SINPHAR — Audit Report / Information 2022

Nov 14, 2022

Stock Code ： 1734

Sinphar Pharmaceutical Co., Ltd.

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

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders of

Sinphar Pharmaceutical Co., Ltd.

Opinion

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

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

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2022. 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.

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

Inventory Valuation

Please refer to Note 4(7.) and 5(2.) in the accompanying parent company only financial statements for related disclosures of the Company’s valuation of inventory accounting policies and critical accounting estimate and assumption.

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The Company mainly engages in the production and sales of various types of drugs and food supplements. As the regulations to the pharmaceutical industry cause the cost to increase and meanwhile selling prices are less likely to be affected as they are covered by the health insurance system. Furthermore, the price of food supplement inventory fluctuates due to market competition and the impacts aroused from advertisements. Management assesses that the net realizable value of inventory involves material judgment. Hence, it is taken as a one of the key audit matters.

Our key audit procedures in response

Our procedures in relation to inventory valuation included:

1. Understand and evaluate the design and implementation of the internal control in relation to inventory.

2. Perform inventory counts, to identify if there are any inventories which are obsolete or damaged.

3. Obtain Inventory aging reports to analyses the changes in inventory age, and check the records of inventory changes to verify the correctness of inventory.

4. Evaluate the reasonableness of its inventory valuation policy of unmarketable items and obsolescence, and check the latest inventory sales price to evaluate the reasonableness of the net realizable value of the inventory.

5. Obtain evaluation documents for subsequent measurement of inventories and assess whether they have been measured in accordance with established accounting policies and review if the management’s disclosure on the evaluation of inventory is presented fairly.

Revenue Recognition

Please refer to Note 4(16.) and 5(2.) in the accompanying parent company only financial statements for related disclosures of the Company’s revenue recognition accounting policies and critical accounting estimate and assumption.

Some products of the Company provide discounts or annual sales incentives based on the terms of the sales contract. Since the recognition of the revenue is measured on the net basis of the related discounts and incentives, we consider the revenue recognition as a key audit matter.

Our key audit procedures in response

Our procedures in relation to the revenue recognition included:

1. Evaluate the design and implementation of the internal control in relation to the revenue recognition.

2. Perform sales contract checks to verify whether the records on the recognition of sales revenue agree with the related contract, and evaluate the fairness of the management’s estimated sales discounts and annual sales incentives.

3. Assess whether the management’s accounting treatments and disclosure in relation to sales discounts and annual sales incentives are presented fairly.

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 Regulation 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.

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

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

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

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards 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 auditing standards of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the 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, misrepresentation, or the override of internal control.

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosure are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieve fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the investee accounted for using equity method within the Company to express an opinion on the parent company only financial statements. We are responsible for direction, supervision and performance of the investee audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Ya Quan Zhang and Jin Shu Pan.

Crowe (TW) CPAs Taipei, Taiwan The Republic of China

March 17, 2023

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY BALANCE SHEETS For the years ended December 31, 2022 and 2021

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS	Note	% Amount December 31,2022	% Amount December 31,2022	Amount % December 31,2021
		Amount
Cash and cash equivalents Notes receivable, net Accounts receivable, net Inventories Prepayments Other current assets Total current assets NONCURRENT ASSETS	6 (1) 6 (2) 6 (3) and 7 (3) 6 (4) 7 (3) 6 (5) 6 (5) 6 (6) 6 (7), 7 (3) and 8 6 (8) and 8 6 (9) and 8 6 (23)	$ 703,055 178,825 456,586 615,056 36,598 4,105 1,994,225	13 3 8 11 1 － 36	$ 531,130 10 159,150 3 365,301 7 559,723 10 26,709 1 2,147 － 1,644,160 31
Financial assets at fair value through profit and loss, non-current Financial assets at fair value through other comprehensive income, non-current		1,219 9,608	－ －	－ － － －
Investments accounted for using equity method Property, plant and equipment Investment property, net Intangible assets Deferred tax assets Prepayments for equipment Refundable deposits Other non-current assets Total non-current assets TOTAL		1,161,753 2,020,278 237,961 28,466 52,108 57,626 17,830 19,147 3,605,996 $ 5,600,221	21 36 4 1 1 1 － － 64 100	1,248,606 23 2,065,639 38 239,508 5 35,028 1 74,875 1 22,902 － 25,292 － 31,337 1 3,743,187 69 $ 5,387,347 100
LIABILITIES AND EQUITY CURRENT LIABILITIES
Short-term loans Contract liabilities-current	6 (10) 6 (18)	$ 360,000 93,235	6 2	$ 440,000 8 92,307 2
Accounts payable	7 (3)	313,721	5	193,522 3
Other payable Deferred tax liabilities Long-term loans - current portion Other current liabilities, others Total current liabilities NONCURRENT LIABILITIES Long-term loans Net defined benefit liability, non-current Other non-current liabilities, others	7 (3) 281,867 39,774 6 (11) , 6 (12) and 8 48,116 42,614 1,179,327 6 (11) and 8 1,404,819 6 (13) 35,978 6 (23) 49,867 1,490,664 2,669,991 6 (14) 1,677,221 6 (15) 929,972 6 (16) 119,606 6 (16) 91,075 6 (16) 233,724 444,405 6 (17) ( 121,368 ) ( 2,930,230 $ 5,600,221	281,867 39,774 48,116 42,614 1,179,327 1,404,819 35,978 49,867	5 1 1 1 21 25 1 1	238,879 4 35,123 1 59,057 1 31,936 1 1,090,824 20 1,472,978 27 50,889 1 50,417 1
Total non-current liabilities		1,490,664	27	1,574,284 29
Total liabilities EQUITY Capital stock		2,669,991 1,677,221	48 30	2,665,108 49 1,677,221 31
Capital surplus		929,972	16	963,516 18
Retained earnings Legal capital reserve Special capital reserve Unappropriated retained earnings (accumulated deficit)		119,606 91,075 233,724	2 153,734 3 2 91,075 2 4 ( 34,128 ) ( 1 )
Total retained earnings		444,405	8	210,681 4
Other Equity Total equity TOTAL LIABILITIES AND EQUITY			2 ) ( 129,179 ) ( 2 ) 52 2,722,239 51 100 $ 5,387,347 100

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

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Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2022 and 2021

(In Thousands of New Taiwan Dollars)

ITEM	Note	2022	%	2021	%
		Amount		Amount
NET REVENUE COST OF REVENUE GROSS PROFIT Less: Unrealized profit on sales Add: Realized profit on sales GROSS PROFIT OPERATING EXPENSES Selling expenses Administrative expenses Research and development expenses Expected credit impairment (loss) gain Total operating expenses NET OPERATIONS INCOME NON-OPERATING INCOME AND EXPENSES Interest income Other income Other gains and losses Finance costs Share of the loss of subsidiaries and associated and joint ventures accounted for using equity method Total non-operating income and expenses INCOME (LOSS) BEFORE INCOME TAX INCOME TAX EXPENSE PROFIT (LOSS) OTHER COMPREHENSIVE INCOME (LOSS)	6 (18) and 7 (3) 6 (4), 6(21) and 7 (3) ( ( 6 (21) and 7 (3) ( ( ( ( ( 6 (19) and 7 (3) 6 (20) and 7 (3) 6 (22) ( 6 (6) ( ( 6 (23) ( 6 (24) ( ( ( ( 6 (25)	$ 2,511,206 1,577,211 ) ( 933,995 371 ) ( 1,106 934,730 390,581 ) ( 121,669 ) ( 111,002 ) ( 1,869 ) ( 625,121 ) ( 309,609 1,744 40,226 11,707 25,007 ) ( 51,887 ) ( 23,217 ) ( 286,392 61,748 ) ( 224,644	100 63 ) ( 37 － ) ( － 37 16 ) ( 5 ) ( 4 ) ( －) 25 ) ( 12 － 2 － ( 1 ) ( 2 ) ( 1 ) ( 11 ( 2 ) ( 9 (	$ 2,157,258 1,391,730 ) ( 765,528 1,106 ) ( 610 765,032 336,091 ) ( 104,453 ) ( 96,247 ) ( 1,160 537,951 ) ( 227,081 243 49,767 5,284 ) ( 22,382 ) ( 271,979 ) ( 249,635 ) ( 22,554 ) ( 15,581 ) ( 38,135 ) (	100 65 ) 35 － ) － 35 16 ) 5 ) 4 ) － 25 ) 10 － 2 －) 1 ) 12 ) 11 ) 1 ) 1 ) 2 )
Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit obligation Unrealized loss from investments in equity instruments measured at fair value through other comprehensive income Share of other comprehensive loss of subsidiaries, associates and joint ventures accounted for using equity method Items that may be reclassified subsequently to profit or loss:		9,080 68 ) ( 3,274 ) ( 5,738 ) ( 13,919 18 2,784 ) ( 11,153 16,891	－ －) －) ( －) ( 1 ( － ( －) － ( 1 (	4,007 － 4,642 ) ( 635 ) ( 6,873 ) ( 47 ) ( 1,374 5,546 ) ( 6,181 ) (	－ － －) －) －) －) － －) －) 2 )
Exchange differences arising on translation of foreign operations
Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using equity method
Income tax related to components of other comprehensive
income that will be reclassified to profit or loss
Other comprehensive income (loss) for the year, net of income tax
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR		$ 241,535	10 (	$ 44,316 ) (
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share Diluted earnings per share		$ 1.34 $ 1.34	(	$ 0.23 )

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

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Sinphar Pharmaceutical Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2022 and 2021

(In Thousands of New Taiwan Dollars)

For the years ended December 31, 2022 and 2021 (In Thousands of New Taiwan Dollars)
	Capital Stock			Retained Earning
ITEM	Common Stock	Capital Surplus	Legal Capital Reserve	Special Capital Reserve	Unappropriated Retained Earnings (Accumulated Deficit)
Balance, January 1, 2021	$ 1,677,221	$ 941,391	$ 184,734
Appropriations of earnings
Legal reserve used to offset accumulated deficits	－	－	( 31,000 )	－	31,000
Other changes in capital surplus
Difference between consideration and carrying amount of subsidiaries acquired or disposed	－	150,726	－	－	－
Changes in ownership interests in subsidiaries	－ ( 95,181 )		－	－	－
Stock dividends from capital surplus	－ ( 33,544 )		－	－	－
Others	－	124	－	－	－
Total	－	22,125	－	－	－	－	－	22,125
Net loss in 2021	－	－	－	－ ( 38,135 )		－
Other comprehensive income (loss) in 2021, net of income tax Total comprehensive income (loss) in 2021 Balance, December 31, 2021 Appropriations of earnings	－ － 1,677,221	－ － 963,516	－ － 153,734
Legal reserve used to offset accumulated deficits	－	－ (	34,128 )	－	34,128	－	－ －
Other changes in capital surplus
Stock dividends from capital surplus Net profit in 2022	－ ( －	33,544 ) －	－ －	－ －	－ 224,644	－ －
Other comprehensive income (loss) in 2022, net of income tax Total comprehensive income (loss) in 2022	－ －	－ －	－ －	－ －	9,080 233,724
Balance, December 31, 2022	$ 1,677,221	$ 929,972	$ 119,606	$ 91,075	$ 233,724 ($ 80,701 ) ($ 40,667 ) $ 2,930,230

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

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Sinphar Pharmaceutical Co., Ltd.

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

(In Thousands of New Taiwan Dollars)

For the years ended December 31, 2022 and 2021 Sinphar Pharmaceutical Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)	For the years ended December 31, 2022 and 2021 Sinphar Pharmaceutical Co., Ltd. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)
ITEM CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax $ 286,392 ( $ 22,554 ) Adjustments for: Depreciation expense (including investment property) 139,137 135,070 Amortization expense 41,207 36,904 Expected credit impairment loss 1,869 1,160 Interest expense 25,007 22,382 Interest income ( 1,744 ) ( 243 ) 2022 2021
Share of profit of subsidiaries and associates and joint ventures accounted for using equity method, net 51,887 271,979 Gain on disposal of property, plant and equipment 402 ( 258 )
Unrealized profit on sales 371 1,106 Realized profit on sales ( 1,106 ) ( 610 ) Changes in operating assets and liabilities: Notes receivable, net ( 19,675 ) ( 56,761 ) Accounts receivable, net ( 93,154 ) ( 57,301 ) Inventories ( 55,333 ) ( 15,512 ) Prepayments ( 9,889 ) ( 9,013 )
Other current assets ( 1,958 ) 3,750 Contract liabilities 928 ( 3,831 ) Accounts payable 120,199 13,965
Other payable 36,888 59,515 Other current liabilities 10,678 727 Net defined benefit liability ( 5,831 ) ( 9,919 ) Other operating liabilities ( 1,474 ) 2,532 Cash generated from operations 524,801 373,088
Interest received	1,744 243
Interest paid ( 24,802 ) ( 22,382 ) Income taxes paid ( 35,422 ) ( 35,344 )
Net cash generated from operating activities	466,321 315,605
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of investments accounted for using equity method	－ ( 332,920 )
Proceeds from disposal of investments accounted for using equity method － 178,830 Acquisition of financial assets at fair value through other comprehensive income ( 9,676 ) － Acquisition of property, plant and equipment ( 69,670 ) ( 81,301 ) Proceeds from disposal of property, plant and equipment 87 258
Decrease (increase) in refundable deposits 7,462 ( 6,846 ) Acquisition of intangible assets ( 11,061 ) ( 13,911 )
Increase in other non-current assets ( 12,219 ) ( 38,199 )
Increase in prepayments for equipment ( 51,369 ) ( 47,609 ) Dividends received 44,405 31,191
	44,405 31,191
Net cash used in investing activities ( 102,041 ) ( 310,507 ) CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loan ( 80,000 ) 90,000 Proceeds from long-term debt 150,000 85,000 Repayments of long-term debt ( 226,888 ) ( 106,695 ) Decrease in long-term payables ( 1,895 ) ( 3,752 ) Decrease in refundable deposits ( 28 ) ( 948 ) Cash dividends paid ( 33,544 ) ( 33,544 ) Other financing activities － 124 Net cash generated from (used in) financing activities ( 192,355 ) 30,185 NET INCREASE IN CASH AND CASH EQUIVALENTS 171,925 35,283 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 531,130 495,847 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 703,055 $ 531,130

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

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Sinphar Pharmaceutical Co., Ltd.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2022 and 2021

(Amounts in Thousands of New Taiwan Dollars , Unless Specified Otherwise)

1. GENERAL INFORMATION

Sinphar Pharmaceutical Co., Ltd. (the Company or Sinphar) was incorporated in the Republic of China (“R.O.C.”) on July 2, 1977. Sinphar mainly engages in the production, processing and trading of various Western medicines, Chinese medicines, medicinal cosmetics and detergents.

Sinphar’s shares have been listed on the Taipei Exchange since October 17, 2000. On August 26, 2002, Sinphar’s stocks were approved for listing on the Taiwan Stock Exchange. The address of its registered office and principal place of business is No.84, Zhongshan Rd., Dongshan Township, Yilan County, Taiwan.

The parent company only financial statements are presented in the Company’s functional currency, New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

The accompanying parent company only financial statements were approved by the Company’s board of directors and issued on March 17, 2023.

1. APPLICATION OF NEW AND REVISED STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

3. New standard, interpretation and amendments to the IFRSs endorsed by the FSC for application starting from 2022:

2022:
New Standards,Interpretations and Amendments Amendments to IAS 16 “Property, Plant and Equipment: Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts—Cost of Fulfilling aContract” Amendments to IFRS 3 “Reference to the Conceptual Framework” Annual Improvements to IFRS Standards 2018–2020	Effective Date Announced by IASB(Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

Note 1: Unless stated otherwise, the New IFRSs above are effective for annual periods beginning on or after their respective effective dates.

• Note 2: An entity shall apply these amendments retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in thefinancial statements in which the entity first applies the amendments.

• Note 3: An entity shall apply these amendments to contracts for which it has not yet fulfilled all its obligations on January 1, 2022.

• Note 4: These amendments apply to business combinations whose acquisition date occur during the annual reporting periods beginning on or after January 1, 2022.

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• Note 5: An entity shall apply the Amendment to IFRS 9 to financial liabilities that are modified or exchanged during the annual reporting periods beginning on or after January 1, 2022. An entity shall apply the Amendment to IAS 41 to fair value measurements for annual reporting periods beginning on or after January 1, 2022. An entity shall apply the Amendment to IFRS 1 for annual reporting periods beginning on or after January 1, 2022.

The Company evaluates there is no significant impact on its financial position and financial performance as a result of the initial adoption of the standards or interpretations.

• (2) Effect of amendments to new issuance or amendments to IFRSs endorsed by FSC but not yet adopted by the Company:

New standards, interpretations and amendments to the IFRSs endorsed by the FSC for application starting from 2023:

2023:
New Standards,Interpretations and Amendments Amendments to IAS 1 “Disclosures of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12“Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction”	Effective Date Announced byIASB
	January 1, 2023 (Note 1) January 1, 2023 (Note 2) January 1, 2023 (Note 3)

Note1: The amendments are applied for annual periods beginning on or after January 1, 2023.

• Note2: These amendments apply to changes in accounting estimates and changes in accounting policies that occur during annual reporting periods beginning on or after January 1, 2023.

• Note3: Except for deferred taxes for temporary differences associated with lease and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

• A. Amendments to IAS 1 “Disclosures of Accounting Policies”

This amendment clarifies that accounting policy information may be evaluated to be material due to the scale or nature of the related transactions, other events or conditions and needed to be disclosed. If the scale or nature of the transactions, other events or conditions are evaluated to be immaterial, and then the disclosure would be not necessary. However, the conclusion which accounting policy information is not significant, does not affect the relevant disclosures required by other IFRS standards.

• B. Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments define accounting estimates as monetary amounts in financial statements that are subject to measurement uncertainty and clarify that a change in measurement techniques or inputs used to develop an accounting estimate is a change in accounting estimates unless the change is due to an error from prior periods.

• C. Amendments to IAS 12 “Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction”

The amendments narrow the exemption extent in paragraphs 15 and 24 of IAS 12 for an company from recognizing a deferred tax asset or liability in particular circumstances. In particular, the exemption does not apply to a transaction that gives rise to equal taxable and deductible difference at the time of the transaction. At the initial application of the amendments, an company shall, at the beginning of the earliest comparative period presented, recognise deferred taxes for all deductible and taxable temporary differences associated with (i) lease and (ii) decommissioning liabilities and recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at that date.

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The Company evaluates there is no significant impact on its financial position and financial performance as a result of the initial adoption of the standards or interpretations.

• (3) New IFRSs issued by International Accounting Standards Board (“IASB”) but not yet endorsed and issued into effect by the FSC.

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs endorsed by the FSC are as follows:

the FSC are as follows:
New Standards,Interpretations and Amendments	Effective Date Announced byIASB
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” Amendments to IFRS 16 “Lease liability in a Sale and Leaseback” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9－ Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-Current” Amendments to IAS 1 “Non-current Liabilities with Covenants”	To be determined by IASB January 1, 2024 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024

As of the date, the parent company only financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations. The related impact will be disclosed when the Company completes the evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The main accounting policies used in the preparation of the parent company only financial statements are explained below. Unless otherwise stated, these policies apply consistently throughout all reporting periods.

• (1.) Statement of Compliance

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

• (2.) Basis of Preparation of the Parent Company Only Financial Statement

• A. Except for the following items, the accompanying parent company only financial statements have been prepared on the historical cost basis:

  • (A.) The financial assets and liabilities measured at fair value through profit and loss (including derivative financial instruments).

  • (B.) The financial assets measured at fair value through other comprehensive income.

  • (C.) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of the parent company only financial statements in compliance with IFRSs endorsed by FSC requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in process of applying the Company’s accounting policies. The areas involving a high degree of judgment or

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complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

• C. The subsidiaries, associates and jointly controlled entities are incorporated in the parent company only financial statements under the equity method.

• (3.) Foreign Currencies

• A. Foreign currency transaction

Transactions in currencies other than the Company’s functional currency are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are not retranslated. Except for financial instruments at FVTOCI, financial instruments that are designated as foreign operation net hedge or qualified as cash flow hedge, the retranslation foreign exchange differences are recognized in other comprehensive income. In other cases, the exchange differences are recognized in profit and loss.

• B. Translation of foreign operation

For the purpose of preparing parent company only financial statements, the functional currencies of the Company and the foreign entities (including subsidiaries, associates, joint ventures and branches in other countries that use currency different from the currency of the Company) are translated into the presentation currency - the New Taiwan dollar as follows: assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; profits and losses items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation involving the loss of control, joint venture or significant influence over the foreign operation, all of the exchange differences accumulated in equity in respect of that operation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to the non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

• (4.) Classification of Current and Noncurrent Assets and Liabilities

• A. Assets that meet one of the following criteria are classified as current assets:

  • (A.) Assets expected to be realized or intended to be sold or used within normal operating cycle;

  • (B.) Assets held primarily for the purpose of trading;

  • (C.) Assets expected to be realized within 12 months after the reporting period; and

  • (D.) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

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

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• B. Liabilities that meet one of the following criteria are classified as current liabilities:

• (A.) Liabilities expected to be paid off within normal operating cycle;

• (B.) Liabilities held primarily for the purpose of trading;

• (C.) Liabilities due to be settled within 12 months after the reporting period (It is still a current liability even if a long-term refinancing or rearrangement of payment agreement is completed after the balance sheet date and before the financial report is approved,); and

• (D.) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 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.

Liabilities that are not classified as current are classified as non-current.

• (5.) Cash and Cash Equivalent

Cash and cash equivalent includes cash on hand, bank deposit and short-term, highly liquid investment that are readily convertible to know amount of cash and which are subject to an insignificant risk of change in value. Time deposits with original maturities within 1 year from the closing date that meet the definition above and are held for purpose of meeting short-term cash commitments in operations are classified as cash equivalent.

• (6.) Financial Instruments

Financial assets and financial liabilities are recognized in balance sheets when the Company becomes a party to the contractual provisions of the instruments.

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

• A. Financial assets

• (A.) Measurement category

The Company adopts trade-date accounting to recognize financial assets.

Financial assets are classified as financial assets at FVTPL, financial assets at amortized cost, and equity investments at FVTOCI.

a. Financial assets at FVTPL

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL including equity investments not designated as at FVTOCI and debt instruments that do not meet the criteria of amortized cost or the FVTOCI.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss including relevant dividend or interest income. Fair value is determined in the manner described in Note 12(3).

b. Equity investment at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in

• 14 -

equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

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

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

• c. Financial assets at amortized cost

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

• (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.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

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.

• (B.) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses (“ECL”) on financial assets at amortized cost (including accounts receivable).

The loss allowance for accounts receivable is measured at an amount equal to lifetime ECL. For other financial assets, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to 12-month ECL. If there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to lifetime ECL.

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

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

• (C.) Derecognition of financial assets

The Company derecognizes a financial asset when one of the following conditions is met:

• a. The contractual rights to receive the cash flows from the financial asset expire.

• b. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

• c. The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

The difference between the book value and the price of financial assets at amortized cost will be recognized to profit or loss on disposal of the financial assets. The cumulative gain or loss of the investments in equity instruments at FVTOCI will not be reclassified to profit or loss on disposal of the equity investments. Instead, they will be transferred to retained earnings.

B. Financial liabilities

• (A.) Subsequent measurement

Except for the following, financial liabilities measured at amortized cost are measured using the effective interest rate method after initial recognition.

• a. Financial liabilities at FVTPL are financial liabilities held for trading or financial liabilities designated upon initial recognition as at FVTPL. Repurchase currently and the derivative financial instruments unless financial guarantee contract and designated and effective as a hedging instrument, are classified financial liabilities held for trading. The Company designates the financial liabilities upon initial recognition as at FVTPL when the financial liabilities accord to one of the followings:

• (a.) Mixed (combined) contract; or

• (b.) Eliminates or significantly reduces measurement or recognition; or

• (c.) A tool to manage and evaluate its performance on a fair value basis in accordance with a written risk management policy.

• b. Financial liabilities at FVTPL are stated at fair value upon initial recognition, related transaction costs and any gain or loss arising on remeasurement is recognized in profit or loss.

• c. A financial liabilities that designated as financial liabilities measured at FVTPL, which amount of change in fair value resulting from a change in credit risk, is recognized as other comprehensive income, and that will not be reclassified subsequently to profit or loss. The amount of the remaining fair value change in the liability is reported in the profit and loss. However, if the aforementioned accounting treatment triggers or exacerbates the improper accounting ratio, the full profits or losses of the liability are reported in the profit or loss.

• (B.) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires. When derecognition of financial liabilities, the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, are recognized in profit or loss.

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C. Modification of Financial Instruments

When the contractual cash flows of a financial instrument are renegotiated or modified and the renegotiation or modification does not result in the derecognition of that financial instrument, the Company recalculates the gross carrying amount of the financial asset or the amortized cost of the financial liabilities using the original effective interest rate and recognises a modification gain or loss in profit or loss. Any costs or fees incurred adjust the carrying amount of the modified financial instrument and are amortised over the remaining term of the modified financial instrument. If the renegotiation or modification results in that the derecognition of that financial instrument is required, then the financial instrument is derecognized accordingly.

If the basis for determining the contractual cash flows of a financial asset or financial liability changes resulting from interest rate benchmark reform and the change is necessary as a direct consequence of interest rate benchmark reform and the new basis for determining the contractual cash flows is economically equivalent to the previous basis, the Company applies the practical expedient to account for that change as a change in effective interest rate. If changes are made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Company first applies the practical expedient aforementioned to the changes required by interest rate benchmark reform, and then applies the applicable requirements to any additional changes to which that practical expedient does not apply.

(7.) Inventories

Inventories, under a perpetual system, are measured at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity), excluding borrowing costs. The item-by-item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

• (8.) Investments Accounted for Using Equity Method

Investments in subsidiaries are accounted for using the equity method. A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in change in the equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of losses of a subsidiary equal or exceed its interest in that subsidiary (which includes any carrying amount of the investment in subsidiary accounted for by the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses.

When the Company loses control of a subsidiary, and retained investment of the former subsidiary is measured at fair value at that date. A gain of loss is recognized in profit or loss and calculated as the difference between 1) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and 2) the previous carrying amount of the investments in such subsidiary. In addition, the

• 17 -

Company shall account for all amount previously recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the subsidiary had directly disposed of the related assets and liabilities.

When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interest in the subsidiaries that are not owned by the Company.

• (9.) Property, Plant and Equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized. For property, plant and equipment under construction, sample produced from testing whether the asset is functioning properly before its intended use are measured at lower of the costs or net realizable value. Proceeds from selling such an item and the cost of the item are recognized in profit or loss.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be reliably measured. The carrying amount of the replaced component is derecognized. All other repairs and maintenance expense are recognized in profit or loss as incurred.

• C. Except for land, which is not depreciated, other items of property, plant and equipment are measured at cost, the depreciable amount shall be allocated by the straight-line method over its useful life. Depreciation methods, useful lives, and residual values are reviewed at the end of each reporting period. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in accounting estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

The estimated useful lives of property, plant and equipment are as follows:

• Buildings: 5~55 Years

Machinery: 3~10 Years

Transportation: 5~8 Years

Office Equipment: 5~15 Years

Other Equipment: 2~10 Years

• D. If an item of property, plant and equipment or any significant component is disposed or there is no future economic benefit flow to the Company, the carrying amount is derecognized in profit and loss. The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized in profit and loss.

(10.) Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes) and include land held for a currently undetermined future use.

Owned investment properties are initially measured at cost, including transaction costs, and subsequently measured at cost less accumulated depreciation and accumulated impairment loss. All investment properties are depreciated using the straight-line method.

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

• (11.) Intangible Assets

• A. Intangible assets acquired separately (with finite useful lives)

Intangible assets acquired from government grants are measured at fair value. Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis as follow.

• (A.)Computer Software: 1~10 Years

• (B.)Technology: 10 Years

• (C.)License: The duration of patent right and the duration of the contract whichever is shorter

The estimated useful life, residual value, and amortization period and method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.

• B. Internally-generated intangible assets - research and development expenditure

• (A.) Expenditure on research activities is recognized as an expense in the period in which it is incurred except for the goodwill or intangible assets from business combination.

• (B.) An internally-generated intangible asset arising from the development phase of an internal project is recognized if, and only if, all of the following conditions have been demonstrated:

  • (a.) The technical feasibility of completing the intangible asset so that it will be available for use or sale;

  • (b.) The intention to complete the intangible asset and use or sell it;

  • (c.) The ability to use or sell the intangible asset;

  • (d.) When the intangible asset could generate probable future economic benefits;

  • (e.) The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

  • (f.) The ability to measure reliably the expenditure attributable to the intangible asset during its development.

• (C.) Capitalized intangible assets in development phase are stated at cost, less accumulated amortization and accumulated impairment loss. Intangible assets with indefinite useful lives that are not amortizable.

• (D.) The assessment of intangible assets with indefinite life is reviewed annually to determine whether the useful lives of intangible asset with indefinite life continues to be with indefinite life. If not, the change in useful life from infinite to finite is recorded as change in accounting estimate.

• C. Disposal of the assets

Any gain or loss arising from the disposal of the assets is determined as the difference between the disposal proceeds and the carrying amount of the asset and is recognized in profit or loss.

• (12.) Impairment of Non-Financial Assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets, excluding inventories and deferred tax assets, to determine whether there is any indication that those

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assets have suffered impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

The Company assesses at each reporting date whether is an indication that an asset other than goodwill may be impaired. If circumstances indicate that previously recognized impairment losses may no longer exist or may have decreased, the Company reassesses 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 estimate of an asset which in turn increase the recoverable amount since the last impairment loss was recognized. The reversal is limited to 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 or amortization had no impairment loss been recognized for the asset in prior years.

Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and recognize impairment loss if the carrying amount less than the recoverable amount.

For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash-generating units (or group of cash-generating units) that are expected to benefit from the synergies of the combination. If the carrying amount of a cash-generating unit exceeds its recoverable amount, an impairment loss is to be recognized. The impairment loss is first allocated to reduce the carrying amount of any goodwill allocated to the cash-generating unit, then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Impairment losses related to goodwill cannot be reversed in future periods.

(13.) Provisions

Provisions are recognised when the Company has a present legal or constructive obligation from past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date. The discount rate shall be a pre-tax rate that reflect current market assessment of the time value and the risk specific to the liability. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as interest expense. Future operating loss is not recognized as provisions.

(14.) Employee Benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expenses in that period when the employees render service.

B. Pensions

• (A.)Defined contribution plans

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For defined contribution plans, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund from the plan or a reduction in future contributions to the plan.

• (B.) Defined benefit plans

  • a. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current or prior period(s). The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is estimated annually by independent actuaries using the projected unit credit method.

  • b. Remeasurements of defined benefit plans are recognized in other comprehensive income as incurred and are recorded as retained earnings.

  • c. Past-service costs are recognized immediately in profit or loss.

• C. Employee’s compensation and directors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated. Any difference between the amount accrued and the amount actually distributed is accounted for a change in accounting estimate.

D. Termination benefits

A liability for a termination benefit is recognized at the earlier of when the Company can no longer withdraw the offer of the termination benefit and when the Company recognize any related restructuring costs. The benefits expected to be due more than 12 months after balance sheet date should be discounted to the present value.

(15.) Taxation

• A. Income tax expenses include both current taxes and deferred taxes. Except for expenses related to the items recognized in other comprehensive income or directly in equity, all current and deferred taxes shall be recognized in profit or loss.

• B. The current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the end of each reporting period in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. According to Income Tax Act in the R.O.C., income tax on unappropriated earnings is expensed in the year the shareholders’ meeting approved the appropriation of earnings which is the year subsequent to the year the earnings are generated.

• C. Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. A deferred tax liability is not recognized on taxable temporary differences arising from the initial recognition of goodwill. If a temporary difference arises from the initial recognition (other than a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit, the resulting deferred tax asset or liability is not recognized. Deferred tax liabilities are recognized for taxable temporary differences associated

• 21 -

with investments in subsidiaries and associates, and interests in joint arrangements, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the reporting period.

• D. Deferred tax assets arising from deductible temporary differences, unused loss carry forward and unused tax credits are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period.

• E. Current income tax assets and liabilities are offset and the net amount reported at the end of the reporting period when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset at the end of the reporting period when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same tax authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

• F. Tax credit resulting from acquisitions of equipment or technology, research and development expenditures, employee training, and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

(16.) Revenue

The Company identifies the contract with the customers, and recognizes revenue when performance obligations are satisfied.

• A. Revenue from sale of goods

Revenue from the sale of goods is mainly from sale of medical product. When a customer obtains control of promised goods, at which time the goods are delivered to the customer's specific location and performance obligation is satisfied.

B. Royalties

Royalties are the rights of using intellectual property in authorized duration. The received royalties are recognized in royalty revenue on a time basis over the period of the authorization.

• C. Technical service

The Company provides research and development technology test services. Revenue from services is recognized as revenue during the period when services are provided to customers. If the services rendered exceed the payment, a contract asset is recognized. If the payments exceed the services rendered, a contract liability is recognized.

The Company’s estimates of revenue, costs and completion degree are revised with the test situation. Any income and cost increase or decrease caused by the estimated changes will be reflected in profit or loss during the period when the revision situation is known to the management.

(17.) Borrowing costs

The borrowing cost directly attributable to the acquisition, construction or production of a qualified assets, is capitalized as part of the cost of the assets until substantially all necessary activities to reach the intended use or

• 22 -

status for sale of the assets have been completed.

To the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings.

Except for the aforementioned, all other borrowing costs are recognized as profit or loss in the period in which they are incurred.

(18.) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate.

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

(19.) Earnings per Share

The Company discloses the basic and diluted earnings per share attributable to ordinary equity holders of the Compnay. The calculation of basic earnings per share is based on the profit or loss attributable to the ordinary shareholders of the Compnay divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit or loss attributable to ordinary shareholders of the Compnay divided by the weighted-average number of ordinary shares outstanding after adjustment for the effect of all dilutive potential ordinary shares.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, the management is required to make judgments, estimations, and assumptions about the uncertain situation. The estimates and associated assumptions are based on historical experience and other factors considered relevant. Actual results may differ from these estimates. The Company considers the economic implications of the Covid-19 pandemic, changes in climates and related governmental policies and regulations, the conflicts between Ukraine and Russia as well as related international sanctions, inflation and volatility in interest rate when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

In the preparation of the parent company only financial statements, the critical accounting judgments the Company has made and the major sources of estimation and assumption uncertainty are described as follows:

• A. Critical judgements in applying accounting policies

Business model assessment for financial assets

The Company determines the business model at a level that reflects how companys of financial assets are managed together to achieve a particular business objective. This assessment involves judgment and consideration of all relevant evidence, such as how the performance of the assets is evaluated, the risks that

• 23 -

affect the performance of the assets, and how the managers of the assets are compensated. The Company constantly assess the adequacy of its business model and monitors financial assets measured at amortized cost and debt investments measured at fair value through other comprehensive income. When these assets are derecognized prior to their maturity, the Company reviews the reasons for their disposal and whether the reasons are consistent with the objective of the business for which the assets were held. If the objective of the business for an asset is changed, the classification of the asset is prospectively changed from the reclassification date.

• B. Critical accounting estimates and assumptions

(A.)Revenue Recognition

Sales revenue, excluding related estimated sales returns, discounts and other similar allowance, is recognized when the control of goods or services is transferred to the customer and the Company satisfies it performance obligation. The Company estimates sales returns and allowance based on historical experience and other known factors. The Company assesses the reasonableness of the estimates periodically.

(B.)Estimated impairment of financial assets

The provision for impairment of accounts receivables, debt investments, and financial guarantee contracts is based on assumptions on default risk and expected loss rates. The Company makes these assumptions and selects inputs for impairment calculation based on the Company’s historical experience and existing market conditions, as well as forward looking information. If the future cash inflows are less than expected, a material impairment loss may arise. Please refer to Note 6(5.)for the assumption and input data.

(C.)Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. The Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. The management considers current market and historical experience on sperific future product demand for evaluation basis, and charge of these factors may significantly affect the results.

(D.)The useful life of property, plant and equipment

Property, plant and equipment are amortized on a straight-line basis, and the Company periodically evaluates the useful life and residual value of property, plant and equipment. If there is a significant change in the relevant estimates, it will be adjusted in the current period of the change and in subsequent years.

(E.)Realisability of deferred tax assets

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deferred tax asset can be utilised. If future generated profit less than expected, there would be significant reversed of deferred tax assets recognized as profit and loss when occurred.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

• (1.) Cash and Cash Equivalents

ITEM Cash on hand Check deposits Demand deposits Cash equivalent Time deposits (Investments with original maturities less than 1 year) Total	31-Dec-22 $ 1,713 1,209 613,469 86,664 $ 703,055	31-Dec-21
		$ 1,592 909 524,256 4,373
		$ 531,130

• A.The Company trades with a variety of financial institutions all with high credit quality to disperse credit risk, and the management expects that the probability of counterparty default is remote.

• B.The cash and cash equivalents were not pledged.

• (2.) Notes Receivable, Net

ITEM			31-Dec-22		31-Dec-21
Notes receivable		$	179,178	$	160,213
Less: Allowance for impairment loss	(		353) (		1,063)
		$	178,825	$	159,150

• A. As of December 31, 2022 and 2021, the notes receivables were not pledged.

• B. Please refer to table below for the information about the disclosures on allowance for impairment loss for accounts receivable.

• (3.) Accounts Receivable, Net

Accounts Receivable, Net
ITEM			31-Dec-22		31-Dec-21
Accounts receivable
Gross carrying amount measured at amortized cost		$	462,300	$	368,436
Less: Allowance for impairment loss	(		5,714) (		3,135)
		$	456,586	$	365,301

• A. The Company’s average credit terms of accounts receivable were 30 to 120 days, which was determined with factors of customers’ industrial environment, business scales and profitability.

• B. The accounts receivable were not pledged.

• C. The Company applies the simplified approach to provisions for expected credit losses, which permits the use of a lifetime expected credit losses provision for all notes receivable and accounts receivable. The lifetime expected credit losses on accounts receivables are estimated by reference to past default experience with the respective debtors and an analysis of the debtors’ current financial positions. According to the past experience of credit loss, there is no significant difference between different customer categories, thus the provision matrix doesn’t further distinguish customer categories, and is set up the expected credit loss ratio by the past due days.

The following table details the loss allowance of note receivables and accounts receivables based on the

• 25 -

Company’s provision matrix.

December 31,2022 Not past due 0 to 60 days 61 to 120 days 121 to 180 days Over 181 days Total December 31,2021 Not past due 0 to 60 days 61 to 120 days 121 to 180 days Over 181 days Total	Expected Credit Loss Ratio 0%~1% 5% 30% 50% 100% Expected Credit Loss Ratio 0%~1% 5% 30% 50% 100%	Gross Carrying Amount $ 623,321 9,792 3,806 952 3,607 $ 641,478 Gross Carrying Amount $ 520,135 4,490 847 294 2,883 $ 528,649	Loss Allowance (Lifetime ECL) $ 353 489 1,142 476 3,607 $ 6,067 Loss Allowance (Lifetime ECL) $ 689 225 254 147 2,883 $ 4,198	Amortized Cost
				$ 622,968 9,303 2,664 476 －
				$ 635,411
				Amortized Cost
				$ 519,446 4,265 593 147 －
				$ 524,451

• D. The movements of the loss allowances of notes receivable and accounts receivable, including those from related parties, were as follows:

Opening Balance Add: Impairment loss Closing Balance	31-Dec-22 $ 4,198 1,869 $ 6,067	31-Dec-21 $ 3,038 1,160 $ 4,198

• E. These amounts were recognized without considering other credit enhancements held by the Company. The Company writes off an accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. However, the Company continues to engage in enforcement activity to recover the receivables due. Any recovered amounts are recognized in profit or loss.

• F. Please refer to Note 12 for information about the related credit risk management and the valuation techniques.

• (4.) Inventories

ITEM Merchandise Finished goods Work in process Raw materials Materials Total	31-Dec-22 $ 826 232,422 83,569 254,293 43,946 $ 615,056	31-Dec-21 $ 889 292,197 35,562 197,765 33,310 $ 559,723

• 26 -

A. Cost of revenue related to inventories recognized in profit or loss as follows:

			For the Year Ended December31	For the Year Ended December31	For the Year Ended December31
ITEM			2022		2021
Cost of goods sold		$	1,559,756	$	1,367,617
Loss on inventory value decline			2,188		4,679
Loss on inventory scrapped			16,838		20,872
Others	(		1,571 ) (		1,438 )
Total		$	1,577,211	$	1,391,730

B. From September to October, 2020, the Company failed to meet the standards and regulations of the Food and Drugs Administration in the stability study testing. The Company therefore was prohibited from manufacturing, selling the related products, and was requested to retrieve the distributed product from the market of the related 6 products. As a result, the Company enlarged the scope of inspections of all products and voluntarily recalled 17 related products and carried out different refinement plans to ensure the mistakes would be resolved effectively.

The Company made adjustments to the related asset items, liability items and income in the consolidated financial statements for the year ended 2022 and 2021 in regard to the incident as follows.

• (A.) Inventory

For the year ended 2021, the Company increased the cost of recycled products NT$1,144 thousand. Recycling products mainly from export customers, scrapped the inventory and recognized cost of goods sold simultaneously. There were scrapped and recalled goods cost amounted to NT$6,786 thousand.

The Company continued to implement the improvement plan and reported to the relevant authority. After having the stability test data that can support the prescribed validity period and ensuring the product quality is safe, the production and shipment of products was resumed in 2022. For the year ended 2022 and 2021.The Company reversed NT$472 thousand and NT$8,433 thousand for loss on inventory market price decline, respectively.

As of December 31, 2021, the different batches of recycled products NT$472 thousand were unavailable for sale. Due to the uncertainty of products available for sale, the Company recognized as unrealized loss on inventories.

• (B.) Refunds Liability

As of Dec 31, 2021, the actual amounts of refunds to the customers were amounted to NT$33,505 thousand. They were written-off in the accounts receivables and recorded in accounts payables or advance sales receipts.

• (C.) Other losses

The related expenses aroused from the recall of the product during 2021 was NT$786 thousand.

• C. No inventories were pledged or held as collateral.

• 27 -

(5.) Financial Assets at Fair Value through profit and loss / other comprehensive income – non-current

ITEM 31-Dec-22 31-Dec-21

Financial assets mandatorily measured at fair
value through profit or loss
Overseas unlisted preferred shares
PHYTOCEUTICA INC. CANCAP		$		4,844 $	4,844
PHARMACEUTICAL, LTD.				1,219	－
				6,063	4,844
Less: Accumulated impairments	(			4,844 ) (	4,844 )
Total		$		1,219 $	－
ITEM			31-Dec-22		31-Dec-21
Financial assets mandatorily measured at fair
value throughother comprehensive income
Domestic unlisted ordinary shares		$		9,676 $	－
Less: Valuation adjustments	(			68 ) (	－)
Total		$		9,608 $	－

• A. The Company invested in the preferred stocks of PHYTOCEUTICA INC., it is not entitled to other rights of ordinary shares, except for that dividends and distribution of residual assets preferred over ordinary shares.

• B. These investments in equity instruments were held for long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI.

• C. As of December 31, 2022 and 2021, the financial assets at fair value through profit or loss were not pledged or held as collateral.

• D. Please refer to Note 12 for information about the related credit risk management and the valuation techniques.

• (6.) Investments Accounted for Using Equity Method

			31-Dec-22				31-Dec-21
		Original	Percentage			Original	Percentage
		Investment	Of	Carrying		Investment	Of		Carrying
Name of Investee		Amount	Ownership	Amount		Amount	Ownership		Amount
CANCAP
PHARMACEUTICAL
LTD. (ordinary shares)	$	44,605	88.43% ( $	125,028 ) $		44,605	88.43%	( $	126,252 )
SUNETIC BIOTECH
INC.		745,748	83.47%	915,635		745,748	83.47%		884,909
UJNIVERSAL NEXT
TECHNOLOGIES INC.		17,467	100.00%		39	17,467	100.00%		27
ZuniMed Biotech Co.,
Ltd.		109,990	100.00%	91,660		109,990	100.00%		88,743
SynCore Biotechnology
Co., Ltd.		1,745,698	62.09%	154,419		1,745,698	62.09%		274,927
Total	$	2,663,508		1,036,725$		2,663,508			1,122,354
Add: Transfer into debit
item of financial asset at
FV through PL				125,028					126,247
Transfer into investment
accounted for using
equity method					－				5
			$	1,161,753				$	1,248,606

• 28 -

• A. The investment accounted for using equity method for CANCAP PHARMACEUTICAL LTD. has been consistently dealing with operating deficit. This caused the Company to carry a credit balance on the carrying amount of its related long-term investment. The Company also owns the preference shares of the investee, hence the credit balance amounted to NT$125,028 thousand and NT$126,247 thousand were respectively debited as Financial Assets at Fair Value through Profit and Loss.

• B. The Company received cash dividends from subsidiary SUNETIC BIOTECH. INC. amounted to NT$44,405 thousand and NT$31,191 thousand for the years ended December 31, 2022 and 2021, respectively..

• C. The Company engaged in seasoned equity offering, acquisition and disposal of the ownership interest of subsidiaries in both 2022 and 2021. The adjustments to capital surplus in accordance to their percentage of ownership interest were described as follows: (For the year ended December 31, 2022:None.)

	For theyear ended December 31,2021
Name of Investee SynCore Biotechnology Co., Ltd. SynCore Biotechnology Co., Ltd. Total

• D. The stocks of SynCore Biotechnology Co, Ltd are listed for publicly traded. As of December 31, 2022 and 2021, the Company held its shares with market values amounted to NT$1,380,084 thousand and NT$1,304,100 thousand, respectively and there were 17,122 thousand shares and 30,382 thousand shares, excluded in the computation of the market value due to the regulation about privately placed equity shares with 3 years resell limit.

• E. The amount of profit and loss and other comprehensive income accounted for using equity method in 2022 and 2021 are calculated based on the financial statements audited by a CPA of the same period.

• F. Please refer to Note 13 for the information of investments accounted for using equity method.

• (7.) Property, Plant and Equipment

										Unfinished
										Construction
										and
										Equipments
								Other		Pending
			Land		Buildings	Machinery		Equipment		Acceptance		Total
Cost
1-Jan-22		$	487,277	$	1,909,362 $	1,185,808	$	203,381	$	66,323	$	3,852,151
Additions			－		10,296	9,989		18,517		37,271		76,073
Disposals	(		－)	(	－) (	3,516 ) (		382)	(	－)	(	3,898）
Reclassification			－		19,457	23,070		5,090	(	30,972)		16,645
31-Dec-22		$	487,277	$	1,939,115 $	1,215,351	$	226,606	$	72,622	$	3,940,971
Accumulated
depreciation and
Impairment
1-Jan-22		$	－	$	764,350 $	868,119	$	154,043	$	－	$	1,786,512
Depreciation			－		58,999	66,448		12,143		－		137,590
Disposals	(		－)	(	－)(	3,047)(		362)	(	－)	(	3,409)
31-Dec-22		$	－	$	823,349 $	931,520	$	165,824	$	－	$	1,920,693

• 29 -

											Unfinished
											Construction
											and
											Equipments
									Other		Pending
			Land		Buildings		Machinery		Equipment		Acceptance		Total
Cost
1-Jan-21		$	487,061	$	1,890,168	$	1,129,043	$	201,677	$	13,940	$	3,721,889
Additions			216		12,189		23,807		6,674		37,912		80,798
Disposals	(		－)	(	－) (		1,368 ) (		5,113)	(	－)	(	6,481）
Reclassification			－		7,005		34,326		143		14,471		55,945
31-Dec-21		$	487,277	$	1,909,362	$	1,185,808	$	203,381	$	66,323	$	3,852,151
Accumulated
Depreciation and
Impairment
1-Jan-21		$	－	$	705,891	$	804,615	$	148,694	$	－	$	1,659,470
Depreciation			－		58,459		64,872		10,192		－		133,523
Disposals	(		－)	(	－) (		1,368) (		5,113)	(	－)	(	6,481)
31-Dec-21		$	－	$	764,350	$	868,119	$	154,013	$	－	$	1,786,512
CarryingAmount
31-Dec-22		$	487,277	$	1,115,766	$	283,831	$	60,782	$	72,622	$	2,020,278
31-Dec-21		$	487,277	$	1,145,012	$	317,689	$	49,338	$	66,323	$	2,065,639

• A. The property, plant and equipment were pledged or held as collateral, please refer to Note 8 for details.

• B. As of December 31, 2022 and 2021, the Company acquired agricultural lands from non-related parties for the purpose of plant planning which could not be registered ownership of the Company. The acquisition cost was NT$23,184 thousand, and the land was registered in the name of Shu Fei Yu. To protect the interest of the Company, the mortgage right of the land was registed belong to the Company.

• (8.) Investment Properties

Investment Properties
Cost 1-Jan-22 Additions 31-Dec-22 Accumulated depreciation and impairments 1-Jan-22 Depreciation expense 31-Dec-22 Cost 1-Jan-21 Additions 31-Dec-21	Land $ 182,880 － $ 182,880 $ － － $ － $ 182,880 － $ 182,880	Buildings $ 71,884 － $ 71,884 $ 15,256 1,547 $ 16,803 $ 71,884 － $ 71,884	Total
			$ 254,764 －
			$ 254,764
			$ 15,256 1,547
			$ 16,803
			$ 254,764 －
			$ 254,764

• 30 -

Accumulated depreciation and impairments 1-Jan-21 Depreciation expense 31-Dec-21 CarryingAmount 31-Dec-22 31-Dec-21	Land $ － － $ － $ 182,880 $ 182,880	Buildings $ 13,709 1,547 $ 15,256 $ 55,081 $ 56,628	Total
			$ 13,709 1,547
			$ 15,256
			$ 237,961
			$ 239,508

• A. Rental income from investment properties and direct operating expenses arising from investment property are shown below:

shown below:
Rental income from investment properties Direct operating expenses arising from the investment properties that generated rental income during the period	31-Dec-22 $ 7,404 $ 2,167	31-Dec-21
		$ 7,404
		$ 2,167

• B. Investment properties are depreciated on a straight-line basis based on 15~50 years useful lives.

• C. The investment properties that are not valued by an external independent valuer are valued by the Company’s management using the rental of adjacent area as reference. This was the cash flow approach and belonged to the level 3 fair value measurement. The fair values as at December 31, 2022 and 2021 were amounted to NT$338,395 thousands and NT$284,643 thousands, respectively.

• D. Information on investment properties pledged to others as collaterals is provided in Note 8.

• (9.) Intangible Assets

ntangible Assets
						Technology
			Software			Licenses			Total
Cost
1-Jan-22		$	94,481		$	－		$	94,481
Additions			10,236			－			10,236
Disposals	(		13,862 )	(		－)	(		13,862 )
31-Dec-22		$	90,855		$	－		$	90,855
Accumulated amortization and
impairment
1-Jan-22		$	59,453		$	－		$	59,453
Amortization			16,798			－			16,798
Disposals	(		13,862 )	(		－)	(		13,862 )
31-Dec-22		$	62,389		$	－		$	62,389
Cost
1-Jan-21		$	81,796		$	1,394		$	83,190
Additions			14,936			－			14,936
Disposals	(		2,375 )	(		1,394 )	(		3,769 )
Reclassification			124			－			124
31-Dec-21		$	94,481		$	－		$	94,481

• 31 -

Software Accumulated amortization and impairment 1-Jan-21 $ 40,634 Amortization 21,194 Disposals ( 2,375 ) ( 31-Dec-21 $ 59,453 CarryingAmount 31-Dec-22 $ 28,466 31-Dec-21 $ 35,028	Technology Licenses Total $ 1,394 $ 42,028 － 21,194 1,394 ) ( 3,769 ) $ － $ 59,453 $ － $ 28,466 $ － $ 35,028

A. The software was pledged as collateral for long-term loans, please refer to Note 8.

(10.) Short-term loans

Short-term loans
Category Unsecured loans Category Unsecured loans	31-Dec-22
	Amount Interest Rate $ 360,000 1.44%~2.12% 31-Dec-21	Interest Rate
	Amount $ 440,000	Interest Rate
		0.77%~1.41%

• (11.) Long-term loans and current portion of long-term liabilities

ITEM			31-Dec-22	31-Dec-21
Secured loans		$	1,192,935 $	879,822
Unsecured loans			260,000	650,000
Subtotal			1,452,935	1,529,822
Less: current portion	(		48,116 ) (	56,844 )
Total		$	1,404,819 $	1,472,978
Interest Rate			1.525%~2.283%	0.800%~1.603%

Please refer to Note 8 for collaterals pledged for long-term borrowings.

• (12.) Long-term payable and current portion of long-term liabilities

The Company has signed a project contract with an equipment manufacture company for an improvement on energy saving of the air conditioner and hot water system. The amounts payable will be paid in installments in accordance to the contract term as described as follows: ( As of December 31, 2022:None.)

Current Less than 1 year		December 31, 2021
	Long-termpayable $ 2,223	Future expense $ 10	PV of long-term payable
			$ 2,213

• (13.) Retirement Benefit Plans

Defined contribution plans

• A. The employee pension plan under the Labor Pension Act of the R.O.C. (the Act) is a defined contribution plan. Pursuant to the plan, the Company make monthly contributions of 6% of each individual employee’s salary or wage to employees’ pension accounts.

• 32 -

• B. NT$19,435 thousand and NT$17,518 thousand were contributed by the Company for the years ended December 31, 2022 and 2021, respectively.

Defined benefit plan

The Company and its domestic subsidiaries have defined benefit pension plans in accordance with the Labor Standards Law of the R.O.C. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited in Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. The Company would assess as the balance in the aforementioned labor pension reserve account by the end of each year. If the account balance is not enough to pay the pension to the labors expected to be qualified for retirement in the next year, the Company will make contribution for the deficit by next March. The pension fund is managed by the government’s designated authorities and the Company has no right to influence their investment strategies.

A. Amounts recognized in the parent company only balance sheets are as follows:

ITEM		31-Dec-22					31-Dec-21
Present value of defined
benefit obligations	$	165,248				$	171,779
Fairvalue ofplan assets	(	129,270	)		(		120,890	)
Net defined benefit liability	$	35,978				$ 50,889
		35,978					50,889

B. Movements of net defined benefit liabilities were as follows:

B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:	B. Movements of net defined benefit liabilities were as follows:
	For the Year Ended December31,2022
			Present value of	Fair value of plan Net defined benefit
			defined benefit				Fair value of plan				Net defined benefit
ITEM			obligations				asset				liability
		$	171,779		(	$	120,890	)		$	50,889
BALANCE at JANUARY 1
Service cost:
Current service cost			1,075				－				1,075
			1,182		(		832	)			350
Interest expense(revenue)
			2,257		(		832	)			1,425
Recognized inprofit or loss
Remeasurement on the net
defined benefit liability:
Return on plan assets			－		(		9,475	)	(		9,475	)
Actuarial (gains) losses
Actuarial loss arising from	8 － 8 ( 9,474 ) － ( 9,474 ) 9,861 － 9,861
changes in demographic
assumptions
Actuarial (gain) loss
arising from changes in
financial assumptions
Actuarial loss arising from
experience adjustments											9,861
Components of defined benefit	395 ( 9,475 ) ( 9,080 )
costs recognized in other
comprehensive income			395					)	(		9,080	)
Pension fund contribution			－	( 7,256 ) ( 7,256								) )
Paid Pension	( 9,183 ) 9,183 (										－
Balance at December 31		$ 165,248 ( $ 129,270 )								$ 35,978

• 33 -

	For the Year Ended December31,2021
			Present value of	Fair value of plan Net defined
			defined benefit				Fair value of plan					Net defined
ITEM			obligations				asset					benefit liability
BALANCE at JANUARY 1	$	$	182,749		(	$		117,934	)		$	64,815
Service cost:
Current service cost			1,469					－				1,469
Interest expense(revenue)			542		(			350	)			192
Recognized inprofit or loss			2,011		(			350	)			1,661
Remeasurement on the net	－ ( 294 ( 6,939 ) 4,493
defined benefit liability:
Return onplan assets			－		(			1,855	)	(		1,855	)
Actuarial(gains)losses
Actuarial loss arising from								－ 294 － ( 6,939 )
changes in demographic
assumptions
Actuarial (gain) loss
arising from changes in
								－		(		6,939
financial assumptions
Actuarial loss arising from								－ 4,493
experience adjustments								－				4,493
Components of defined benefit	( 2,152 ) (							1,855 ) ( 4,007 )
costs recognized in other
comprehensive income			2,152		(				)	(		4,007	)
Pension fund contribution	(		－		(			11,431	)	(		11,431	)
Paid Pension			10,829	)				10,680		(		149	)
Balance at December 31		$	171,779		(	$		120,890	)		$	50,889
C. The defined benefit plan as of the year ended 2022 and 2021 were 31-Dec-22 Operation Costs $ 648 Selling Expense 408 Administrative Expense 293 Research and Development Expense 76 $ 1,425								summarized by functions as follows: 31-Dec-21 $ 766 454 354 87 $ 1,661

• D. Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

(A.)Investment risk

The pension funds are invested in equity and debt securities, bank deposits, etc. at the discretion of the Bureau of Labor Funds of Ministry of Labor, or under the mandated management. However, under the Labor Standards Law, the rate of return on plan assets shall not be less than the average interest rate on a two-year time deposit published by the local banks.

(B.)Interest risk

A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

• 34 -

(C.)Salary risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

E. The main actuarial assumptions used were as follows:

	31-Dec-22		31-Dec-21
Discount rate	1.30%		0.70%
Expected rate of salary increase	1.50%		1.50%
The weighted average duration of the
	9 years		9 years
defined benefit obligation

• (A.) Assumptions on future mortality experience are set based on the 6th Taiwan Standard Ordinary Experience Mortality Table (TSO).

• (B.) The sensitivity analysis:

If significant actuarial assumptions change reasonably and all other assumptions are held constant, the present value of the defined benefit obligation may increase(decrease) as below:

		31-Dec-22	31-Dec-21
ITEM
Discount rate	( $ 3,727 ) ( $ 4,188 ) ( 1,506 ) ( 1,693 ) 3,854 4,339 1,526 1,717 3,837 4,293 ( 3,729 ) ( 4,165 ) ( 26 ) ( 48 ) 26 48
0.25% increase
0.1% increase
0.25% decrease
0.1% decrease
Future salaryincrease rate
0.25% increase
0.25% decrease
Employee turnover rate
110% of the expected
employee turnover rate
90% of the expected
employee turnover rate

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

• F. The contribution that the Company expects to make to its defined benefit pension plans in next year is NT$1,136 thousand.

Other Employees’ benefits were as follows:

ITEM Employees benefits payable Compensated absences payable Other employees benefits Total	31-Dec-22 $ 9,647 4,846 15,029 $ 29,522	31-Dec-21
		$ － 4,841 14,898
		$ 19,739

• 35 -

(14.) Capital Stock

The movements in the number of the Company's ordinary shares outstanding are as follows:

For the Year Ended December 31, 2022

	For the Year Ended December 31, 2022	ecember 31, 2022
January 1 December 31 January 1 December 31	Issued and paid shares (in thousands) Issued capital 167,722 $ 1,677,221 167,722 $ 1,677,221 For the Year Ended December 31, 2021	Issued capital
		$ 1,677,221
		$ 1,677,221
	Issued and paid shares (in thousands) 167,722 167,722	Issued capital
		$ 1,677,221
		$ 1,677,221

As of Dec 31, 2022 the Company’s authorized capital amount was NT$2,500,000 thousand, consisting of 250,000 thousand shares of ordinary stocks.

• (15.) Capital Surplus

Capital Surplus
ITEM Additional paid in capital Additional paid-in capital arising from bond conversion Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interest in Subsidiaries Others Total	31-Dec-22 $ 422,450 190,611 310,439 5,832 640 $ 929,972	31-Dec-21
		$ 455,994 190,611 310,439 5,832 640
		$ 963,516

Under the Company Act, the capital surplus generated from excess of the issuance price over the par value of capital stock and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as stock dividends or cash dividends. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized mentioned above should not exceed a certain percentage of the Compnay’s paid in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(16.) Accumulated Deficit and Dividend Policy

• A. When allocating the net profits in each fiscal year, Sinphar shall be first utilized for paying taxes, offsetting losses of previous years, and then setting aside the 1) legal capital reserve at 10% of the profits left over, until the accumulated legal capital reverse equals Sinphar’s paid-in capital; 2) special capital reverse in accordance with relevant laws or regulations or as requested by the authorities in charge; and 3) balance left over shall be allocated according to the resolution of the board of directors and the shareholders’ meeting.

• B. To consider about the economic circumstances, development phase, and future business expansion, dividends will be allocated in consideration of future capital expenditure and cash forecast. However, cash dividends are limited to over 20% of total dividends distributed.

• C. The appropriation for legal capital reserve shall be made until the reserve equals the Company’s paid-in capital. The reserve may be used to offset deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.

• 36 -

D. Special Reserve ：

ial Reserve：
ITEMS Amount when first applied to IFRSs Amount aroused from other equity interest Total	31-Dec-22 $ 37,951 53,124 $ 91,075	31-Dec-21
		$ 37,951 53,124
		$ 91,075

• (A.) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• (B.) When IFRSs were first adopted, according to the special reserve regulation of Financial Supervisory Commission R.O.C, no. 1010012865 on April 6, 101, If the company subsequently uses, disposes or reclassifies the relevant assets, the proportion originally set aside as the special reserve will be reversed into distributable retained earnings.

• E. The resolutions of 2021 and 2020 deficit compensation have been approved by the company’s shareholders in its meeting held on June 21, 2022 and August 3, 2021, respectively. The deficit would be covered with legal capital reserve and distribute cash dividend of NT$0.2 per share, based on the amount NT$33,545 thousand of capital surplus upon issuance.

• F. The appropriations of earnings for 2022 had been approved in the meeting of the Board of Directors on March 17, 2023 and the appropriations and dividends per share were as follows:

		Appropriation of Earnings			Dividends Per Share(NT$)
Legal capital reserve	$	23,372	$		－
Special capital reserve		30,292			－
Cash dividends		167,722			1
Total	$	221,386

The appropriations of earnings for 2022 are to be presented for approval in the shareholders’ meeting which is to be held on June 20, 2023.

• G. Information on the resolution of the Board of Directors' and shareholders' meetings regarding the appropriation of earnings is available from the Market Observation Post System on the website of the TWSE.

• (17.) Others Equity Items

Others Equity Items
						Unrealized Gain
			Exchange			(Loss) on Financial
ITEM		differences on translation of foreign financial statements				Assets at Fair Value Through Other Comprehensive Income		Total
Balance as at Jan 1, 2022	(	$	91,854 ) (			$	37,325 ) ( $	129,179 )
Exchange differences on translation of foreign
financial statements			13,919				－	13,919
Unrealized gain on financial assets at FVTOCI			－		(		68 ) (	68 )
Income tax effects	(		2,784 )				－(	2,784 )
Share of other comprehensive income of
associates accounted for using the equity
method			18		(		3,274 ) (	3,256)
Balance as at Dec 31, 2022	(	$	80,701 ) (			$	40,667 ) ($	121,368 )

• 37 -

						Unrealized Gain	Unrealized Gain
			Exchange			(Loss) on Financial
ITEM		differences on translation of foreign financial statements				Assets at Fair Value Through Other Comprehensive Income		Total
Balance as at Jan 1, 2021	(	$	86,308 ) (			$	32,683 ) ( $	118,991 )
Exchange differences on translation of foreign
financial statements	(		6,873 )				－(	6,873 )
Income tax effects			1,374				－	1,374
Share of other comprehensive income of
associates accounted for using the equity
method	(		47		) (		4,642 ) (	4,689)
Balance as at Dec, 2021	(	$	91,854 ) (			$	37,325) ($	129,179)

• (18.) Net Revenue

Net Revenue
			For the Year Ended		December31
ITEM			2022		2021
Revenue from contracts with customers
Net revenue from the sale of goods		$	2,846,628	$	2,504,119
Less: Sales returns	(		15,124 ) (		17,094	)
Less: Sales discounts	(		320,298) (		329,767	)
Total		$	2,511,206	$	2,157,258

• A. Breakdowns of contract revenue

• (A.) Please refer to Note 14 for geographical and departmental information details.

• (B.) Revenue was recognized at a specific point of time period when all the obligations were fulfilled.

• B. Contract Balance

• The contract liabilities in relation to contract revenue were as follows:

ITEM Contract liabilities-current	31-Dec-22 $ 93,235	31-Dec-21 $ 92,307	1-Jan-21
			$ 96,138

• (A.) Changes in contract liabilities mainly result from the time difference between the performance obligation satisfied and the customer’s payment.

• (B.) Revenue from opening contract liabilities - sales of goods recognized as revenue in the current period were as follows:

as follows:
Revenue Amounts from opening contract liabilities - sales of good ) Other Income ITEM Government grants Rental income Others Total	2022 2021 $ 84,649$ 84,394 FortheYear EndedDecember31	2021
		$ 84,394
	2022 $ 828 15,543 23,855 $ 40,266	2021
		$ － 15,564 34,203
		$ 49,767

• (19.) Other Income

• 38 -

(20.) Other Gains and Losses

Other Gains and Losses
			For the	Year Ended December31
ITEM			2022	2021
Net currency exchange gains (losses)		$		15,314 ( $	1,874 )
Gains (losses) on disposal of assets	(			402 )	258
Others	(			3,205) (	3,668)
Total		$		11,707 ($	5,284 )

• (21.) Employee Benefits Expense, Depreciation and Amortization

ITEM Employee benefits expense Salaries and wages Labor and health insurance Pension Remuneration to directors Other employee benefits Depreciation Amortization Total	For the	Year Ended December 31, 2022	Year Ended December 31, 2022
	Cost of revenue $ 242,959 24,608 11,088 － 15,420 110,227 3,473 $ 407,775	Operating expenses $ 253,658 20,627 9,772 8,194 17,046 27,362 37,734 $ 374,393	Total
			$ 496,617 45,235 20,860 8,194 32,466 137,589 41,207
			$ 782,168

ITEM Employee benefits expense Salaries and wages Labor and health insurance Pension Remuneration to directors Other employee benefits Depreciation Amortization Total	For the	Year Ended December 31, 2021	Year Ended December 31, 2021
	Cost of revenue $ 215,605 23,344 10,111 － 14,489 106,339 4,736 $ 374,624	Operating expenses $ 211,241 19,948 9,068 2,262 16,332 27,184 32,168 $ 318,203	Total
			$ 426,846 43,292 19,179 2,262 30,821 133,523 36,904
			$ 692,827

• A. As of December 31, 2022, and 2021, the number of employees of the Company were 775 and 769, respectively, the directors who have not served as employees were both 6.

• B. The average employee benefits expense are NT$ 774 thousand and NT$ 682 thousand in 2022 and 2021, respectively.

• C. The average salaries and wages are NT$ 646 thousand and NT$ 559 thousand in 2022 and 2021, respectively.

• D. The adjustment rate of average salaries and wages is 16%.

• E. The supervisor's remuneration are NT$370 thousand in 2021. (The auditing committee was formed at August 2021).

• 39 -

F. Salary Policy

Directors’ remuneration

• a. The Company's Articles of Incorporation stipulate that the remuneration for all directors is determined by the board of directors, regardless of operating profit or loss, which would be paid at the usual level of the industry.

• b. The Company's Articles of Incorporation stipulate the company shall allocate not higher than 5% of annual profits during the period to directors’ and supervisors’ remuneration.

Executive compensation

The remuneration for the management of the Company is based on the nature of the department, personnel positioning, work performance and business development progress, and is reviewed by the remuneration committee and resolved by the board of directors.

Employees’ compensation

The remuneration of the Company’s employees includes the salary, various allowances, position subsidy additions, overtime wages and various bonuses, as well as the employee remuneration paid by the Company according to the annual profitability. The Company's Articles of Incorporation stipulate the company shall allocate 2%~8% of income before income tax during the period to employees’ compensation.

• G. The employees’ compensation and directors’ and supervisors’ remuneration for 2022 and 2021 were approved in the meetings of the Board of Directors on March 17, 2023 and March 15, 2022, respectively. The amounts recognized in the financial reports were as follows:

Amount resolved to be distributed Amount recognized in financial reports Difference	2022 Employees’ compensation Directors’ and supervisors’ remuneration $ 9,647 $ 5,426 9,647 5,426 $ － $ －	2021	2021
	Employees’ compensation $ 9,647 9,647 $ －	Employees’ compensation $ － － $ －	Directors’ and supervisors’ remuneration
			$ － －
			$ －

The above-mentioned compensation was distributed in cash. There was no compensation to employees and remuneration to directors and supervisors allocated in 2021 due to net loss.

• H. The information about employees’ compensation and directors’ and supervisors’ remuneration of the company as resolved by the meeting of Board of Directors is available from the Market Observation Post System on the website of the TWSE.

• (22.) Finance Costs

.) Finance Costs
ITEM Interest expense - bank loans Interest expense – long term payables Total	For the Year Ended December 31
	2022 $ 24,997 10 $ 25,007	2021
		$ 22,325 57
		$ 22,382

• 40 -

(23.) Income Tax

A. The components of tax expense:

For the Year Ended December 31

ITEM		2022	2021
Current tax
Current tax expense recognized in the current year	$	39,894	$	35,124
Adjustments for prior periods		179		2,095
Total	$	40,073	$	37,219
Deferred tax
Deferred income tax related to origination and
reversal of temporary differences		21,675	(	21,638)
Income tax expense	$	61,748	$	15,581
. Income tax recognized in other comprehensive income		(loss):
		For the Year Ended December 31
ITEM		2022	2021
Currency translation differences	$	2,784	($	1,374)

• B. Income tax recognized in other comprehensive income (loss):

• C. Reconciliation between income tax expense and accounting loss as follows:

			For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
ITEM			2022		2021
Profit (loss) before income tax		$	286,392	(	$	22,554 )
Tax calculated based on profit (loss) before tax
and statutory tax rate		$	57,278	(	$	4,511 )
Effects from items disallowed by tax regulation			16,628			59,451
The Income from Income Basic Tax Act			3,637			－
Investment tax credit	(		33,260)	(		16,663)
Net change in deferred tax expense (income)			21,675	(		21,638)
Income tax adjustments for prior years			179			2,095
Foreign tax credit	(		4,389)	(		3,153)
Income tax expense		$	61,748		$	15,581

Under the Act for the Development of Biotech and Pharmaceutical Industry, the Company could recognize an investment tax credit within a limit of 20% of the investment price if the investee is applicable to the act.

D. Deferred income tax assets and liabilities

Deferred tax assets or liabilities arising from temporary differences, operating loss carryforward, and investment tax credits:

• 41 -

For the Year Ended December 31, 2022

	For the Year Ended December 31,2022	For the Year Ended December 31,2022	For the Year Ended December 31,2022
Deferred income tax asset Temporary difference Employee benefits Sales returns and allowances Unrealized loss on inventories Exchange difference on foreign operations Others Investment tax credit Deferred income tax liabilities Temporary difference Land value increment tax Gain on foreign investments accounted for using the equity method Deferred income tax asset Temporary difference Employee benefits Sales returns and allowances Unrealized loss on inventories Exchange difference on foreign operations Others Investment tax credit Deferred income tax liabilities Temporary difference Land value increment tax	Jan-1 Profit and loss Other comprehensive income $ 2,980 $ 26 $ － 12,780 ( 1,516 ) － 16,429 438 － 22,957 － ( 2,784 ) 1,392 ( 594 ) － 18,337 ( 18,337 ) － $ 74,875 ( $ 19,983 ) ( $ 2,784 ) $ 32,939 $ －$ － － 1,692 － $ 32,939 $ 1,692 $ － For the Year Ended December 31,2021			Dec-31 $ 3,006 11,264 16,867 20,173 798 － $ 52,108 $ 32,939 1,692 $ 34,631 Dec-31 $ 2,980 12,780 16,429 22,957 1,392 18,337 $ 74,875 $ 32,939
	Jan-1 $ 2,936 11,144 15,462 21,583 737 － $ 51,862 $ 32,939	Profit and loss $ 44 1,636 967 － 655 18,337 $ 21,639 $ －	Other comprehensive income $ － － － 1,374 － － $ 1,374 $ －

The above-mentioned deferred income tax liabilities were classified as other non-current liabilities.

• E. Unrecognized deferred tax assets:

Unrecognized deferred tax assets:
ITEMS Items not recognized as deferred tax assets: Loss on investments accounted for using the equity method Loss on financial assets evaluation Investment tax credit	31-Dec-22 $ － 969 － $ 969	31-Dec-21
		$ 1,917 969 4,331
		$ 7,217

• F. The tax authorities have examined income tax return of the Company through 2020.

• 42 -

(24.) Other Comprehensive Income (Loss)

.) Other Comprehensive Income (Loss)
				For the Year Ended December 31,2022
						Income tax
ITEM			Before tax				expense				After tax
Items that will not be reclassified subsequently to
profit or loss:
Remeasurement of defined benefit obligation			$	9,080		$	－			$	9,080
Unrealized loss on equity instruments at fair value
through other comprehensive income		(		68 )			－		(		68 )
Share of other comprehensive income of associates
accounted for using the equity method
Unrealized loss on equity instruments at fair
value through other comprehensive income		(		3,274 )			－		(		3,274 )
Subtotal				5,738			－				5,738
Items that may be reclassified subsequently to profit		or
loss:
Exchange differences arising on translation of foreign
operations				13,919	(		2,784 )				11,135
Share of other comprehensive income of associates
accounted for using the equity method
Exchange differences arising on translation		of
foreign operations transferred to profit	or loss			18			－				18
Subtotal				13,937	(		2,784 )				11,153
Other comprehensive income			$	19,675	(	$	2,784 )			$	16,891
				For the Year Ended December 31,2021
						Income tax
ITEM			Before tax				benefit				After tax
Items that will not be reclassified subsequently to
profit or loss:
Remeasurement of defined benefit obligation			$	4,007		$	－			$	4,007
Share of other comprehensive income of associates
and joint ventures accounted for using the equity
method
Unrealized loss on equity instruments at	fair value
through other comprehensive income		(		4,642 )			－		(		4,642 )
Subtotal		(		635 )			－		(		635 )
Items that may be reclassified subsequently to profit		or
loss:
Exchange differences arising on translation of foreign
operations		(		6,873 )			1,374		(		5,499 )
Share of other comprehensive income of	associates
and joint ventures accounted for using the equity
method
Exchange differences arising on translation		of
foreign operations transferred to profit or loss		(		47 )			－		(		47 )
Subtotal		(		6,920 )			1,374		(		5,546 )
Other comprehensive income		(	$	7,555 )		$	1,374		(	$	6,181 )

• 43 -

(25.) Earnings (Loss) per Share

ITEM Basic earnings (loss) per share: Net income (loss) attributable to shareholders of the parent Weighted average number of shares outstanding for the period (in thousands) Basic earnings (loss) per share, after tax (Unit: NT$ Per Share) Diluted earnings per share: Net income (loss) available to shareholders of the parent Weighted average number of shares outstanding for the period (in thousands) Effect of the dilutive potential ordinary shares Employees’ compensation (share in thousands) Weighted average number of shares outstanding for diluted earnings per share (share in thousand) Diluted earnings per share, after tax (in dollars)

For the Year Ended December 31 2022 2021 $ 224,644 ($ 38,135) 167,722 167,722 $ 1.34 ($ 0.23) $ 224,644 ($ 38,135) 167,722 167,722 291 (Note) 168,013 (Note) $ 1.34 $ (Note)

Note: The year ended 2021 is the loss, and the potential ordinary shares have an anti-dilution effect, so the diluted loss per share will not be calculated.

If the Company offered to settle the compensation or bonuses paid to employees in shares or cash at the Company’s option, the Company assumed that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the calculation of diluted earnings per share if the effect is dilutive. Such dilutive effect of the potential shares is included in the calculation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

7. TRANSACTIONS WITH RELATED PARTIES

A. Name of the parent company and the ultimate controlling party

The Company is the ultimate controlling party.

B. Names of related parties and relationship categories

Names of relatedparties SynCore Biotechnology Co., Ltd. ZuniMed Biotech Co., Ltd. CANCAP PHARMACEUTICAL LTD. Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou) Board of Directors, General Manager and Vice General Manager (Note) CANADA BIOTECH Shu Fei Yu	Relatedpartycategories
	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Key management personnel Other related parties Other related parties

Note: According to the Order of the Financial Supervisory Commission, issue no. 10703452331, The Company has established an audit committee to replace the supervisor since August 3, 2021.

• 44 -

C. Significant transaction with related parties

(A.) Revenue

Revenue
Related party category/Name Subsidiary/SynCore	FortheYear EndedDecember31
	2022 $ 2,267	2021
		$ 2,677

The prices of sales with related parties were not significantly different from those of sold to third parties, and the payment term is 30-90 days.

• (B.) Purchases of goods

Purchases of goods
Relatedpartycategory/Name Subsidiaries ZuniMed Sinphar Tian-Li	FortheYear EndedDecember31
	2022 $ 63,358 5,058 $ 68,416	2021
		$ 41,636 10,149
		$ 51,785

The prices of purchase and commission processing with related parties were not significantly different from those of purchased from third parties, and the payment term is 30-90 days.

• (C.) Lease arrangement-operating lease

The subsidiary, SynCore, leased buildings from the Company mainly for the use of office and laboratory with lease terms from August 1, 2017 to February 28, 2024. The rental price was determined in accordance with mutual agreement and the payment would be collected monthly. As of the year ended December 31, 2022 and 2021, the rental receivables were NT$11,263 thousand and NT$5,311 thousand, respectively. The rental incomes were both NT$13,356 thousand in 2022 and 2021.

(D.) Trademarks and royalties

Under an agreement with CANADA BIOTECH, CANADA BIOTECH, the Company owns the right to use its trademark under the condition which the Company pays 0.2%~0.8% of annual gross profit from merchandise sale as royalty each quarter, with the annual sum of payment not less than 36 thousand in Canadian currency. The Company paid the royalties amounted to NT$890 thousand and NT$872 thousand in 2022 and 2021 respectively. The payments were recognized as marketing expense.

(E.) Others

• (a.) The Company collected the common general administration fee, research and development cost and other income from its related party in 2022 and 2021. The amounts were described as follows:

Relatedpartycategory/Name Subsidiaries SynCore Others	2022 $ 10,147 49 $ 10,196	2021
		$ 18,165 15
		$ 18,180

The Company entered a sales agency agreement with its Subsidiary, SynCore. The Company would charge a service fee based on the quantity of sales. The service income in 2022 and 2021 were NT$5,064 thousand and NT$2,398 thousand respectively; As of December 31, 2022 and 2021, the advance service incomes were amounted to NT$534 thousand and NT$1,481 thousand respectively; Service fee charged on SynCore for assisting the development of new drugs in 2021 was NT$3,599 thousand. Deferred credit

• 45 -

items as of December 31, 2022 and 2021 were NT$1,304 thousand and NT$2,909 thousand, respectively. They were recognized as other non-current liabilities.

• (b.) The Company entrusted its subsidiary, SynCore, with the development of new drugs. The research and development cost in 2021 was NT$87 thousand.

• (c.) For the years ended December 31, 2022 and 2021, the Company paid its subsidiary, CANCAP, service fee amounting to NT$8,113 thousand and NT$1,426 thousand, respectively.

• (d.) The Company paid its subsidiaries various related operating expenses in 2022 and 2021. The amounts were described as follows:

were described as follows:
Related party category/Name Subsidiaries SynCore	FortheYear EndedDecember31
	2022 $ 601	2021
		$ 704

• (e.) As of December 31, 2022, the Company paid its subsidiary, SynCore, a compensation for loss on raw material amounting to NT$413 thousand.

• (f.) The Company has successively acquired nearby agricultural land for the plant planning. However, under the current regulations, the ownership of agricultural lands could not be registered under the compnay. Therefore, the Company has appointed the other related party, Shu Fei Yu, to be the owner the land. Please refer to the property, plant and equipment session in Note 6(7.) for more information.

• (F.) Receivables from / payables to related parties

Item Accounts receivable Other receivables Accounts payable Other payables	Related party category/Name Subsidiary/SynCore Subsidiary/SynCore Subsidiary/ZuniMed Subsidiary/Sinphar Tian-Li Total Subsidiary/SynCore	31-Dec-22 $ 7 $ 328 $ 9,178 315 $ 9,493 $ 434	31-Dec-21
			$ －
			$ 492
			$ 5,742 374
			$ 6,116
			$ －

The above-mentioned other receivable was recognized as other current asset.

No endorsement or guarantee was obtained for outstanding receivables from and payables to related parties and no loss allowances were recognized for receivables from related parties for 2022 and 2021.

(G.) Endorsements/guarantees obtain

Endorsements/guarantees obtain
Relatedpartycategory/Name Subsidiary/ZuniMed Relatedpartycategory/Name Subsidiary/ZuniMed	31-Dec-22
	Endorsement/Guarantee received Used Balance $ 25,000$ 25,000 31-Dec-21		Unused Balance
			$ －
	Endorsement/Guarantee received $ 25,000	Used Balance $ 25,000	Unused Balance
			$ －

The above is a supply guarantee of the medical institution.

• 46 -

(H.) Endorsements/Guarantees provide

Endorsements/Guarantees provide
Related Party Categories Subsidiary/SynCore Subsidiary/ZuniMed Related PartyCategories Subsidiary/SynCore Subsidiary/ZuniMed	31-Dec-22
	Endorsement/Guarantee provided Used Balance $ 350,000 $ 30,000 30,000 5,000 $ 380,000 $ 35,000 31-Dec-21		Unused Balance
			$ 320,000 25,000
			$ 345,000
	Endorsement/Guarantee provided $ 350,000 30,000 $ 380,000	Used Balance $ 100,000 5,000 $ 105,000	Unused Balance
			$ 250,000 25,000
			$ 275,000

D. Compensation of key management personnel

The remuneration to the Board of Directors and main management personnel were as follows:

ITEM Salaries and other short-term employee benefits	For the Year Ended December31	For the Year Ended December31
	2022 $ 26,373	2021
		$ 20,059

Please refer to the shareholder meeting’s annual report for the information about the above-mentioned remuneration to board of directors and the main management personnel.

8. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The Company’s assets pledged as collateral for long-term loans are as follows:

ITEM Property, plant and equipment Investment properties Intangible assets Total	31-Dec-22 $ 1,161,084 237,961 6,559 $ 1,405,604	31-Dec-21 $ 1,193,389 239,508 8,199 $ 1,441,096

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

As of December 31, 2021, Capital expenditures committed but not yet incurred are as follows:

ITEM Property, plant and equipment	31-Dec-2022 $ 58,363	31-Dec-2021
		$ 62,945

10. SIGNIFICANT LOSSES FROM DISASTERS: None.

1. SIGNIFICANT EVENTS AFTER REPORTING PERIOD: None.

12. OTHER INFORMATION

(1.) CAPITAL MANAGEMENT

The Company requires significant amount of capital to maintain its research and development expenditure. Accordingly, the Company manages its capital to ensure that it has sufficient and necessary financial resources and plans to fund its working capital needs, capital asset purchase, research and development expenditure, debt

• 47 -

service requirement and dividend payments associated with its existing operations over the next 12 months.

• (2.) FINANCIAL INSTRUMENTS

• A. Financial Risk of financial instrument.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company's risk management objectives are to manage the market risk (including foreign currency risk, interest risk and price risk), credit risk and liquidity risk related to its operating activities. The Company identifies, measures and manages the aforementioned risks and mitigates the disadvantage impact on financial performance. The material treasury activities are reviewed by Audit Committees and/or Board of Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, Corporate Treasury function must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

NATURE AND EXTENT OF SIGNIFICANT FINANCIAL RISKS

• (A)Market risk

• a. Foreign currency risk

• (a.) The Company is exposed to the foreign currency risk due to the transaction of sales, purchase and cash denominated in foreign currency other than the Company’s functional currency. These non-functional currencies are USD, RMB, JPY and HKD.

• (b.) Foreign currency exposure and sensitivity analysis

Financial assets Monetaryitems USD：NT$ CNY：NT$ HKD：NT$ JPY：NT$ Financial liabilities Monetaryitems USD：NT$			31-Dec-22	31-Dec-22	31-Dec-22	31-Dec-22
	Foreign Currencies (In Thousands) $ 4,225 1,074 118 64,992 $ 603	Exchange Rate 30.7100 4.4080 3.9380 0.2324 30.7100	Carrying Amount (In Thousands) $ 129,751 4,736 465 15,104 $ 18,522	Sensitivityanalysis
				Extent of variation 1% 1% 1% 1% 1%	Impact on Profit or loss $ 1,298 47 5 151 $ 185	Impact on Equity
						$ － － － － $ －

Financial assets Monetaryitems USD：NT$ CNY：NT$ HKD：NT$ Financial liabilities Monetaryitems USD：NT$			31-Dec-21	31-Dec-21	31-Dec-21	31-Dec-21
	Foreign Currencies (In Thousands) $ 4,429 1,046 1,118 $ 76	Exchange Rate 27.6800 4.3440 3.5490 27.6800	Carrying Amount (In Thousands) $ 122,598 4,543 3,966 $ 2.101	Sensitivityanalysis
				Extent of variation 1% 1% 1% 1%	Impact on Profit or loss $ 1,226 45 40 $ 21	Impact on Equity
						$ － － － $ －

• 48 -

If New Taiwan dollar strengthened against the relevant currency and all other variables were held constant, there would be an equal and opposite impact on profit or loss and other equity as of December 31, 2022, and December 31, 2021.

• (c.) Since there were varieties of foreign currencies within the Company, the Company disclosed the summarized foreign exchange gains (losses) information of monetary items. The realized and unrealized foreign exchange gains (losses) were NT$ 15,314 thousand and NT$ (1,874) thousand for the year ended December 31, 2022 and 2021, respectively.

• (d.) The unrealized exchange gains (losses) of fluctuation risk on foreign currency monetary item is significant. The unrealized foreign exchange gains (losses) were NT$ 240 thousand and NT$ (21) thousand for the year ended December 31, 2022 and 2021, respectively.

b. Price risk

The Company is exposed to price risk primarily related to its investment in instruments classified as financial assets at FVTPL and financial assets at FVTOCI.

The Company primarily invested in the unlisted stocks. The instruments prices are affected by the uncertainties of the investment targets’ future value.

Assuming a hypothetical increase/decrease of 1% in prices of the equity instruments at the end of the reporting period, the other comprehensive income for the years ended December 31, 2022 and 2021 would have increased/decreased by NT$ 12 thousand and NT$ 0 thousand, respectively, as they were classified as financial assets at FVTOCI.

c. Interest rate risk

The carrying amounts of the Company’s financial assets and financial liabilities exposed to interest rate risk were as follows:

rate risk were as follows:
		CarryingAmount
Item		31-Dec-22	31-Dec-21
Fair value interest rate risk
Financial assets	$	86,664 $	4,373
Financial liabilities	(	317) (	2,213)
Net	$	86,347 $	2,160
Cash flow interest rate risk
Financial assets	$	613,469 $	524,256
Financial liabilities	(	1,812,935) (	1,969,822)
Net	($	1,199,466) ($	1,445,566)

• (a.) Sensitivity analysis: Fair value interest rate risk

The Company did not designate any fixed interest rate financial instruments as fair value through profit or loss and derivatives instruments (interest rate swaps) to hedge its exposures to changes in fair values. As such, changes in interest rate would not affect the net income and the other comprehensive income at the end of the reporting period.

• (b.) Sensitivity analysis: Cash flow interest rate risk

The Company’s financial instruments at floating interest rate were assets (liabilities) at floating interest rate. Therefore, changes in interest rate would affect the future cash flows. Assuming a

• 49 -

hypothetical increase/decrease 1% in interest rates, the net income for the years ended December 31, 2022 and 2021 would increase/decrease by NT$ 11,995 thousand and NT$ 14,456 thousand, respectively.

(B) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Company. The Company is exposed to credit risk from operating activities, primarily from account receivables, and from investing activities, primarily from bank deposits, fixed-income investments and other financial instruments. The Company managed the credit risk separately for business related and financial related risk.

• a. Business related credit risk:

To maintain the quality of account receivable, the Company has established related credit risk management procedure. The risk assessment of individual customer includes evaluating financial position, internal evaluation, historical trading records and economic circumstance which could affect the payment ability of the customer. The Company may choose to strengthen overall risk management including collection in advance or guarantee provided by customers to mitigate the credit risk of certain customers.

b. Financial credit risk:

The financial department of the Company regularly monitors and reviews the credit risk of bank deposit and other financial instruments. The Company mitigates its exposure by selecting counterparties (banks, financial institutions, Company organizations and government authorities) with well credit and investment-grade credit ratings. The credit risk is insignificant.

• (a.) Concentration of credit risk

As of December 31, 2022, and December 31, 2021, accounts receivable from the top 10 customers represent 24.51%, and 23.20% of total accounts receivables of the Company, respectively. The Company believes the concentration risk is insignificant for the remaining accounts receivable.

• (b.) Expected credit impairment losses measurement

  • Accounts receivable : Simplified approach, please refer to Note 6(3.).

  • Judgment on whether credit risk increasing significantly: None.

• (C) Liquidity risk

• a. Liquidity risk management

The Company’s objective of managing liquidity risk is to maintain sufficient cash and cash equivalents required for operations, high liquidity securities, and bank financing lines for operations, and to ensure that the Company has sufficient financial flexibility.

• b. Maturity analysis of financial liabilities

Non-derivative financial liabilities Short-term loans Accounts payable Other payables Long-term borrowing, including current portion Total				31-Dec-22
	Less than 6 Months $ 360,000 313,721 258,835 24,058 $ 956,614	6－12 Months $ － － 23,032 24,058 $ 47,090	1－2 Years $ － － － 988,115 $ 988,115	2－5 Years $ － － － 410,093 $ 410,093	Over 5 Years $ － － － 6,611 $ 6,611	Contractual Cash flows $ 360,000 313,721 281,867 1,452,935 $ 2,408,523	Carrying Amount
							$ 360,000 313,721 281,867 1,452,935
							$ 2,408,523

• 50 -

			31-Dec-21
						Carrying Amount
						$ 440,000 193,522 238,879 1,529,822 2,213

The Company doesn’t expect the timing of occurrence of the cash flows estimated through the maturity

date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

• B. Categories of financial instruments

The following is the carrying amounts of the financial assets and financial liabilities of the Company at December 31, 2022 and December 31, 2021.

December 31, 2022 and December 31, 2021.
Financial assets Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable (including related parties) Refundable deposits Financial assets at FVTPL – non-current Financial assets at FVTOCI－non-current Financial liabilities Financial liabilities measured at amortized cost Short-term loans Net, accounts payable (including related parties) Other payable (including related parties) Long-term loans (including the current portion) Long-term payable (including the current portion)	31-Dec-22 $ 703,055 635,411 17,830 1,219 9,608 360,000 313,721 281,867 1,452,935 －	31-Dec-21
		$ 531,130 524,451 25,292 － － 440,000 193,522 238,879 1,529,822 2,213

• (3.) Fair value information

• A. Details of the fair values of the Company’s financial assets and financial liabilities not measured at fair value

and investment property measured at cost are provided in Note 12. (3)B and Note 6.(8), respectively.

Level 1

Fair value measurements of the Level 1 are those derived from quoted prices in active markets for identical financial instruments. An active market is a market in which transactions for identical instrument take place with sufficient frequency and volume to provide public pricing information on an ongoing basis.

Level 2

Fair value measurements are those derived from inputs other than quoted prices included within Level 1 that

• 51 -

observable for the instrument, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3

Fair value measurements are those derived from valuation techniques that include inputs for instrument that are not based on observable market data. The Company invested in equity investments without active market included within level 3.

• B. Financial instruments that are not measured at fair value

The Company considers the carrying amounts of financial instruments that are not measured at fair value, such as cash and cash equivalents, notes and accounts receivables, refundable deposits, accounts payable, approximate their fair values.

• C. Fair value hierarchy information

The Company’s financial instruments measured at fair value were under a recurring basis.

The following table presents the Company’s financial instruments measured at fair value on a recurring basis:

Items Asset: Fair value on a recurringbasis Financial assets measured at FVTPL Foreign unlisted publicly traded preference share Financial assets at FVTOCI Domestic unlisted ordinary shares Items Asset: Fair value on a recurringbasis Financial assets measured at FVTPL Foreign unlisted publicly traded preference share		31-Dec-22	31-Dec-22
	Level 1 $ － $ －	Level 2 Level 3 $ － $ 1,219 $ － $ 9,608 31-Dec-21		Total
				$ 1,219
				$ 9,608
	Level 1 $ －	Level 2 $ －	Level 3 $ －	Total
				$ －

• D. Valuation techniques and assumptions used in fair value measurement

• (A.) If there is an active market for the financial instruments, the fair value of the financial instruments is measured by using the quoted market prices. The quoted market prices announced by the main market place and the prices of government bonds classified as popular securities announced by Taipei Exchange (TPEx) are deemed as fair value foundation of publicly traded equity instruments and debt instruments with an active market.

If there are timely and frequent quoted prices from the exchange market, the broker, the dealer, industry association, price service organization, or the administrative, and the prices represent actual, frequent, and fair trades, the financial instruments are deemed as with an active market. Otherwise, the market is deemed as not active. In general, huge price gap, price gap apparently expanding, and small trading volume were indicators of a not active market.

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• (B.) Except for the aforementioned financial instruments with active market, the fair value of other financial instruments is measured by valuation technique or quotation of counterparties. The fair value from valuation technique could refer to the fair value of other financial instruments with similar substantial conditions and characteristics, discounted cash flow method and other valuation technique including model with observable market information on balance sheet date (e.g. yield curve of TPEx, quoted interest rate of Reuters commercial Note).

The fair values of non-listed equity investments were Level 3 fair value assets, and determined using the market approach by reference the peer companies valuation, third party quotation, net value and operation status. The significant unobservable input used was discount for lack of marketability. A movement in discount for the lack of marketability would not result in significant changes in the fair values.

• (C.) The Company considered the credit risk evaluation adjustment for financial instruments and non-financial instruments to reflect the credit risk of the counterparty and the credit quality of the Company.

• (D.) Valuation techniques used in Level 3 fair value Measurement:

The evaluation procedure of the financial instruments belong to Level 3 is verified by the financial department of the Company through verifying the independent source inputs to make sure the evaluation results closing to the market status. To make sure the reasonability of the evaluation results, the financial department verify the independence and reliability of source data, test and renew the input data, model and other necessary inputs.

• (E.) There were no transfers between different fair value hierarchy for the years ended December 31, 2022 and 2021, respectively.

13. SEPARATELY DISCLOSED ITEMS

• (1.) Information about significant transactions:

• A. Financing provided to others: None;

• B. Endorsements/guarantees provided: Table 1 attached

• C. Marketable securities held (excluding investment in subsidiaries, associates and joint ventures): Please see Table 2 attached;

• D. Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital: None;

• E. Acquisition of individual real estate properties at costs of at least NT $300 million or 20% of the paid-in capital: None;

• F. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None;

• G. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None;

• H. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None;

• I. Trading in derivative instruments: None;

• 53 -

• (2.) Related Information of investees: Please see Table 3 attached;

• (3.) Information on investments in Mainland China: Please see Table 4 attached and Table 3 attached;

• A. The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 4 attached.

• B. Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: See Table 7 & 3 attached.

• (4.) Information of major shareholder (list of all shareholders with ownership 5% or greater showing the names and the number of shares and percentage of ownership held by each shareholder): Please see Table 5 attached.

14. SEGMENT INFORMATION

Please refer to the consolidated financial statements of Sinphar Pharmaceutical Co., Ltd. and subsidiaries for operating segment information.

• 54 -

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries

TABLE 1

Endorsements/Guarantees provided

For the Year Ended December 31, 2022

(Amounts in thousands of New Taiwan Dollars, Unless Specified Otherwise)

		Guaranteed Party	Guaranteed Party	Limits on
				Endorsement/				Amount of	Ratio of	Maximum			Guarantee
No. (Note 1)	Endorsement / Guarantee Provider	Name	Nature of relationship (Note 2)	Guarantee Amount Provided to Each Guaranteed Party (Note 3)	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Endorsement/ Guarantee Collateralized by Properties	Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements	Endorsement/ Guarantee Amount Allowable (Note 4)	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Provided to Subsidiaries in Mainland China
0	Sinphar Pharmaceutical Co.,Ltd.	ZuniMed Biotech Co., Ltd.	1	$ 1,172,092	$ 30,000	$ 30,000	$ 5,000	$ －	1.02%	$ 1,465,115	Y	－	－
0	Sinphar Pharmaceutical Co.,Ltd.	SynCore Biotechnology Co.,Ltd.	1	$ 1,172,092	$ 350,000	$ 350,000	$ 30,000	$ －	11.94%	$ 1,465,115	Y	－	－
1	ZuniMed Biotech Co., Ltd.	Sinphar Pharmaceutical Co.,Ltd	2	$ 38,322	$ 25,000	$ 25,000	$ 25,000 (Note 5)	$ －	26.09%	$ 47,903	－	Y	－

Note 1 ： (1) The issuer fills in “0”. (2) The subsidiaries are numbered in order starting from “1”.

Note 2 ： (1) The endorser/guarantor parent company owns directly and indirectly more the 50% voting shares of the endorsed/guaranteed subsidiary.

(2) The endorsed/guaranteed company owns directly and indirectly more the 50% vo ting shares of the endorser/guarantor parent company. Note 3 ： Maximum endorsement/guarantee amount allowable is 40% of the net worth of the Endorsement/Guarantee Provider. Note 4 ： Maximum endorsement/guarantee amount allowable is 50% of the net worth of the Endorsement/Guarantee Provider. Note 5 ： It is a supply guarantee for the medical institution.

• 55 -

TABLE 2

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries TABLE 2

Marketable Securities Held (Excluding Subsidiaries, Associate and Joint Venture)

As of December 31, 2022

(Amounts in thousands of New Taiwan Dollars, Unless Specified Otherwise)

Held Company Name	Marketable Securities Type and Name	Relationship with Sinphar	Financial Statement Account	December 31,2022	December 31,2022	December 31,2022	December 31,2022	Note
				Shares/Units	Carrying Value	Percentage of Ownership	Fair Value
Sinphar Pharmaceutical Co., Ltd.	PHYTOCEUTICA INC.(preferred share)	Investee	Financial assets at fair value throughprofit or loss(Non-Current)	90,362.00	$ －	－	$ －	－
Sinphar Pharmaceutical Co., Ltd.	Datun Entertainment Development Co.,Ltd.	－	Financial assets at fair value through other comprehensive income(Non-Current)	4.00	9,608	0.33%	9,608	－
SynCore Biotechnology Co., Ltd.	Fuh Hwa Money Market	－	Financial assets at fair value throughprofit or loss(Current)	252,743.00	3,617	－	3,697	－
SynCore Biotechnology Co., Ltd.	Fuh Hwa You Li Money Market	－	Financial assets at fair value throughprofit or loss(Current)	152,110.90	2,031	－	2,078	－
SynCore Biotechnology Co., Ltd.	JPMorgan（Taiwan）Glbl Fd of Bd Fds Inc	－	Financial assets at fair value throughprofit or loss(Current)	90,062.20	1,012	－	988	－
SynCore Biotechnology Co., Ltd.	MacuCLEAR, INC. (Preferred Share)	－	Financial assets at fair value through other comprehensive income(Non-Current)	95,160.00	－	0.95%	－	－
SynCore Biotechnology Co., Ltd.	Medigene (Common Share)	－	Financial assets at fair value through other comprehensive income(Non-Current)	224,934.00	15,087	0.92%	15,087	－

• 56 -

TABLE 3

Name, Location, and Related Information of Investees Over Which Sinphar Exercise Significant Influence (Excluding Information On Investment In Mainland China) as of December 31, 2022

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

			Mi	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2022	Balance as of December 31, 2022	Balance as of December 31, 2022	Nt I
Investor Company	Investee Company	Location	an Businesses	December	December		Percentage	Carrying	e ncome (Losses) of the	Share of Profits /	Notes
			and Products	31, 2022	31, 2021	Shares	of Ownership	Value	Investee	Losses of Investee
Sinphar Pharmaceutical Co., Ltd.	CANCAP PHARMACEUTICAL LTD.(Ordinary shares)	Canada	Production and sale of healthy food	$ 44,605	$ 44,605	2,140,000	88.43%	$ －	$ 1,222	$ 1,222	Subsidiary
Sinphar Pharmaceutical Co., Ltd.	CANCAP PHARMACEUTICAL LTD.(Preference shares)	Canada	Production and sale of healthy food	126,247	126,247	51,500	100.00%	1,219	1,222	－	Subsidiary
Sinphar Pharmaceutical Co.,Ltd.	SUNETIC BIOTECH INC.	Mauritius	Investment business	745,748	745,748	18,854,534	83.47%	915,635	71,464	61,217	Subsidiary
Sinphar Pharmaceutical Co.,Ltd.	UNIVERSAL NEXT TECHNOLOGIES INC.	British Virgin Islands	Investment business	17,467	17,467	503,845	100.00%	39	9	9	Subsidiary
Sinphar Pharmaceutical Co., Ltd.	ZuniMed Biotech Co., Ltd.	Taiwan	Production and sale of medical appliances	109,990	109,990	10,300,000	100.00%	91,660	2,516	2,917	Subsidiary
Sinphar Pharmaceutical Co.,Ltd.	SynCore Biotechnology Co., Ltd.	Taiwan	Biotechnology service	1,745,698	1,745,698	71,456,000	62.09%	154,419	(188,666)	(117,252)	Subsidiary
SynCore Biotechnology Co., Ltd.	SynCore Biotechnology Europe GmbH	Germany	New drugs development and biotechnology service	834	834	25,000	100.00%	692	12	12	Subsidiary

Note：The shares of profits/losses of investee were calculated based on the financial statements audited by the CPAs. The effect of realized (unrealized) gains and losses have already been considered.

• 57 -

TABLE 4

Sinphar Pharmaceutical Co., Ltd. and Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2022

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital (RMB in Thousands)	Method of Investment	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2022	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31,2022	Net Income (Losses) of Investee Company	Percentage of Ownership	Shares of Profits/Losses (note 1)	Carrying Amount as of December 31, 2022	Accumulated Inward Remittance of Earnings as of December 31,2022
							Outflow	Inflow
Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou)	Production and sales of raw materials, pharmaceuticals		RMB 193,005	Indirect investment in mainland China by SUNETIC BIOTECH INC., an 83.47% owned subsidiary of Sinphar		$ 645,635 (USD 19,786 thousand)	－	－	$ 645,635 (USD 19,786 thousand)	$ 77,554	83.47%	$ 64,734	$ 919,592	$ 107,493
Hetian Tianli shasheng Pharmaceutical Development Co., Ltd.	Scientific research and production and sales of shasheng Pharmaceutical		RMB 10,000	Indirect investment in mainland China by Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou), a sub-subsidiary company of which Sinphar holds 83.47% of the total shares		－	－	－	－	(14,370)	75.96%	(9,090)	87,630	－
Hangzhou Vitrum Healthy Food Co., Ltd.	Sale of healthy food		RMB 30,000	Indirect investment in mainland China by Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou) a sub-subsidiary company of which Sinphar holds 83.47% of the total shares.		－	－	－	－	(453)	83.47%	(378)	1,811	－
		Accumulated Investment in Mainland China as of December 31, 2022 (US$ in Thousands)			Investment Amounts Authorized by Investment Commission, MOEA (US$ in Thousands)		Upper Limit on Investment (Note 3)
		652,200 (USD 19,986 (Note 2))			777,614 (USD 25,321)		1,758,138

Note 1 ： The shares profits/losses of investee were calculated based on the financial statements audited by the R.O.C. CPAs of the parent company.

Note 2 ： The amount included the indirect investment of UNIVERSAL NEXT TECHOLOGY INC to Qinghai Mingxing Bio-Engineering Co., amounting to USD$ 200 thousand, which has already been cancelled by the Investment Board. Note 3 ： According to the regulations of the Investment Commission of the Ministry of Economic Affairs, the upper limit of the cumulative amount of its investment in the mainland is 60% of the net value.

• 58 -

Sinphar Pharmaceutical Co., Ltd.

TABLE 5

Information of major shareholders

December 31, 2022

Shareholders	Shares	Shares
	Total shares owned (In thousands)	Ownership Percentage
XING-DA CAPITAL CORP.	15,470	9.22%

Note: The main shareholder information in this table is calculated by Taiwan Depository & Clearing Corporation, using total number of ordinary shares and preferred shares held by the shareholders who have completed Sinphar’s dematerialized securities registration and delivery (including treasury shares) is more than 5% on the last business day at the end of each quarter. As for the difference between capital stock recorded in Sinphar's financial report and the number of shares which Sinphar actually have completed the dematerialized securities registration and delivery, may result from computation basis.

• 59 -

Sinphar Pharmaceutical Co., Ltd. STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars and Foreign Currencies in Dollars

Item Cash Bank deposits	Description Petty cash and cash on hand Check deposits Demand deposits: Chang Hwa Commercial Bank, Ltd. Tatung Branch First Commercial Bank Su’ao Branch Taiwan Business Bank Co., Ltd. Su’ao Branch Taiwan Cooperative Bank Bei Luodong Branch Bank of Taiwan Lou Tung Branch Mega International Commercial Bank Co., Ltd. Yilan Branch Land Bank of Taiwan Hsinyi Branch Taishin International Bank Co., Ltd. Offshore Banking Branch E.SUN Commercial Bank, Ltd. Chungshiaw Branch Taiwan Cooperative Bank Bei Luodong Branch Chunglun Branch Bank SinoPac Co., Ltd. Taipei World Trade Center Branch others Foreign currency deposits: Mega International Commercial Bank Co., Ltd. Yilan Branch (JPY$ 64,908,797.00 Exchange rate:0.2324) Taiwan Cooperative Bank Bei Luodong Branch (USD$ 487,426.56 Exchange rate:30.7100) Chang Hwa Commercial Bank, Ltd. Tatung Branch (USD$ 420,569.79 Exchange rate:30.7100) others		Amount
		$	1,713
			1,209
			195,754 115,369 48,158 45,976 32,339 29,073 25,299 16,193 12,273 12,002 10,041 18,841
			561,318
			15,085 14,969 12,916 9,181
			52,151

• 60 -

Sinphar Pharmaceutical Co., Ltd. STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars and Foreign Currencies in Dollars

Item	Description Time deposits: Chang Hwa Commercial Bank, Ltd. Tatung Branch (USD$ 1,006,102.54 Interest rate:3.50% Exchange rate:30.7100) Taiwan Cooperative Bank Bei Luodong Branch (USD$ 700,000.00 Interest rate:3.82%~4.14% Exchange rate:30.7100) Mega International Commercial Bank Co., Ltd. Yilan Branch(USD$ 500,000.00 Interest rate:4.30% Exchange rate:30.7100) Taiwan Business Bank Co., Ltd. Su’ao Branch(USD$ 500,000.00 Interest rate:4.10% Exchange rate:30.7100) Taiwan Business Bank Co., Ltd. Su’ao Branch(CNY$ 600,000.00 Interest rate:1.40% Exchange rate:4.4080) Mega International Commercial Bank Co., Ltd. Yilan Branch(CNY$ 207,594.16 Interest rate:2.2%~2.45% Exchange rate:4.4080)	Amount
		30,897 21,497 15,355 15,355 2,645 915
		86,664
		$ 703,055

• 61 -

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NOTES RECEIVABLE

DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Client Name Third Parties: Hoja Life Development Co.,Ltd. Others(The amount of individual clients in others does not exceed 5% of this account balance) Less：Loss allowance Net	Description Amount Payments $ 22,371 Payments 156,807 179,178 ( 353 ) $ 178,825	Note
		－ －

• 62 -

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Client Name Third Parties: Watson''s Personal Care Stores(Taiwan) Co., Limited. Herbalife Nutrition Ltd. Others(The amount of individual clients in others does not exceed 5% of this account balance) Related Parties: SynCore Biotech Co., Ltd. Less：Loss allowance Net	Description Amount Payments $ 40,657 Payments 26,582 Payments 395,054 462,293 Payments 7 462,300 ( 5,714 ) $ 456,586	Note
		－ － －

• 63 -

Sinphar Pharmaceutical Co., Ltd. STATEMENT OF INVENTORIES

DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Amount

Item Raw materials Materials Work in process Finished goods Merchandise Less：Allowance for loss Net	Description Cost Western medicine raw materials, natural raw materials, etc. $ 292,658 Empty capsules, medicine bottles and instructions, etc. 55,346 Pharmaceuticals in progress, etc. 93,699 Medicines, health food, etc. 256,862 Health food 827 699,392 ( 84,336 ) $ 615,056	Net Realizable Value $ 302,302 55,413 84,321 382,117 1,012	Note
			－ － － － －

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Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGHT PROFIT OR LOSS FOR THE YEAR ENDED DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars; Shares / Units

Name of financial instruments CANCAP PHARMACEUTICAL LTD. (preferred share) PHYTOCEUTICA INC.(preferred share) Less: Accumulated Impairment Total	As of January 1, 2022 Shares Amount 51,500 $ － 90,362 4,844 4,844 ( 4,844 ) $ －	Additions Shares Amount －$ 1,219 － － 1,219 ( －) $ 1,219	Decrease Shares Amount －( $ －) － － ( －) － ( $ －)	As of December 31, 2022 Shares Amount 51,500 $ 1,219 90,362 4,844 6,063 ( 4,844 ) $ 1,219	Collateral － －	Note
						－ －

Note: The increase of NT$1,219 thousand in the current period is due to the operating loss of the invested company CANCAP PHARMACEUTICAL LTD., which is evaluated by the equity method, resulting in a credit balance of book value of the long-term equity investment. The amount of NT$125,028 thousand, which is recognized as a credit amount by the equity method, was taken as a deduction of “Financial Assets measured at Fair Value through Profit or Loss”, and the remaining book value NT$1,219 thousand taken as the increase in the current period.

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Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2022

Name of financial instruments Datun Entertainment Development Co., Ltd. (ordinary shares) Less: Valuation adjustments Total	As of January 1, 2022 Shares Amount －$ － ( －) $ －	Additions Shares Amount 4 $ 9,676 ( 68 ) $ 9,608	Amounts in Thousands of New Taiwan Dollars; Shares / Units Decrease As of December 31, 2022 Collateral Note Shares Amount Shares Amount －( $ －) 4 $ 9,676 － － － ( 68 ) ( $ －) $ 9,608	Amounts in Thousands of New Taiwan Dollars; Shares / Units Decrease As of December 31, 2022 Collateral Note Shares Amount Shares Amount －( $ －) 4 $ 9,676 － － － ( 68 ) ( $ －) $ 9,608
				－

• 66 -

Sinphar Pharmaceutical Co., Ltd.

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

Name of financial instruments	As of January1,2022 Shares Amount 2,140,000 ( $ 126,252 ) 18,854,534 884,909 503,845 27 10,300,000 88,743 71,456,000 274,927 1,122,354 126,252 $ 1,248,606	Additions	Additions	Decrease Shares Amount Share of profit(loss) Cumulative translation difference Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income －$ － $ 1,222 $ 2 $ － －( 44,405 ) 61,217 13,914 － － － 9 3 － － － 2,917 － － － －( 117,252 ) 18 ( 3,274 ) ( $ 44,405 )( $ 51,887 ) $ 13,937 ( $ 3,274 )	Amounts As of December 31,2022	Amounts As of December 31,2022	Amounts As of December 31,2022
		Shares － － － － －	Amount		Shares 2,140,000 18,854,534 503,845 10,300,000 71,456,000	Amount	Unitprice
CANCAP PHARMACEUTIC AL LTD. (ordinary shares) SUNETIC BIOTHECH INC UNIVERSAL NEXT TECHNOLOGIES INC ZuniMed Biotech Co., Ltd. SynCore Biotechnology Co., Ltd. Add: Credit balance of investments accounted for using equity method Total			$ － － － － －
			$ －

Note1: CANCAP PHARMACEUTICAL LTD. , which is evaluated by the equity method, has a credit balance on the book value of the long-term investment due to the operating loss. The amount of NT$125,028 thousand has been transferred to “Financial Assets measured at Fair Value through Profit or Loss - non-current”. Note2: The decrease in this period is due to the cash dividend of NT$44,405 thousand.

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Sinphar Pharmaceutical Co., Ltd. STATEMENT OF ACCUMULATED DEPERCIATION AND IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Please refer to Note 6(7).

Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF ACCUMULATED DEPERCIATION AND IMPAIRMENT OF INVESTMENT PROPERTY DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Please refer to Note 6(8).

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Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Description Unsecured borrowings	Nature E.SUN Commercial Bank, Ltd. Land Bank of Taiwan O-Bank Co., Ltd. Taiwan Cooperative Bank The Export-Import Bank of ROC	Ending Balance $ 100,000 80,000 20,000 100,000 60,000 $ 360,000	Contract Period 2022/08~2023/08 2022/04~2023/04 2022/06~2023/06 2022/10~2023/10 2022/08~2023/08	Range of Interest Rate 1.65% 1.64% 2.12% 1.50% 1.44%	Credit Line $ 100,000 100,000 100,000 100,000 80,000	Collateral － － － － －	Note
							－ － － － －

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Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Client Name Related parties: ZuniMed Biotech Co., Ltd. Sinphar Tian-Li Pharmaceutical Co., Ltd.(Hangzhou) Third parties: HYDROBIO INTERNATIONAL CO., LTD. NEW CHIENS BIOTECH CO., LTD. Ohters(The amount of individual item in others does not exceed 5% of the account balance) Total	Description payment payment payment payment payment	Amount $ 9,178 315 9,493 33,336 17,534 253,358 304,228 $ 313,721	Note
			－ － － － －

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Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF OTHER PAYABLES

DECEMBER 31, 2022

Item Expense payable

Amounts in Thousands of New Taiwan Dollars Description Amount Wages、salaries and various allowances payable $ 38,454 Year-end bonus and performance bonus payable 64,915 Various advertising promotion fees 30,860 Various research project fees 22,384 Labor and health insurance payable 7,640 Pension expense payable 4,848 Employees’ compensation and Directors’ remuneration 15,073 Others 97,693 $ 281,867

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Sinphar Pharmaceutical Co., Ltd. STATEMENT OF LONG-TERM BORROWINGS DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Creditor Description Amount Contract Period Bank of Taiwan Lou Tung Branch Secured Loans $ 11,000 2010/12-2025/12 Secured Loans 46,278 2013/10-2028/10 Secured Loans 65,476 2020/07-2027/07 Secured Loans 200,000 2022/10-2024/10 First Commercial Bank Su’ao Branch Secured Loans 58,660 2011/12-2026/12 Secured Loans 80,000 2022/11-2024/11 Unsecured Loans 260,000 2022/11-2024/11 Mega International Commercial Bank Co., Ltd. Yilan Branch Secured Loans 400,000 2022/01-2024/01 Secured Loans 933 2005/12-2025/12 Taiwan Business Bank Co., Ltd. Su’ao Branch Secured Loans 40,588 2007/11-2027/11 Secured Loans 290,000 2022/02-2025/02 Subtotal 1,452,935 Less：Current portion ( 48,116 ) $ 1,404,819	Contract Period	Interest Rate 2.102% 2.102% 2.283% 2.100% 2.050% 1.775% 1.725% ~1.900% 1.525% ~1.695% 2.215% 2.070% 1.625%	Collateral (Note 1) Buildings Buildings Machinery Land and buildings Land and buildings Land and buildings None Land and buildings Land and buildings Land and buildings Land and buildings	Note
				One-monthly installments, divided into 180 installments equal repayments One-monthly installments, divided into 180 installments equal repayments One-monthly installments, divided into 84 installments equal repayments During the credit period, maturity to renew One-monthly installments, divided into 180 installments equal repayments During the credit period, maturity to renew During the credit period, maturity to renew During the credit period, maturity to renew Six-monthly installments, divided into 40 installments equal repayments One-monthly installments, divided into 240 installments equal repayments During the credit period, maturity to renew

Note1: Please refer to Note 8 for collaterals pledged for long-term borrowings.

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Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF OPERATING REVENUES

FOR THE YEAR ENDED DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Item Pharmaceutical Healthy food Cosmetic Sales revenue Less:Sales return Sales discount Total	Quantity (Unit) Amount Thousand grain, kilogram and liter $ 1,870,112 Thousand grain, kilogram and liter 884,088 Kilogram and liter 92,428 2,846,628 ( 15,124 ) ( 320,298 ) $ 2,511,206	Note
		－ － － － －

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Sinphar Pharmaceutical Co., Ltd. STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2022

Amounts in Thousands of New Taiwan Dollars

Item			Amount
Raw materials：
Beginning raw materials		$		232,759
Add: Raw materials purchased				795,492
gain on physical inventory				247
work in progress transfer in				28,775
Other add item -other				764
Less: Ending raw materials and animal feed	(			292,658 )
Scrap of inventories	(			2,183 )
Transfers to expense	(			4,806 )
Costs to sell non-finished goods - raw materials	(			262 )
Raw materials used during the year				758,128
Supplies：
Beginning supplies				39,929
Add: Supplies purchased				271,673
gain on physical inventory				1,324
Less: Ending supplies	(			55,346 )
Scrap of inventories	(			993 )
Transfers to expense	(			1,970 )
Costs to sell non-finished goods - supplies	(			322 )
Suppliers used during the year				254,295
Direct labor				138,504
Manufacturing expense				428,912
Manufacturing cost				1,579,839
Add: Beginning work in progress				37,959
Outsourcing costs				20,721
Less: Ending work in progress	(			93,699 )
Scrap of inventories	(			1,634 )
Transfers to expense	(			5,116 )
Transfers to raw materials	(			28,775 )
Cost of finished goods and merchandise				1,509,295
Add: Beginning finished goods and merchandise				331,224
Cost of finished goods purchased				1,956
Less: Ending finished goods and merchandise	(			257,689 )
Scrap of inventories	(			12,028 )
Transfers to expense	(			13,002 )
Cost of goods manufactured and sold				1,559,756
Other operating costs				17,455
Cost of goods sold		$		1,577,211

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Sinphar Pharmaceutical Co., Ltd.

STATEMENT OF OPERATING EXPENSE

FOR THE YEAR ENDED DECEMBER 31, 2022

Item Wages and salaries Traveling Expense Freight Advertisement expense Insurance expense Depreciation Amortizations Meal expense Training expense Service fee promotional expenses Others (Note) Expected credit losses	Selling Expenses $ 163,329 12,805 19,400 54,413 11,648 10,353 6,828 5,428 6,064 1,066 58,603 40,644 $ 390,581	Amounts in Thousands of New Taiwan Dollars Administrative Expenses Research and Development Expenses Total $ 51,146 $ 49,255 $ 263,730 993 156 13,954 24 23 19,447 3,830 － 58,243 5,860 4,634 22,142 3,612 13,397 27,362 14,428 16,479 37,735 1,413 1,933 8,774 337 127 6,528 15,391 117 16,574 － － 58,603 24,635 24,881 90,160 $ 121,669 $ 111,002 623,252 1,869 $ 625,121	Amounts in Thousands of New Taiwan Dollars Administrative Expenses Research and Development Expenses Total $ 51,146 $ 49,255 $ 263,730 993 156 13,954 24 23 19,447 3,830 － 58,243 5,860 4,634 22,142 3,612 13,397 27,362 14,428 16,479 37,735 1,413 1,933 8,774 337 127 6,528 15,391 117 16,574 － － 58,603 24,635 24,881 90,160 $ 121,669 $ 111,002 623,252 1,869 $ 625,121
			$ 263,730 13,954 19,447 58,243 22,142 27,362 37,735 8,774 6,528 16,574 58,603 90,160
			623,252 1,869
			$ 625,121

Note: None of the balances of each item is greater than 5% of this account balance.

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