Thinking Electronic Industrial Company Limited and Subsidiaries

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

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The entities that are required to be included in the consolidated financial statements of affiliates as of and for the year ended December 31, 2022, under the “Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are all the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standard No. 10 “Consolidated Financial Statements”. In addition, the information required to be disclosed in the consolidated financial statements has all been disclosed in the consolidated financial statements of the parent and subsidiary companies. Consequently, Thinking Electronic Industrial Co., Ltd. and its subsidiaries did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

Thinking Electronic Industrial Co., Ltd.

Sui, Tai-Zhong Chairman March 22, 2023

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Thinking Electronic Industrial Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Thinking Electronic Industrial Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, 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 consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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

Recognition of revenue from export sales

The Group’s principal business is the manufacturing and selling of passive components. The consolidated revenue mainly comes from export sales. Since the sales locations include Asian and European markets, the recognition of its export sales requires more control mechanisms; therefore, we have considered the authenticity of the recognized export sales of specific customers as a key audit matter. For the accounting policy on revenue recognition, refer to Note 4 (l) to the financial statements.

Our main audit procedures performed in response to the above-mentioned key audit matter included the following:

We understood and tested the effectiveness of the management’s internal control process that is related to the authenticity of the recognized export sales.
We selected samples from the sales details from export sales and examined the shipping documents and receipt certificates to confirm the authenticity of the export sales.
We verified that the revenue amounts recognized in the export sales ledger were the same as the data recorded in the accounts receivable ledger.

Other Matter

We have also audited the parent company only financial statements of the Company as of and for the years ended December 31, 2022 and 2021, on which we have issued an unmodified opinion and unmodified opinion with emphasis of matter paragraph, respectively.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the FSC, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audits resulting in this independent auditors’ report are Jia-Ling Chiang and Chiu-Yen Wu.

Deloitte & Touche Taipei, Taiwan Republic of China

March 22, 2023

Notice to Readers

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

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 , 7 and 29) Financial assets at amortized cost - current (Notes 4 and 8 ) Notes receivable (Notes 10 and 31) Accounts receivable, net (Notes 4 and 10) Other receivables Other receivables from related parties (Note 30) Current tax assets (Notes 4 and 25) Inventories (Notes 4 and 11) Other financial assets - current (Notes 12 and 31) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 9) Financial assets at amortized cost - non-current (Notes 4 and 8) Property, plant and equipment (Notes 4, 14, 31 and 32) Right-of-use assets (Notes 4 and 15) Investment property, net (Notes 4 and 16) Computer software, net (Note 4) Deferred tax assets (Notes 4 and 25) Prepayments for equipment Net defined benefit assets - non-current (Notes 4 and 21) Other financial assets - non-current (Notes 12 and 31) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 4, 17 and 31) Financial liabilities at fair value through profit or loss - current (Notes 4, 7 and 29) Notes payable (Note 18) Accounts payable (Note 18) Accounts payable to related parties (Note 30) Other payables (Note 19) Other payables to related parties (Note 30) Current tax liabilities (Notes 4 and 25) Lease liabilities - current (Notes 4 and 15) Current portion of long-term borrowings (Notes 4 and 17) Refund liabilities - current (Notes 4 and 20) Other current liabilities (Notes 4 and 27) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 4 and 17) Deferred tax liabilities (Notes 4 and 25) Lease liabilities - non-current (Notes 4 and 15) Long-term deferred revenue (Notes 4 and 27) Guarantee deposits received Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 13 and 22) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable owners of the Company NON-CONTROLLING INTERESTS (Notes 4, 13 and 22) Total equity TOTAL		December 31, 2022		December 31, 2021
		Amount % $ 3,573,120 26 1,007,201 7 88,058 1 323,739 2 1,924,152 14 55,915 - - - 7,883 - 1,664,792 12 285,739 2 205,467 2 9,136,066 66 25,723 - 484,318 4 3,219,260 24 381,309 3 40,176 - 42,449 - 183,472 1 185,714 2 9,530 - 20,974 - 28,825 - 4,621,750 34 $ 13,757,816 100 $ 708,000 5 92,340 1 69,827 1 384,807 3 1 - 727,311 5 4,113 - 152,139 1 41,563 - 14,458 - 84,696 1 19,858 - 2,299,113 17 1,022,218 7 1,367,671 10 85,285 1 33,228 - 1,679 - 5,175 - 2,515,256 18 4,814,369 35 1,281,127 9 352,907 3 1,316,508 9 222,378 2 5,776,786 42 7,315,672 53 (140,627) (1) 8,809,079 64 134,368 1 8,943,447 65 $ 13,757,816 100		Amount % $ 2,578,973 20 1,525,486 13 - - 327,135 3 1,884,670 15 44,989 - 145 - 11,137 - 1,945,627 15 367,328 3 165,292 1 8,850,782 70 36,273 - 347,661 3 2,619,638 21 237,535 2 46,060 - 48,075 - 141,304 1 220,855 2 4,894 - 88,091 1 28,717 - 3,819,103 30 $ 12,669,885 100 $ 749,630 6 - - 131,126 1 474,584 4 45 - 679,232 5 4,673 - 114,694 1 37,141 - - - 92,669 1 25,578 - 2,309,372 18 688,100 6 1,287,305 10 75,234 - 26,998 - 1,348 - 5,175 - 2,084,160 16 4,393,532 34 1,281,127 10 352,907 3 1,159,089 9 201,436 2 5,386,452 43 6,746,977 54 (222,378) (2) 8,158,633 65 117,720 1 8,276,353 66 $ 12,669,885 100

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4 and 23) OPERATING COSTS (Notes 11, 24 and 30) GROSS PROFIT OPERATING EXPENSES (Notes 4, 10, 24 and 30) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain) Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 24, 27 and 30) Interest income Other income Other gains and losses Finance costs Total non-operating income and expenses CONSOLIDATED PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 25) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 22 and 25) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Income tax related to items that will not be reclassified subsequently to profit or loss		2022 Amount % $ 7,463,135 100 4,829,759 65 2,633,376 35 298,181 4 603,989 8 326,395 4 4,634 - 1,233,199 16 1,400,177 19 100,827 1 69,808 1 243,107 3 (17,175) - 396,567 5 1,796,744 24 406,766 5 1,389,978 19 3,093 - (10,550) - (618) - (8,075) -		2021
				Amount % $ 7,500,455 100 4,261,024 57 3,239,431 43 282,129 4 536,436 7 298,071 4 (2,040) - 1,114,596 15 2,124,835 28 88,523 1 34,309 1 (76,768) (1) (11,565) - 34,499 1 2,159,334 29 568,711 8 1,590,623 21 (4,465) - (3,208) - 220 - (7,453) - (Continued)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Income tax related to items that may be reclassified subsequently to profit or loss Other comprehensive income (loss) for the year, net TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Non-controlling interests EARNINGS PER SHARE (Note 26) Basic Diluted			2022 Amount % 115,376 1 (23,075) - 92,301 1 84,226 1 1,474,204 20 1,373,833 19 16,145 - 1,389,978 19 1,457,556 20 16,648 - 1,474,204 20 $ 10.72 $ 10.66		2021
		$			Amount % $ (22,168) - 4,434 - (17,734) - (25,187) - $ 1,565,436 21 $ 1,577,307 21 13,316 - $ 1,590,623 21 $ 1,553,244 21 12,192 - $ 1,565,436 21 $ 12.31 $ 12.25


		$
		$
		$
		$
		$

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

(Concluded)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

		Equity Attributable to Ow	ners of the Company	ners of the Company
Ordinary Shares Capital Surplus $ 1,281,127 $ 348,263 - - - - - - - - - - - - - - - 4,644 1,281,127 352,907 - - - - - - - - - - - - - - $ 1,281,127 $ 352,907		Retained Earnings			Other Equity	Total Other Equity $ (201,436) - - - - - (20,942) (20,942) - (222,378) - - - - - 81,751 81,751 $ (140,627)
				Exchange Differences on Translation of Foreign Operations $ (206,975) - - - - - (17,734) (17,734) - (224,709) - - - - - 92,301 92,301 $ (132,408)	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income $ 5,539 - - - - - (3,208) (3,208) - 2,331 - - - - - (10,550) (10,550) $ (8,219)
	Legal Reserve $ 1,020,206 138,883 - - 138,883 - - - - 1,159,089 157,419 - - 157,419 - - - $ 1,316,508	Special Reserve Unappropriated Earnings $ 284,655 $ 4,572,550 - (138,883) - (704,620) (83,219) 83,219 (83,219) (760,284) - 1,577,307 - (3,121) - 1,574,186 - - 201,436 5,386,452 - (157,419) 20,942 (20,942) - (807,110) 20,942 (985,471) - 1,373,833 - 1,972 - 1,375,805 $ 222,378 $ 5,776,786	Total Retained Earnings $ 5,877,411 - (704,620) - (704,620) 1,577,307 (3,121) 1,574,186 - 6,746,977 - - (807,110) (807,110) 1,373,833 1,972 1,375,805 $ 7,315,672

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

CASH FLOWS FROM OPERATING ACTIVITIES Consolidated income before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss (gain) Net loss on financial assets or liabilities at fair value through profit or loss Finance costs Interest income Dividend income Gain on disposal of property, plant and equipment Loss on inventories Reversal of refund liabilities Amortization of grants income Other non-cash items Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Accounts receivable Other receivables Other receivables from related parties Inventories Other current assets Net defined benefit asset Notes payable Accounts payable Accounts payable to related parties Other payables Other payables to related parties Other current liabilities Refund liabilities Cash generated from operations Interest received Interest paid Income taxes paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortized cost Proceeds from disposal of financial assets at amortized cost Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss	2022 $ 1,796,744 370,789 10,690 4,634 2,165 17,175 (100,827) (988) (13,785) 318,331 - (1,084) (16) (2,075) 3,396 (44,166) 866 145 (39,607) (40,175) (1,543) (61,299) (89,777) (44) 27,457 (560) (5,720) (7,973) 2,142,753 89,035 (12,132) (351,557) 1,868,099 (306,511) 93,967 (4,208,837) 4,837,254	2021 $ 2,159,334 313,331 8,536 (2,040) - 11,565 (88,523) - (5,476) 143,275 (47,912) (1,080) (256) - 261,148 (38,580) (664) (145) (822,303) (82,094) (1,429) (64,739) 24,663 45 114,213 4,188 14,129 (30,398) 1,868,788 77,068 (9,098) (362,684) 1,574,074 (346,514) 83,366 (6,614,943) 6,666,177 (Continued)

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THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of right-of-use assets Increase in other financial assets Decrease in other financial assets Increase in other non-current assets Dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Proceeds from long-term borrowings Increase in guarantee deposits received Repayments of the principal portion of lease liabilities Cash dividends paid Acquisition of subsidiary Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT THE END OF YEAR	2022 $ (874,188) 59,635 (4,874) (95,320) - 104,660 (108) 988 (393,334) 742,100 (783,730) 351,240 331 (48,971) (807,110) - (546,140) 65,522 994,147 2,578,973 $ 3,573,120	2021 $ (852,859) 26,246 (12,684) - (258,978) - (11,697) - (1,321,886) 4,480,200 (4,236,540) 353,540 257 (32,375) (704,620) (29,250) (168,788) (9,775) 73,625 2,505,348 $ 2,578,973

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

(Concluded)

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THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Amounts in Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Thinking Electronic Industrial Co., Ltd. (the “Company”) was incorporated in July 1979. The Company mainly manufactures, processes and sells electric devices, thermistors, varistors and wires.

The Company’s shares have been listed on the Taiwan Stock Exchange since September 2000.

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

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on March 22, 2023.

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

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

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the accounting policies of the Company and its subsidiaries (collectively referred to as the “Group”):

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

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

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

The amendments specify that the Group should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;
The Group may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and
Not all accounting policy information relating to material transactions, other events or conditions is itself material.

The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

a) The Group changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;
b) The Group chose the accounting policy from options permitted by the standards;
c) The accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;
d) The accounting policy relates to an area for which the Group is required to make significant judgements or assumptions in applying an accounting policy, and the Group discloses those judgements or assumptions; or
e) The accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.
2) Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Group may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Group uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

3) Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

The amendments clarify that the initial recognition exemption under IAS 12 does not apply to transactions in which equal taxable and deductible temporary differences arise on initial recognition. The Group shall recognize a deferred tax asset (to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized) and a deferred tax liability for all deductible and taxable temporary differences associated with leases and decommissioning obligations on January 1, 2022, and the Group shall recognize the cumulative effect of initial application in retained earnings at that date. The Group shall apply the

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amendments prospectively to transactions other than leases and decommissioning obligations that occur on or after January 1, 2022. The Group shall restate its comparative information when it initially applies the aforementioned amendments.

Upon initial application of the aforementioned amendments, the anticipated impact on the current year is set out below:

Impact on assets, liabilities and equity December 31, 2022 Deferred tax assets Total effect on assets Deferred tax liabilities Total effect on liabilities Retained earnings Total effect on equity January 1, 2022 Deferred tax assets Total effect on assets Deferred tax liabilities Total effect on liabilities Retained earnings Total effect on equity Impact on total comprehensive income for the year ended December 31, 2022 Income tax expense Total effect on net profit for the year Total effect on total comprehensive income for the year	Carrying Amount $ 183,472 $ 13,757,816 $ 1,367,671 $ 4,814,369 $ 7,315,672 $ 8,943,447 $ 141,304 $ 12,669,885 $ 1,287,305 $ 4,393,532 $ 6,746,977 $ 8,276,353 $ 406,766 1,389,978 $ 1,474,204	Adjustments Arising from Initial Application $ 10,740 $ 10,740 $ 10,216 $ 10,216 $ 524 $ 524 $ 10,945 $ 10,945 $ 10,618 $ 10,618 $ 327 $ 327 $ (197) 197 $ 197	Adjusted Carrying Amount $ 194,212 $ 13,768,556 $ 1,377,887 $ 4,824,585 $ 7,316,196 $ 8,943,971 $ 152,249 $ 12,680,830 $ 1,297,923 $ 4,404,150 $ 6,747,304 $ 8,276,680 $ 406,569 1,390,175 $ 1,474,401

(Continued)

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Impact on net profit attributable to: Owners of the Company Non-controlling interests Impact on total comprehensive income attributable to: Owners of the Company Non-controlling interests	Carrying Amount $ 1,373,833 16,145 $ 1,389,978 $ 1,457,556 16,648 $ 1,474,204	Adjustments Arising from Initial Application $ 197 - $ 197 $ 197 - $ 197	Adjusted Carrying Amount $ 1,374,030 16,145 $ 1,390,175 $ 1,457,753 16,648 $ 1,474,401 (Concluded)

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

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

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

New IFRSs
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between An Investor and Its Associate or Joint Venture”

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

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

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

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

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

Effective Date
Announced by IASB (Note 1)

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

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

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” (referred to as the “2020 amendments”) and “Non-current Liabilities with Covenants” (referred to as the “2022 amendments”)

The 2020 amendments clarify that for a liability to be classified as non-current, the Group shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Group will exercise that right.

The 2020 amendments also stipulate that, if the right to defer settlement is subject to compliance with specified conditions, the Group must comply with those conditions at the end of the reporting period

15 -

even if the lender does not test compliance until a later date. The 2022 amendments further clarify that only covenants with which an entity is required to comply on or before the reporting date should affect the classification of a liability as current or non-current. Although the covenants to be complied with within twelve months after the reporting period do not affect the classification of a liability, the Group shall disclose information that enables users of financial statements to understand the risk of the Group that may have difficulty complying with the covenants and repay its liabilities within twelve months after the reporting period.

The 2020 amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Group’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Group’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32 “Financial Instruments: Presentation”, the aforementioned terms would not affect the classification of the liability.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of Compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

b. Basis of preparation

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

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

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

Current assets include:

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

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
3) Liabilities for which the Group 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.

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

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

See Note 13, Table 5 and 6 for detailed information on subsidiaries (including percentages of ownership and main businesses).

e. Foreign currencies

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

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

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when fair value is determined. Exchange differences arising from the

17 -

retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

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

For the purposes of presenting the consolidated financial statements, the functional currencies of the Company and its foreign operations (including subsidiaries in other countries that use currencies which are 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; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income attributed to the owners of the company and non-controlling interests.

On the disposal of a foreign operation (i.e., a disposal of the Company’s entire interest in a foreign operation, or a disposal involving the loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

f. Inventories

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

g. Property, plant, and equipment

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

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

Freehold land is not depreciated.

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting year, with the effects of any changes in the estimates accounted for on a prospective basis.

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

h. Investment properties

Investment properties are properties held to earn rental and/or for capital appreciation.

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Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

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

i. Intangible assets

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

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

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

j. Impairment of property, plant and equipment, right-of-use assets, investment properties and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use assets, investment properties and intangible assets to determine whether there is any indication that those 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to individual cash-generating units or the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

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

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

k. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance 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.

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1) Financial assets

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

a) Measurement category

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

i Financial asset at FVTPL

Financial asset is classified as at FVTPL when such a financial asset is mandatorily classified as at FVTPL, which are not designated as instruments and derivative financial instruments that do not meet the amortized cost criteria or the FVOTCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends and interest earned on such financial assets are recognized in other income and interest income, respectively; any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 29.

ii Financial assets at amortized cost

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

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

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

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.

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

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

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash

20 -

and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii Investments in equity instruments at FVTOCI

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

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

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

b) Impairment of financial assets

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

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

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

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

i Internal or external information show that the debtor is unlikely to pay its creditors.
ii When a financial asset is more than 180 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

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

c) Derecognition of financial assets

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

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

2) Financial liabilities
a) Subsequent measurement

Except financial liabilities at FVTPL, all financial liabilities are measured at amortized cost using the effective interest method. Financial liabilities at FVTPL including financial liabilities held for trading are stated at fair value, and any gains or losses on such financial liabilities are recognized in other gains or losses.

Fair value is determined in the manner described in Note 29.

b) Derecognition of financial liabilities

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

3) Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including forward exchange contracts and interest rate swaps contracts.

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument; in which event. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of IFRS 9 (e.g., financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts, and the host contracts are not measured at FVTPL.

l. Revenue recognition

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

Revenue from sale of goods comes from sales of thermistors and varistors. Sales of thermistors and varistors are recognized as revenue when the goods are shipped or delivered to the customer’s specific location because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers, and bears the risks of obsolescence. Accounts receivable are recognized simultaneously.

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

Refund liabilities are based on the historical experience and different contract items to estimate the probable sales returns and allowance.

m. Leases

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease. For a contract that contains a lease component and non-lease components, the Group allocates the consideration in the contract to each component on the basis of the relative stand-alone price and accounts for each component separately.

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

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

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

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

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

n. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

o. Government grants

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

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Government grants related to income are recognized in other income on a systematic basis over the period in which the group recognized as expense the related cost that the grants intend to compensate. Specifically, government grants whose primary condition is that the group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

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

The benefit of a government loan received at a below-market rate of interest in treated as a government grant measured as the difference between the proceeds received and the fair value of the loan base on prevailing market interest rate.

p. Employee benefits
1) Short-term employee benefits

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

2) Retirement benefits

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

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

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

q. Taxation

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

1) Current tax

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

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

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

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2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

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

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

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

3) Current and deferred taxes

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts Demand deposits	December 31
	2022 2021 $ 4,563 $ 4,542 74 74 2,490,333 1,881,201 (Continued)

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Cash equivalents Time deposits with original maturities of 3 months or less The annual interest rate of time deposits (%)		December 31	December 31
		2022 $ 1,078,150 $ 3,573,120 2.00-2.74	2021 $ 693,156 $ 2,578,973 0.62-3.00 (Concluded)

The Group transacted with variety of financial institutions which are high credit quality to disperse credit risk, hence, there was no expected credit loss.

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets-current Financial assets mandatorily classified as at FVTPL Hybrid financial assets Structured deposits (a) Derivative instruments (non-designated hedges) Swap contracts (c) Financial liabilities-current Financial assets mandatorily classified as at FVTPL Derivative instruments (non-designated hedges) Swap contracts (c) Forward exchange contracts (b)		December 31	December 31
		2022 $ 914,951 92,250 $ 1,007,201 $ 92,273 67 $ 92,340	2021 $ 1,525,486 - $ 1,525,486 $ - - $ -

a. Structured deposits combined with embedded derivatives which have no direct connection to major contract. Because of the major contract include in above financial assets should be measured under IFRS 9, based on this reason, the entire contract should mandatorily classified as at FVTPL.
b. At the end of the year, outstanding forward exchange contracts not under hedge accounting were as follows:

December 31, 2022

			Notional Amount
	Currency	Maturity Date	(In Thousands)
Buy	USD/CNY	2023.01	USD3,718/CNY25,901

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c. At the end of the year, outstanding swap contracts not under hedge accounting were as follows:

December 31, 2022

		Notional Amount
Currency	Maturity Date	(In Thousands)
USD/NTD	2023.01	USD3,000/NTD92,122

The Group entered into forward exchange contracts and swap contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities.

Details of profit and loss of financial instruments at FVTPL for the year 2022 and 2021 list on Note 24.

8. FINANCIAL ASSETS AT AMORTIZED COST

Time deposits with original maturities of more than 3 months Current Non-current The annual interest rate (%)		December 31	December 31
		2022 $ 572,376 $ 88,058 484,318 $ 572,376 3.40-4.18	2021 $ 347,661 $ - 347,661 $ 347,661 4.05-4.18

9. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

Investments in equity instruments at FVTOCI Domestic unlisted shares		December	31
		2022 $ 25,723	2021 $ 36,273

These investments in equity instruments are not held for trading or for short-term gains. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI.

10. NOTES AND ACCOUNTS RECEIVABLE

Notesreceivable At amortized cost Gross carrying amount - operating		December 31	December 31
		2022 $ 323,739	2021 $ 327,135

(Continued)

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Accounts receivable-non-related parties At amortized cost Gross carrying amount - operating Less: Allowance for impairment loss		December 31	December 31
		2022 $ 1,953,361 29,209 $ 1,924,152	2021 $ 1,909,195 24,525 $ 1,884,670 (Concluded)

Refer to Note 31 for information related to notes receivable pledged as security.

The Company’s notes receivable and accounts receivable have been measured by amortized cost. Refer to Note 29 for information related to credit management policy.

The Group measures the loss allowance for accounts receivable at an amount equal to lifetime ECLs. The expected credit losses on accounts receivable are estimated using a provision matrix prepared by reference to the past default records of the debtor and an analysis of the debtor’s current financial position, adjusted for economic conditions of the industry in which the debtor operates and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date.

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

There were no notes receivable that were past due and not impaired at the end of the reporting years.

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

December 31, 2022

Expected credit loss rate (%) Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2021 Expected credit loss rate (%) Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Not Past Due 0-0.05 $ 1,807,561 (972) $ 1,806,589 Not Past Due 0-0.05 $ 1,760,170 (987) $ 1,759,183	Past Due 1to 30 Days 0.5 $ 32,562 (164) $ 32,398 Past Due 1to 30 Days 0.5 $ 53,111 (265) $ 52,846	Past Due 31 to 60 Days 1 $ 73,420 (734) $ 72,686 Past Due 31 to 60 Days 1 $ 63,609 (636) $ 62,973	Past Due 61 to 90 Days 30 $ 12,540 (3,762) $ 8,778 Past Due 61 to 90 Days 30 $ 11,916 (3,575) $ 8,341	Past Due 91 to 180 Days 50 $ 7,402 (3,701) $ 3,701 Past Due 91 to 180 Days 50 $ 2,666 (1,339) $ 1,327	Past Due Over 180 Days 100 $ 19,876 (19,876) $ - Past Due Over 180 Days 100 $ 17,723 (17,723) $ -	Total $ 1,953,361 (29,209) $ 1,924,152 Total $ 1,909,195 (24,525) $ 1,884,670

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

Balance at January 1 Net remeasurement (reversal) of loss allowance Foreign exchange gains and losses Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 24,525 4,634 50 $ 29,209	2021 $ 26,595 (2,040) (30) $ 24,525

11. INVENTORIES

December 31 2022 2021 Finished goods $ 749,101 $ 911,822 Work-in-process 293,862 356,743 Semi-finished 276,647 258,283 Raw materials 311,356 380,018 Supplies 27,761 26,468 Inventory in transit 6,065 12,293 $ 1,664,792 $ 1,945,627 The cost of inventories recognized as cost of goods sold were as follows: For the Year Ended December 31 2022 2021 Cost of goods sold $ 4,829,759 $ 4,261,024 Write-off obsolete inventories $ 77,397 66,997 Inventory write-downs 240,934 76,278 Unallocated manufacturing overhead 205 - $ 318,536 $ 143,275		December 31	December 31
		2022 $ 4,829,759 $ 77,397 240,934 205 $ 318,536	2021 $ 4,261,024 66,997 76,278 - $ 143,275

As the actual production capacity was lower than the normal production capacity, unallocated manufacturing overhead was recognized as cost of goods sold in the current year.

12. OTHER FINANCIAL ASSETS

Pledge demand deposits Pledge time deposits Deposits of banker’s acceptance Refundable deposits		December 31	December 31
		2022 $ 100,153 151,700 33,886 20,974 $ 306,713	2021 $ 86,811 305,600 2,608 60,400 $ 455,419

(Continued)

29 -

Current Non-current Interest rate of pledge time deposits (%)		December 31	December 31
		2022 $ 285,739 20,974 $ 306,713 1.195-4.15	2021 $ 367,328 88,091 $ 455,419 0.35-0.57 (Concluded)

For other financial assets pledged information please refer to Note 31.

13. SUBSIDIARIES

Subsidiaries included in the consolidated financial statements were as follows:

Name of Investor
Name of Investee
Main
Businesses and
Products
The Company
Yenyo Technology Co., Ltd. (Yenyo)
Note 1
Greenish Co., Ltd. (Greenish)
Note 2
Thinking (Changzhou) Electronic Co., Ltd.
(Thinking Changzhou)
Note 3
Thinking Holding (Cayman) Co., Ltd.
(Thinking Holding)
Note 2
Thinking Electronic USA, Inc.
(Thinking USA)
Note 4
Greenish
Thinking Changzhou
Note 3
Thinking Holding
Thinking International Co., Ltd.
(Thinking International)
Note 2
Thinking (HK) Enterprises Limited
(Thinking HK)
Note 2
View Full (Samoa) Ltd. (View Full Samoa)
Note 2
Thinking Electronic (Samoa) Ltd.
(Thinking Samoa)
Note 2
Thinking International
Thinking (Yichang) Electronic Co., Ltd.
(Thinking Yichang)
Note 3
Thinking HK
Jiang Xi Thinking Electronic Co., Ltd.
(Jiangxi Thinking)
Note 5
View Full Samoa
Guangdong Welkin Thinking Electronic Co., Ltd.
(Guangdong Welkin Thinking)
Note 6
Dong Guan Welkin Electronic Co., Ltd.
(Dongguan Welkin)
Note 7
Thinking Samoa
Dongguan Welkin
Note 7
Thinking Changzhou
Dongguan Welkin
Note 7
Dongguan Welkin
Welkin Electronic Co., Ltd.
(Zhongshan Welkin)
Note 3

Percentage of Ownership (%)
December 31,
2022
December 31,
2021
Description
63.76
63.76
Note 8
100.00
100.00
47.39
47.39
100.00
100.00
100.00
-
Note 9
52.61
52.61
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
58.34
58.34
10.42
10.42
31.24
31.24
100.00
100.00

Note 1: Processing, selling and manufacturing diodes.

Note 2: International trading and investment.

Note 3: Manufacturing and selling thermistors, varistors and sensors.

Note 4: Electronic product design and marketing.

Note 5: Manufacturing and selling thermistors and varistors.

Note 6: Wholesale of thermistors, varistors, sensors and equipment.

Note 7: Manufacturing and selling thermistors, varistors, sensors and equipment.

30 -
Note 8: In July 2021, the Company acquired 4,500,000 shares of its subsidiary Yenyo from non-controlling interests for $29,250 thousand, and the difference between the amount of consideration and the carrying amount of subsidiaries’ net assets acquired was included in the capital reserve of $4,644 thousand; as a result, its shareholding increased from the original 52.61% to 63.76%. Since the preceding transaction did not change the Company's control over the subsidiary, the Company recognized such transaction as an equity transaction.
Note 9: In order to implement the Group’s global layout plan, the board of directors resolved to set up a new subsidiary in the USA on August 9, 2022, and the total investment amount is expected to be US$3 million. As of December 31, 2022, the Company had invested US$1 million in the subsidiary.

14. PROPERTY, PLANT, AND EQUIPMENT

a. Changes in costs and accumulated depreciation

For the Year ended December 31, 2022

Cost Balance at January 1, 2022 Additions Disposals Effect of foreign currency exchange differences Balance at December 31, 2022 Accumulated depreciation Balance at January 1, 2022 Depreciation expense Disposals Effect of foreign currency exchange differences Balance at December 31, 2022 Carrying amount at December 31, 2022	Land $ 195,719 - - - $ 195,719 $ - - - - $ - $ 195,719	Buildings Machinery and Equipment Leasehold Improvements $ 978,864 $ 2,236,815 $ 142,919 17,208 424,705 4,976 (9,569 ) (130,203 ) (23,925 ) 8,728 19,413 2,070 $ 995,231 $ 2,550,730 $ 126,040 $ 308,750 $ 1,200,021 $ 105,671 41,935 192,438 26,249 (9,540 ) (85,433 ) (23,925 ) 2,154 9,947 1,478 $ 343,299 $ 1,316,973 $ 109,473 $ 651,932 $ 1,233,757 $ 16,567	Others Property under Construction $ 438,799 $ 534,679 40,594 442,481 (14,000 ) - 2,644 1,781 $ 468,037 $ 978,941 $ 293,715 $ - 43,515 - (12,949 ) - 1,412 - $ 325,693 $ - $ 142,344 $ 978,941	Total $ 4,527,795 929,964 (177,697 ) 34,636 $ 5,314,698 $ 1,908,157 304,137 (131,847 ) 14,991 $ 2,095,438 $ 3,219,260

For the Year ended December 31, 2021

Cost Balance at January 1, 2021 Additions Disposals Effect of foreign currency exchange differences Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expense Disposals Effect of foreign currency exchange differences Balance at December 31, 2021 Carrying amount at December 31, 2021	Land $ 195,719 - - - $ 195,719 $ - - - - $ - $ 195,719	Buildings Machinery and Equipment Leasehold Improvements $ 943,625 $ 2,009,737 $ 141,503 39,033 312,645 1,881 (1,905 ) (81,228 ) - (1,889) (4,339) (465) $ 978,864 $ 2,236,815 $ 142,919 $ 271,747 $ 1,103,534 $ 77,716 39,336 159,380 28,158 (1,905 ) (60,657 ) - (428) (2,236) (203) $ 308,750 $ 1,200,021 $ 105,671 $ 670,114 $ 1,036,794 $ 37,248	Others Property under Construction $ 384,268 $ 210,310 61,996 324,575 (7,116 ) - (349) (206) $ 438,799 $ 534,679 $ 257,198 $ - 43,746 - (6,917 ) - (312) - $ 293,715 $ - $ 145,084 $ 534,679	Total $ 3,885,162 740,130 (90,249 ) (7,248) $ 4,527,795 $ 1,710,195 270,620 (69,479 ) (3,179) $ 1,908,157 $ 2,619,638

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In January 2019, the board of directors of the Company approved the investment plan for the Nanzih Plant in Kaohsiung, and the estimated investment amount increased to 1,000,000 thousand in January 2021, which had not been completed and accepted as of the reporting date, and the actual project contract request was included in the property under construction.

A reconciliation of the above-mentioned increase in property, plant and equipment and the amount paid in the consolidated statements of cash flows is as follows:

Investing activities that affected both cash and non-cash items Additions to property, plant, and equipment Increase in payables for equipment (in other payables) Increase (decrease) in prepayments for equipment Capitalization of depreciation Payments of acquisition of property, plant and equipment	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 929,964 (20,050) (35,141) (585) $ 874,188	2021 $ 740,130 (14,595) 127,908 (584) $ 852,859

b. Useful lives

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

Buildings Main plants 20-60 years Improvement engineering 2-60 years Machinery and equipment 3-12 years Leasehold improvements 10 years Others 2-10 years

c. As of December 31, 2022 and 2021, the Group didn’t provide property, plant and equipment as guarantee.

15. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Buildings Additions to right-of-use assets Decrease in right-of-use assets		December 31	December 31
	2022 $ 316,304 65,005 $ 381,309 For the Year Ended		2021 $ 183,220 54,315 $ 237,535 December 31
		2022 $ 204,268 $ 2,387	2021 $ 21,598 $ 422

(Continued)

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Depreciation charge for right-of-use assets Land Buildings	For the Year Ended	For the Year Ended	December 31
		2022 $ 7,962 52,758 $ 60,720	2021 $ 5,103 31,530 $ 36,633 (Concluded)

Except for the recognized depreciation, additions and reduction, the Group did not have impairment or subleasing of right-of-use assets for the years ended December 31, 2022 and 2021.

b. Lease liabilities

Carrying amount Current Non-current Range of discount rates for lease liabilities was as follows:		December	31
		2022 $ 41,563 $ 85,285	2021 $ 37,141 $ 75,234

Land Buildings	December 31
	2022 2021 0.75-1.38 0.75-1.38 4.70-6.04 5.10-6.04

c. Material leasing activities and terms

The Group leases land and buildings for the use of plants and offices.

1) Land

The land is located in Nanzih Export Processing Zone with the remaining useful life of 3 to 7 years. The government reserves the right to adjust rent according to the assessed land value.

The right-of-use land is located in mainland China with the remaining useful life of 32 to 50 years.

2) Buildings

The building is located in mainland China with the remaining useful life of 1 to 3 years. The lease payments will be adjusted every 3 years based on the changes in market rental rates.

The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease period. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

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d. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	For the Year Ended	For the Year Ended	December 31
		2022 $ 5,012 $ 608 $ 155,638	2021 $ 5,265 $ 580 $ 42,277

Lease arrangements under operating leases for the leasing out of investment properties are presented in Note 16.

16. INVESTMENT PROPERTIES

Cost Balance at January 1 Effect of foreign currency exchange differences Balance at December 31 Accumulated depreciation Balance at January 1 Depreciation expense Effect of foreign currency exchange differences Balance at December 31 Carrying amount at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ 113,697 1,492 $ 115,189 $ 67,637 6,517 859 $ 75,013 $ 40,176	2021 $ 114,077 (380) $ 113,697 $ 61,167 6,662 (192) $ 67,637 $ 46,060

Depreciation is provided on a straight-line basis over the estimated useful lives of 5-22 years.

The Group has buildings located in Beijing, Suzhou, and Nanchang, China with fair values that are not evaluated by an independent valuer but valued by the management using the valuation model that market participants would use in determining the fair value, and the fair value was measured using Level 3 inputs. The valuation was arrived at by reference to market evidence of transaction prices for similar properties. The calculated fair value was $96,440 thousand and $107,995 thousand as of December 31, 2022 and 2021, respectively.

17. BORROWINGS

a. Short-term borrowings

Secured loans (Note 31) Credit loans		December 31	December 31
		2022 $ 108,000 600,000 $ 708,000	2021 $ 249,630 500,000 $ 749,630 (Continued)

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The annual interest rate (%) Secured loans Credit loans b. Long-term borrowings Credit loans Less: Government grants discount Current portion of long-term borrowings The annual interest rate (%)		December 31	December 31
		2022 2021 1.5 0.34 1.09-1.80 0.68-0.72 (Concluded) December 31
		2022 $ 1,051,780 15,104 14,458 $ 1,022,218 0.975	2021 $ 700,540 12,440 - $ 688,100 0.35

Borrowings under the “Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan” have interest at prime rate and are used for capital expenditures and operating turnovers. The details of relevant loan contract are as follows:

1) Credit period: The credit period is from October 2020 to October 2027, and the credit line is $1,264,000 thousand, which is a revolving loan allowing separate drawdowns, and all credits will expire in October 2027.
2) Borrowing interest rate: For the first 5 years from the date of initial drawdown, after the reduction of the variable interest rate of 0.495% based on the two-year fixed deposit interest rate of Chunghwa Post Co., Ltd. On the sixth year, when variable interest rate increases by 0.005% based on the two-year fixed deposit interest rate of Chunghwa Post Co., Ltd. The Company calculates its fair value with an annual interest rate of general condition which was 1.47% and 0.845% as of December 31, 2022 and 2021, respectively.
3) Repayment method: Monthly installments start on the fourth year from the date of initial drawdown until October 2027.
4) Each annual repayment plan drawdown is as follows:

Repayment year 2023 (November-December) 2024 2025 2026 2027 (January-October)		Amounts of Repayment
		$ 14,458 131,589 286,741 331,610 287,382 $ 1,051,780

35 -

18. NOTES PAYABLE AND ACCOUNTS PAYABLE

The Group’s notes payable and accounts payable were from operating activities and were not secured by collaterals.

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms; therefore, no interest was charged on the outstanding accounts payable.

19. OTHER PAYABLES

Payable for salaries and bonuses Payable for purchase of equipment Payable for employees’ compensation Payable for remuneration of directors Others		December 31	December 31
		2022 $ 392,695 80,015 79,543 23,242 151,816 $ 727,311	2021 $ 342,391 59,965 91,100 26,800 158,976 $ 679,232

20. REFUND LIABILITIES

Balance at January 1 Reversed Usage Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ 92,669 - (7,973) $ 84,696	2021 $ 170,979 (47,912) (30,398) $ 92,669

The discount on refund liabilities was based on historical experience, management’s judgments and other known reasons to estimate sales compensation and offset refund liability when compensation actually occurs.

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plans
1) The Company and Yenyo of the Group adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.
2) Thinking Changzhou, Dongguan Welkin, Thinking Yichang, Jiangxi Thinking, Guangdong Welkin Thinking and Zhongshan Welkin of the Group make contributions in accordance with the local regulations. The subsidiaries are required to contribute a specified percentage of salaries to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan are to make the specified contributions.
36 -

b. Defined benefit plans

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

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit assets		December 31	December 31
		2022 $ 104,610 (114,140) $ (9,530)	2021 $ 102,739 (107,633) $ (4,894)

Movements in net defined benefit assets were as follows:

	Present Value	Present Value
	of the Defined
		Benefit	Fair Value of	Net Defined
	Obligation		the Plan Assets	Benefit Assets
Balance at January 1, 2021	$	97,584	$ (105,514)	$	(7,930)
Service cost
Current service cost		104	-		104
Net interest expense (income)		759	(827)		(68)
Recognized in profit or loss		863	(827)		36
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-	(1,058)		(1,058)
Actuarial loss - changes in financial
assumptions		1,346	-		1,346
Actuarial loss - experience adjustments		4,177	-		4,177
Recognized in other comprehensive income		5,523	(1,058)		4,465
Contributions from the employer		-	(1,465)		(1,465)
Benefits paid		(1,231)	1,231		-
Balance at December 31, 2021		102,739	(107,633)		(4,894)
					(Continued)

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	Present Value	Present Value
	of the Defined
		Benefit	Fair Value of		Net Defined
	Obligation		the Plan Assets		Benefit Assets
Service cost
Current service cost	$	102	$	-	$	102
Net interest expense (income)		623		(669)		(46)
Recognized in profit or loss		725		(669)		56
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-		(8,381)		(8,381)
Actuarial loss - changes in financial
assumptions		(3,434)		-		(3,434)
Actuarial loss - experience adjustments		8,722		-		8,722
Recognized in other comprehensive income		5,288		(8,381)		(3,093)
Contributions from the employer		-		(1,599)		(1,599)
Benefits paid		(4,142)		4,142		-
Balance at December 31, 2022	$	104,610	$ (114,140)		$	(9,530)
						(Concluded)

Through the defined benefit plans under the Labor Standards Law, the Company and Yenyo of the Group are exposed to the following risks:

1) Investment risk

The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets shall not be below the interest rate for a 2-year time deposit with local banks.

2) Interest risk

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

3) Salary risk

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

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

38 -

Discount rate (%) Expected rate of salary increase (%)	December 31
	2022 2021 1.25 0.50-0.65 2.00-3.00 2.00-3.00

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

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase (decrease) 1% increase 1% decrease		December	31
		2022 $ (1,248) $ 1,285 $ 5,290 $ (4,797)	2021 $ (1,571) $ 1,622 $ 6,654 $ (5,982)

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

The expected contributions to the plans for the next year Average duration of the defined benefit obligation (years)		December	31
		2022 $ 2,130 8-10	2021 $ 1,440 9-12

22. EQUITY

a. Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2022 200,000 $ 2,000,000 128,113 $ 1,281,127	2021 200,000 $ 2,000,000 128,113 $ 1,281,127

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

39 -

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends,or transferred to ordinaryshares(Note) Conversion of bonds Issuance of ordinary shares Treasury share transactions Difference between consideration and carrying amount of the subsidiaries acquired		December 31	December 31
		2022 $ 265,446 59,168 23,649 4,644 $ 352,907	2021 $ 265,446 59,168 23,649 4,644 $ 352,907

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

c. Retained earnings and dividend policy

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

The Company’s dividend policy is also designed to meet the current and future development plans and takes into consideration the investment environment, capital needs, domestic or international competitive conditions while simultaneously meeting shareholders’ interests. The Company shall distribute the dividends at no less than 30% of the distributable earnings of the current year. The way to distribute dividends could be either through cash or shares, and cash dividends shall not be less than 20% of total dividends.

Items referred to under Rule No. 1090150022 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and thereafter distributed.

The legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of earnings for 2021 and 2020 were approved in the shareholders’ meeting on June 16, 2022 and July 29, 2021, respectively. The appropriations of earnings for 2021 and 2020 were as follows:

40 -

Legal reserve Special reserve Cash dividends	Appropriation of Earnings For the Year Ended 2021 2020 $ 157,419 $ 138,883 20,942 (83,219) 807,110 704,620 $ 985,471 $ 760,284	Appropriation of Earnings For the Year Ended 2021 2020 $ 157,419 $ 138,883 20,942 (83,219) 807,110 704,620 $ 985,471 $ 760,284	Dividend Per Share (NT$)
		For the Year	For the Year Ended
		2021 $ 157,419 20,942 807,110 $ 985,471	2021 2020 $ 6.3 $ 5.5

The appropriations of earnings for 2022 were proposed by the Company’s board of directors on March 22, 2023. The appropriation and dividends per share were as follows:

	Appropriation	Dividend Per
	of Earnings	Share (NT$)
Legal reserve	$ 137,581
Special reserve	(81,751)
Cash dividends	691,809	$ 5.4
	$ 747,639

The appropriations of earnings for 2022 are subject to the resolution of the shareholders in their meeting to be held on June 13, 2023.

d. Other equity items

1) Exchange differences on translation of foreign operations

Balance at January 1 Recognized for the year Exchange differences on translation of the financial statements of foreign operations Income tax benefit (expenses) relating to exchange differences arising on translation of foreign operations Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ (224,709) 115,376 (23,075) $ (132,408)	2021 $ (206,975) (22,168) 4,434 $ (224,709)

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

Balance at January 1 Unrealized valuation loss on financial assets at FVTOCI Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ 2,331 (10,550) $ (8,219)	2021 $ 5,539 (3,208) $ 2,331

41 -

e. Non-controlling interests

Balance at January 1 Share in gain for the year Other comprehensive income during the year Acquisition of ownership interests in subsidiaries (Note 13) Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ 117,720 16,145 503 - $ 134,368	2021 $ 139,422 13,316 (1,124) (33,894) $ 117,720

23. OPERATING REVENUE

Revenue from contracts with customers Revenue from sale of goods Service revenue	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 7,462,925 210 $ 7,463,135	2021 $ 7,500,274 181 $ 7,500,455

a. Refer to Note 4 (l) for information related to contracts with customers.

b. Contract balances

December 31, 2022 December 31, 2021 Notes and accounts receivable (Note 10) $ 2,247,891 $ 2,211,805	January 1, 2021 $ 2,432,303

c. Disaggregation of revenue

For the year ended December 31, 2022

Reportable Segments Thinking Yenyo Thinking Changzhou Guangdong Welkin Thinking Dongguan Welkin Others	Type of revenue	Type of revenue
	Revenue from Sale of Passive Components $ 3,116,111 395,945 1,812,397 638,022 1,193,541 306,909 $ 7,462,925	Service Revenue $ 210 - - - - - $ 210	Total $ 3,116,321 395,945 1,812,397 638,022 1,193,541 306,909 $ 7,463,135

42 -

For the year ended December 31, 2021

Reportable Segments Thinking Yenyo Thinking Changzhou Guangdong Welkin Thinking Others	Type of revenue	Type of revenue
	Revenue from Sale of Passive Components $ 3,230,807 298,403 1,770,357 1,695,602 505,105 $ 7,500,274	Service Revenue $ 181 - - - - $ 181	Total $ 3,230,988 298,403 1,770,357 1,695,602 505,105 $ 7,500,455

24. CONSOLIDATED NET PROFIT

Consolidated net profit included following items:

a. Interest income

Bank deposits Financial assets at fair value through profit or loss Financial assets at amortized cost Others	For the Year Ended	For the Year Ended	December 31
		2022 $ 44,611 37,794 17,555 867 $ 100,827	2021 $ 22,881 52,951 10,328 2,363 $ 88,523

b. Other income

Grants Rental income Dividend income Overpayment Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 35,647 5,111 988 10,937 17,125 $ 69,808	2021 $ 10,371 5,382 - - 18,556 $ 34,309

c. Other gains and losses

Loss on financial assets at fair value through profit or loss Foreign exchange gains (losses), net Gain on disposal of property, plant and equipment, net Others	For the Year Ended	For the Year Ended	December 31
		2022 $ (2,165) 240,666 13,785 (9,179) $ 243,107	2021 $ - $ (71,405) 5,476 (10,839) $ (76,768)

43 -

d. Finance costs

For the Year Ended	For the Year Ended	December 31
2022 $ 5,727 16,417 22,144 4,969 $ 17,175 For the Year Ended		2021 $ 4,057 8,797 12,854 1,289 $ 11,565 December 31
2022 $ 4,969 0.35-1.23 For the Year Ended		2021 $ 1,289 0.35-1.23 December 31
	2022 $ 304,137 60,720 6,517 10,690 382,064 585 $ 381,479 $ 288,222 76,050 6,517 $ 370,789 $ 3,988 6,702 $ 10,690	2021 $ 270,620 36,633 6,662 8,536 322,451 584 $ 321,867 $ 241,372 65,297 6,662 $ 313,331 $ 3,347 5,189 $ 8,536

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f. Employee benefits expense

Short-term employee benefits Salary Others Retirement benefits Defined contribution plans Defined benefit plans (Note 21) An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 1,778,707 192,197 1,970,904 101,462 56 101,518 $ 2,072,422 $ 1,315,225 757,197 $ 2,072,422	2021 $ 1,742,833 182,784 1,925,617 85,426 36 85,462 $ 2,011,079 $ 1,338,525 672,554 $ 2,011,079

g. Compensation of employees and remuneration of directors

The Company accrues compensation of employees and remuneration of directors at rates of no less than 2% and no higher than 2%, respectively, of net profit before income tax, compensation of employees and remuneration of directors. The appropriations of employees’ compensation and remuneration of directors for the years ended December 31, 2022 and 2021, which were approved by the Company’s board of directors on March 22, 2023 and March 21, 2022, respectively, were as follows:

Accrual rate Employees’ compensation (%) Remuneration of directors (%) Amounts Employees’ compensation Remuneration of directors	For the Year Ended December 31
	2022 2021 3.9 4.3 1.3 1.3 $ 68,812 $ 91,100 23,242 26,800

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

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

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

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25. INCOME TAX

a. Major components of income tax expense are as follows:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year Adjustments for prior years Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2022 $ 383,742 29,504 (20,990) 392,256 33,514 (19,004) 14,510 $ 406,766	2021 $ 320,105 31,427 3,444 354,976 211,099 2,636 213,735 $ 568,711

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

Profit before income tax Income tax expense calculated at the statutory rate Tax-exempt income Nondeductible expenses and tax-exempt income Income tax on unappropriated earnings Unrecognized loss carryforwards Unrecognized deductible temporary differences Usage of investment credit Adjustments for prior years’ tax Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 1,796,744 $ 489,062 (198) (11,443) 29,504 (6,729) 5 (53,441) (39,994) $ 406,766	2021 $ 2,159,334 $ 608,247 - (14,521) 31,427 3,896 (6,585) (59,833) 6,080 $ 568,711

The tax rate applicable to income generated in the Republic of China is 20%, and the tax rate applicable to income generated in mainland China is 15% and 25%.

b. Income tax recognized in other comprehensive income

Deferred income tax expense (benefit) Translation of foreign operations Remeasurement on defined benefit plans Income tax recognized in other comprehensive income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 23,075 618 $ 23,693	2021 $ (4,434) (220) $ (4,654)

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c. Current tax assets and liabilities

Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December 31	December 31
		2022 $ 7,883 $ 152,139	2021 $ 11,137 $ 114,694

d. Deferred tax assets and liabilities

The movements of net of deferred tax assets and liabilities are as follows:

For the Year ended December 31, 2022

Deferred Tax Assets Temporary differences Unrealized loss on inventories Unrealized gross profits Unrealized refund liabilities Loss Carryforwards Exchange differences on translation of the financial statements of foreign operations Others Deferred Tax Liabilities Temporary differences Foreign investment income Others	Balance, Beginning of Year $ 43,519 6,528 18,534 - 56,177 16,546 $ 141,304 Balance, Beginning of Year $ 1,251,484 35,821 $ 1,287,305	Recognized in Profit or Loss Recognized in Other Comprehensive Income Exchange Differences $ 44,270 $ - $ 366 9,259 - - (1,595 ) - - 6,971 - (19 ) - (23,075 ) - 6,532 (618) 77 $ 65,437 $ (23,693) $ 424 Recognized in Profit or Loss Exchange Differences $ 54,820 $ - 25,127 419 $ 79,947 $ 419	Balance, End of Year $ 88,155 15,787 16,939 6,952 33,102 22,537 $ 183,472 Balance, End of Year $ 1,306,304 61,367 $ 1,367,671
		$

For the Year ended December 31, 2021

DeferredTax Assets Temporary differences Unrealized loss on inventories Unrealized gross profits Unrealized refund liabilities Exchange differences on translation of the financial statements of foreign operations Others	Balance, Beginning of Year $ 28,502 4,068 34,196 51,743 19,483 $ 137,992	Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 15,093 $ - 2,460 - (15,662 ) - - 4,434 (3,134) 220 $ (1,243) $ 4,654	Exchange Differences $ (76 ) - - - (23) $ (99)	Balance, End of Year $ 43,519 6,528 18,534 56,177 16,546 $ 141,304

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Deferred Tax Liabilities Temporary differences Foreign investment income Others	Balance, Beginning of Year $ 1,041,545 33,362 $ 1,074,907	Recognized in Profit or Loss $ 209,939 2,553 $ 212,492	Exchange Differences $ - (94) $ (94)	Balance, End of Year $ 1,251,484 35,821 $ 1,287,305

e. Income tax assessments

The tax returns of the Company and Yenyo through 2020 have been assessed by the tax authorities.

26. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of EPS are as follows:

Net profit for the year

Profit for the year attributable to owners of the Company	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 1,373,833	2021 $ 1,577,307

Weighted average number of ordinary shares outstanding (in thousands of shares)

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Compensation of Employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended	For the Year Ended	December 31
		2022 128,113 706 128,819	2021 128,113 652 128,765

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

27. GOVERNMENT GRANTS

The Company obtained government loans under the “Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan” which have interest at prime rate and are used for capital expenditures and operating turnovers. The Company calculated its fair value with annual interest rate based

48 -

on general condition. The difference between the acquisition amount borrowed and the fair value was classified as government’s low interest grants and recognized as deferred revenue.

Balance at January 1 Deferred revenue in the reporting period Realized revenue in the reporting period (in other income) Effect of foreign currency exchange differences Balance at December 31 Carrying amount of deferred revenue Current (in other current liabilities) Non-current	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 28,078 7,135 (1,084) 179 $ 34,308 December	2021 $ 21,694 7,512 (1,080) (48) $ 28,078 31
		2022 $ 1,080 33,228 $ 34,308	2021 $ 1,080 26,998 $ 28,078

28. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group’s overall strategy remains unchanged from the last 2 years.

The Group is not subject to any externally imposed capital requirements.

29. FINANCIAL INSTRUMENTS

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

The Group’s management considers that the carrying amounts of financial assets and financial liabilities which are not measured at fair value approximate their fair values.

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

December 31, 2022

Financial assets at FVTPL Structured deposit Derivative financial assets Total	Level 1 $ - - $ -	Level 2 $ - 92,250 $ 92,250	Level 3 $ 914,951 - $ 914,951	Total $ 914,951 92,250 $ 1,007,201 (Continued)

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Financial assets at FVTOCI Domestic unlisted shares Financial liabilities atFVTPL Derivative financial liabilities December 31, 2021 Financialassets atFVTPL Structured deposit Financial assets at FVTOCI Domestic unlisted shares	Level 1 $ - $ - Level 1 $ - $ -	Level 2 $ - $ 92,340 Level 2 $ - $ -	Level 3 $ 25,723 $ - Level 3 $ 1,525,486 $ 36,273	Total $ 25,723 $ 92,340 (Concluded) Total $ 1,525,486 $ 36,273

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

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

For the year ended December 31, 2022

Financialassets Balance at January 1, 2022 Purchases Disposals Recognized in other comprehensive income Foreign currency exchange differences Balanced at December 31, 2022	Debt Instruments Financial Assets at FVTPL $ 1,525,486 4,208,837 (4,837,254) - 17,882 $ 914,951	Equity Instruments Financial Assets at FVTOCI Total $ 36,273 $ 1,561,759 - 4,208,837 - (4,837,254) (10,550) (10,550) - 17,882 $ 25,723 $ 940,674

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For the year ended December 31, 2021

Financialassets Balance at January 1, 2021 Purchases Disposals Recognized in other comprehensive income Foreign currency exchange differences Balanced at December 31, 2021	Debt Instruments Financial Assets at FVTPL $ 1,582,073 6,614,943 (6,666,177) - (5,353) $ 1,525,486	Equity Instruments Financial Assets at FVTOCI $ 39,481 - - (3,208) - $ 36,273	Total $ 1,621,554 6,614,943 (6,666,177) (3,208) (5,353) $ 1,561,759

3) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instrument

Valuation Technique and Inputs

  - Derivatives - swap contracts Discounted cash flow: future cash flows are estimated based on and forward exchange observable forward exchange rates at the end of the year and contracts contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

4) Valuation techniques and inputs applied for Level 3 fair value measurement
- a) The fair values of domestic unlisted shares are determined using the market approach where the inputs are categories of business, values of same type of company and operation of company.
- b) The fair values of structured deposits mined using discounted cash flow method.
c. Categories of financial instruments

Financial assets	December 31
	2022 2021 $ 1,007,201 $ 1,525,486 6,753,447 5,636,151 25,723 36,273 $ 92,340 $ - 2,932,414 2,728,738
FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (Note 1) Financial assets at FVTOCI Equity instruments Financial liabilities
FVTPL Mandatorily classified as at FVTPL Amortized cost (Note 2)

1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, notes receivable, accounts receivable, other receivables (including related parties and excluding income tax refund receivable) and other financial assets.
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2) The balances include financial liabilities at amortized cost, which comprise short-term loans, notes payable, accounts payable (including related parties), other payables (including related parties), long-term borrowings (including current portion) and guarantee deposits received.
d. Financial risk management objectives and policies

Financial risks associated with the management and operations of the Group included market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.

The Group seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Group did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The treasury function reports monthly to the Group’s management.

1) Market risk

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

a) Foreign currency risk

The Group has foreign currency denominated sales and purchases, which exposes the Group to foreign currency risk. The Group engaged in derivative financial instruments within the scope of the policy, including forward exchange contracts and swap contracts, to mitigate the risk exposures to exchange rates that may arise from non-functional currency denominated assets and liabilities and certain anticipated transactions, but the impact of foreign currency exchange rate changes cannot be completely ruled out.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities exposed to foreign currency risk at the end of the year are set out in Note 34.

Sensitivity analysis

The Group is mainly exposed to the risk from the fluctuations of the USD and the CNY, and the sensitivity rate used when reporting foreign currency risk internally to key management personnel in foreign exchange rates is 1%. The following table details the Group’s sensitivity to a 1% increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currencies.

The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 1% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit associated with the functional currency.

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Profit or loss	USD Impact For the Year Ended December 31 2022 2021 $ 12,574 $ 20,105	CNY Impact
		For the Year Ended December 31
		2022 2021 $ 13,323 $ 10,416

b) Interest rate risk

The interest rate risk of the Group is primarily related to its fixed interest rates and variable rate of borrowing funds. The Group manages its interest rate risk by using interest rate swap contracts and forward interest rate contracts. Furthermore, total amount of the Group’s cash and cash equivalents are considerably greater than the amount of bank loans which can process repayment procedure spontaneously. Therefore, interest rate risk does not have significant impact to the Group.

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

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities Sensitivity analysis	December 31
	2022 2021 $ 1,928,439 $ 1,496,236 714,848 862,005 3,434,084 3,406,687 1,156,676 688,100

If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2022 and 2021 would have been higher/lower by $22,774 thousand and by $27,186 thousand, respectively, which was mainly a result of the changes in the floating interest rate financial instrument.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligation provided due to the financial guarantees provided by the Group, could be the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets.

The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group uses other publicly available financial information and its own trading records to rate its major customers. The Group is continuously monitoring and spreading the aggregate transactions to each credit-qualified counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the Group annually.

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3) Liquidity risk

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

Bank loans are a major source of liquidity risk for the Group. As of December 31, 2022 and 2021, the Group had available unutilized short-term bank loan facilities set out in (c) below.

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

The following table details the Group’s remaining contractual maturities for its non-derivative financial liabilities with agreed upon repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed upon repayment dates.

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

December 31, 2022

On Demand or Less than 1 Month Non-interest bearing $ 335,844 Lease liabilities 6,096 Variable interest rate liabilities 120,864 Fixed interest rate liabilities 76,392 $ 539,196	1-3 Months $ 538,763 12,191 1,709 198,911 $ 751,574	3 Months to 1 Year $ 310,611 47,472 22,144 315,568 $ 695,795	1-5 Years $ - 83,140 1,062,026 - $ 1,145,166	5+ Years $ - 60,883 - -
				$ 60,883

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

Lease liabilities Variable interest rate liabilities	Less than 1 Year $ 65,759 144,717 $ 210,476	1-5 Years $ 83,140 1,062,026 $1,145,166	5-10 Years 10-15 Years 15-20 Years $ 7,321 $ 7,321 $ 7,321 - - - $ 7,321 $ 7,321 $ 7,321	20+ Years $ 38,920 -
				$ 38,920

December 31, 2021

On Demand or Less than 1 Month Non-interest bearing $ 287,699 Lease liabilities 3,347 Variable interest rate liabilities 204 Fixed interest rate liabilities 150,525 $ 441,775	1-3 Months $ 670,392 6,695 409 599,953 $ 1,277,449	3 Months to 1 Year $ 331,569 30,227 1,839 - $ 363,635	1-5 Years $ - 30,824 547,749 - $ 578,573	5+ Years $ - 62,347 161,619 -
				$ 223,966

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

Lease liabilities Variable interest rate liabilities	Less than 1 Year $ 40,269 2,452 $ 42,721	1-5 Years $ 30,824 547,749 $ 578,573	5-10 Years 10-15 Years 15-20 Years $ 7,321 $ 7,321 $ 7,321 161,619 - - $ 168,940 $ 7,321 $ 7,321	20+ Years $ 40,384 -
				$ 40,384

b) Liquidity and interest rate risk table for derivative financial liabilities

The following table details the Group’s liquidity analysis of its derivative financial instruments. The table is based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed is determined by reference to the projected interest rates as illustrated by the yield curves at the end of the year.

December 31, 2022

		On	Demand or
		Less than1
			Month
	Gross settled
Forward exchange contracts
Inflows		$	113,924
Outflows			(113,991)
		$	(67)
Swap contracts
Inflows		$	92,122
Outflows			(92,145)
		$	(23)

c) Financing facilities

Bank loan facilities Amount used Amount unused		December 31	December 31
		2022 $ 1,759,780 3,314,799 $ 5,074,579	2021 $ 1,450,170 2,372,830 $ 3,823,000

e. Transfers of financial assets

The Group transferred a portion of its banker’s acceptance bills in mainland China to some of its suppliers in order to settle the trade payables to these suppliers. As the Group has transferred substantially all risks and rewards relating to these bills receivable, it derecognized the full carrying amount of the bills receivable and the associated trade payables. However, if the derecognized bills receivable are not paid at maturity, the suppliers have the right to request that the Group pay the unsettled balance; therefore, the Group still has continuing involvement in these bills receivable.

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The maximum exposure to loss from the Group’s continuing involvement in the derecognized bills receivable is equal to the face amounts of the transferred but unsettled bills receivable, and as of December 31, 2022 and 2021, the face amounts of these unsettled bills receivable were $263,156 thousand and $317,115 thousand, respectively. The unsettled bills receivable will be due in 10 months and 9 months, respectively after December 31, 2022 and 2021. Taking into consideration the credit risk of these derecognized bills receivable, the Group estimates that the fair values of its continuing involvement are not significant.

During the years ended December 31, 2022 and 2021, the Group did not recognize any gains or losses upon the transfer of the banker’s acceptance bills. No gains or losses were recognized from the continuing involvement, both during the current year or cumulatively.

30. TRANSACTIONS WITH RELATED PARTIES

Balances, transactions and revenues and expenses among the Group have been eliminated on consolidation and are not disclosed in this note. Details of transaction between the Group and other related parties were as follows:

a. Related party name and its relationship with the Group

Related Party Name Relationship with the Group Welkin Electronic Industrial Co., Ltd. (Pingtung Welkin) Related party in substance Boh Chin Investment Co., Ltd. (Boh Chin Investment) Related party in substance Honungxin Technology Co., Ltd. (Honungxiu Technology) Related party in substance

b. Purchases of goods

Related Party Category/Name Related party in substance- Honungxin Technology	For	the Year Ended December 31	the Year Ended December 31
		2022 $ 888	2021 $ 43

The purchase prices and terms between the Group and its related parties were not significantly different from those of ordinary transactions.

c. Receivables from related parties

Related Party Line Item Category/Name Other receivables - related parties Related party in substance Pingtung Welkin		December 31	December 31
		2022 $ -	2021 $ 145

The payment terms between the Group and the related parties were 60 days after monthly closing, and the outstanding payment receivables from related parties were unsecured. For the years ended December 31, 2022 and 2021, no impairment losses were recognized for trade receivables from related parties.

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d. Payables to related parties

Related Party Line Item Category/Name Accounts payable - related parties Related party in substance Honungxin Technology Other payables - related parties Related party in substance Pingtung Welkin Honungxin Technology	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 1 $ 4,079 34 $ 4,113	2021 $ 45 $ 4,466 207 $ 4,673

The Group and its related parties have monthly payment terms of 30 to 60 days, and the outstanding amounts due to related parties are not guaranteed.

e. Acquisition of property, plant and equipment

Purchase Price	Purchase Price	Purchase Price	Purchase Price
For the Year Ended December 31
	2022 2021 $ 400 $ - 1,850 - $ 2,250 $ - For the Year Ended December 31
		2022 $ 11,061 374 $ 11,435	2021 $ 15,909 28 $ 15,937

The prices and payment terms with substantial related parties were not comparable because the Group did not have other consigned processing businesses with non-related parties. The payment term was 30-60 days from the invoice date.

2) Consigned processing

Related Party Category/Name Related parties Subsidiaries -Pingtung Welkin		December 31	December 31
		2022 $ -	2021 $ 147

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3) Lease arrangements

Related Party Line Item Category/Name Lease expense Related party in substance Boh Chin Investment	For	the Year Ended December 31	the Year Ended December 31
		2022 $ 480	2021 $ 480

The lease contract between the Group and related parties in substance is based on the market rental agreement under the general payment terms.

g. Remuneration of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended	For the Year Ended	December 31
		2022 $ 73,852 1,081 $ 74,933	2021 $ 109,298 1,081 $ 110,379

The remuneration of directors and other members of key management is determined by the remuneration committee based on the performance of individuals and market trends.

31. ASSETS PLEDGED AS COLLATERAL FOR SECURITY

The Group provided the following assets as collateral for bank borrowings, tariff guarantee for imported and exported, deposits for construction contract and payment:

Notes receivable Pledged demand deposits (classified as other financial assets) Pledged time deposits (classified as other financial assets) Deposits of banker’s acceptance (classified as other financial assets)		December 31	December 31
		2022 $ 83,956 100,153 151,700 33,886 $ 369,695	2021 $ 179,860 86,811 305,600 2,608 $ 574,879

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

The Group’s unrecognized commitments due to the plants under construction and equipment were as follows:

Acquisition of property, plant and equipment		December 31	December 31
		2022 $ 550,321	2021 $ 556,646

33. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

In order to implement the Group’s global layout plan, the board of directors resolved to set up a subsidiary in Vietnam on February 8, 2023, and the total investment amount is expected to be US$27 million.

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34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

Foreign
Currency (In
Thousand)
Exchange Rate
December31,2022
Financial assets
Monetary items
USD
$ 19,120
6.9793
(USD:CNY)

USD
34,301
30.725
(USD:NTD)

CNY
298,380
4.4023
(CNY:NTD)

CNY
9,756
0.1433
(CNY:USD)

Financial liabilities
Monetary items
USD
174
6.9793
(USD:CNY)

USD
12,322
30.725
(USD:NTD)
CNY
5,492
4.4023
(CNY:NTD)

December31,2021
Financial assets
Monetary items
USD
36,897
6.3674
(USD:CNY)

USD
51,915
27.68
(USD:NTD)

CNY
234,702
4.3471
(CNY:NTD)

CNY
12,240
0.1570
(CNY:USD)

Financial liabilities
Monetary items
USD
885
6.3674
(USD:CNY)

USD
15,296
27.68
(USD:NTD)
CNY
7,333
4.3471
(CNY:NTD)

Carrying
Amount (In
Thousand)
$ 587,462
1,053,898
1,313,558

42,949
$ 2,997,867
$ 5,346
378,593

24,177
$ 408,116
$ 1,021,309
1,437,007
1,020,273

53,209
$ 3,531,798
$ 24,497
423,393

31,877
$ 479,767

Refers to Note 24 (c) for the informational related to realized and unrealized net foreign exchange loss. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the Group’s entities.

59 -

35. ADDITIONAL DISCLOSURES

a. Information on significant transactions and b. investees
1) Financing provided to others: None.
2) Endorsement/guarantee provided: None.
3) Marketable securities held (excluding investment in subsidiaries): Table 1.
4) Marketable securities acquired or disposed of at cost or price of at least NT$300 million or 20% of the paid-in capital: Table 2.
5) Acquisition of individual real estate at cost of at least NT$300 million or 20% of the paid-in capital: None.
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 3.
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 4.
9) Information on investees: Table 5.
10) Trading in derivative instruments: Note 7.
11) Intercompany relationships and significant intercompany transaction: Table 7.
c. Information on investments in Mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China areas: Table 6.
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third area, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year: Table 3.
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year: Table 3.
- c) The amount of property transactions and the amount of the resultant gains or losses: None.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes: None.
- e) The highest balance, the end of year balance, the interest rates range, and total current year interest with respect to financing of funds: None.
60 -
f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receiving of services: None.
d. Information of major shareholder: Shareholding ratio of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: Table 8.

36. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on type of goods or services delivered or provided. The Group’s reportable segments were as follows:

a. Thinking Electronic Industrial Co., Ltd. (Thinking): Manufacturing, processing and selling of electric devices, thermistors, varistors and wines.
b. Yenyo: Processing, selling and manufacturing diodes as principle business.
c. Thinking Changzhou: Manufacturing and selling thermistors, varistors and sensors as principle business.
d. Guangdong Welkin Thinking: Wholesale of thermistors, varistors, sensors and equipment as principle business.
e. Dongguan Welkin: Manufacturing and selling thermistors, varistors, sensors and equipment as principle business.

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segment:

FortheYearendedDecember31,2022 Revenues from external customers Inter-segment revenue Segment revenue Segment income Interest income Other income Other gains and losses Finance costs Consolidated profit before income tax Income tax Consolidated net income December31,2022 Total segment assets Total segment liabilities	Thinking $ 3,116,321 502,964 $ 3,619,285 $ 694,967 $ 5,057,787 $ 4,203,715	Yenyo $ 395,945 641 $ 396,586 $ 33,408 $ 484,435 $ 113,472	Thinking Changzhou $ 1,812,397 1,387,031 $ 3,199,428 $ 375,138 $ 4,278,902 $ 531,024	Guangdong Welkin Thinking $ 638,022 178,837 $ 816,859 $ 61,650 $ 377,012 $ 13,279	Dongguan Welkin $ 1,193,541 1,599,951 $ 2,793,492 $ 161,571 $ 1,990,065 $ 795,920	Others $ 306,909 1,707,908 $ 2,014,817 $ 27,858 $ 2,971,328 $ 461,865	Adjustment and Elimination $ - (5,377,332) $(5,377,332) $ 45,585 $(1,401,713) $(1,304,906)	Consolidated Amount $ 7,463,135 - $ 7,463,135 $ 1,400,177 100,827 69,808 243,107 (17,175) 1,796,744 406,766 $ 1,389,978 $ 13,757,816 $ 4,814,369

61 -

FortheYearendedDecember31,2021 Revenues from external customers Inter-segment revenue Segment revenue Segment income Interest income Other income Other gains and losses Finance costs Consolidated profit before income tax Income tax Consolidated net income December31,2021 Total segment assets Total segment liabilities	Thinking $ 3,230,988 544,529 $ 3,775,517 $ 952,159 $ 4,485,047 $ 3,816,668	Yenyo $ 298,403 8,524 $ 306,927 $ 34,020 $ 404,145 $ 79,119	Thinking Changzhou $ 1,770,357 1,348,673 $ 3,119,030 $ 448,494 $ 4,415,636 $ 583,185	Guangdong Welkin Thinking $ 1,695,602 105,455 $ 1,801,057 $ 168,720 $ 798,145 $ 487,107	Others $ 505,105 4,121,408 $ 4,626,513 $ 491,434 $ 4,309,390 $ 1,030,495	Adjustment and Elimination $ - (6,128,589) $ (6,128,589) $ 30,008 $ (1,742,478) $ (1,603,042)	Consolidated Amount $ 7,500,455 - $ 7,500,455 $ 2,124,835 88,523 34,309 (76,768 ) (11,565) 2,159,334 568,711 $ 1,590,623 $ 12,669,885 $ 4,393,532

Segment profit represents the profit before tax earned by each segment without interest income, other income, other gains and finance costs. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

a. Other segment information

Thinking Yenyo Thinking Changzhou Guangdong Welkin Thinking Dongguan Welkin Others	Depreciation and amortization	Depreciation and amortization	Depreciation and amortization
		December 31
		2022 $ 88,861 12,763 120,416 646 56,392 102,401 $ 381,479	2021 $ 80,367 9,943 115,745 809 - 115,003 $ 321,867

b. Revenue from major products

The following is an analysis of the Group’s revenue from its major products.

Passive components Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 7,066,980 396,155 $ 7,463,135	2021 $ 7,201,871 298,584 $ 7,500,455

c. Geographical information

1) The Group operates in two principal geographical areas - China and Taiwan.

62 -
2) The Group’s revenue from external customers by location of operations and information on its non-current assets by location of assets are detailed below.

Asia Europe Taiwan Others	Revenue from External Customers	Revenue from External Customers	Revenue from External Customers
	For the Year Ended December 31
		2022 $ 5,671,459 753,417 523,430 514,829 $ 7,463,135	2021 $ 5,678,699 767,009 548,334 506,413 $ 7,500,455

3) The location of Group’s non-current assets are detailed below

China Taiwan		Non-current Assets	Non-current Assets
		December 31
		2022 $ 2,230,596 1,667,137 $ 3,897,733	2021 $ 1,955,478 1,245,402 $ 3,200,880

Non-current assets exclude financial instruments, deferred tax assets and net defined benefit assets.

d. Information on major customers

No single customer contributed over 10% of the Group’s consolidated operating revenue.

63 -

TABLE 1

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2022

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

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2022	December 31, 2022		Note
				Number of shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
The Company Thinking Changzhou Thinking Yichang Jiangxi Thinking Dongguan Welkin Guangdong Welkin Thinking Zhongshan Welkin	Share ACPA TECHNOLOGY CO., LTD. CNY financial products Structured Deposit Monthly Profit - Fubon Bank (China) CNY financial products “Tian Libao” Net Worth Type - Industrial and Commercial Bank of China Structured Deposit Monthly Profit - Fubon Bank (China) Time Deposit Monthly Profit - Fubon Bank (China) Structured Deposits - Bank Of China CNY financial products Structured Deposit Monthly Profit - Fubon Bank (China) Time Deposit Monthly Profit - Fubon Bank (China) CNY financial products Point Gold Series Structured Deposit - China Merchants Bank Structured Deposits - E.SUN Bank CNY financial products Point Gold Series Structured Deposit - China Merchants Bank CNY financial products Point Gold Series Structured Deposit - China Merchants Bank	- - - - - - - - - - - -	Financial assets at FVTOCI - non-current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current	2,543,203	$ 25,723 CNY 20,000 thousand CNY 6,000 thousand CNY 15,000 thousand CNY 5,000 thousand CNY 45,000 thousand CNY 22,000 thousand CNY 9,810 thousand CNY 20,000 thousand CNY 20,000 thousand CNY 30,000 thousand CNY 15,000 thousand	11	$ 25,723 CNY 20,000 thousand CNY 6,000 thousand CNY 15,000 thousand CNY 5,000 thousand CNY 45,000 thousand CNY 22,000 thousand CNY 9,810 thousand CNY 20,000 thousand CNY 20,000 thousand CNY 30,000 thousand CNY 15,000 thousand

64 -

TABLE 2

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2022

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

Company Name	Marketable Securities Type and Name	Financial Statement Account	Counterparty	Relationship	Beginn	ing Balance	Ac	quisition		D	isposal		Endin	g Balance
					Number of shares	Amount	Number of shares	Amount	Number of shares	Amount	Carrying Amount	Gain/Loss on Disposal	Number of shares	Amount
Thinking Changzhou Dongguan Welkin Zhongshan Welkin Thinking Yichang	CNY financial products Wishful Life V “Tian Libal” net month type Accumulate every day Qianyuan-An Xin daily cash management Open-end Fund CNY interest. rate structured products CNY Structured Time Deposit Monthly Profit CNY financial products Point Gold Series Structured Deposit CNY financial products Point Gold Series Structured Deposit CNY financial products Structured Deposits	Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current	Industrial and Commercial Bank of China Industrial and Commercial Bank of China Bank of China China Construction Bank Fubon Bank (China) China Merchants Bank China Merchants Bank Bank of China		- - - - - - - -	CNY 60,000 thousand CNY 193 thousand CNY 14,500 thousand CNY - thousand CNY 120,000 thousand CNY 40,000 thousand CNY - thousand CNY - thousand	- - - - - - - -	CNY - thousand CNY 123,460 thousand CNY 110,650 thousand CNY 161,430 thousand CNY 20,000 thousand CNY 67,000 thousand CNY 67,000 thousand CNY 60,000 thousand	- - - - - - - -	CNY 60,989 thousand CNY 123,763 thousand CNY 125,224 thousand CNY 161,613 thousand CNY 124,500 thousand CNY 87,285 thousand CNY 52,094 thousand CNY 15,222 thousand	CNY 60,000 thousand CNY 123,653 thousand CNY 125,150 thousand CNY 161,430 thousand CNY 120,000 thousand CNY 87,000 thousand CNY 52,000 thousand CNY 15,000 thousand	CNY 989 thousand CNY 110 thousand CNY 74 thousand CNY 183 thousand CNY 4,500 thousand CNY 285 thousand CNY 94 thousand CNY 222 thousand	- - - - - - - -	CNY - thousand CNY - thousand CNY - thousand CNY - thousand CNY 20,000 thousand CNY 20,000 thousand CNY 15,000 thousand CNY 45,000 thousand

65 -

TABLE 3

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2022

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

Buyer	Related Party	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts (Receivable) Payable	Notes/Accounts (Receivable) Payable	Note
			Purchases/Sales	Amount	% of Total	Payment Terms	Unit Price	Payment Term	Ending Balance (Note)	% of Total
The Company Thinking Changzhou Thinking Yichang Jiangxi Thinking Guangdong Welkin Thinking Dongguan Welkin	Thinking Changzhou Thinking Changzhou Dongguan Welkin Dongguan Welkin Jiangxi Thinking Jiangxi Thinking Dongguan Welkin Jiangxi Thinking Guangdong Welkin Thinking Dongguan Welkin Dongguan Welkin Zhongshan Welkin Dongguan Welkin Dongguan Welkin Zhongshan Welkin	Subsidiary Subsidiary Subsidiary Subsidiary Associate Associate Associate Associate Associate Associate Associate Associate Associate Associate Subsidiary	Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Sales Sales Sales Sales Purchases Purchases	$ (256,764 ) 982,797 (242,658 ) 1,117,170 (100,888 ) 125,087 (154,684 ) 165,077 (145,953 ) (270,754 ) (241,340 ) (145,581 ) (178,709 ) 312,016 406,599	(7 ) 41 (7 ) 47 (3 ) 8 (5 ) 30 (16 ) (30 ) (34 ) (20 ) (22 ) 62 20	60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month	$ - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - -	$ (108,871 ) 160,381 (70,435 ) 204,929 (13,038 ) 24,661 (25,086 ) 39,701 (4,327 ) (73,146 ) (37,096 ) (29,164 ) (18,958 ) 2,434 121,339	(11 ) 21 (7 ) 27 (1 ) 5 (3 ) 22 (2 ) (29 ) (24 ) (19 ) (15 ) 21 16

Note: All intercompany transactions have been eliminated upon consolidation.

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TABLE 4

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2022

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

Company Name	Related Party	Relationship	Ending Balance (Note)	Turnover Rate		Overdue	Amounts Received in Subsequent Period	Allowance for Doubtful Accounts
					Amount	Actions Taken
The Company Thinking Changzhou Dongguan Welkin Zhongshan Welkin	Thinking Changzhou The Company The Company Dongguan Welkin	Subsidiary Parent company Parent company Parent company	$ 108,871 160,381 204,929 121,339	2.63 5.67 5.20 4.96	$ - - - -	- - - -	$ 64,086 8,689 193,019 70,502	$ - - - -

Note: All intercompany transactions have been eliminated upon consolidation.

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TABLE 5

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

Investor Company	Investee Company	Location	Main Businesses and Products	Original Inves	tment Amount	Balan	ce as of Dece	mber 31, 2022	Net Income (Loss) of the Investee	Share of profit (Loss)	Note
				December 31, 2022	December 31, 2021	Number of shares	Percentage of ownership (%)	Carrying Amount
The Company Thinking Holding	Yenyo Greenish Thinking Holding Thinking USA Thinking International Thinking HK View Full Samoa Thinking Samoa	Yilan British Virgin Island Cayman USA Mauritius Hong Kong Samoa Samoa	Processing, sales and manufacturing of diodes Investment holding and international trading Investment holding and international trading Electronic product design and marketing Investment holding and international trading Investment holding and international trading Investment holding and international trading Investment holding and international trading	$ 304,410 242,300 ( US$ 7,375 thousand ) 783,237 ( US$ 25,176 thousand ) 30,715 ( US$ 1,000 thousand ) 196,512 ( US$ 6,075 thousand ) 311,109 ( US$ 10,020 thousand ) 155,108 ( US$ 5,055 thousand ) 112,518 ( US$ 3,864 thousand )	$ 304,410 242,300 ( US$ 7,375 thousand ) 770,212 ( US$ 24,729 thousand ) - 196,512 ( US$ 6,075 thousand ) 311,109 ( US$ 10,020 thousand ) 155,108 ( US$ 5,055 thousand ) 94,465 ( US$ 3,244 thousand )	25,732,508 7,374,997 25,176,302 1,000,000 6,075,000 10,020,000 5,055,000 3,864,354	63.76 100 100 100 100 100 100 100	$ 231,421 2,463,106 3,437,858 28,350 1,121,385 771,145 1,401,729 185,611	$ 44,551 251,749 272,422 (2,426 ) 51,130 52,368 150,409 19,028	$ 28,407 254,508 309,834 (2,426 ) 51,130 52,368 150,409 19,028	Note 1 Note 1 Note 1

Note 1: The share of profits or losses of investee includes the effect of unrealized gross profit on intercompany transaction.

Note 2: Information of investees which located in mainland China, refer to Table 6.

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TABLE 6

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2022

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

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2022	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2022	Remittanc	e of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2022	Net Income (Loss)of the Investee	Percentage of Ownership Direct or Indirect Investment	Investment Gain (Loss) (Note 7)	Carrying Amount as of December 31, 2022 (Note 7)	Accumulated Repatriation of Investment Income as of December 31, 2022	Note
							Outward	Inward
Thinking Changzhou Thinking Yichang Jiangxi Thinking Guangdong Welkin Thinking Dongguan Welkin Zhongshan Welkin	Manufacturing and selling thermistors, varistors and sensors Manufacturing and selling thermistors, varistors and sensors Manufacturing and selling thermistors and varistors Wholesale of thermistors, varistors, sensors and equipment Manufacturing and selling thermistors, varistors, sensors and equipment Manufacturing and selling thermistors, varistors and sensors		US$ 31,260 thousand US$ 6,000 thousand US$ 10,000 thousand US$ 5,000 thousand CNY$163,859 thousand CNY$140,000 thousand	Note 1 Note 2 Note 3 Note 4 Note 5 Note 6	$ 452,725 194,170 310,330 153,547 93,706 -		$ - - - - 18,053 -	$ - - - - - -	$ 452,725 194,170 310,330 153,547 111,759 -	$ 516,533 51,221 52,395 48,851 183,337 (17,027 )	100 100 100 100 100 100	$ 521,779 51,221 52,395 48,851 183,337 (17,027 )	$ 3,628,440 1,120,042 770,904 363,733 1,789,678 582,482	$ 1,868,287 ( US$ 61,686 ) - - - - -	Notes 10 and 11 Note 11 Note 11 Note 11 Note 11 Note 11
									EA
Accumulated Outward Remi in Mainland China as of D	ttance for Investment ecember 31, 2022	In	vestment Amounts Authorized by th Investment Commission, MOEA		e	Upper Limit on the Amou Stipulated by the Investment		nt of Investments Commission, MO	EA
$ 1,222,531 (US$38,474 thousand)			$ 949,372 (US$30,899 thousand)			$ 5,285,447 (Note 9)
			(Note 8)

Note 1: Indirectly investment in mainland China through Greenish which was registered in the third area. The Company increased the amount of indirect investments in mainland China through Greenish since 2003.
Note 2: Indirectly investment in mainland China through companies registered in the third area (Thinking International).
Note 3: Indirectly investment in mainland China through companies registered in the third area (Thinking HK).
Note 4: Indirectly investment in mainland China through companies registered in the third area (View Full Samoa).
Note 5: Indirectly investment in mainland China through companies registered in the third area, View Full Samoa and Thinking Samoa and the subsidiary, Thinking Changzhou.
Note 6: Indirectly investment in mainland China through subsidiary (Dongguan Welkin).
Note 7: The financial statements have been audited by the ultimate parent company’s certified public accountant.
Note 8: The amount of US$30,899 thousand was the difference between the MOEA approved investment amount of US$38,474 thousand and the amount of accumulated outflow of investment from Taiwan of US$7,575 thousand. Such difference was the result of deducting the capital increase of US$22,024 thousand from the subsidiary in mainland China, deductions of US$176 thousand for remittance of liquidation proceeds to third parties not yet approved. The added surplus of the subsidiary in mainland China, which was approximately US$29,726 thousand, was repatriated, and the difference between the exchange rate of the remitted funds and US$49 thousand. The balance as of December 31, 2022 was based on the exchange rate of US$1=NT$30.725.
Note 9: The upper limit on investment in mainland China is determined by 60% of the Company’s consolidated net worth.
Note 10: The Company recognized share of profits of Thinking Changzhou was $247,286 thousand, and Greenish recognized share of profits of Thinking Changzhou was $274,493 thousand. Total amount of share of profits was $521,779 thousand. The difference between total amount of share of profits and the net income of Thinking Changzhou resulted from unrealized gross profit on intercompany transactions.
Note 11: All intercompany transactions have been eliminated upon consolidation.
69 -

TABLE 7

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

INTERCOMPANY BUSINESS RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Company Name	Counterparty	Nature of Relationship (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statement Item	Amount	Terms	Percentage of Consolidated Total Sales or Total Assets
0 1	The Company Thinking Changzhou	Thinking Changzhou Thinking Changzhou Thinking Changzhou Thinking Changzhou Thinking Changzhou Thinking Yichang Thinking Yichang Thinking Yichang Dongguan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Yenyo Yenyo Thinking Yichang Thinking Yichang Thinking Yichang Thinking Yichang Thinking Yichang Jiangxi Thinking Jiangxi Thinking Jiangxi Thinking Jiangxi Thinking Jiangxi Thinking Guangdong Welkin Thinking Dongguan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Zhongshan Welkin ZhongshanWelkin	1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2	Sales Purchases Accounts receivable Other accounts receivable Accounts payable Sales Purchases Accounts payable Sales Purchases Accounts receivable Accounts payable Purchases Accounts payable Sales Purchases Accounts receivable Accounts payable Other accounts payable Sales Purchases Accounts receivable Other accounts receivable Accounts payable Sales Sales Purchases Accounts receivable Accounts payable Sales Accountsreceivable	$ 256,764 982,797 108,871 937 160,381 3,542 87,178 13,108 242,658 1,117,170 70,435 204,929 533 559 80,238 96,723 35,857 16,865 4,752 100,888 125,087 13,038 3,416 24,661 48,791 154,684 51,902 25,086 5,088 19,597 8,540	Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice 60 daysfromthe end ofthemonth	3 13 1 - 1 - 1 - 3 15 1 1 - - 1 1 - - - 1 2 - - - 1 2 1 - - - -
							(Continued)

70 -

No.	Company Name	Counterparty	Nature of Relationship (Note)		Intercompany Transactions	Intercompany Transactions
				Financial Statement Item	Amount	Terms	Percentage of Consolidated Total Sales or Total Assets
2 3 4 5	Thinking Yichang Jiangxi Thinking Guangdong Welkin Thinking Dongguan Welkin	Jiangxi Thinking Jiangxi Thinking Jiangxi Thinking Jiangxi Thinking Guangdong Welkin Thinking Guangdong Welkin Thinking Dongguan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Zhongshan Welkin Zhongshan Welkin Zhongshan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Zhongshan Welkin Zhongshan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Dongguan Welkin Zhongshan Welkin Zhongshan Welkin Zhongshan Welkin Zhongshan Welkin Zhongshan Welkin Zhongshan Welkin	2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1	Sales Purchases Accounts receivable Accounts payable Sales Accounts receivable Sales Purchases Accounts receivable Accounts payable Other accounts payable Sales Accounts receivable Other accounts receivable Sales Purchases Accounts receivable Other accounts payable Sales Accounts receivable Sales Purchases Accounts receivable Other accounts receivable Accounts payable Sales Purchase Accounts receivable Advanced receipts Accounts payable Other accounts payable	$ 15,406 165,077 5,588 39,701 145,953 4,327 270,754 42,825 73,146 6,923 3,441 8,210 2,751 872 241,340 8,167 37,096 1,812 145,581 29,164 178,709 312,016 18,958 968 2,434 67,871 406,599 43,044 20,743 121,339 1,358	Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month 60 days from the end of the month 60 days from the end of the month Pricing by cost-plus practice Pricing by cost-plus practice 60 days from the end of the month T/T days from the end of the month 60 days from the end of the month 60 days from the end of the month	- 2 - - 2 - 4 1 1 - - - - - 3 - - - 2 - 2 4 - - - 1 5 - - 1 -

(Concluded)

Note : Transactions are categorized as follows:

1) Transactions from parent company to subsidiaries.
2) Transactions between subsidiaries.
71 -

TABLE 8

THINKING ELECTRONIC INDUSTRIAL CO., LTD

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2022

Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Boh Chin Investment Co., Ltd. Yih Chin Investment Co., Ltd.	27,178,247 15,871,153	21.21 12.38

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

72 -

AI assistant

THINKING — Annual Report 2022

52076_rns_2022-11-08_38b0324d-408f-4863-bc50-a33ae482bbc7.pdf

Thinking Electronic Industrial Company Limited and Subsidiaries

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Recognition of revenue from export sales

Other Matter

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

e. Foreign currencies

h. Investment properties

k. Financial instruments

m. Leases

n. Borrowing costs

2) Retirement benefits

q. Taxation

1) Current tax

2) Deferred tax

3) Current and deferred taxes

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT AMORTIZED COST

9. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

10. NOTES AND ACCOUNTS RECEIVABLE

December 31, 2022

11. INVENTORIES

12. OTHER FINANCIAL ASSETS

13. SUBSIDIARIES

14. PROPERTY, PLANT, AND EQUIPMENT

b. Useful lives

15. LEASE ARRANGEMENTS

b. Lease liabilities

1) Land

d. Other lease information

16. INVESTMENT PROPERTIES

17. BORROWINGS

18. NOTES PAYABLE AND ACCOUNTS PAYABLE

19. OTHER PAYABLES

20. REFUND LIABILITIES

21. RETIREMENT BENEFIT PLANS

b. Defined benefit plans

1) Investment risk

2) Interest risk

3) Salary risk

22. EQUITY

b. Capital surplus

c. Retained earnings and dividend policy

d. Other equity items

e. Non-controlling interests

23. OPERATING REVENUE

For the year ended December 31, 2021

24. CONSOLIDATED NET PROFIT

d. Finance costs

f. Employee benefits expense

25. INCOME TAX

a. Major components of income tax expense are as follows:

b. Income tax recognized in other comprehensive income

c. Current tax assets and liabilities

d. Deferred tax assets and liabilities

THINKING Annual Report 2022