For theyears ended 31 December	For theyears ended 31 December
	2022	2021
4,6(14),7 6(4.18),7 6(18),7 6(18),7 4,6(6) 4,6(20) 6(19) 4,6(21)	$7,691,998 (5,629,876)	$6,928,235 (5,242,802)
	2,062,122	1,685,433
	(695,083) (601,218) (294,748)	(466,789) (445,417) (280,860)
	(1,591,049)	(1,193,066)
	471,073	492,367
	6,366 284,863 190,854 (29,727) 2,481,420	853 190,263 22,540 (28,940) 2,063,726
	2,933,776	2,248,442
	3,404,849 (524,296)	2,740,809 (409,307)
	2,880,553	2,331,502
	5,864 (42,287) (48,082) (1,173) 247,131 4,255 (49,384)	(178) 9,387 69,609 36 (74,034) (911) 15,249
	116,324	19,158
	$2,996,877	$2,350,660
	$12.22	$10.00
	$11.88	$9.80

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

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended 31 December 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Capital	Capital	Additional Paid-in Capital		Retained earnings	Retained earnings	Other components of equity	Other components of equity	Total Equity
Common stock	Certificate of entitlement to new shares from convertible bond		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains (Losses) on Equity Instruments Measured at Fair Value Through Other Comprehensive Income
$2,327,775	$ -	$1,885,096 (2,415) 33,203 10,174	$1,280,774 213,221	$481,223 (81,494)	$3,579,649 (213,221) (1,467,504) 81,494 472 2,331,502 (142)	$(501,613) 30 (59,696)	$101,884 (472) 78,996	$9,154,788 - (1,467,504) - (2,385) 33,203 10,174 2,331,502 19,158
-	-	-	-	-	2,331,360	(59,696)	78,996	2,350,660
5,995	8,290	264,414			(748) 1,964		748 (1,853)	- 111 278,699
$2,333,770	$8,290	$2,190,472	$1,493,995	$399,729	$4,313,466	$(561,279)	$179,303	$10,357,746
$2,333,770	$8,290	$2,190,472 90,910 1,577 (1,927) 5,202	$1,493,995 233,305	$399,729 (17,754)	$4,313,466 (233,305) (1,640,858) 17,754 374 2,880,553 4,691	$(561,279) 20 202,002	$179,303 (374) (90,369)	$10,357,746 - (1,640,858) - 90,910 1,577 (1,907) 5,202 2,880,553 116,324
-	-	-	-	-	2,885,244	202,002	(90,369)	2,996,877
32,071	10,910	780,971						823,952
$2,365,841	$19,200	$3,067,205	$1,727,300	$381,975	$5,342,675	$(359,257)	$88,560	$12,633,499

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

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended 31 December 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Net income before tax Adjustments to reconcile net income before tax to net cash provided by (used in) operating activities: Income and expense adjustments: Depreciation Amortization Interest expense Interest income Dividend income Share of profit of subsidiaries,associates and joint ventures Gain on disposal of property, plant and equipment Gain on disposal of investments Gain of financial assets/liabilities at fair value through loss or profit Changes in operating assets and liabilities: Decrease (increase) in notes receivable (Increase) decrease in accounts receivable Decrease (increase) in other receivables Increase in inventories, net Increase in other current assets (Decrease) increase in notes payable Increase (decrease) in accounts payable Increase in other payables Increase in contract liability Increase (decrease) in other current liabilities Decrease in accrued pension liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash provided by operating activities	For theyears ended 31 December	For theyears ended 31 December
	2022 $3,404,849 135,103 13,768 29,727 (6,366) (38,818) (2,481,420) (3,006) - (32,269) 3,663 (285,663) 60,015 (767,075) (62,670) (106) 24,178 189,879 1,155,686 32,490 (8,196) 1,363,769 6,366 38,818 (20,222) (285,559) 1,103,172	2021
		$2,740,809 106,264 10,139 28,940 (853) (14,643) (2,063,726) (14,326) (315) (75,921) (14,897) 75,272 (40,508) (609,117) (131,199) 177 (115,543) 99,363 428,185 (20,199) (5,582)
		382,320
		853 14,643 (12,603) (373,474)
		11,739

(Continued)

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese

SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS(Continued) For the years ended 31 December 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of investments accounted for under the equity method Proceeds from disposal of investments accounted for under the equity method Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Decrease in financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss, current Proceeds from disposal of financial assets at fair value through profit or loss, current Increase in other noncurrent assets Dividends received Net cash provided by investing activities Cash flows from financing activities: Cash payments for the principal portion of lease liability (Decrease) increase in short-term loans Proceeds from bonds issued Decrease in long-term loans Increase in deposits received Cash dividends Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For theyears ended 31 December	For theyears ended 31 December
	2022 (67,480) 18,376 (129,663) - (50,000) - 15,689 (16,143) - (38,903) 1,169,327 901,203 (49,473) (435,830) 1,045,040 (300,000) 480 (1,640,858) (1,380,641) 203 623,937 1,451,590 $2,075,527	2021
		(115,800) 140,048 (50,994) 47,835 (75,000) 23,590 2,449 - 52,870 (209,303) 1,454,433
		1,270,128
		(47,046) 493,862 - - 60 (1,467,504)
		(1,020,628)
		2,226
		263,465 1,188,125
		$1,451,590

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

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS

For the Years Ended 31 December 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

1. History and organization

SINBON Electronics Co., Ltd. (the “Company”) was incorporated in Republic of China (R.O.C) in December 1989. The main activities of the Company include manufacturing and selling computer peripherals, connectors, wires and other parts. The shares of the Company commenced trading on Taiwan’s Over-the-Counter Market in May 2001 and were listed on the Taiwan Stock Exchange in August 2002.

2. Date and procedures of authorization of financial statements for issue

The parent company only financial statements of the Company for the years ended 31 December 2022 and 2021 were authorized for issue by the Board of Directors on 9 March 2023.

3. Newly issued or revised standards and interpretations

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Company applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after 1 January 2022. The adoption of these new standards and amendments had no material impact on the Company.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	Disclosure Initiative - Accounting Policies – Amendments to IAS 1	1 January 2023
b	Definition of Accounting Estimates–Amendments to IAS 8	1 January 2023
c	Deferred Tax related to Assets and Liabilities arising from a Single Transaction–Amendments to IAS 12	1 January 2023

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

(b) Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and include other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after 1 January 2023. The new or amended standards and interpretations have no material impact on the Company.

(3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS 17“Insurance Contracts”	1 January 2023
c	Classification of Liabilities as Current or Non-current – Amendments to IAS 1	1 January 2024
d	Lease Liability in a Sale and Leaseback – Amendments to IFRS 16	1 January 2024
e	Non-current Liabilities with Covenants – Amendments to IAS 1	1 January 2024

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures , in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

(b) IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

(d) Lease Liability in a Sale and Leaseback – Amendments to IFRS 16

The amendments add seller-lessees additional requirements for the sale and leaseback transactions in IFRS 16, thereby supporting the consistent application of the standard.

(e) Non-current Liabilities with Covenants – Amendments to IAS 1

The amendments improved the information companies provide about long-term debt with covenants. The amendments specify that covenants to be complied within twelve months after the reporting period do not affect the classification of debt as current or non-current at the end of the reporting period.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. The new or amended standards and interpretations have no material impact on the Company.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

4. Summary of significant accounting policies

(1) Statement of Compliance

The parent company only financial statements of the Company for the years ended 31 December 2022 and 2021 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”).

(2) Basis of Preparation

The Company prepared the parent company only financial statements in accordance with the Regulations. According to the Article 21 of the Regulation, which provided that the profit or loss and other comprehensive income for the period presented in the parent company only financial statements shall be the same as the profit or loss and other comprehensive income attributable to stockholders of the parent presented in the consolidated financial statements for the period, and the total equity presented in the parent company only financial statements shall be the same as the equity attributable to the parent company presented in the consolidated financial statements. Therefore, the Company accounted for its investments in subsidiaries using equity method and, accordingly, made necessary adjustments.

The parent company only financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The parent company only financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Foreign Currency Transactions

The Company’s parent company only financial statements are presented in its functional currency, New Taiwan Dollars (NT$). Items included in the financial statements are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Company at the respective functional currency rates prevailing at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. Non-monetary items measured at fair value in foreign currencies are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in foreign currencies are translated using the exchange rates as at the dates of the initial transactions.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

(a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
(b) Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.
(c) Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(4) Translation of Foreign Currency Financial Statements

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following partial disposals are accounted for as disposals:

(a) when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and
(b) when the retained interest after the partial disposal of an interest in a joint arrangement or a partial disposal of an interest in an associate that includes a foreign operation is a financial asset that includes a foreign operation.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation In partial disposal of an associate or joint arrangement that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(5) Current and non-current distinction

An asset is classified as current when:

(a) The Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
(b) The Company holds the asset primarily for the purpose of trading
(c) The Company expects to realize the asset within twelve months after the reporting period
(d) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

(a) The Company expects to settle the liability in its normal operating cycle
(b) The Company holds the liability primarily for the purpose of trading
(c) The liability is due to be settled within twelve months after the reporting period
(d) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(6) Cash Equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(7) Financial Instruments

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

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

(1) Financial instruments: Recognition and Measurement

The Company accounts for regular way purchase or sales of financial assets on the trade date.

The Company classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

A. the Company’s business model for managing the financial assets
B. the contractual cash flow characteristics of the financial asset

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

A. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
B. 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.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

A. purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition
B. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

A. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. 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

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
(b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
(c) Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
i. Purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
ii. Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

In addition, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Company made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

(2) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

The Company measures expected credit losses of a financial instrument in a way that reflects:

(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
(b) the time value of money; and
(c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measured as follows:

(a) At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Company measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
(c) For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.
(d) For lease receivables arising from transactions within the scope of IFRS 16, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Company needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

(3) Derecognition of financial assets

A financial asset is derecognized when:

i. The rights to receive cash flows from the asset have expired
ii. The Company has transferred the asset and substantially all the risks and rewards of the asset have been transferred
iii. The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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

(4) Financial liabilities and equity

Classification between liabilities or equity

The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Compound instruments

The Company evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, the Company assesses if the economic characteristics and risks of the put and call options contained in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on the rate of interest applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost before the instrument is converted or settled.

For the embedded derivative that is not closely related to the host contract (for example, if the exercise price of the embedded call or put option is not approximately equal on each exercise date to the amortized cost of the host debt instrument), it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies for an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IFRS 9 Financial Instruments.

Transaction costs are apportioned between the liability and equity components of the convertible bond based on the allocation of proceeds to the liability and equity components when the instruments are initially recognized.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

On conversion of a convertible bond before maturity, the carrying amount of the liability component being the amortized cost at the date of conversion is transferred to equity.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is classified as held for trading if:

i. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term
ii. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking
iii. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

i. it eliminates or significantly reduces a measurement or recognition inconsistency; or
ii. a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the Company is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(5) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(8) Derivative financial instruments

The Company uses derivative financial instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as assets or liabilities at fair value through profit or loss except for derivatives that are designated effective hedging instruments which are classified as derivative financial assets or liabilities for hedging.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognized in equity.

When the host contracts are either non-financial assets or liabilities, derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not designated at fair value though profit or loss.

(9) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability, or
(b) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(10) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Raw materials - Purchase cost under weighted average cost method Finished goods and work in progress – Cost of direct materials and labor and a

proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

(11) Investments accounted for under the equity method

According to Article 21 of the Regulation, the Company’s investment in subsidiaries was presented as “Investments accounted for using equity method” and made necessary adjustments. The profit or loss during the period and other comprehensive income presented in the parent company only financial statements shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to shareholders of the parent presented in the financial statements prepared on a consolidated basis, and the shareholders’ equity presented in the parent company only financial statements shall be the same as the equity attributable to shareholders of the parent presented in the financial statements prepared on a consolidated basis. The adjustment was considered the difference between investment in subsidiaries in consolidated financial statements according to IFRS 10 “Consolidated financial statements” and application of IFRS to different reporting entities, debit/credit “Investment accounted for using equity method”, “Share of profit or loss of subsidiaries, associates and joint ventures” or “Share of other comprehensive profit or loss of subsidiaries, associates and joint ventures” etc.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity olver which the Company has significant influence. Joint venture means the Company has rights to the net assets of the joint agreement (with joint controller).

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Company’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the Company’s related interest in the associate or joint venture.

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Company’s percentage of ownership interests in the associate or joint venture, the Company recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a pro-rata basis.

When the associate or joint venture issues new stock, and the Company’s interest in an associate or a joint venture is reduced or increased as the Company fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in additional paid-in capital and investment accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Company disposes the associate or joint venture.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

The Company determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures . If this is the case the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets . In determining the value in use of the investment, the Company estimates:

(a) Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
(b) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets .

Upon loss of significant influence over the associate or joint venture, the Company measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(12) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Company recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Items Buildings Machinery and equipment Transportation equipment Office equipment Other equipment Leasehold improvements	Useful Lives
	5`～`50 years 3`～`15 years 5`～`10 years 3`～`10 years 2`～`15 years Lower of leasehold years or useful lives

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate, and are treated as changes in accounting estimates.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(13) Leases

The Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether, throughout the period of use, has both of the following:

(a) the right to obtain substantially all of the economic benefits from use of the identified asset; and

(b) the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximizing the use of observable information.

Company as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Company recognizes right-of-use asset and lease liability for all leases which the Company is the lessee of those lease contracts.

At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
(c) amounts expected to be payable by the lessee under residual value guarantees;
(d) the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
(e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Company measures the lease liability on an amortized cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

(a) the amount of the initial measurement of the lease liability;
(b) any lease payments made at or before the commencement date, less any lease incentives received;
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Company measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Company accounted for as short-term leases or leases of low-value assets, the Company presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Company elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

For the rent concession arising as a direct consequence of the Covid-19 pandemic, the Company elected not to assess whether it is a lease modification but accounted it as a variable lease payment.

Company as a lessor

At inception of a contract, the Company classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Company recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Company allocates the consideration in the contract applying IFRS 15.

The Company recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(14) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

A summary of the policies applied to the Company’s intangible assets is as follows:

follows:
Useful lives Amortization method used Internally generated or acquired	Computer software
	1~15 years Amortized on a straight- line basis over the estimated useful life Acquired

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(15) Impairment of non-financial assets

The Company assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(16) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probably that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Provision for decommissioning, restoration and rehabilitation costs

The provision for decommissioning, restoration and rehabilitation costs arose on construction of a property, plant and equipment. Decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognized as part of the cost of that particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognized as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.

Provision for warranties

A provision is recognized for expected warranty claims on products sold, based on past experience, management’s judgement and other known factors.

(17) Revenue recognition

The Company’s revenue arising from contracts with customers are primarily related to sale of goods and rendering of services. The accounting policies are explained as follows:

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Sale of goods

The Company manufactures and sells machinery. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Company are computer peripherals, connectors, wires and other parts and revenue is recognized based on the consideration stated in the contract.

The credit period of the Company’s sale of goods is from 60 to 120 days. For most of the contracts, when the Company transfers the goods to customers and have a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Company usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract. For some of the contracts, the Company has transferred the goods to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. Besides, in accordance with IFRS 9, the Company measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses.

Rendering of services

The Company provides maintenance services for the sale of construction for solar photovoltaic power generation system. Such services are separately priced or negotiated, and provided based on contract periods.

Most of the contractual considerations of the Company are collected evenly throughout the contract periods. When the Company has performed the services to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Company has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component has arisen.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Construction revenues

Contract revenue is recognized within the scope that is likely to generate revenue and can be measured reliably, including the original amount of the contract signed, plus any changes related to the contract, claims for compensation and incentive payments, etc. When the construction contract meet the following critiria, the entity recognizes revenue over time. The customer simultaneously receives and consumes all of the benefits provided by the entity as the entity performs; the entity’s performance creates or enhances an asset that the customer controls as the asset is created; or the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. Contract assets are recognized when the service has been transferred to the customer but the right to unconditionally receive the consideration has not yet been granted. However, there are some contracts, because part of the consideration is collected from the customer when the contract is signed, and the company assumes the obligation to provide labor services in the future, so it is recognized as a contract liability.

Depending on the nature of the contract, the degree of completion is calculated as the proportion of contract costs incurred to date on completion of work to the estimated total contract costs. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized only to the extent of expected cost recovery and expected contract losses are recognized immediately in profit or loss.

(18) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(19) Post-employment benefits

All regular employees of the Company are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company. Therefore fund assets are not included in the Company’s consolidated financial statements.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the defined contribution plan, the Company will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

(a) the date of the plan amendment or curtailment, and
(b) the date that the Company recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(20) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

i.Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
ii. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

i.Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
ii. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities 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. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

5. Significant accounting judgments, estimates and assumptions

The preparation of the parent company only financial statements require management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(1)Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flow model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

(2)Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Please refer to Note 6 for more details.

(3)Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company's domicile.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Deferred tax assets are recognized for all carry forward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

(4)Accounts receivables–estimation of impairment loss

The Company estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

(5)Inventories

Estimates of net realisable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

6. Contents of significant accounts

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and petty cash Demand deposits Total	As of31 December
	2022	2021
	$87 2,075,440	$24 1,451,566
	$2,075,527	$1,451,590

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Financial assets at fair value through profit or loss

Financial assets mandatorily at fair value through profit or loss: Stocks Corporate bonds Cross currency swaps Embedded derivatives-Corporate bonds Total Current Non – current Total	As of 31 December	As of 31 December
	2022	2021
	$180,841 72,330 43,578 178	$190,190 57,168 - 2,333
	$296,927	$249,691
	$296,927 -	$247,358 2,333
	$296,927	$249,691

Financial assets at fair value through profit or loss were not pledged.

(3) Accounts receivables and accounts receivable - related parties

Accounts receivables Less: loss allowance subtotal Accounts receivable – related parties Total	As of31 December	As of31 December
	2022	2021
	$1,312,758 (1,166)	$1,048,019 (1,166)
	1,311,592 493,400	1,046,853 472,476
	$1,804,992	$1,519,329

Accounts receivables were not pledged.

Accounts receivables are generally on 60-120 day terms. The total carrying amount for the years ended 31 December 2022 and 2021 were NT$1,806,158 thousand and NT$1,520,495 thousand, respectively. Please refer to Note 6(15) for more details on loss allowance and Note 12 for details on credit risk management.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Inventories

Raw materials Work in progress Finished goods Merchandise Total	As of 31 December	As of 31 December
	2022 $905,970 147,861 1,821,931 266,607 $3,142,369	2021
		$779,079 187,342 1,145,930 262,943
		$2,375,294

The inventory cost recognized as operating costs for the years ended 31 December 2022 and 2021 were NT$5,629,876 thousand and NT$5,242,802 thousand, respectively. The price reduction (gain from price recovery) of inventories related to cost of goods sold were NT$16,328 thousand and NT$(18,376) thousand.

Gain from price recovery of inventories was due to the sale of obsolete products and the net realized value recovery for the year ended 31 December 2021.

Inventories were not pledged.

(5) Financial assets at fair value through other comprehensive income

Equity instrument investments measured at fair value through other comprehensive income – Non-current Unlisted companies' stocks	As of31 December	As of31 December
	2022	2021
	$313,758	$321,734

On 15 June 2022, the Company invested NT$50,000 thousand in Top Taiwan XIV Venture Capital Co., Ltd. which were reported under equity instrument investments measured at fair value through other comprehensive income during the period.

On 20 June 2022, the paid-in capital returned from capital reduction of Top Taiwan Venture Capital Co., Ltd. and Top Taiwan VII Venture Capital Co., Ltd. amounted to NT$11,250 thousand and NT$4,439 thousand, respectively.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

On 26 January 2021, the Company disposed of the unlisted stocks in Japan SINBON Electronics Co., Ltd., which were reported under equity instrument investments measured at fair value through other comprehensive income during the period. Upon derecognition, the fair value of the investments was NT$1,510 thousand, and the cumulative disposal loss of NT$556 thousand was transferred from other components of equity to retained earnings.

On 23 April 2021, the Company invested NT$75,000 thousand in SINTOP Energy I Corp. which were reported under equity instrument investments measured at fair value through other comprehensive income during the period.

On the second quarter of 2021, the Company disposed NT$7,530 thousand in Gongwin Biopharm Holdings Co., Ltd., which were reported under equity instrument investments measured at fair value through other comprehensive income during the period. Upon derecognition, the fair value of the investments was NT$20,832 thousand, and the cumulative disposal gain of NT$13,302 thousand was transferred from other components of equity to retained earnings

On 29 April 2020, Top Taiwan III Venture Capital Co., Ltd., was liquidated. On 27 September 2021, the paid-in capital returned from the liquidation in the amount of NT$777 thousand was received and the unrealized disposal loss of NT$4,914 thousand was transferred from other components of equity to retained earnings.

On 29 April 2020, Top Taiwan II Venture Capital Co., Ltd., was liquidated. On 22 October 2021, the paid-in capital returned from the liquidation in the amount of NT$471 thousand was received and the unrealized disposal loss of NT$5,979 thousand was transferred from other components of equity to retained earnings.

The paid-in capital returned from capital reduction of Top Taiwan VII Venture Capital Co., Ltd. amounted to NT$2,449 thousand on 9 July 2021.

Financial assets at fair value through other comprehensive income were not pledged.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company’s dividend income related to equity instrument investments measured at fair value through other comprehensive income for the years ended 31 December 2022 and 2021 are as follow:

Related to investments held at the end of the reporting period Related to investments derecognized during the period Dividends recognized during the period	For theyears ended 31 December	For theyears ended 31 December
	2022	2021
	$35,688 -	$13,144 -
	$35,688	$13,144

(6) Investments accounted for using the equity method

The following table lists the investments accounted for using the equity method of the Company:

As of 31 December	As of 31 December	As of 31 December
2022 Amount % $5,864,583 100.00% 2,162,814 85.53% 1,408,743 100.00% 699,071 100.00% 437,831 57.45% 100,002 100.00% 4,753 100.00% 165,268 55.00% 106,822 100.00% 9,242 53.57% 10,959,129 145,064 3.56% $11,104,193	2021
Amount $5,864,583 2,162,814 1,408,743 699,071 437,831 100,002 4,753 165,268 106,822 9,242 10,959,129 145,064 $11,104,193	Amount $4,736,920 1,946,117 1,155,609 736,103 436,436 39,142 3,203 107,007 142,129 8,199 9,310,865 143,605 $9,454,470	%
		100.00% 85.53% 100.00% 100.00% 57.45% 100.00% 100.00% 55.00% 100.00% 53.57% 3.52%

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

On 25 April and 1 July 2022, in order to expand productivity and market development in USA, the Company invested additional NT$8,803 thousand and NT$89,385 thousand in SINBON USA L.L.C..

On 20 September 2022, in order to increase working capital of SINBON Hungary Kft., the Company invested additional NT$31,475 thousand in SINBON Hungary Kft..

On the third quarter of 2022, Argocy Research Inc. has bought back 1,000 thousand treasury shares. Consequently, the Company’s ownership interest in Argocy Research Inc. was increased from 3.52% to 3.56%.

On 26 January 2021, T-CONN raised capital; however, the Company did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 61.18% to 58.86% and recognized capital surplus in the amount of NT$10,174 thousand.

On 15 April 2021, the Company newly invested NT$6,804 thousand to establish SINTOP Energy Management Co., Ltd..

On 31 May 2021, the Company disposed of 1.41% interest in T-CONN. The cash consideration amounted to NT$41,949 thousand and the Company recognized capital surplus in the amount of NT$33,203 thousand. Therefore, its ownership interest in T-CONN was decreased from 58.86% to 57.45%

On 26 July 2021, the Company invested additional NT$29,730 thousand in SINBON Hungary Kft.

On 27 September 2021, the return of paid-in capital following liquidation was NT$5,886 thousand and the Company has recognized gain on disposal of investment in the amount of NT$315 thousand.

On 23 November 2021, the Company invested additional NT$14,460 thousand in SINBON USA L.L.C..

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(1)For the years ended 31 December 2022 and 2021, the Company recognized share of profit or loss of subsidiaries and associates and exchange differences on translation of foreign operations accounted for using equity method, and the details are as follows:

For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December
2022 Investment income (loss) Exchange differences on translation of Foreign operations $1,085,556 $83,101 263,550 32,721 960,019 125,437 121,494 1,188 (40,724) 6,161 58,261 - 74,102 2,896 1,351 199 (66,085) (697) 2,298 - 2,459,822 251,006 21,598 191 $2,481,420 $251,197	2021
Investment income (loss) $1,085,556 263,550 960,019 121,494 (40,724) 58,261 74,102 1,351 (66,085) 2,298 2,459,822 21,598 $2,481,420	Investment income (loss) $769,109 152,972 867,722 131,869 (21,595) 51,160 134,480 2,085 (48,028) 1,395 2,041,169 22,557 $2,063,726	Exchange differences on translation of Foreign operations
		$(23,145) (9,900) (39,415) (105) (1,204) - (700) (261) (2,320) -
		(77,050)
		(76)
		$(77,126)

(2)Investments in subsidiaries

Investing subsidiaries was expressed as “Investments accounted for under the

equity method” in the parent company only financial statements, and was made the adjustment which was necessary.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(3)Investments in associates

The Company’s investments in Argocy Research Inc. are not individually material. The aggregate financial information of the Company’s share of its associates is as follows:

Profit from continuing operations Other comprehensive income (post-tax) Total comprehensive income	For the years ended 31 December	For the years ended 31 December
	2022 $21,598 (2,640) $18,958	2021
		$22,557 9,812
		$32,369

The associates had no contingent liabilities or capital commitments as of 31 December 2022 and 2021.

Fair value of the investment in the associate when there is a quoted market price for the investment:

Argocy Research Inc. is a listed entity on the Taipei Exchange (TPEx). The fair value of the investment in Argocy Research Inc. was NT$253,968 thousand and NT$428,571 thousand as of 31 December 2022 and 2021.

T-CONN Precision Co., Ltd. is a listed entity on the Taipei Exchange (TPEx). The fair value of the investment in T-CONN Precision Co., Ltd. was NT$1,230,867 thousand and NT$2,165,276 thousand as of 31 December 2022 and 2021.

Our audit, insofar as it related to the investments accounted for under the equity method amounting to NT$2,711,169 thousand and NT$2,399,257 thousand as of 31 December 2022 and 2021; the related shares of investment income from the associates and joint ventures amounted to NT$1,122,405 thousand and NT$1,114,335 thousand for the years ended 31 December 2022 and 2021, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$(22,062) thousand and NT$59,102 thousand for the years ended 31 December 2022 and 2021, respectively; are based solely on the reports of other independent accountants.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(7) Property, plant and equipment

Cost:	Land $194,189 9,056 - - $203,245 $150,430 43,759 - - $194,189 $ - - -	Buildings $424,783 14,082 (112) 94,583 $533,336 $424,135 648 - - $424,783 $157,069 21,983 (112)	Machinery and equipment $201,927 29,338 (733) 6,953 $237,485 $168,159 33,980 (1,437) 1,225 $201,927 $127,846 33,395 (733)	Office equipment $63,057 10,943 (4,195) (3,250) $66,555 $47,470 13,536 (92) 2,143 $63,057 $36,481 11,348 (4,195)	Transportatio n equipment $2,244 - - - $2,244 $2,244 - - - $2,244 $1,695 219 -	Other equipment $50,230 3,866 (15,831) 15,831 $54,096 $158,613 7,291 (129,258) 13,584 $50,230 $15,979 6,741 (461)	Leasehold improvements	Total $1,054,236 67,480 (21,249) 114,117 $1,214,584 $970,375 115,800 (132,254) 100,315 $1,054,236 $349,438 84,948 (5,879)
							$117,806 195 (378) -
As of 1 January 2022 Additions Disposals Other changes As of 31 December 2022 As of 1 January 2021 Additions Disposals Other changes As of 31 December 2021 Depreciation and impairment:
							$117,623
							$19,324 16,586 (1,467) 83,363
							$117,806
							$10,368 11,262 (378)
As of 1 January 2022 Depreciation Disposals As of 31 December 2022 As of 1 January 2021 Depreciation Disposals As of 31 December 2021 Net carrying amount as at:
	$ -	$178,940	$160,508	$43,634	$1,914	$22,259	$21,252	$428,507
	$ - - -	$139,578 17,491 -	$106,736 22,547 (1,437)	$29,476 7,097 (92)	$1,475 220 -	$12,099 7,416 (3,536)	$7,993 3,842 (1,467)	$297,357 58,613 (6,532)
	$ -	$157,069	$127,846	$36,481	$1,695	$15,979	$10,368	$349,438
	$203,245 $194,189	$354,396 $267,714	$76,977 $74,081	$22,921 $26,576	$330 $549	$31,837 $34,251	$96,371 $107,438	$786,077 $704,798
31 December 2022 31 December 2021

Property, plant and equipment was not pledged.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

There is no capitalization of interest due to purchase of property, plant and equipment

Components of building that have different useful lives are the main building structure and air conditioning, which are depreciated over 50 years and 25 years, respectively.

(8) Other non-current assets

Prepayment for equipment Long-term prepaid rent Refundable deposits Other long-term investment Other assets Total	As of 31 December	As of 31 December
	2022 $72,616 18,696 14,030 600 154 $106,096	2021
		$167,649 16,830 13,095 600 154
		$198,328

No other non-current assets were pledged.

(9) Short-term loans

Unsecured bank loans Interest rates applied	As of 31 December	As of 31 December
	2022 2021 $1,516,620 $1,952,450 As of 31 December	2021
		$1,952,450
	2022 0.54%~1.65%	2021 0.53%~0.58%

The Company’s unused short-term lines of credits amounted to NT$4,380,020 thousand and NT$3,174,300 thousand as of 31 December 2022 and 2021, respectively.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(10) Financial liabilities at fair value through profit or loss

Held for trading: Derivatives not designated as hedging Instruments Embedded derivative-bonds Cross currency swaps Total Current Non-current Total	As of31 December	As of31 December
	2022 $5,100 - $5,100 $ - 5,100 $5,100	2021 $ - 241 $241 $241 - $241

(11) Bonds payable

Liability component Principal amount Discounts on bonds payable Subtotal Less: current portion Net Embedded derivative Equity component	As of31 December	As of31 December
	2022	2021
	$1,178,100 (56,171)	$1,014,400 (20,049)
	1,121,929 (176,281)	994,351 -
	$945,648	$994,351
	$4,922	$(2,333)
	$110,602	$112,157

A.Issuance of convertible bonds:

On 12 December 2022, the Company issued the eighth zero coupon unsecured convertible bonds. The terms of the convertible bonds were evaluated to include a liability component, embedded derivatives (a call option and a put option) and an equity component (an option for conversion into issuer’s ordinary shares). The terms of the bonds are as follows:

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Issue amount: NT$1,000,000 thousand

Period: 12 December 2022 ~ 12 December 2025

Redemption clauses:

a. The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (13 March 2023) and prior to 40 days before the maturity date (2 November 2025), at the principal amount of the bonds with an interest calculated at the rate of 0% per annum (early redemption conversion price) if the closing price of the Company’s ordinary shares on the Taiwan Stock Exchange (TWSE) for a period of 30 consecutive trading days, is at least 130% of the conversion price.
b. The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (13 March 2023)and prior to 40 days before the maturity date (2 November 2025), at the early redemption conversion price if at least 90% in principal amount of the bonds has already been exchanged, redeemed, purchased or cancelled.
c. The Company may redeem the bonds in cash, within 5 trading days after the base date of withdrawing the bonds as stated on the “Withdrawal of Convertible Bonds Notice”, at the par value if the bondholders do not reply to the share affair agency in writing before the base date.

Reversal clauses:

a. The bondholders have the right to require the Company to redeem all or any portion of the bonds, 40 days prior to 2 year anniversary (12 December 2024) of the issuance, at the principal amount of the bonds with an interest calculated at the rate of 0.5% per annum.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Terms of Exchange:

a. Underlying Securities: Common shares of the Company
b. Exchange Period: The bonds are exchangeable at any time on or after 13 March 2023 and prior to 12 December 2025 into common shares of the Company.
c. Exchange Price and Adjustment: The exchange price was originally NT$286.5 per share. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture.

In accordance with IFRS 9, said financial instrument is classified as an embedded derivative so the exercise price of the embedded put option is allocated to the liability component and equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. The difference between the equity component and the book value was recognized in profit or loss. The difference between the liability component and the book value was recognized in “Share premium-warrants”.

The financial assets of convertible bonds are measured at amortized cost, fair value through profit or loss amounted to NT$5,100 thousand as at 31 December 2022.

B. Issuance of convertible bonds:

On 15 December 2020, the Company issued the seventh zero coupon unsecured convertible bonds. The terms of the convertible bonds were evaluated to include a liability component, embedded derivatives (a call option and a put option) and an equity component (an option for conversion into issuer’s ordinary shares). The terms of the bonds are as follows:

Issue amount: NT$1,300,000 thousand

Period: 15 December 2020 ~ 15 December 2023

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Redemption clauses:

a. The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (16 March 2021) and prior to 40 days before the maturity date (5 November 2023), at the principal amount of the bonds with an interest calculated at the rate of 0% per annum (early redemption conversion price) if the closing price of the Company’s ordinary shares on the Taiwan Stock Exchange (TWSE) for a period of 30 consecutive trading days, is at least 130% of the conversion price.
b. The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (16 March 2021)and prior to 40 days before the maturity date (5 November 2023), at the early redemption conversion price if at least 90% in principal amount of the bonds has already been exchanged, redeemed, purchased or cancelled.
c. The Company may redeem the bonds in cash, within 5 trading days after the base date of withdrawing the bonds as stated on the “Withdrawal of Convertible Bonds Notice”, at the par value if the bondholders do not reply to the share affair agency in writing before the base date.

Reversal clauses:

a. The bondholders have the right to require the Company to redeem all or any portion of the bonds, 40 days prior to 2 year anniversary (15 December 2022) of the issuance, at the principal amount of the bonds with an interest calculated at the rate of 0.5% per annum.

Terms of Exchange:

a. Underlying Securities: Common shares of the Company
b. Exchange Period: The bonds are exchangeable at any time on or after 16 March 2021 and prior to 15 December 2023 into common shares of the Company.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

c. Exchange Price and Adjustment: The exchange price was originally NT$203 per share. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture. The exchange price as of 31 December 2022 and 31 December 2021 was NT$192.7 and NT$197.7, respectively.

The financial assets of convertible bonds are measured at amortized cost, fair value through profit or loss amounted to NT$178 thousand and NT$2,333 thousand as of 31 December 2022 and 31 December 2021, respectively.

The convertible bonds that have already been converted were NT$1,121,900 thousand and NT$285,600 thousand as at 31 December 2022 and 31 December 2021 respectively.

(12) Post-employment benefits

Defined contribution plan

The Company adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Company have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Pension expenses under the defined contribution plan for the years ended 31 December 2022 and 2021 were NT$37,935 thousand and NT$33,683 thousand, respectively.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Defined benefits plan

The Company adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company contribute an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company assess the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the same year, the Company will make up the difference in one appropriation before the end of March the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under discretionary accounts, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Company expects to contribute NT$9,600 thousand to its defined benefit plan during the 12 months beginning after 31 December 2022.

The weighted average duration of the defined benefits obligation was 10.5 years as of 31 December 2022.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Pension costs recognized in profit or loss are as follows:

Current service costs Net interest on the net defined benefit liabilities Total	For the years ended 31 December	For the years ended 31 December
	2022	2021
	$687 408	$797 601
	$1,095	$1,398

Reconciliations of liabilities of the defined benefit obligation and plan assets at fair value are as follows:

Defined benefit obligation Plan assets at fair value Net defined benefit liabilities Less: current portion Net defined benefit liabilities, noncurrent	31 Dec. 2022 $134,168 (80,576) 53,592 (91) $53,501	As of
		31 Dec. 2021	1 Jan.2021
		$140,221 (72,660)	$138,096 (65,131)
		67,561 -	72,965 -
		$67,561	$72,965

Reconciliation of liabilities (assets) of the defined benefit plan are as follows:

	As of
Defined benefit obligation	Plan assets at fairvalue	Net defined benefit liabilities
$138,096 797 1,174	$(65,131) - (573)	$72,965 797 601
140,067 2,372 (1,584) -	(65,704) - - (610)	74,363 2,372 (1,584) (610)
788	(610)	178

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	As of
Defined benefit obligation	Plan assets at fairvalue	Net defined benefit liabilities
(634) -	634 (6,980)	- (6,980)
140,221 687 911	(72,660) - (503)	67,561 687 408
141,819 `（`6,073`）` 5,416 -	(73,163) - - (5,207)	68,656 (6,073) 5,416 (5,207)
(657)	(5,207)	(5,864)
(6,994) -	6,994 (9,200)	- (9,200)
$134,168	$(80,576)	$53,592

The principal assumptions used in determining the Company’s defined benefit plan are shown below:

benefit plan are shown below:
Discount rate Expected rate of salary increases	As of31 December
	2022	2021
	0.85% 3.00%	0.65% 3.00%

Sensitivity analysis for significant assumption are shown below:

Forthe years ended 31 December	Forthe years ended 31 December	Forthe years ended 31 December	Forthe years ended 31 December
2022		2021
Defined benefit obligation increase	Defined benefit obligation decrease	Defined benefit obligation increase	Defined benefit obligation decrease
$ - 5,028 10,101 -	$4,717 - - 9,084	$ - 6,228 12,468 -	$5,810 - - 11,098

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

(13) Equity

(a) Common stock

The Company’s authorized capital was NT$4,500,000 thousand as of 31 December 2022 and 2021. The issued capital was NT$2,365,841 thousand and NT$2,333,770 thousand in a total of 236,584 thousand shares and 233,377 thousand shares, respectively. Each share has one voting right and a right to receive dividends.

The investors requested to convert the Company’s convertible bonds into common stocks in the amount of NT$42,981 thousand in a total of 4,298 thousand shares from 1 January 2022 to 31 December 2022, and 2,378 thousand shares had completed the registration process as of 31 December 2022. As the registration process has not been completed, the accumulated book value of certificate of entitlement to new shares from convertible bond amounted to NT$19,200 thousand in a total of 1,920 thousand shares as of 31 December 2022.

As of 1 January 2022, the accumulated book value of certificates of bond - to - stock conversion that had completed the registration process amounted to NT$8,290 thousand in a total of 829 thousand shares in the first quarter of 2022.

(b) Capital surplus

Capital surplus
Additional paid-in capital Treasury share transactions Share of changes in net assets of associates and joint ventures accounted for using the equity method From differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries Increase through changes in ownership interests in subsidiaries Premium from merger Stok options	As of 31 December
	2022 $2,416,991 5,749 132,519 27,385 373,254 705 110,602	2021
		$1,543,555 5,749 132,869 22,183 373,254 705 112,157

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Total $3,067,205 $2,190,472

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(c) Retained earnings and dividend policies

According to the Company’s original Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

a. Payment of all taxes and dues;
b. Offset prior years’ operation losses;
c. Set aside 10% as legal reserve;
d. Set aside or reverse special reserve in accordance with law and regulations; and
e. The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.

As the Company is undergoing a growth stage, the policy of dividend distribution should reflect its long-term financial planning. The Board of Directors shall make the distribution proposal annually and present it at the Shareholder’s meeting every year. The distribution of shareholders dividend shall be allocated cash dividends to be distributed may not be less than 10% of total dividends to be distributed.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to “other net deductions from shareholders” equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed from the special reserve.

The FSC on 31 March 2021 issued Order No. Financial-SupervisorySecurities-Corporate-1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

The Company did not reverse any special reserve as a result of use, disposal or reclassification of related assets during the years ended 31 December 2022 and 2021.

Details of the 2022 and 2021 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on 9 March 2023 and 30 May 2022, respectively, are as follows:

Common stock -cash dividend Legal reserve Special reserve	Appropriationofearnings	Appropriationofearnings	Dividend pershare (NT$)	Dividend pershare (NT$)
	2022	2021	2022	2021
	$2,030,999 288,562 (111,279)	$1,640,858 233,305 (17,754)	$8.5	$7.0

Please refer to Note 6(17) for further details on employees’ compensation and remuneration to directors and supervisors.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(14)Operating revenue

Revenue from contracts with customers Sale of goods Construction revenues Other operating revenue Total	For the years ended 31 December	For the years ended 31 December
	2022 $7,394,824 162,981 134,193 $7,691,998	2021
		$6,686,227 - 242,008
		$6,928,235

Analysis of revenue from contracts with customers for the years ended 31 December 2022 and 2021 are as follows:

(1) Disaggregation of revenue

For the year ended 31 December 2022

Sale of goods Construction revenues Other operating revenues Total Timing of revenue recognition : At a point in time Over time Total	Green Energy $410,206 162,981 3,066 $576,253 $413,272 162,981 $576,253	Industrial Application $4,444,071 - 110,514 $4,554,585 $4,554,585 - $4,554,585	Medical Health $115,084 - 9,200 $124,284 $124,284 - $124,284	Automotive& Aviation $539,407 - 5,329 $544,736 $544,736 - $544,736	Communication $1,886,056 - 6,084 $1,892,140 $1,892,140 - $1,892,140	Total
						$7,394,824 162,981 134,193
						$7,691,998
						$7,529,017 162,981
						$7,691,998

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended 31 December 2021

Green Energy Industrial Application Medical Health Automotive& Aviation Communication Total $289,718 $3,850,142 $111,981 $407,917 $2,026,469 $6,686,227 24,909 173,225 10,621 19,222 14,031 242,008 $314,627 $4,023,367 $122,602 $427,139 $2,040,500 $6,928,235 $314,627 $4,023,367 $122,602 $427,139 $2,040,500 $6,928,235 - - - - - - $314,627 $4,023,367 $122,602 $427,139 $2,040,500 $6,928,235 (2) Contract balances Contract liabilities - current As Of 31 Dec. 2022 31 Dec. 2021 1 Jan. 2021 Sales of goods $1,909,725 $1,009,680 $581,495 Construction revenues 255,641 - - Total $2,165,366 $1,009,680 $581,495	Automotive& Aviation $407,917 19,222 $427,139 $427,139 - $427,139	Communication $2,026,469 14,031 $2,040,500 $2,040,500 - $2,040,500 As Of	Total
			$6,686,227 242,008
			$6,928,235
			$6,928,235 -
			$6,928,235
		As Of
31 Dec. 2022	31	Dec. 2021
$1,909,725 255,641	$1,009,680 -
$2,165,366	$1,009,680

For the years ended 31 December 2022 and 2021, contract liabilities increased as additional performance obligations are not satisfied.

(3) Transaction price allocated to unsatisfied performance obligations

As of December 31, 2022, the Company's total transaction price apportioned to unsatisfied performance obligations is NT$3,690,717 thousand. The Company will gradually recognize the revenue with the completion of these projects, which are expected to be completed in the next 4 years.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Assets recognized from costs to fulfil a contract

None.

(15) Expected credit losses

The Company had no expected credit losses for the years ended 31 December 2022 and 31 December 2021.

Please refer to Note 12 for more details on credit risk.

The Company measures the loss allowance of its trade receivables (including note receivables and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Company’s loss allowance as of 31 December 2022 and 2021 are as follows:

31 December 2022

		Overdue		Total
<=30 days	31-60 days $6,876 -% - $6,876	61-90 days $4,018 -% - $4,018	91-120 days $1,818 -% - $1,818
$325,903 -%				$1,826,045
-				(1,166)
$325,903				$1,824,879

31 December 2021

		Overdue		Total
<=30 days	31-60 days $ - -% - $ -	61-90 days $ - -% - $ -	91-120 days $ - -% - $ -
$2,167 -%				$1,544,045
-				(1,166)
$2,167				$1,542,879

Note: The Company’s note receivables are not overdue.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The movement in the provision for impairment of note receivables and trade receivables during the years ended 31 December 2022 and 2021 are as follows:

follows:
As of 1 January 2022 Write off Addition/(reversal) for the current period As of 31 December 2022 As of 1 January 2021 Write off Addition/(reversal) for the current period As of 31 December 2021	Note receivables $ - - - $- $ - - - $-	Trade receivables
		$1,166 - -
		$1,166
		$1,166 - -
		$1,166

(16) Leases

The Company is a lessee

The Company leases various properties, including real estate such as buildings, machinery and equipment and transportation equipment. The lease terms range from 1 to 16 years.

The Company’s leases effect on the financial position, financial performance and cash flows are as follow:

A. Amounts recognized in the balance sheet
(a) Right-of-use asset

The carrying amount of right-of-use assets

Buildings Machinery and equipment Transportation equipment Total	As of31	December
	2022	2021
	$217,157 1,037 16,401	$241,699 - 13,945
	$234,595	$255,644

During the years ended 31 December 2022 and 2021, The Company’s additions to right-of-use assets amounting to NT$29,159 thousand and NT$96,268 thousand, respectively.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Lease liabilities

Lease liabilities Current Non-Current Total	As of31 December	As of31 December
	2022	2021
	$49,212 186,995	$45,532 211,048
	$236,207	$256,580

Please refer to Note 6(18)(d) for the interest on lease liabilities recognized during the years ended 31 December 2022 and 2021 and refer to Note 12 (5) liquidity risk management for the maturity analysis for lease liabilities as of 31 December 2022 and 2021.

B. Amounts recognized in the statements of comprehensive income

Depreciation charge for right-of-use assets

Buildings Machinery and equipment Transportation equipment Total	For the years ended 31 December	For the years ended 31 December
	2022 $41,696 129 8,330 $50,155	2021
		$40,126 - 7,525
		$47,651

C. Income and costs relating to leasing activities

The expenses relating to short-term leases	For the years ended 31 December	For the years ended 31 December
	2022 $17,107	2021
		$13,840

During the years ended 31 December 2022 and 2021, there is no rent concession arising from a direct consequence of the Covid-19 pandemic.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

D. Cash outflow related to lessee and lease activity

During the years ended 31 December 2022 and 2021, The Company’s total cash outflows for leases amounting to NT$68,318 thousand and NT$62,510 thousand.

(17)Summary statement of employee benefits, depreciation and amortization expenses by function for the years ended 31 December 2022 and 2021:

Function Nature		For	the years ended 31 December	the years ended 31 December	the years ended 31 December
		2022			2021
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salaries	$308,930	$684,415	$993,345	$254,542	$576,094	$830,636
Labor and health insurance	37,214	47,970	85,184	29,121	48,941	78,062
Pension	14,268	24,762	39,030	11,578	23,503	35,081
Remuneration to directors and supervisors	-	23,500	23,500	-	21,000	21,000
Otheremployee benefits expense	26,949	28,898	55,847	22,618	27,732	50,350
Depreciation	71,262	63,841	135,103	54,383	51,881	106,264
Amortization	-	13,768	13,768	25	10,114	10,139

As of 31 December 2022 and 2021, the number of employees of the Company were 1,357 and 1,231; the number of directors who were not concurrently employees both were 8.

For the years ended 31 December 2022 and 2021, the average of employees benefits expense of the Company were NT$870 thousand and NT$813 thousand, respectively.

For the years ended 31 December 2022 and 2021, the average of employees salaries of the Company were NT$736 thousand and NT$679 thousand, respectively.

The Company’s average salary expense adjustment for the year ended 31 December 2022 increased by 8%.

The Company has set up an audit committee to replace the supervisor in accordance with the regulations, so the supervisor's remuneration has not been recognized.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company’s policy for compensation of directors, managers and employees is as follows:

The remuneration standard of the Company’s managers shall be determined by the company’s human resources unit in accordance with the relevant provisions of personnel performance evaluation, personal performance and contribution to the company’s overall operations, and reference to the market level of the industry. After being reviewed by the Salary and Compensation Committee and approved by the Board of Directors, it will be implemented.

The Company's salary and remuneration policy is planned based on individual abilities and performance differentiation, and considering cost-effectiveness and risk control remuneration resources; and in order to attract, retain and motivate talents, relatively reasonable salary standards are formulated. The overall salary and remuneration package mainly include basic salary, bonuses, employee dividends, and benefits. Remuneration standard, basic salary is based on the market competition situation of the position held by the employee and the company's policy; bonus and employee dividend are paid in conjunction with the achievement of the employee's personal and departmental goals or the company's operating performance; the welfare part is in compliance with the law and regulations. The premise is to be revised at any time according to environmental needs, and the actual needs of employees are the main consideration, and welfare measures that employees can share are designed.

According to the Articles of Incorporation, 1% to 15% of profit of the current year is distributable as employees’ compensation and no higher than 3% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the Board of Directors’ resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Based on profit of 31 December 2022, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2022 to be 1.01% and 0.68% of profit, respectively. The employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2022 amount to NT$35,000 thousand and NT$23,500 thousand respectively, recognized as employee benefits expense.

A resolution was passed at the Board of Directors meeting held on 9 March 2023 to distribute NT$35,000 thousand and NT$23,500 thousand in cash as employees’ compensation and remuneration to directors and supervisors of 2022, respectively. Differences between the estimated amount and the actual distribution of the employee compensation and remuneration to directors and supervisors for the year ended 31 December 2022 are recognized in profit or loss of the subsequent year in 2023.

The employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2021 amount to NT$30,000 thousand and NT$21,000 thousand, respectively. No material differences exist between the recognized amount and the actual distribution of the employee bonuses and remuneration to directors and supervisors for the year ended 31 December 2021.

(18) Non-operating income and expenses
(a)Interest income

nterest income
Bank deposit interest	For theyears ended 31 December
	2022 $6,366	2021
		$853

(b) Other income

ther income
Sample income Dividend income Rent income Others Total	For theyears ended 31 December
	2022 $82,516 38,818 7,277 156,252 $284,863	2021
		$52,132 14,643 4,908 118,580
		$190,263

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(c) Other gains and losses

Other gains and losses
Foreign exchange gains and losses net Gains on disposal of investments Gains on disposal of property, plant and equipment Gains of financial asset at fair value through profit or loss (Note1) (Losses) gains of financial liabilities at fair value through profit or loss (Note2) Total	For theyears ended 31 December
	2022 $155,579 - 3,006 32,352 (83) $190,854	2021
		$(68,022) 315 14,326 51,024 24,897
		$22,540

Note:

Balances were arising from financial assets mandatorily measured at fair value through profit or loss, including valuation adjustment, dividend income, interest income and exchange gains and losses etc.
Balances were arising from held for trading financial liabilities, including valuation adjustment, interest expense and exchange gains and losses etc.

(d) Finance costs

Interest on loans from bank Interest on bonds payable Interest on lease liabilities Total	For theyears ended 31 December	For theyears ended 31 December
	2022 $19,554 8,435 1,738 $29,727	2021
		$10,691 16,625 1,624
		$28,940

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(19) Components of other comprehensive income

For the year ended 31 December 2022

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains on equity instruments measured at fair value through other comprehensive income Share of other comprehensive income of subsidiaries, associates and joint ventures which will not be reclassified subsequently to profit or loss To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of foreign operations Share of other comprehensive loss of subsidiaries, associates and joint ventures which may be reclassified subsequently to profit or loss Total of other comprehensive income	Arising during theperiod	Reclassification adjustments duringtheperiod	Other comprehensive income,before tax	Income tax relating to components of other comprehensive income	Other comprehensive income,net of tax
	$5,864 (42,287) (48,082) 247,131 4,255	$ - - - - -	$5,864 (42,287) (48,082) 247,131 4,255	$(1,173) - - (49,384) -	$4,691 (42,287) (48,082) 197,747 4,255
	$166,881	$-	$166,881	$(50,557)	$116,324

For the year ended 31 December 2021

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains on equity instruments measured at fair value through other comprehensive income Share of other comprehensive income of subsidiaries, associates and joint ventures which will not be reclassified subsequently to profit or loss To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of foreign operations Share of other comprehensive loss of subsidiaries, associates and joint ventures which may be reclassified subsequently to profit or loss Total of other comprehensive income	Arising during theperiod	Reclassification adjustments duringtheperiod	Other comprehensive income,before tax	Income tax relating to components of other comprehensive income	Other comprehensive income,net of tax
	$(178) 9,387 69,609 (74,034) (911)	$ - - - - -	$(178) 9,387 69,609 (74,034) (911)	$36 - - 15,249 -	$(142) 9,387 69,609 (58,785) (911)
	$3,873	$-	$3,873	$15,285	$19,158

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(20)Income tax

The major components of income tax expense are as follows:

Income tax expense recognized in profit or loss

Income tax expense recognized in profit or loss
	For the years	ended
	31 December
	2022	2021
Current income tax expense :
Current income tax charge	$369,894	$326,330
Adjustments in respect of current income tax of	11,553	995
prior periods
Deferred tax expense:
Deferred tax expense relating to origination and	142,849	95,367
reversal of temporary differences
Adjustments in respect of current income tax of	-	(13,385)
prior periods
Total income tax expense	$524,296	$409,307
Income tax relating to components of other comprehensive income

Deferred tax expense(income) : Exchange differences on translation of foreign operations Remeasurements of defined benefit plans Income tax relating to components of other comprehensive income Income tax charged directly to equity Current income tax expense (income): Realized losses from equity instruments investment measured at fair value through other comprehensive income	For the years ended 31 December	For the years ended 31 December
	2022 2021 $49,384 $(15,249) 1,173 (36) $50,557 $(15,285) For the years ended 31 December	2021
		$(15,249) (36)
		$(15,285)
	2022 $-	2021
		$(111)

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

multiplied by applicable tax rates is as follows:
Accounting profit before tax from continuing operations At the Company’s statutory income tax rate Tax effect of revenues exempt from taxation Tax effect of expenses not deductible for tax purposes Tax effect of deferred tax assets/liabilities Corporate income surtax on undistributed retained earnings Adjustments in respect of deferred income tax of prior periods Adjustments in respect of current income tax of prior periods Others Total income tax expense recognized in profit or loss	For the years ended 31 December
	2022	2021
	$3,404,849	$2,740,809
	$680,970 (41,566) 1,687 (144,721) 17,127 - 11,553 (754)	$548,162 (59,237) 2,564 (87,023) 17,231 (13,385) 995 -
	$524,296	$409,307

Deferred tax assets (liabilities) relate to the following:

For the year ended 31 December 2022

Temporary differences Exchange differences on translation of foreign operations Unrealized foreign exchange gains or losses Loss from price reduction of inventories Revaluations of financial liabilities at fair value through profit or loss Investments accounted for using the equity method Unrealized intragroup profits and losses Remeasurements of defined benefit plans Non-current liability – Defined benefit liability Loss allowance Convertible bonds Deferred tax (income) expense Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $95,247 4,585 4,752 (19,686) (211,627) 8,325 7,500 7,816 974 (2,244) $(104,358) $129,199 $233,557	Recognized in profit or loss $ - (10,858) 3,266 (6,699) (150,077) 22,895 - (1,621) - 245 $(142,849)	Recognized in other comprehensive income $(49,384) - - - - - (1,173) - - - $(50,557)	Balance as of 31 December $45,863 (6,273) 8,018 (26,385) (361,704) 31,220 6,327 6,195 974 (1,999)
				$(297,764)
				$98,597
				$396,361

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended 31 December 2021

Temporary differences Exchange differences on translation of foreign operations Unrealized foreign exchange gains or losses Loss from price (recovery) reduction of inventories Revaluations of financial liabilities at fair value through profit or loss Investments accounted for using the equity method Unrealized intragroup profits and losses Remeasurements of defined benefit plans Non-current liability – Defined benefit liability Loss allowance Convertible bonds Deferred tax (income) expense Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $79,998 923 8,427 (8,838) (151,966) 18,434 7,464 8,095 974 (1,172) $(37,661) $124,315 $161,976	Recognized in profit or loss $ - 3,662 (3,675) (10,848) (59,661) (10,109) - (279) - (1,072) $(81,982)	Recognized in other comprehensive income $15,249 - - - - - 36 - - - $15,285	Balance as of 31 December $95,247 4,585 4,752 (19,686) (211,627) 8,325 7,500 7,816 974 (2,244)
				$(104,358)
				$129,199
				$233,557

Unrecognized deferred tax liabilities relating to the investment in subsidiaries

The Company shall recognize the relevant deferred income tax liabilities for the income tax payable that may arise when the undistributed surplus of a foreign subsidiary is remitted back, in accordance with the undistributed surplus expected to be allocated by the future subsidiary.

The assessment of income tax returns

As of 31 December 2022, the Company’s income tax returns through 2020 have been assessed and approved by the tax authority.

(21)Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

(a) Basic earnings per share Profit attributable to ordinary equity holders of the Company Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Basic earnings per share (NT$) (b) Diluted earnings per share Profit attributable to ordinary equity holders of the Company Interest expense from convertible bonds Profit attributable to ordinary equity holders of the Company after dilution Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Effect of dilution: Employee compensation-stock (in thousands) Convertible bonds (in thousands) Weighted average number of ordinary shares outstanding after dilution (in thousands) Diluted earnings per share (NT$)	For the years ended 31 December	For the years ended 31 December
	2022 $2,880,553 235,774 $12.22 $2,880,553 6,748 $2,887,301 235,774 127 7,145 243,046 $11.88	2021
		$2,331,502
		233,157
		$10.00
		$2,331,502 13,300
		$2,344,802
		233,157 106 6,046
		239,309
		$9.80

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and completion of the financial statements.

Related party transactions

Information of the related parties that had transactions with the Company during the financial reporting period is as follows:

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Name and nature of relationship of the related parties

Name oftherelated parties
SINBON Circuits & Cables LLC
Hong Kong SINBON Electronics Co., Ltd.
Tong Cheng SINBON Electronics Co., Ltd.
Jiangyin SINBON Electronics Co., Ltd.
Beijing SINBON TongAn Renewable Energy
Co., Ltd.
SINBON USA LLC
Radbon Avionics Inc.
T-CONN Precision Co., Ltd.
SINBON Hungary Kft.
Jiangsu ENMAGIC Energy Co., Ltd.
ENMAGIC Renewable Energy Co., Ltd.
SINBON Europe GmbH
Kwan-Ze Corporation Ltd.
SINBON Technologies Tennessee L.L.C.
SINTOP Energy Management Co., Ltd.

Nature of relationship

Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary

Significant transactions with related parties

(a)Sales

ales
Subsidiaries	For the years ended 31 December
	2022 $346,654	2021
		$864,123

The sales price to the above related parties was determined through mutual agreement based on the market rates. The outstanding balance as of 31 December 2022 and 2021 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

(b) Purchases

Purchases
Subsidiaries	For the years ended 31 December
	2022 $3,132,911	2021
		$2,162,933

The purchase price from the above related parties was determined through mutual agreement based on the market rates. The payment terms from the related party suppliers were comparable with third party suppliers.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(c)Accounts receivable-related parties

ccounts receivable-related parties
Subsidiaries Other receivables Subsidiaries	As of 31 December 2022 2021 $493,400 $472,476 As of 31 December
	2022 $104,662	2021
		$117,218

(d) Other receivables

(e)Accounts payable-related parties

ccounts payable-related parties
Subsidiaries	As of 31 December
	2022 $610,531	2021
		$401,136

(f) Other payables

(f) Other payables
Subsidiaries (g) Expenses Subsidiaries (h) Other income Subsidiaries (i) Leases	As of 31 December
	2022 2021 $13,655 $13,714 For the years ended 31 December	2021
		$13,714
	2022 2021 $35,419 $33,267 For the years ended 31 December	2021
		$33,267
	2022 $21,253	2021
		$11,650

a. Right-of-use asset Subsidiaries	As of 31 December	As of 31 December
	2022 $1,741	2021
		$1,410

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

b. Lease liabilities

b. Lease liabilities
Subsidiaries c. Depreciation Subsidiaries d. Interest expense Subsidiaries e. Rent revenue Subsidiaries	As of 31 December
	2022 2021 $1,748 $1,414 For the years ended 31 December	2021
		$1,414
	2022 2021 $834 $704 For the years ended 31 December	2021
		$704
	2022 2021 $12 $13 For the years ended 31 December	2021
		$13
	2022 $7,273	2021
		$4,908

The company leases offices to related parties. The rental price is negotiated with reference to market conditions and paid monthly.

(j) Key management personnel compensation

ey management personnel compensation
Short-term employee benefits Post-employment benefits Total	For the years ended 31 December
	2022 $168,853 39,030 $207,883	2021
		$132,429 35,081
		$167,510

8. Assets pledged as security

None.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

9. Significant contingencies and unrecognized contract commitments

(a)The Company provided guarantees for subsidiaries’ financing to banks for the year ended 31 December 2022. Please refer to Note 13.1(b).
(b) As of 31 December 2022 and 2021, the Company was issued letters of guarantee by banks in the amount of NT$10,000 thousand and NT$8,000 thousand for importing goods, respectively.
(c)Amounts available under unused letters of credit are as follows:

Currency USD	Carrying	amount
	2022.12.31 $300	2021.12.31
		$300

The amounts that are available under unused letters of credit above are unguaranteed.

10. Significant disaster loss

None.

11. Significant subsequent events

On 9 March 2023, the Company passed the resolution of the board of directors to transfer the production line, property, plant and equipment and inventory of the Miaoli E-BIKE assembly plant to the subsidiary T-CONN Precision Corporation for the expansion of its Miaoli plant to effectively integrate the group's resources and give full play to the group's comprehensive management benefits. The transaction price is about NT$115 million, and the transaction price is determined by referring to the appraisal report.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

12. Others

(1) Categories of financial instruments

Financial assets Financial assets at fair value through profit or loss: Mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost (Note) Total Financial liabilities Financial liabilities at amortized cost: Short-term loans Notes and accounts payable Bonds payable (including current portion with maturity less than 1 year) Long-term loans (including current portion with maturity less than 1 year) Others payables Lease liabilities Subtotal Financial liabilities at fair value through profit or loss: Held for trading Total	As of 31 December	As of 31 December
	2022 2021 $296,927 $249,691 313,758 321,734 4,067,653 3,221,794 $4,678,338 $3,793,219 As of 31 December	2021
		$249,691 321,734 3,221,794
		$3,793,219
	2022	2021
	$1,516,620 1,329,632 1,121,929 - 751,525 236,207	$1,952,450 1,305,560 994,351 300,000 558,826 256,580
	4,955,913	5,367,767
	5,100	241
	$4,961,013	$5,368,008

Note:Including cash and cash equivalents, notes receivable, trade receivables and other receivables.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Financial risk management objectives and policies

The Company’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Company identifies measures and manages the aforementioned risks based on the Company’s policy and risk appetite.

The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there are usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense are denominated in a different currency from the Company’s functional currency) and the Company’s net investments in foreign subsidiaries.

The Company has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Company also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Company.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Company’s foreign currency risk is mainly related to the volatility in the exchange rates for USD.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s loans and receivables at variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit.

Pre-tax sensitivity analysis of changes in related risk factors for the years ended 31 December 2022 and 2021 are as follows:

For the year ended 31 December 2022

Main Risk Foreign currency risk Foreign currency risk Interest rate risk	Fluctuation NTD/USD rate +/− 1% NTD/JPY rate +/− 1% Market rate +/− 10 basis points	Sensitivity of profit/loss +/−$12,306 +/−$1,008 −/+$1,476	Sensitivity of equity
			- - -

For the year ended 31 December 2021

Main Risk Foreign currency risk Foreign currency risk Interest rate risk	Fluctuation NTD/USD rate +/− 1% NTD/JPY rate +/− 1% Market rate +/−10 basis points	Sensitivity of profit/loss +/−$14,032 +/−$672 −/+$2,252	Sensitivity of equity
			- - -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Equity price risk

The fair value of the Company’s listed and unlisted equity securities and conversion rights of the Euro-convertible bonds issued are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company’s listed and unlisted equity securities are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value, while conversion rights of the Euro-convertible bonds issued are classified as financial liabilities at fair value through profit or loss as it does not satisfy the definition of an equity component. The Company manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, a change of 10% in the price measured at fair value through profit or loss could increase/decrease The Company’s profit for the years ended 31 December 2022 and 2021 by NT$18,084 thousand and NT$19,019 thousand, respectively.

Please refer to Note 12(9) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Company’s internal rating criteria etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of 31 December 2022 and 2021, amounts receivables from top ten customers represented 32% and 45% of the total accounts receivables of the Company. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Company’s treasury in accordance with the Company’s policy. The Company only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank borrowings, convertible bonds and finance leases. The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial instruments

As of 31 December 2022 Loans Notes and accounts payable Convertible bonds Lease liabilities As of 31 December 2021 Loans Notes and accounts payable Convertible bonds Lease liabilities	Less than 1year $1,522,369 1,329,632 179,885 49,375 $2,256,841 1,305,560 - 47,093	2 to 3years $ - - 1,010,025 59,428 $ - - 1,024,569 75,944	4 to 5years $ - - - 29,437 $ - - - 28,850	> 5years $ - - - 100,075 $ - - - 112,850	Total
					$1,522,369 1,329,632 1,189,910 238,315 $2,256,841 1,305,560 1,024,569 264,737

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Derivative financial instruments

As of 31 December 2022

None

Less than 1 year 2 to 3 years 4 to 5 years > 5 years Total As of 31 December 2021 Cross currency swaps Net settlement – outflow $(241) $ - $ - $ - $(241)

The table above contains the undiscounted net cash flows of derivative financial instruments.

(6) Reconciliation of liabilities from financing activities

Reconciliation of liabilities for the year ended 31 December 2022:

As of 1 January 2022 Cash flow Non-cash change As of 31 December 2022	Short-term loans $1,952,450 (435,830) - $1,516,620	Lease liabilities $256,580 (49,473) 29,100 $236,207	Long-term loan(including maturity within ayear) $300,000 (300,000) - $-	Bonds payable (including maturity within ayear) $994,351 1,045,040 (917,462) $1,121,929	Deposits received $62 480 - $542	Total liabilities from financing activities
						$3,503,443 260,217 (888,362)
						$2,875,298

Reconciliation of liabilities for the year ended 31 December 2021:

As of 1 January 2021 Cash flow Non-cash change As of 31 December 2021	Short-term loans $1,458,588 493,862 - $1,952,450	Lease liabilities $207,605 (47,046) 96,021 $256,580	Long-term loan(including maturity within ayear) $300,000 - - $300,000	Bonds payable (including maturity within ayear) $1,256,981 - (262,630) $994,351	Deposits received $2 60 - $62	Total liabilities from financing activities
						$3,223,176 446,876 (166,609)
						$3,503,443

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(7) Fair values of financial instruments

(a) The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Company to measure or disclose the fair values of financial assets and financial liabilities:

a. The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.
b. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities, beneficiary certificates, bonds and futures etc.) at the reporting date.
c. Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
d. Fair value of debt instruments without market quotations, bank loans, bonds payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

e. The fair value of derivatives which are not options and without market quotations, is determined based on the counterparty prices or discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using on the counterparty prices or appropriate option pricing model (for example, Black-Scholes model) or other valuation method (for example, Monte Carlo Simulation).
(b) Fair value of financial instruments measured at amortized cost

The carrying amount of the Company’s financial assets and liabilities measured at amortized cost approximate their fair value.

Please refer to Note 12.(9) for fair value measurement hierarchy for financial instruments of the Company.

(8) Derivative financial instruments

The Company’s derivative financial instruments include forward currency contracts, cross currency swap and embedded derivatives. The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as of 31 December 2022 and 2021 are as follows:

Cross currency swaps contracts

The Company entered into cross currency swaps contracts to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to cross currency swaps contracts:

Items As of 31 December 2022 Cross currency swaps As of 31 December 2021 Cross currency swaps	Amount(in thousands) USD 15,000 USD 4,000	Contract Period
		26 February 2022 – 24 March 2023 26 November 2021 – 16 March 2022

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Embedded derivatives

The embedded derivatives arising from issuing convertible bonds have been separated from the host contract and were carried at fair value through profit or loss. Please refer to Note 6(11) for further information on this transaction.

The counterparties for the aforementioned derivatives transactions are well known domestic or overseas banks, as they have sound credit ratings, the credit risk is insignificant.

The cross currency swaps and foreign exchange option contracts have been entered into to hedge the foreign currency risk of net assets or net liabilities, and there will be corresponding cash inflow or outflows upon maturity and the Company has sufficient operating funds, the cash flow risk is insignificant.

(9) Fair value measurement hierarchy

(a) Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

(b) Fair value measurement hierarchy of the Company’s assets and liabilities

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis is as follows:

As of 31 December 2022

As of 31 December 2022
Financial assets: Financial assets at fair value through profit or loss Stocks Bonds Cross currency swaps Embedded derivatives- Corporate bonds Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income Financial liabilities: Financial liabilities at fair value through profit or loss Embedded derivatives- Corporate bonds As at 31 December 2021 Financial assets: Financial assets at fair value through profit or loss Stocks Bonds Embedded derivatives- Corporate bonds Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income Financial liabilities: Financial liabilities at fair value through profit or loss Cross currency swaps	Level 1 $180,841 72,330 - - - $ - Level 1 $190,190 57,168 - - $ -	Level 2 $ - - 43,578 178 - $5,100 Level 2 $ - - 2,333 - $241	Level 3 $ - - - - 313,758 $ - Level 3 $ - - - 321,734 $ -	Total
				$180,841 72,330 43,578 178 313,758 $5,100 Total
				$190,190 57,168 2,333 321,734 $241

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2022 and 2021, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

Beginning balances as of 1 January 2022 Total gains and losses recognized for the year ended 31 December 2022: Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income) The return of paid-in capital for capital reduction Acquisition Ending balances as of 31 December 2022 Beginning balances as of 1 January 2021 Total gains and losses recognized for the year ended 31 December 2021: Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income) The return of paid-in capital for capital reduction Disposal Acquisition Ending balances as of 31 December 2021	Assets
	At fair value through other comprehensive income
	Stocks
	$321,734 (42,287) (15,689) 50,000
	$313,758
	$227,917 22,776 (2,449) (1,510) 75,000
	$321,734

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of 31 December 2022

Financial assets: At fair value through profit or loss Stocks and others Stocks and others As Financial assets: At fair value through profit or loss Stocks and others Stocks and others	Valuation techniques	Significant unobservableinputs	Quantitative information	Relationship between inputs andfairvalue	Sensitivity of the input to fair value
	Market approach Discount for lack of marketability Option pricing model Fluctuation rate of 31 December 2021 Valuation techniques Significant unobservableinputs		30% 34.08% Quantitative information	The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the fluctuation rate, the higher the fair value of the stocks Relationship between inputs andfairvalue	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Company’s profit or loss by NT$31,058 thousand 10% increase (decrease) in the fluctuation rate would result in increase (decrease) in the Company’s profit or loss by NT$ 318 thousand Sensitivity of the input to fair value
	Market approach Option pricing model	Discount for lack of marketability Fluctuation rate	30% 33.09%	The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the fluctuation rate, the higher the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Company’s profit or loss by NT$30,953 thousand 10% increase (decrease) in the fluctuation rate would result in increase (decrease) in the Company’s profit or loss by NT$ 1,220 thousand

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Company’s Financial Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company’s accounting policies at each reporting date.

(c) Fair value measurement hierarchy of the Company’s assets and liabilities not measured at fair value but for which the fair value is disclosed

As at 31 December 2022 Financial assets not measured at fair value but for which the fair value is disclosed: Investments accounted for using the equity method(please refer to Note 6(6)) As at 31 December 2021 Financial assets not measured at fair value but for which the fair value is disclosed: Investments accounted for using the equity method(please refer to Note 6(6))	Level 1	Level 2	Level 3	Total
	$1,484,835 Level 1	$ - Level 2	$ - Level 3	$1,484,835 Total
	$2,593,847	$ -	$ -	$2,593,847

(10) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

Financial assets Monetaryitems: USD JPY Financial liabilities Monetaryitems: USD JPY	As of 31 December 2022 Foreign currencies Foreign exchange rate NTD $85,480 30.71 $2,624,918 435,054 0.23 101,117 $45,407 30.71 $1,394,344 1,390 0.23 323	As of 31 December 2022 Foreign currencies Foreign exchange rate NTD $85,480 30.71 $2,624,918 435,054 0.23 101,117 $45,407 30.71 $1,394,344 1,390 0.23 323	As of 31 December 2021	As of 31 December 2021	As of 31 December 2021
	Foreign currencies $85,480 435,054 $45,407 1,390	Foreign exchange rate 30.71 0.23 30.71 0.23	Foreign currencies $81,512 279,696 $30,836 304	Foreign exchange rate 27.69 0.24 27.69 0.24	NTD
					$2,257,070 67,295 $853,855 73

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company has a number of different functional currencies; therefore, we are unable to disclose the exchange loss and gain of monetary financial assets and financial liabilities under each foreign currency that has significant impact. The Company recognized NT$155,579 thousand and NT$(68,022) thousand foreign exchange gains and (losses) for the years ended 31 December 2022 and 2021, respectively.

The above information is disclosed based on the carrying amount of foreign currency (after conversion to functional currency).

(11) Capital management

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payments to shareholders, return capital to shareholders or issue new shares.

13. Other disclosure

(1) Information at significant transactions and information on investees:
(a) Financing provided to others for the year ended 31 December 2022: Please refer to Attachment 1.
(b) Endorsement/Guarantee provided to others for the year ended 31 December 2022: Please refer to Attachment 2.
(c) Securities held as of 31 December 2022: Please refer to Attachment 3.
(d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the paid-in capital for the year ended 31 December 2022: None.
(e) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the paid-in capital for the year ended 31 December 2022: None.

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(f) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2022: None.
(g) Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock for the year ended 31 December 2022: Please refer to Attachment 4.
(h) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of year ended 31 December 2022: Please refer to Attachment 5.
(i) Names, locations, main businesses and products, original investment amount, investment as of 31 December 2022, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2022: Please refer to Attachment 7.
(j) Financial instruments and derivative transactions: Please refer to Note 12. (8).
(k) The business relationship, significant transactions and amounts between parent company and subsidiaries: Please refer to Attachment 6.
(2) Information on investments in mainland China
(a) Investment in Mainland China: Please refer to Attachment 8.
(b) Significant transactions through third regions with the investees in Mainland China: Please refer to Attachment 2,4,5 and 6.
(3) Information of major shareholders

Shares Shareholders	Total Shares Owned	Ownership Percentage
Investment Account of Small Denomination World Funds Co. Ltd. incustody ofStandard CharteredBank	13,589,000	5.69%

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Note:

(a) The main shareholder information in the table is calculated by the Taiwan Depository & Clearing Corporation on the last business day at the end of each quarter. The information included the total number of ordinary shares and special shares held by the shareholders who have completed the delivery without physical registration (including treasury shares) that reached 5%. The share capital stated in the Company's financial report and the number of shares actually delivered by the Company without physical registration may differ because the calculation bases were different.
(b) If the above information included the shareholder's shares transferred to the trust, it will be disclosed by the trustee who opened the trust account individually. As for shareholders who declared insider equity holding for more than 10% in accordance with the Securities Exchange Act, such shareholdings shall include their shareholdings plus their shares that have been delivered to the trust and shares of the trust that they have control of. Please refer to the information on insider equity declaration in the “Market Observation Post System” on the website of the TWSE.

14. Segment information

The Company fully disclosed segment information in consolidated financial statements.

Attachment 1: Financing provided to others for the year ended 31 December 2022

No.	Lender (Note 1)	Counterparty	Financial statement account	Related Party	Maximum balance for the period	Ending balance	Actual amount provided	Interest rate	Nature of financing	Amount of sales to (purchases from) counter-party	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit of financing amount for individual counter-party (Note2)	Limit of total financing amount (Note3)
													Item	Value
0	The Company	SB Hungary	Other receivables	Y	$95,953	$98,125	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$1,263,350	$5,053,400
0	The Company	SB Ohio	Other receivables	Y	$96,630	$92,124	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$1,263,350	$5,053,400
1	KSEM	JSEM	Other receivables	Y	$5,415	$5,301	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$5,937	$5,937
2	BJSB	JSEM	Other receivables	Y	$45,122	$44,175	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$55,954	$55,954
2	BJSB	XZEM	Other receivables	Y	$45,122	$44,175	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$55,954	$55,954
3	SB TongAn	JSEM	Other receivables	Y	$44,752	$44,175	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$1,011,610	$1,011,610
3	SB TongAn	JSEM	Other receivables	Y	$22,376	$22,088	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$1,011,610	$1,011,610
3	SB TongAn	XZEM	Other receivables	Y	$44,752	$44,175	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$1,011,610	$1,011,610
3	SB TongAn	JSEM	Other receivables	Y	$64,904	$66,263	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$1,011,610	$1,011,610
3	SB TongAn	XZEM	Other receivables	Y	$64,903	$66,262	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$1,011,610	$1,011,610

Note 1: The above transations were all made between consolidated entities in the Group and have been reversed.

100

Note 2: Total financing limit for individual counterparty was set at 10% of the lender's net worth of the financial which were audited by independent accountants as of 31 December 2022.

The Company: $12,633,499*10%=$1,263,350

Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial which were audited by independent accountants as of 31 December 2022.

KSEM: $14,843*40%=$5,937

BJSB: $139,884*40%=$55,954

SB TongAn: $2,529,024*40%=$1,011,610

Note 3: Total financing limit was set at 40% of the lender's net worth of the financial report which were audited by independent accountants as of 31 December 2022.

The Company: $12,633,499*40%=$5,053,400

KSEM: $14,84340%=$5,937 BJSB: $139,88440%=$55,954 SB TongAn: $2,529,024*40%=$1,011,610

Note 4: For short-term financing.

101

Attachment 2: Endorsement/Guarantee provided to others as of 31 December 2022

(Note 1) No.	Endorsor/ Guarantor	Receiving party	Receiving party	Limit of guarantee/endorsement amount for receiving party (Note 3)	Maximum balance for the period	Ending balance	Actual amount provided	Amount of collateral guarantee/ endorsement	Percentage of accumulated guarantee amount to net assets value from the latest financial statement	Limit of total guarantee/ endorsement amount (Note 4)	Parent company's guarantee/ endorsement amount to subsidiaries (Note 5)	Subsidiaries' guarantee/ endorsement amount to parent company (Note 5)	Guarantee/ endorsement amount to company in Mainland China (Note 5)
		Company name	Releationship (Note 2)
0	The Company	SHSB	2	$5,053,400	$95,388	$76,770	$ -	None	0.61%	$12,633,499	Y	N	Y
0	The Company	JYSB	2	$5,053,400	$1,821,727	$1,704,294	$521,265	None	13.49%	$12,633,499	Y	N	Y
0	The Company	TCSB	2	$5,053,400	$596,025	$574,017	$136,943	None	4.54%	$12,633,499	Y	N	Y
0	The Company	SZSB	2	$5,053,400	$16,105	$15,354	$ -	None	0.12%	$12,633,499	Y	N	Y
0	The Company	SB Hungary	2	$5,053,400	$328,019	$319,007	$250,221	None	2.53%	$12,633,499	Y	N	N
0	The Company	SB Ohio	2	$5,053,400	$386,520	$368,496	$238,294	None	2.92%	$12,633,499	Y	N	N
0	The Company	SB USA	2	$5,053,400	$16,105	$15,354	$9,212	None	0.12%	$12,633,499	Y	N	N
0	The Company	Radbon	2	$3,790,050	$150,000	$150,000	$300	None	1.19%	$12,633,499	Y	N	N
1	T-CONN	T-CONN Zhongshan	2	$306,429	$189,120	$182,361	$ -	None	23.80%	$766,072	N	N	Y

Note 1: The Company and its subsidiaries are coded as follows:

The Company is coded "0".
The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.
Note 2: According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following:
A company with which it does business.
A company in which the public company directly and indirectly holds more than 50% of the voting shares.
A company that directly and indirectly holds more than 50% of the voting shares in the public company.
A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.
A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.
Note 3: Limit of guarantee/endorsement amount for overseas subsidiary is 40% of the net worth of the financial report audited by the certified public accountants as of 31 December 2022. $12,633,499*40%=$5,053,400
Limit of guarantee/endorsement amount for domestic subsidiaries is 30% of the net worth of the financial report of the company audited by the certified public accountants as of 31 December 2022. $12,633,499*30%=$3,790,050
Limit of guarantee/endorsement amount for T-CONN Zhongshan is 40% of the net worth of the financial of T-CONN which were not audited by the certified public accountants as of 31 December 2022. $766,072*40%=$306,429
Note 4: Limit of total guarantee/ endorsement amount is 100% of the net worth of the financial report audited by the certified public accountants as of 31 December 2022.
Note 5: "Y" for the listed (OTC) parent company guarantees/endorses for subsidiary, subsidiary guarantees/endorses for the listed (OTC) parent company or guarantee/endorse for companies in Mainland China.

102

Attachment 3: Securities held as of 31 December 2022. (Excluding subsidiaries, associates and joint ventures)

Holding Company	Type and name of securities	Relationship (Note 1)	Financial statement account	As of 31 December 2022	As of 31 December 2022	As of 31 December 2022	As of 31 December 2022	As of 31 December 2022	Note
				Shares	Carrying amount		Percentage of ownership (%)	Fair value
The Company	Chengding Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	15,000,000 shares		$106,503	11.10%	$106,503	-
The Company	Top Taiwan XIV Venture Capital CO., Ltd.		Financial assets measured at fair value through other comprehensive income- noncurrent	5,000,000 shares		$37,099	2.30%	$37,099	-
The Company	Top Taiwan Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	4,875,000 shares		58,575	7.50%	58,575	-
The Company	Dynahz Technologies	-	Financial assets measured at fair value through other comprehensive income- noncurrent	2,771,670 shares		51,137	16.67%	51,137	-
Kwan-Ze	Chengding Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	5,000,000 shares		35,469	3.70%	35,469	-
The Company	Top Taiwan VII Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	443,878 shares		4,648	3.06%	4,648	-
Kwan-Ze	Actmax Technologies Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	-		4,767	19.00%	4,767	-
The Company	VAN MOOF Global Holding BV	-	Financial assets measured at fair value through other comprehensive income- noncurrent	780,000 shares		3,181	0.50%	3,181	-
T-CONN	VAN MOOF Global Holding BV	-	Financial assets measured at fair value through other comprehensive income- noncurrent	780,000 shares		3,181	0.50%	3,181	-
SINBON USA L.L.C	Katalyst Interactive Inc		Financial assets measured at fair value through other comprehensive income- noncurrent	36,511shares		957	0.24%	957	-
SINBON USA L.L.C	HOTWIRE Development LLC	-	Financial assets measured at fair value through other comprehensive income- noncurrent	-		696	10.00%	696	-
The Company	Bandrich, Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	330,000 shares		145	1.62%	145	-
The Company	SINTOP Energy Management Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	7,500,000 shares		52,470	15.00%	52,470
			Subtotal			$358,828
The Company	Nextronics Engineering Corp.	-	Financial asset measured at fair value through profit or loss –current	3,009,000 shares		$180,841	9.29%	$180,841	-
The Company	Nextronics Engineering Corp. Private placement unsecured conversion bonds	-	Financial asset measured at fair value through profit or loss –current	600,000 shares		56,976	-	56,976	-
The Company	Damon Motors Inc conversion bonds	-	Financial asset measured at fair value through profit or loss –current	-		15,354	-	15,354	-
The Company	Trutankless, Inc.	-	Financial asset measured at fair value through profit or loss –current	25,000 shares		-	0.26%	-	-
Kwan-Ze	Nextronics Engineering Corp.	-	Financial asset measured at fair value through profit or loss –current	28,000 shares		1,683	0.09%	1,683	-
			Total			$254,854

Note 1: Not required if the issuer of securities is not a related party.

103

Attachment 4: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2022.

Related-party	Counter-party	Relationship	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Details of non-arm's length transaction	Details of non-arm's length transaction	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)
			Purchases (Sales)	Amount	Percentage of total consolidated purchase (Sales)	Terms	Unit price	Terms	Carrying amount	Percentage of total consolidated receivables (payable)
The Company	JYSB	Subsidiary	Purchase	$2,858,714	43.55%	Trading condition is the same as other supplier	N/A	N/A	$(559,157)	-42.05%
HKSB	JYSB	Associates	Purchase	$3,469,850	54.44%	Trading condition is the same as other supplier	N/A	N/A	$401,132	-33.77%
SB TongAn	JSEM	Associates	Purchase	$109,610	7.65%	Trading condition is the same as other supplier	N/A	N/A	$(30,565)	-5.96%
JYSB	SINBON USA	Associates	Purchase	$346,509	3.77%	Trading condition is the same as other supplier	N/A	N/A	$(38,800)	-1.46%
JYSB	T-CONN Zhongshan	Associates	Purchase	$128,891	1.40%	Trading condition is the same as other supplier	N/A	N/A	$(61,514)	-2.31%
JSEM	XZEM	Associates	Purchase	$104,027	7.34%	Trading condition is the same as other supplier	N/A	N/A	$(9,487)	-0.89%
T-CONN	T-CONN Zhongshan	Associates	Purchase	$444,120	35.00%	Trading condition is the same as other supplier	N/A	N/A	$(112,324)	-42.00%

Attachment 5: Receivables from related parties with accounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2022.

Related-party	Counter-party	Relationship	Amount	Average collection turnover	Overdue account receivable-related parties	Overdue account receivable-related parties	Collection in subsequent period	Allowance for doubtful debts
					Amount	Processingmethod
JYSB	The Company	The Company	$559,157	11.63	$ -	-	$116,101	$ -
JYSB	HKSB	Associates	$401,132	24.27	$ -	-	$129,089	$ -
The Company	T-CONN	Associates	$402,720	1.79	$ -	-	$20,927	$ -

104

Attachment 6: The business relationship, significant transactions and amounts between parent company and subsidiaries

No. (Note 1)	Related-party	Counterparty	Relationship with the Company (Note 2)	Transactions	Transactions	Transactions	Transactions
				Account	Amount	Terms	Percentage of consolidated operating revenues or consolidated total assets(Note3)
0	The Company	JYSB	1	Purchase	$2,858,714	(Note 4)	9.35%
1	JYSB	The Company	2	Sales	$2,858,714	(Note 4)	9.35%
3	HKSB	JYSB	3	Purchase	$3,469,850	(Note 4)	11.35%
1	JYSB	HKSB	3	Sales	$3,469,850	(Note 4)	11.35%
4	SB TongAn	JSEM	3	Purchase	$109,610	(Note 4)	0.36%
5	JSEM	SB TongAn	3	Sales	$109,610	(Note 4)	0.36%
1	JYSB	SINBON USA	3	Purchase	$346,509	(Note 4)	1.13%
2	SINBON USA	JYSB	3	Sales	$346,509	(Note 4)	1.13%
1	JYSB	T-CONN Zhongshan	3	Purchase	$128,891	(Note 4)	0.42%
6	T-CONN Zhongshan	JYSB	3	Sales	$128,891	(Note 4)	0.42%
5	JSEM	XZEM	3	Purchase	$104,027	(Note 4)	0.34%
7	XZEM	JSEM	3	Sales	$104,027	(Note 4)	0.34%
8	T-CONN	T-CONN Zhongshan	3	Purchase	$444,120	(Note 4)	34.00%
6	T-CONN Zhongshan	T-CONN	3	Sales	$444,120	(Note 4)	34.00%

Note 1 : The Company is coded "0".The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.
Note 2 : Transactions are categorized as follows:
The holding company to subsidiary.
Subsidiary to holding company.
Subsidiary to subsidiary.
Note 3 : The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item's balance at period-end. For profit or loss items, interim cumulative balances are used as basis.
Note 4 : The sales price to the above related parties was determined through mutual agreement based on the market conditions.

105

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2022 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2022: (Excluding investment in Mainland China)

Investor	Investee company (Note1)	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 Dec	Investment as of 31 Dec	ember 2022	Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value			(Note 1 )
The Company	HKSB	Hong Kong	Manufacturing and selling a wide variety of connectors, wires and cables.	HKD95,606,000	HKD95,606,000	-	100.00%	$1,408,743	$960,019	$960,019	Subsidiary
				$401,262	$401,262
The Company	Kwan-Ze	New Taipei City, Taiwan	Holding company	$235,600	$235,600	25,200,000 shares	100.00%	$699,071	$121,494	$121,494	Subsidiary
The Company	SB BVI	British Virgin Islands	Holding company	USD45,021,000	USD45,021,000	-	100.00%	$5,864,583	$1,085,556	$1,085,556	Subsidiary
				$1,461,158	$1,461,158
The Company	SINTOP	New Taipei City, Taiwan	Renewable energy investment management consulting business	$6,804	$6,804	680,400 shares	53.57%	$9,242	$4,291	$2,298	Subsidiary
The Company	Argosy Technologies Co., Ltd.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers and peripheral equipment	$51,768	$51,768	3,174,598 shares	3.56%	$145,064	$610,670	$21,598	Investee under the equity method
The Company	SINBON USA LLC	4265 Gibson Dr., Tipp City , OH 45371, USA	Logistic center.	USD8,979,000	USD5,679,000	-	100.00%	$100,002	$(40,724)	$(40,724)	Subsidiary
				$274,591	$176,403
The Company	SINBON Europe GmbH	Pfarrkirchen, Germany	Logistic center.	EUR5,209,000	EUR5,209,000	-	100.00%	$4,753	$1,351	$1,351	Subsidiary
				$185,241	$185,241
The Company	Radbon Avionics Inc.	Miaoli County, Taiwan	Manufacturing and selling signal cables and cabin wiring.	$33,000	$33,000	5,280,000 shares	55.00%	$165,268	$105,930	$58,261	Subsidiary
The Company	T-CONN Precision	New Taipei City, Taiwan	Manufacturing and selling a wide variety of connectors, wires and cables.	$157,360	$157,360	20,107,286 shares	57.45%	$437,831	$121,343	$74,102	Subsidiary
The Company	SB Hungary	Hungary	Selling,Producting and Processing a wide variety of connectors and cables.	EUR13,264,000	EUR12,264,000	-	100.00%	$106,822	$(66,085)	$(66,085)	Subsidiary
				$455,501	$424,026
T-CONN Precision	S P L	Mauritius	Logistic center.	$3,039	$3,039	100,000 shares	100.00%	$ -	USD(145,000)	$ -	Subsidiary
									$(4,527)
SB TongAn	TWEM	1F., No. 15, Ln. 588, Guohua Rd., Miaoli City, Miaoli County 36055, Taiwan (R.O.C.)	Produce and sells a wide variety of connectors and cables.	RMB10,405,000	RMB10,405,000	-	100.00%	RMB9,865,000	RMB1,009,000	$ -	Subsidiary
				$45,000	$45,000			$43,581	$4,466
SINBON USA L.L.C	SB Ohio	815 South Brown School Road Vandalia, OH 45377, USA	Selling a wide variety of connectors and cables.	USD5,654,000	USD2,704,000	-	100.00%	USD2,809,000	USD(850,000)	$ -	Subsidiary
								$86,280	$(25,341)
SINBON USA L.L.C	Worldwide Wire Harnesses Co.,Ltd.	Samoa	Logistic center.	USD75,000	USD75,000	-	50.00%	USD145,000	USD53,000	$ -	Subsidiary
								$4,477	$1,584

106

Investor	Investee company (Note1)	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 Dece	Investment as of 31 Dece	mber 2022	Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value			(Note 1 )
Kwan-Ze	Argocy Research Inc.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers and peripheral equipment	$197,969	$197,969	14,771,152 shares	16.55%	$633,251	$610,670	$ -	Investee under the equity method
Worldwide Wire Harnesses Co., Ltd.	STT	U.S.A Tennessee	Logistic center.	USD140,000	USD140,000	-	100.00%	USD41,000	USD53,000	$ -	Subsidiary
				$4,542	$4,542			$1,275	$1,584
Argocy Research Inc.	Argosy Technology Inc.(USA)	U.S.A	Sell Multimedia related products, ODM and OED	$30,347	$30,347	-	100.00%	$ -	$ -	$ -	Investee under the equity method
Argocy Research Inc.	Argosy International B.V.	The Netherlands	Leasing operations and sell ODM and OED	$22,314	$22,314	-	100.00%	$15,518	$203	$-	Investee under the equitymethod
Argocy Research Inc.	Global Saber Electronics Co., Ltd.	Mauritius	Selling a wide variety of connectors and cables.	$ -	$ -	-	100.00%	$68,895	$(6,710)	$ -	Investee under the equity method
Argocy Research Inc.	ROTEC LIMITED	British Virgin Islands	Holding company	$543,588	$543,588	-	88.04%	$836,738	$8,275	$ -	Investee under the equity method
Global Saber Electronics Co., Ltd	ROTEC LIMITED	British Virgin Islands	Holding company	$72,918	$72,918	-	11.96%	$113,669	$8,275	$ -	Investee under the equity method

Note 1: （ 1 ） "Investee company", "Address", "Main businesses and products", "Initial Investment" and "Investment as of 31 December 2022" shall be filled in appropriate fields according to the Company's reinvestment and the re-investment of the subsidiaries the Company directly or indirectly controls and indicate the relationship in the Notes.
（ 2 ） "Net income (loss) of investee company" shall be filled in net income (loss) of investee for the year ended 31 December 2022.
（ 3 ） "Investment income (loss) recognized" requires only the investment income (loss) from the direct investees of the the Company and the investment income (loss) from investees valued under the equity method, and ensure that when recognizing the subsidiary's investment income (loss), the subsidiaries' re-investment income (loss) is included.

107

Attachment 8: Investment in Mainland China

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January 2022	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2022	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2022	Accumulated Inward Remittance of Earnings as of 31 December 2022
					Outflow	Inflow
BJSB	Manufacturing and selling a wide variety of connectors, wires and cables.	RMB 12,830,000	Directly investment in Mainland China.	USD 1,020,000 $30,719	$ -	$ -	USD 1,020,000 $30,719	RMB1,562,000 $6,913	85.53%	RMB1,336,000 $5,913 Note 1	RMB31,666,000 $139,884	USD11,030,000 $351,623
JYSB	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 37,780,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 22,050,000 $705,108	$ -	$ -	USD 22,050,000 $705,108	USD33,024,000 $984,336	100%	USD33,024,000 $984,336 Note 1	USD150,712,000 $4,628,068	USD39,976,000 $1,200,889
SHSB	Selling a wide variety of connectors, wires and cables.	USD 3,280,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 1,700,000 $55,358	$ -	$ -	USD 1,700,000 $55,358	USD756,000 $22,531	100%	USD756,000 $22,531 Note 1	USD7,296,000 $227,114	USD2,887,000 $87,821
SZSB	Selling a wide variety of connectors, wires and cables.	USD 2,810,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 2,750,000 $83,385	$ -	$ -	USD 2,750,000 $83,385	USD861,000 $25,677	100%	USD861,000 $25,677 Note 1	USD8,954,000 $274,948	RMB38,400,000 $157,642
TCSB	Selling a wide variety of connectors, wires and cables.	USD17,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 8,000,000 $248,003	$ -	$ -	USD 8,000,000 $248,003	USD6,481,000 $193,182	100%	USD6,481,000 $193,182 Note 1	USD29,547,000 $907,329	USD196,000 $5,890
China Digital Library Corp.Ltd.	Technology development of computer software, transfer of technology, advisory service	RMB 88,600,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 750,000	$ -	$ -	USD 750,000 $20,768	$ -	4.85%	$ -	$ -	$ -
Argosy (Beijing) Technologies Co., Ltd.	Selling a wide variety of connectors, wires and cables.	RMB 5,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 76,000	$ -	$ -	USD 76,000 $2,104	$ -	12.00%	$ -	$ -	$ -
Wu Xi S&D	Manufacturing and selling new flat panel displays.	USD 4,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 1,900,000 $61,823	$ -	$ -	USD 1,900,000 $61,823	$ -	-	$ -	$ -	$ -
Ning Bo Smart and Diligent Co., Ltd.	Manufacturing and selling a new Flat Panel Display.	USD 2,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 1,140,000 $37,025	$ -	$ -	USD 1,140,000 $37,025	$ -	-	$ -	$ -	$ -

108

Attachment 8: Investment in Mainland China

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January 2022	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2022	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2022	Accumulated Inward Remittance of Earnings as of 31 December 2022
					Outflow	Inflow
JY Sinact	Manufacturing and selling a wide variety of electronic materials.	USD 9,500,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 5,266,000 $164,599	$ -	$ -	USD 5,266,000 $164,599	$ -	-	$ -	$ -	$ -
Shang Hai Comtek Electronics Trading Co., ltd.	Selling a wide variety of electronic materials.	USD 160,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 104,000 $3,302	$ -	$ -	USD 104,000 $3,302	$ -	-	$ -	$ -	$ -
Dong Guan CMK	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 1,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 645,000 $20,768	$ -	$ -	USD 645,000 $20,768	$ -	-	$ -	$ -	$ -
T-CONN Zhongshan	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 9,300,000	Directly investment in Mainland China.	USD 3,686,000 $117,529	$ -	$ -	USD 3,686,000 $117,529	$75,291	57.45%	$43,255 Note 2	$352,251	$ -
BJSB TongAn	Manufacturing and selling a wide variety of connectors, wires and cables.	RMB152,000,000	Directly investment in Mainland China.	USD 3,000,000 $89,134	$ -	$ -	USD 3,000,000 $89,134	$304,915	85.53%	$263,550 Note 1	$2,162,814	$1,264,302
USD 52,087,000 USD 53,420,000 N/A(Note3) Upper Limit on Investment Accumulated Investment in Mainland China as of 31 December 2022 Investment Amounts Authorized by Investment Commission, MOEA
Accumulated Investment in Mainland China as of 31 December 2022			Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on Investment
USD 52,087,000			USD 53,420,000		N/A(Note3)

Note 1: Based on the financial statements certificated by the public accountant of the parent company in Taiwan.

Note 2: The financial statements were audited by other independent accountants.

Note 3: According to Order No. Jing-Shen-Zi-09704604680 issued by Ministry of Economic Affairs, R.O.C., the Company's investment in Mainland China is not limited to 60% of net worth or consolidated net worth specified by the Investment Commission.

109

SINBON ELECTRONICS CO., LTD.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

FOR THE YEAR ENDED 31 DECEMBER 2022

ITEM	INDEX
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF ACCOUNTS RECEIVABLE	2
STATEMENT OF OTHER RECEIVABLES	3
STATEMENT OF INVENTORIES	4
STATEMENT OF OTHER CURRENT ASSETS	5
STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME,NONCURRENT	6
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD	7
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note 6 (7)
STATEMENT OF CHANGES IN ACCUMULATED DEPERCIATION OF PROPERTY,PLANT AND EQUIPMENT	Note 6 (7)
STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS	8
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF RIGHT-OF-USE ASSETS	9
STATEMENT OF SHORT-TERM LOANS	10
STATEMENT OF ACCOUNTS PAYABLE	11
STATEMENT OF BONDS PAYABLE	12
STATEMENT OF LEASE LIABILITIES	13
STATEMENT OF NET OPERATING REVENUES	14
STATEMENT OF OPERATING COSTS	15
STATEMENT OF MANUFACTURING EXPENSES	16
STATEMENT OF OPERATING EXPENSES	17
SUMMARY STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION	Note 6 (17)
STATEMENT OF NON-OPERATING INCOME, EXPENSES AND LOSSES	Note 6 (18)

110

SINBON ELECTRONICS CO., LTD.

1. STATEMENT OF CASH AND CASH EQUIVALENTS 31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Item	Description	Amount	Note
Cash on hand &petty cash Bank savings Demand deposits`－`NTD Demand deposits`－`foreign currency Total	USD 41,791 thousand Exchange rate 1: 30.7080 JPY 412,276 thousand Exchange rate 1: 0.2324 EUR 8,973 thousand Exchange rate 1: 32.7086 RMB 10,619 thousand Exchange rate 1: 4.4175 GBP 269 thousand Exchange rate 1: 37.0553 HKD 155 thousand Exchange rate 1: 3.9384	$87 345,327 1,730,113 $2,075,527

SINBON ELECTRONICS CO., LTD.

2. STATEMENT OF ACCOUNTS RECEIVABLE 31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

ClientName	Description	Amount	Note
Third parties: Client A Client B Client C Others (Note) Subtotal Less: loss allowance Subtotal (third parties) Related parties: T-CONN Precision Co., Ltd. ENMAGIC Renewable Energy Co., Ltd. SINBON Ohio LLC Others (Note) Subtotal (related parties) Total	Construction Construction	$154,872 142,340 70,406 945,140 1,312,758 (1,166) 1,311,592 407,497 51,531 28,011 6,361 493,400 $1,804,992

(Note) The amount of individual client in others does not exceed 5% of the account blance.

111

SINBON ELECTRONICS CO., LTD.

3. STATEMENT OF OTHER RECEIVABLES

31 DECEMBER 2022

	(In Thousands ofNewTaiwan Dollars)	(In Thousands ofNewTaiwan Dollars)	(In Thousands ofNewTaiwan Dollars)
Client Name	Description	Amount	Note
VAT and GST refund Third parties Client A Others (Note) Subtotal Less: loss allowance Subtotal (Third parties) Related parties: Jiangyin SINBON Electronics Co., Ltd. HongKong SINBON Electronics Co., Ltd. T-CONN Precision Co., Ltd. ENMAGIC Renewable Energy Co., Ltd. Others (Note) Subtotal (Related parties) Total		$21,300 9,164 34,574
		43,738 (2,366)
		41,372
		37,281 15,925 22,254 10,716 18,486
		104,662
		$167,334

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

112

SINBON ELECTRONICS CO., LTD.

4. STATEMENT OF INVENTORIES

31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Item	Description	Cost	Net Realizable Value	Note
Raw materials Work in process Finished goods Merchandise Subtotal		$905,970 147,861 1,821,931 266,607 $3,142,369	$1,116,450 272,798 2,934,256 316,009 $4,639,513	Please refer to Note 4 (10) for more details on net realizable value

SINBON ELECTRONICS CO., LTD.

5. STATEMENT OF OTHER CURRENT ASSETS

31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Item	Description	Amount	Note
Prepayment for purchases Temporary payments Prepaid expenses Input tax (VAT) Other prepayments Total	Rent expense, Insurance etc.	$230,176 32,706 18,116 14,236 4,023 $299,257

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6. STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME, NONCURRENT FOR THE YEAR ENDED 31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Name of Securities	As of 1 January 2022	As of 1 January 2022	Additions	Additions	Decrease	Decrease	Adjustments	As of 31 December 2022	As of 31 December 2022	Accumulated impairment	Collateral	Note
	Shares	FairValue	Shares	Amount	Shares	Amount		Shares	FairValue
Chengding Venture Capital Co., Ltd. Top Taiwan XIV Venture Capital Co., Ltd. Top Taiwan Venture Capital Co., Ltd. Dynahz Technologies Top Taiwan VII Venture Capital Co., Ltd. VAN MOOF Global Holding BV Bandrich, Inc. SINTOP Energy Management Co., Ltd. Total	15,000,000 - 6,000,000 2,771,670 887,755 780,000 330,000 7,500,000	$147,480 - 53,807 41,333 13,910 12,198 199 52,807 $321,734	- 5,000,000 - - - - -	$ - 50,000 - - - - - $50,000	- - (1,125,000) - (443,877) - - -	$ - - (11,250) - (4,439) - - - $(15,689)	$(40,977) (12,901) 16,018 9,804 (4,823) (9,017) (54) (337) $(42,287)	15,000,000 5,000,000 4,875,000 2,771,670 443,878 780,000 330,000 7,500,000	$106,503 37,099 58,575 51,137 4,648 3,181 145 52,470 $313,758	N/A N/A N/A N/A N/A N/A N/A N/A	None None None None None None None None	(Note 1) (Note 2) (Note 3)

Note 1: Top Taiwan VII Venture Capital Co., Ltd. newly invested NT$50,000 thousand.

Note 2: The return of paid-in capital for capital reduction from Top Taiwan Venture Capital Co., Ltd. was NT$11,250 thousand. Note 3: The return of paid-in capital for capital reduction from Top Taiwan VII Venture Capital Co., Ltd. was NT$4,439 thousand.

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SINBON ELECTRONICS CO., LTD.

7. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD FOR THE YEAR ENDED 31 DECEMBER 2022

												(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Name	As of 1 January 2022		Additions		Decrease		Investment income (loss)	Exchange differences	As of 31 December 2022			Fair value/ Net assets value		Collateral	Note
	Shares	Fair Value	Shares	Amount	Shares	Amount			Shares	%	Amount	Unit price	Total Amount
SINBON International Enterprise Co., Ltd. Hong Kong SINBON Electronics Co., Ltd. Beijing SINBON TongAn Renewable Energy Co., Ltd. Kwan-Ze Corporation Ltd. SINBON Europe GmbH SINBON USA LLC. SINBON Hungary Kft. Argocy Research Inc.. Radbon Avionics Inc. T-CONN Precision Co., Ltd. SINTOP Energy Management Co., Ltd. Total	USD 52,781,715 HKD 95,606,400 RMB 13,000,000 25,200,000 shares EUR 5,208,773 USD 5,678,774 EUR 6,000,000 3,174,598 shares 5,280,000 shares 20,107,286 shares 680,400 shares	$4,736,920 1,155,609 1,946,117 736,103 3,203 39,142 142,129 143,605 107,007 436,436 8,199	USD 3,299,994 EUR 1,000,000	$ - - - - - 103,389 31,475 279 - - -		$(40,994) (832,322) (79,574) (159,714) - (7,967) - (20,609) - (75,603) (1,255)	$1,085,556 960,019 263,550 121,494 1,351 (40,724) (66,085) 21,598 58,261 74,102 2,298	$83,101 125,437 32,721 1,188 199 6,161 (697) 191 - 2,896 -	USD 53,281,175 HKD 95,606,400 USD 19,211,190 25,200,000`股` EUR 5,208,772.96 USD 8,978,768 EUR 7,000,000 3,174,598`股` 7,700,000`股` 21,112,650`股` 680,400`股`	100.00 100.00 85.53 100.00 100.00 100.00 100.00 3.56 55.00 57.45 53.57	$5,864,583 1,408,743 2,162,814 699,071 4,753 100,002 106,822 145,064 165,268 437,831 9,242	80 58.3	$5,864,583 1,408,743 2,162,814 699,071 4,753 100,002 106,822 253,968 165,268 1,230,867 9,242	None None None None None None None None None None None	(Note 1) (Note 2) (Note 3) (Note 4) (Note 5) (Note 6) (Note 7) (Note 8) (Note 9) (Note 10)
		$9,454,470		$135,144		$(1,218,038)	$2,481,420	$251,197			$11,104,193		$12,006,133

Note 1: SINBON International Enterprise Co., Ltd. repatriated profit in the amount of RMB5,400 thousand (NT$ 26,634 thousand), and USD 500 thousand (NT$ 14,360 thousand).
Note 2: Hong Kong SINBON Electronics Co., Ltd. repatriated profit of USD 866 thousand (NT$ 832,322 thousand).

Note 3: Beijing SINBON TongAn Renewable Energy Co., Ltd. repatriated profit in the amount of RMB18,200 thousand (NT$ 79,574 thousand).

Note 4: Kwan-Ze Corporation Ltd. repatriated profit of NT$ 127,028 thousand, recognized the capital reserve of changes in shareholders' equity of the investee company of NT$ (629) thousand, and unrealized benefits of financial assets measured at fair value through other comprehensive losses from changes in shareholders’ equity of the invested company NT$ 32,057 thousand.
Note 5: SINBON USA LLC made additional equity investment in the amount of USD 3,300 thousand (NT$ 98,188 thousand) and recognized investee company of unrealized loss of financial assets measured at fair value through other comprehensive gains an losses from changes in shareholders’ equity in the amount of NT$ 7,967 thousand.

Note 6: SINBON Hungary Kft. made additional equity investment in the amount of EUR1,000 thousand(NT$ 31,475 thousand).

Note 7: Argocy Research Inc. cash dividends NT$ 17,778 thousand, recognized the capital reserve of changes in shareholders' equity of the investee company of NT$ 279 thousand, and unrealized benefits of financial assets measured at fair value through other comprehensive losses from changes in shareholders’ equity of the invested company NT$ 2,831 thousand.

Note 8: Radbon Avionics Inc. distributed stock dividends of 2,420,000 shares.

Note 9: T-CONN Precision Co., Ltd. distributed stock dividends of 1,005,364 shares, repatriated profit of NT$ 70,376 thousand, and recognized the unrealized loss of financial assets measured at fair value through loss from changes in the shareholders’ equity of the investee company in the amount of NT$ 5,227 thousand.

Note 10 : SINTOP Energy Management Co., Ltd. repatriated profit of NT$ 1,255 thousand

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8. STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED 31 DECEMBER 2022

Cost: As of 1 January 2022 Additions Disposals Exchange rate effects Others As of 31December 2022	Buildings $296,148 17,148 (3,600) (3) - $309,693	Machine equipment	Transportation equipment	Total
		$ - 1,166 - - -	$29,713 10,845 (4,192) - -	$325,861 29,159 (7,792) (3) -
		$1,166	$36,366	$347,225

SINBON ELECTRONICS CO., LTD.

9. STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF

RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED 31 DECEMBER 2022

Depreciation and impairment: As of 1 January 2022 Depreciation Disposals Exchange rate effects Others As of 31 December 2022	Buildings	Machine equipment	Transportation equipment $15,768 8,330 (4,133) - - $19,965	Total
	$54,449 41,696 (3,600) (9) -	$ - 129 - - -		$70,217 50,155 (7,733) (9) -
	$92,536	$129		$112,630

116

SINBON ELECTRONICS CO., LTD.

10. STATEMENT OF SHORT-TERM LOANS

31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Type	Description	Balance, End of Year	Contract Period	Interest rates applied (%)	Loan Commitments	Collateral	Note
Unsecured bank loans Unsecured bank loans	HSBC Bank (Taiwan) Limited, Taichung Branch Cathay United Bank(Taiwan), Guanqian Branch Total	$1,276,620 240,000 $1,516,620	Within 365days Within 365days	0.54%-1.65% 1.50%-1.60%	USD70,000,000 NTD240,000,000	- - -

117

SINBON ELECTRONICS CO., LTD.

11. STATEMENT OF ACCOUNTS PAYABLE

31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Vendor Name	Description	Amount	Note
Third Parties: Vendor A Vendor B Others (Note) Subtotal (Third parties) Related parties: Jiangyin SINBON Electronics Co., Ltd. Others (Note) Subtotal (Related parties) Total	Payment Payment Payment	$205,939 68,622 444,078 718,639 550,183 60,348 610,531 $1,329,170

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

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SINBON ELECTRONICS CO., LTD.

12. STATEMENT OF BONDS PAYABLE

31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Bonds Name	Trustee	Issuance Date	Interest Payment Date	Coupon Rate			Amount			Repayment	Collatera l
					Total Amount	Repayment Paid	Balance, End of Year	Unamortized Premiums (Discounts)	Carrying Amount
The seventh zero coupon unsecured convertible bonds The eighth zero coupon unsecured convertible bonds Less: Current portion Net	Taipei Fubon Commercial Bank Co., Ltd.ofTrust Department Taishin International Commercial Bank Co., Ltd. of Trust Department	2020.12.15 2022.12.12	None None	0.00% 0.00%	$1,300,000 1,000,000	$ - -	$178,100 1,000,000	$(1,819) (54,352)	$176,281 945,648	(Note1) (Note1)	None None
							(178,100)	1,819	(176,281)
							$1,000,000	$(54,352)	$945,648

Note ： All the bonds are redeemable in cash at maturity except for those have been converted or repurchased. The detail information for redemption please refer to Note 6. (11) “Contents of Significant Accounts – Bonds Payable”.

119

SINBON ELECTRONICS CO., LTD.

13. STATEMENT OF LEASE LIABILITIES

31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Item	Description	Period	Discount rate	Amount
Buildings Machine equipment Transportation equipment Subtotal Less: Current portion Total	Office equipment lease Production equipment Car leases	2016.7.13~2025.4.25 2022.7.1~2026.12.31 2010.6.1~2030.10.31	0.7% 0.7% 0.7%	$217,872 1,880 16,455 236,207 (49,212)
				$186,995

120

SINBON ELECTRONICS CO., LTD.

14. STATEMENT OF NET OPERATING REVENUES

FOR THE YEAR ENDED 31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Item	Shipments (Piece)	Amount
Cable assembly Cable connectors Construction revenues Other operating revenues Others Total	29,466,076 PCS 343,651,280 PCS 10,426,346 PCS	$5,827,761 1,381,390 162,981 134,193 185,673 $7,691,998

121

SINBON ELECTRONICS CO., LTD.

15. STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED 31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Item Amount

Cost of sales of goods manufactured
Direct material: Raw material purchased
Add：Raw material, beginning of year
Transferred from finished goods
Less: Raw material, end of year
Sale of raw material
Transferred to expenses
Direct material used
Direct labor
Manufacturing expenses (Refer to 16)
Manufacturing cost
Add: Work in process, beginning of year
Less: Work in process, end of year
Cost of finished goods
Add:Finished goods, beginning of year
Finished goods purchased
Transferred from manufacturing expense
Less:Finished goods, end of year
Transferred to raw material
Others
Cost of sales of goods manufactured (A)
Cost of sales of goods purchased
Merchandise purchased
Add: Merchandise, beginning of year
Less: Merchandise, end of year
Transferred to expenses
Cost of sales of goods purchased (B)
Cost from sale of raw material (C)
Operating Costs (D)=(A)+(B)+(C)
Loss on valuation (E)
Loss on scrap of inventories (F)
Revenue from sale of scraps (G)
Purchased on behalf of others (H)
Other operating cost (I)
Construction costs(J)
Total(K)=(D)+(E)+(F)+(G)+(H)+(I)+(J) $1,506,756
794,333
3,403,491
(922,221)
(300,317)
(61,714)
4,420,328
184,866
472,568
5,077,762
190,275
(151,343)
5,116,694
1,148,382
3,116,534
11,211
(1,838,451)
(3,403,491)
(29,995)
4,120,884
1,130,045
266,065
(270,444)
(15,904)
1,109,762
300,317
5,530,963
16,328
31,073
(1,598)
(184,976)
91,403
146,683
$5,629,876

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SINBON ELECTRONICS CO., LTD.

16. STATEMENT OF MANUFACTURING EXPENSES

FOR THE YEAR ENDED 31 DECEMBER 2022

(In Thousands of New Taiwan Dollars)

Item		Amount
Others (Note) Indirect labor Processing costs Depreciation expense Insurance expense Less: Transferred to finished goods Total		$127,774 124,064 119,956 71,262 40,723 (11,211) $472,568

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

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SINBON ELECTRONICS CO., LTD.

17. STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED 31 DECEMBER 2022

		(In	Thousands ofNewTaiwan Dollars)	Thousands ofNewTaiwan Dollars)
Item	Selling and Marketing Expenses	General and Administrative Expenses	Research and Development Expenses	Total
Payroll expense Commission Freight expense Insurance expense Sample expense Depreciation expense Others (Note) Total	$129,386 205,879 91,900 14,752 151,719 13,048 88,399 $695,083	$358,665 - 1,807 22,965 - 32,941 184,840 $601,218	$196,364 - 240 22,351 - 17,852 57,941 $294,748	$684,415 205,879 93,947 60,068 151,719 63,841 331,180 $1,591,049

(Note) The amount of individual client in others does not exceed 5% of the account

balance.

124

AI assistant

SINBON Electronics — Audit Report / Information 2022

52256_rns_2022-12-06_3f5fb0de-9b6d-40cf-81f5-dab77a827994.pdf

SINBON ELECTRONICS CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT AUDITORS

Independent Auditors’ Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

1. Valuation for inventories (Including inventories of the subsidiaries under the equity method)

2. Impairment of accounts receivable

Other Matter– Making Reference to the Audits of Component Auditors

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2022 and 2021

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2022 and 2021

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS(Continued) For the years ended 31 December 2022 and 2021

1. History and organization

2. Date and procedures of authorization of financial statements for issue

3. Newly issued or revised standards and interpretations

(b) IFRS 17 “Insurance Contracts”

4. Summary of significant accounting policies

(1) Statement of Compliance

(2) Basis of Preparation

(3) Foreign Currency Transactions

(4) Translation of Foreign Currency Financial Statements

SINBON ELECTRONICS CO., LTD.

(6) Cash Equivalents

Financial assets measured at amortized cost

Financial asset measured at fair value through other comprehensive income

Financial asset measured at fair value through profit or loss

(3) Derecognition of financial assets

Classification between liabilities or equity

SINBON ELECTRONICS CO., LTD.

Equity instruments

Compound instruments

SINBON ELECTRONICS CO., LTD.

Financial liabilities

Financial liabilities at fair value through profit or loss

SINBON ELECTRONICS CO., LTD.

Financial liabilities at amortized cost

Derecognition of financial liabilities

(5) Offsetting of financial instruments

(8) Derivative financial instruments

(9) Fair value measurement

(10) Inventories

(11) Investments accounted for under the equity method

SINBON ELECTRONICS CO., LTD.

SINBON ELECTRONICS CO., LTD.

SINBON ELECTRONICS CO., LTD.

(12) Property, plant and equipment

SINBON ELECTRONICS CO., LTD.

(13) Leases

Company as a lessee

SINBON ELECTRONICS CO., LTD.

Company as a lessor

SINBON ELECTRONICS CO., LTD.

(14) Intangible Assets

SINBON ELECTRONICS CO., LTD.

(15) Impairment of non-financial assets

SINBON ELECTRONICS CO., LTD.

(16) Provisions

Provision for decommissioning, restoration and rehabilitation costs

Provision for warranties

(17) Revenue recognition

SINBON ELECTRONICS CO., LTD.

Sale of goods

Rendering of services

SINBON ELECTRONICS CO., LTD.

Construction revenues

(18) Borrowing costs

(19) Post-employment benefits

(20) Income taxes

Current income tax

Deferred tax

SINBON Electronics Audit Report / Information 2022