TMC — Audit Report / Information 2022

Dec 29, 2022

Taiwan Mask Corporation Parent Only financial statements and independent auditor’s report 2022 and 2021 (Stock Code: 2338)

Company address: No. 11, Chuangxin 1st Road, Hsinchu County, Hsinchu Science Park Telephone: (03)563-4370

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Taiwan Mask Corporation

’ 2022 and 2021 Parent-Only Financial Statements and Independent Auditor s Report Table of Contents

Items I. Cover II. Table of Contents III. Independent Auditors’ Report IV. Parent Only Balance Sheets V. Parent Only Statement of Comprehensive Income VI. Parent Only Statement of Changes in Equity VII. Parent Only Statement of Cash Flows VIII. Notes to the Parent Only Financial Statements (I) Company History (II) Date and procedures for passing the financial statement (III) Application of New and Revised International Financial Reporting Standards (IV) Summary of Significant Accounting Policies (V) Critical Accounting Judgments and Key Sources of Estimation and Uncertainty (VI) Summary of Significant Accounting Items (VII) Related Party Transactions

Page/No./Index 1 2 ~ 4 5 ~ 10 11 ~ 12 13 14 15 ~ 16 17 ~ 69 17 17 17 ~ 18 18~ 28 28 28 ~ 55 55 ~ 58

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Page/No./Index

Items

(VIII) Pledged Assets	58
(IX) Significant Contingent Liabilities and Unrecognized Contract
Commitments	58 ~ 59
(X) Losses due to major disasters	59
(XI) Major Events after Financial Statement Date	59
(XII) Others	59 ~ 68
(XIII) Supplementary Disclosure	68
1. Information on significant transactions	68
2. Information on investees	69
3. Information on investments in Mainland China	69
4. Information on Major Shareholders	69
(XIV) Segment Information	69
IX. Schedule of Significant Accounting Items
Cash and Cash Equivalents Schedule	Schedule 1
Accounts Receivable Schedule	Schedule 2
Inventories Schedule	Schedule 3
Financial assets schedule at fair value through profit and loss	Schedule 4
Schedule of Investments Changes Accounted for Using Equity Method	Schedule 5
Property, Plant and Equipment Cost Changes Schedule	Schedule 6
Property, Plant and Equipment Accumulated Depreciation Changes Schedule	Schedule 7
Right-of-Use Assets Schedule	Schedule 8
Right-of-Use Assets Accumulated Depreciation Schedule	Schedule 9

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Items Short-Term Borrowings Schedule Long-Term Borrowings Schedule Sales Income Schedule Operating Costs Schedule Manufacturing Expenses Schedule Operating Expenses Schedule Employee Benefits, Depreciation, Depletion and Amortization in the Current Period	Page/No./Index Schedule 10 Schedule 11 Schedule 12 Schedule 13 Schedule 14 Schedule 15 Schedule 16

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Independent Auditors’ Report

(112) Tsai-Sheng-Bao-Zi No. 22003018

To Taiwan Mask Corporation,

Opinions

We have audited the accompanying parent-only balance sheets of Taiwan Mask Corporation as of December 31, 2022 and 2021, and the related statements of comprehensive income, of changes in equity and of cash flows for the years ended December 31, 2022 and 2021, and notes to the parent-only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of the other independent auditors, as described in the Other matters section of our report, the parent-only financial statements present fairly, in all material respects, the standalone financial position of Taiwan Mask Corporation as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years ended December 31, 2022 and 2021, in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of Taiwan Mask Corporation of fiscal year 2022. These matters were addressed in the context of our audit of the parent only financial statements as a whole and, in forming our opinion thereon, we do not provide a parent

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only opinion on these matters.

Key audit matters for the parent-only financial statements in fiscal year 2022 are stated as follows:

Evaluation of Inventories

Description

Refer to Note 4(12) for the accounting policies on the valuation of inventories, Note 5(2) for the uncertainty of accounting estimations and assumptions for valuation of inventories, inventory accounts description please refer to Note 6(5), for the details of allowance for inventory valuation. The inventory amount and allowance for inventory valuation loss as of December 31, 2022 is NT$123,824 thousand and NT$5,115 thousand, respectively.

Taiwan Mask Corporation is primarily engaged in mask and integrated circuit services in the semiconductor industry. Due to rapid technological innovations, short life-cycle and competition within the mask industry, the risk of price fluctuations, loss on decline in value of inventories and obsolescence is higher than that of other industries. Management evaluates inventories stated at the lower of cost and net realizable value. Since the evaluation of inventories is subject to management’s judgment and the accounting estimations will have significant influence on the inventory values, the evaluation of inventories has been identified as one of the key audit matters.

How our audit addressed the matter

We have performed primary audit procedures for the above matter as follows:

1. Understand and evaluate the accounting policy for the provision of allowance for losses on decline in value of inventories.

2. Perform test to evaluate the ageing statement of inventories and the statement of lower of cost and net realizable value of inventories, including validating the supporting documents related to the date of inventory movement to confirm the correct ageing classification, and validating the supporting documents related to the net realizable value to assess and confirm the reasonableness of the net realizable value determination.

3. Verify the reasonableness of allowance for inventory valuation loss.

Income recognition

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Description

For the accounting policy on income recognition, please refer to Note 4(27) of the financial report. For sales revenue please refer to Note 6(21); the operating income in fiscal year 2022 is NT$3,887,648 thousand.

Taiwan Mask Corporation mainly produces and sells products such as masks and integrated circuits used in semiconductors, and has a large and diversified sales base. Trading conditions vary according to market conditions and customer needs. Considering that sales revenue is a major transaction that has a significant impact on the parent only financial statements, we believe that the recognition of sales revenue is one of the most important matters to be considered in this year's audit.

How our audit addressed the matter

We have performed primary audit procedures for the above matter as follows:

1. Understand the type of major income and assess internal operations, review revenue recognition and accounting treatment.

2. Obtain the sales revenue statement, sample the sales transactions and verify the relevant documents to determine the appropriateness of the sales revenue.

3. Execute the cut-off test for the sales receipts transaction for a certain period of time before and after the closing date, and confirm that the account is correct at the time of entry.

Responsibilities of management and those charged with governance for the parent only financial statements

Management is responsible for the preparation and fair presentation of the parent only financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of parent only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent only financial statements, management is responsible for assessing Taiwan Mask Corporation’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate Taiwan Mask Corporation or to cease operations, or has

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no realistic alternative but to do so.

Those charged with governance, including the Audit Committee, are responsible for overseeing Taiwan Mask Corporation's financial reporting process.

Independent auditor’s responsibilities for the audit of the parent only financial statements

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

As part of an audit conducted in accordance with ROC AS, we exercise professional judgment and professional skepticism throughout the audit. We also conduct the following undertakings:

1. Identify and assess the risks of material misstatement of the parent only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Taiwan Mask Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures

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in the parent only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause Taiwan Mask Corporation to cease to continue as a going concern.

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

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

We communicated 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 for the current period.

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

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

PricewaterhouseCoopers Taiwan

Ya-Hui Cheng

Accountant Chien-Yu Liu

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Securities and Futures Bureau of Financial Supervisory Commission of the Executive

Yuan Approval Certificate No. 0960072936 Financial Supervisory Commission of the Executive Yuan Approval Document for Attestation: Jin-Guan-Zheng-Shen-Zi No. 1090350620

March 3, 2023

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Taiwan Mask Corporation Parent Only Balance Sheets December 31, 2022 and 2021

Assets	Notes 6(1) 6(2) 6(3) and 8 6(4) 6(4) and 7 7 6(5) 6(2) 6(3) and 8 6(6) 6(7) and 8 6(8) 6(10) and 8 6(28) 6(11)	December31,2022 Amount % $ 1,211,411 9 307,448 2 3,000 - 90,642 1 800,431 6 9,525 - 4,566 - 17,443 - 118,709 1 104,427 1 803 - 2,668,405 20 925,006 7 222,774 2 1,897,832 15 4,762,328 37 541,438 4 683,746 5 41,720 - 1,780 - 1,331,600 10 10,408,224 80 $ 13,076,629 100	Unit: NT$Thousand December31,2021 Amount % $ 1,798,841 16 824,558 7 3,000 - 115,854 1 592,967 5 5,112 - 3,826 - 14,870 - 109,889 1 36,959 - 973 - 3,506,849 30 296,800 3 35,425 - 2,560,741 22 3,178,465 28 563,415 5 703,953 6 8,518 - - - 650,211 6 7,997,528 70 $ 11,504,377 100
		Amount $ 1,211,411 307,448 3,000 90,642 800,431 9,525 4,566 17,443 118,709 104,427 803 2,668,405 925,006 222,774 1,897,832 4,762,328 541,438 683,746 41,720 1,780 1,331,600 10,408,224 $ 13,076,629	Amount $ 1,798,841 824,558 3,000 115,854 592,967 5,112 3,826 14,870 109,889 36,959 973 3,506,849 296,800 35,425 2,560,741 3,178,465 563,415 703,953 8,518 - 650,211 7,997,528 $ 11,504,377
Current assets 1100 Cash and Cash Equivalents 1110 Financial Assets at Fair Value Through Profit or Loss - Current 1136 Financial Assets at Amortized Cost - Current 1140 Contract Asset - Current 1170 Accounts Receivables (Net) 1180 Accounts Receivables - Related Parties (Net) 1200 Other Receivables 1210 Other Receivables - Related Parties 130X Inventories 1410 Prepayments 1470 Other Current Assets 11XX Total Current Assets Non-Current Assets 1510 Financial Asset at Fair Value Through Profit or Loss - Non Current 1535 Financial Assets at Amortized Cost - Non Current 1550 Investment under Equity Method 1600 Property, plant and equipment 1755 Right-of-use Asset 1760 Investment property (Net) 1780 Intangible assets 1840 Deferred Income Tax Assets 1900 Other Non-Current Assets 15XX Total Non-Current Assets 1XXX Total Assets

(Continued)

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Taiwan Mask Corporation Parent Only Balance Sheets December 31, 2022 and 2021

Unit: NT$Thousand

Liabilities and Equities

December 31, 2022 December 31, 2021 Notes Amount % Amount % 6(12) $ 1,054,934 8 $ 860,000 7 6(2) 5,697 - - - 6(21) 57,323 1 7,660 - 109,004 1 81,451 1 6(13) 520,173 4 446,349 4 150,791 1 119,062 1 30,682 - 28,054 - 6(15) 484,737 4 60,000 1 29,182 - 32,567 - 2,442,523 19 1,635,143 14 6(14) 2,609,044 20 1,657,049 14 6(15) 2,905,263 22 2,590,000 23 6(28) 3,850 - 59 - 518,641 4 540,421 5 6(16) 16,514 - 15,540 - 33,874 - 4,805 - 6,087,186 46 4,807,874 42 8,529,709 65 6,443,017 56 6(17) 2,564,465 20 2,556,735 22 6(18) 1,251,681 10 1,315,828 11 6(19) 769,952 6 656,037 6 - - - - 1,729,293 13 1,470,151 13 6(20) 10,508 - 4,032 - 6(17) ( 1,778,979) ( 14 ) ( 941,423) ( 8) 4,546,920 35 5,061,360 44 9 11 $ 13,076,629 100 $ 11,504,377 100

Current liabilities 2100 Short Term Loans 2120 Financial liabilities at fair value through profit or loss - Current 2130 Contract Liabilities - Current 2170 Accounts Payable 2200 Other Payables 2230 Current Income Tax Liabilities 2280 Lease Liability - Current 2320 Long-term liabilities due within one year or one business cycle 2399 Other Current Liabilities - Other 21XX Total Current Liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term Loans 2570 Deferred Income Tax 2580 Lease liability - Non Current 2640 Defined Benefit Liabilities - Non Current 2645 Guarantee Deposits Received 25XX Total Non-Current Liabilities 2XXX Total Liabilities Capital 3110 Capital stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Other equity interests 3400 Other equity interests 3500 Treasury stock 3XXX Total Equities Major Commitments and Contingencies Major Events after Financial Statement Date 3X2X Total Liabilities and Equities

The accompanying notes are an integral part of the parent only financial statements and should be read in conjunction.

Chairman: Sean Chen

Managerial Officer: Lidon Chen

Accounting Officer: Eve Yang

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Taiwan Mask Corporation Parent Only Statement of Comprehensive Income January 1 to December 31 of 2022 and 2021

Unit: NT$Thousand (Except for earnings per share)

Items

2022 2021 Notes Amount % Amount % 6 (21) and 7 $ 3,887,648 100 $ 2,773,339 100 6(5) ( 1,796,579 ) ( 46)( 1,454,152 )( 52) 2,091,069 54 1,319,187 48 6(26) (27) ( 63,495 ) ( 2) ( 56,719 ) ( 2) ( 272,202 ) ( 7) ( 459,279 ) ( 17) ( 92,972 ) ( 2) ( 64,936 ) ( 2) 12(2) ( 821 ) - ( 117 ) - ( 429,490 ) ( 11)( 581,051)( 21) 1,661,579 43 738,136 27 6(22) 11,798 - 3,264 - 6(23) 195,387 5 153,506 6 6(24) ( 205,013 ) ( 5) 81,799 3 6(25) ( 91,694 ) ( 2) ( 55,918 ) ( 2) ( 676,888 ) ( 18) 403,041 14 ( 766,410 ) ( 20) 585,692 21 895,169 23 1,323,828 48 6(28) ( 191,650 ) ( 5)( 177,218 )( 6) $ 703,519 18 $ 1,146,610 42 6(16) ( $ 2,721 ) - $ 1,011 - 65 - 178 - ( 2,656 ) - 1,189 - 6(20) 6,476 - 3,143 - 6,476 - 3,143 - 6(26) $ 3,820 - $ 4,332 - $ 707,339 18 $ 1,150,942 42 6(29) $ 3.37 $ 5.47 6(29) $ 3.12 $ 5.37

4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling Expenses 6200 Administrative Expenses 6300 R&D Expenses 6450 Expected loss on credit impairment 6000 Total Operating Expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other Incomes 7020 Other Gains and Losses 7050 Financial Costs 7070 The share of subsidiaries, affiliates and joint venture profits and losses recognized by the equity method 7000 Total Non-Operating Incomes and Losses 7900 Earnings Before Tax 7950 Income Tax Expense 8200 Net Income Other Comprehensive Incomes (Net) Components of other comprehensive income that will not be reclassified to profit or loss 8311 Re-measurements of defined benefit plan 8330 Profit and loss of subsidiaries, associates and joint ventures recognized by using equity method - Items that will not be reclassified to profit or loss 8310 Total items that will not be reclassified subsequently to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statement translation differences of foreign operations 8360 Total Components of other comprehensive income that will be reclassified to profit or loss 8300 Other Comprehensive Incomes (Net) 8500 Total comprehensive income for the year Earnings per share 9750 Net Income (Loss) Diluted Earnings per share 9850 Net Income (Loss)

The accompanying notes are an integral part of the parent only financial statements and should be read in conjunction.

Chairman: Sean Chen

Managerial Officer: Lidon Chen Accounting Officer: Eve Yang

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Taiwan Mask Corporation Parent Only Changes of Equity Statements January 1 to December 31 of 2022 and 2021

2021 Balance as of 2021/1/1 Net Income Other Comprehensive Profit or Loss Total comprehensive income for the year Distribution and appropriation of earnings for 2020 Legal capital reserve Reversal of Special reserve Cash dividends Conversion of convertible bonds Adjustment of capital reserve by dividends paid to subsidiaries Changes in shares of affiliates and joint ventures recognized under the equity method Share-based payment transaction Treasury Stock Buyback Treasury stocks transfer to employees Capital surplus - convertible bond stock options Acceptance of gifts from shareholders Payment of overdue unclaimed dividends to shareholders Balance as of 2021/12/31 2022 Balance January 1, 2022 Net Income Other Comprehensive Profit or Loss Total comprehensive income for the year Distribution and appropriation of earnings for 2021 Legal capital reserve Cash dividends Conversion of convertible bonds Distribution of cash from capital surplus Adjustment of capital reserve by dividends paid to subsidiaries Changes in ownership interests in subsidiaries recognized Changes in shares of affiliates and joint ventures recognized under the equity method Share-based payment transaction Treasury Stock Buyback Treasury stock donation Balance December 31, 2022	Notes		Capital stock		Capital surplus			Retained earnings	Retained earnings	Retained earnings	Retained earnings		Other equity interests	Other equity interests	Other equity interests		Unit: NT$Thousand Treasury stock Total Equity ($ 834,598 ) $ 3,538,598 - 1,146,610 - 4,332 - 1,150,942 - - - - - ( 379,071 ) - 246,014 - 55,622 - ( 20,287 ) - 169,174 ( 828,884 ) ( 828,884 ) 722,059 722,059 - 406,616 - 586 - ( 9 ) ($ 941,423 ) $ 5,061,360 ($ 941,423 ) $ 5,061,360 - 703,519 - 3,820 - 707,339 - - - ( 241,189 ) - 63,202 - ( 241,189 ) - 73,463 - ( 76,448 ) - 21,107 - 16,831 ( 842,536 ) ( 842,536 ) 4,980 4,980 ($ 1,778,979 ) $ 4,546,920
							Legal reserve		Special reserve	Unappropriated earnings			Financial statement translation differences of foreign operations	a	Unrealized gain or loss on financial ssets measured at fair value through other comprehensive income
	6(20) 6(19) 6(17) 6(18) 6(18) 6(18) 6(17) 6(17) 6(18) 6(18) 6(18) 6(20) 6(19) 6(17) 6(18) 6(18) 6(18) 6(18) 6(18) 6(17)		$ 2,527,136 - - - - - - 29,599 - - - - - - - - $ 2,556,735 $ 2,556,735 - - - - - 7,730 - - - - - - - $ 2,564,465		$ 439,898 - - - - - - 216,415 55,622 27,526 169,174 - - 406,616 586 ( 9 ) $ 1,315,828 $ 1,315,828 - - - - - 55,472 ( 241,189 ) 73,463 10,169 21,107 16,831 - - $ 1,251,681		$ 587,990 - - - 68,047 - - - - - - - - - - - $ 656,037 $ 656,037 - - - 113,915 - - - - - - - - - $ 769,952		$ 2,666 - - - - ( 2,666 ) - - - - - - - - - - $ - $ - - - - - - - - - - - - - - $ -		$ 814,617 1,146,610 1,189 1,147,799 ( 68,047 ) 2,666 ( 379,071 ) - - ( 47,813 ) - - - - - - $ 1,470,151 $ 1,470,151 703,519 ( 2,656 ) 700,863 ( 113,915 ) ( 241,189 ) - - - ( 86,617 ) - - - - $ 1,729,293		$ 3,555 - 3,143 3,143 - - - - - - - - - - - - $ 6,698 $ 6,698 - 6,476 6,476 - - - - - - - - - - $ 13,174		($ 2,666 ) - - - - - - - - - - - - - - - ($ 2,666 ) ($ 2,666 ) - - - - - - - - - - - - - ($ 2,666 )		($ 834,598 ) - - - - - - - - - - ( 828,884 ) 722,059 - - - ($ 941,423 ) ($ 941,423 ) - - - - - - - - - - - ( 842,536 ) 4,980 ($ 1,778,979 )

The accompanying notes are an integral part of the parent only financial statements and should be read in conjunction.

Managerial Officer: Lidon Chen

Chairman: Sean Chen

Accounting Officer: Eve Yang

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Taiwan Mask Corporation Parent Only Statement of Cash Flows January 1 to December 31 of 2022 and 2021

Cash Flow from Operating Activities Net Income (Loss) Before Tax Adjustments to Reconcile Net Income to Net Cash Flow from Operating Activities Revenues and Expenses Depreciation Amortization Expected loss on credit impairment Dividend income Interest income Interest Incomes Net Profit of Financial Asset at Fair Value Through Loss (Profit) Loss on disposal of investments Share-based payment transaction The Share of Subsidiaries and Affiliates Profits and Losses Recognized by the Equity Method Property, plant and equipment reclassified as expenses The Changes of Assets/ Liabilities related to Operating Activities The Changes of Assets/ Liabilities related to Operating Activities Mandatory financial assets at fair value through profit or loss Contract Assets Notes Receivables Accounts Receivables Accounts Receivables－Related Parties Other Receivables Inventories Prepayments Other Current Assets Net Changes of Liabilities related to Operating Activities Contract Liabilities Accounts Payable Other Payables Other Current Liabilities Defined Benefit Liabilities Net Cash In-Flow from Operating Dividends Received Interest Received Interest Paid Income Tax Paid Net Cash In-Flow from Operating Activities

Unit: NT$Thousand Notes January 1 to December31,2022 January 1 to December31,2021 $ 895,169 $ 1,323,828 6(26) 513,116 355,573 6(26) 6,284 6,105 12(2) 821 117 6(23) ( 33,682 ) ( 3,288 ) 6(22) ( 11,799 ) ( 3,264 ) 6(25) 91,694 55,918 6(24) 114,183 ( 85,115 ) 6(24) 119,316 38,774 6(17) 14,131 119,544 676,888 ( 442,208 ) 6(7) 116 - ( 357,348 ) ( 888,218 ) 25,212 ( 36,957 ) - 29 ( 208,285 ) ( 168,078 ) ( 4,413 ) 3,891 ( 1,580 ) ( 3,756 ) ( 8,820 ) 967 ( 67,468 ) 26,745 170 ( 323 ) 49,663 1,529 27,553 ( 27,592 ) 29,844 168,192 ( 3,385 ) 25,271 ( 1,749) ( 2,013 ) 1,865,631 465,671 70,496 26,243 10,066 3,245 ( 90,670 ) ( 56,986 ) ( 157,909) ( 106,485 ) 1,697,614 331,688

(Continued)

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Taiwan Mask Corporation Parent Only Statement of Cash Flows January 1 to December 31 of 2022 and 2021

Cash Flow from Investment Activities Acquisition of Amortized Cost Financial Assets Acquisition of investment property by the Equity Method Return of capital by investee company Other Receivables－Related Parties Acquisition of Property, Plants and Equipment Acquisition of Intangible Assets Increase in refundable deposit Net Cash Outflow from Investing Activities Cash Flows from Financing Activities Increase of Short Term Loan Redemption of Short Term Loan Increase of Long Term Loan Redemption of Long Term Loan Issuance of ordinary/convertible corporate bonds Distribution of cash dividends (including capital surplus distribution cash) Treasury stocks transfer to employees Cost of treasury stock buyback Redemption of Lease Principal Increase in Guarantee Deposits Received Payment of overdue unclaimed dividends Net Cash In-Flow (Out-Flow) from Funding Activities Net increase (decrease) in cash and cash equivalents Beginning Balance of Cash and Cash Equivalents Ending Balance of Cash and Cash Equivalents

Unit: NT$Thousand Notes January 1 to December31,2022 January 1 to December31,2021 ( $ 187,349 ) ( $ 3 ) - ( 367,671 ) - 180,000 - 609,195 6(30) ( 2,662,286 ) ( 1,562,684 ) ( 39,486 ) ( 12,257 ) ( 2,370 ) ( 4,956 ) ( 2,891,491 ) ( 1,158,376 ) 6(31) 5,662,100 2,960,484 6(31) ( 5,467,166 ) ( 3,549,084 ) 6(31) 4,624,737 1,891,000 6(31) ( 3,884,737 ) ( 962,427 ) 6(31) 997,095 2,297,099 6(19) ( 482,378 ) ( 379,071 ) - 722,059 ( 842,536 ) ( 828,884 ) 6(31) ( 29,737 ) ( 19,912 ) 6(31) 29,069 436 - ( 9 ) 606,447 2,131,691 ( 587,430 ) 1,305,003 1,798,841 493,838 $ 1,211,411 $ 1,798,841

The accompanying notes are an integral part of the parent only financial statements and should be read in conjunction.

Chairman: Sean Chen

Managerial Officer: Lidon Chen

Accounting Officer: Eve Yang

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Taiwan Mask Corporation Notes to the Parent Only Financial Statements 2022 and 2021

Unit: NT$Thousand (Unless otherwise specified)

I. Company history

Taiwan Mask Corporation (hereinafter referred to as the "Company") was established on October 21, 1988, and started its operations in March 1989. The Company was approved by the shareholders meeting on June 12, 2000 to acquire Shin-Tai Technology Co., Ltd., on the merger record date of December 1, 2000, with the Company being the surviving entity. The Company mainly engage in the research, development, manufacturing and sales of photomask, providing technical assistance, consultation, inspection and repair of the abovementioned products.

II. Date and procedures for passing the financial report

The accompanying parent-only financial statements were approved and authorized for issuance by the Board of Directors on March 3, 2023.

III. Application of New and Revised International Financial Reporting Standards

• (I) The impact from adopting the newly released and revised International Financial Reporting Standards recognized and issued into effect by the Financial Supervisory Commission (FSC).

The following table summarizes the applicable newly released, corrected and amended standards and interpretations of the International Financial Reporting Standards recognized and issued into effect by the Financial Supervisory Commission in 2022:

Effective Date Issued by Newly released / corrected / amended standards and interpretations IASB Amendments to IFRS 3 - "Reference to Conceptual Framework" January 1, 2022 Amendment to IAS 16 - "Property, Plant and Equipment: Proceeds January 1, 2022 before Intended Use". Amendment to IAS 37 "Onerous Contracts - Cost of Fulfilling a Contract" January 1, 2022 Annual improvements to 2018 - 2020 cycle January 1, 2022

The Company believes that the adoption of aforementioned IFRSs will not have a significant effect on the financial position and performance.

• (II) Impact of the newly released and amended IFRS recognized by the FSC not yet adopted by the Company.

The following table summarizes the applicable newly released, corrected and amended standards and interpretations of the International Financial Reporting Standards recognized by the Financial Supervisory Commission in 2023:

Newly released / corrected / amended standards and interpretations Effective Date Issued by IASB Amendment to IAS 1 - "Disclosure of Accounting Policies" January 1, 2023 Amendment to IAS 8 - "Definition of Accounting Estimates" January 1, 2023 Amendments to IAS 12, "Deferred Income Taxes Related to Assets January 1, 2023

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and Liabilities Arising from a Single Transaction"

The Company believes that the adoption of aforementioned IFRSs will not have a significant effect on the financial position and performance.

(III) IFRSs issued by the IASB but not yet recognized by the FSC.

The following table summarizes the applicable newly released, corrected and amended standards and interpretations of the International Financial Reporting Standards issued by the IASB but not yet recognized by the FSC:

Newly released / corrected / amended standards and interpretations Effective Date Issued by

IASB but not yet recognized by the FSC: Newly released / corrected / amended standards and interpretations	Effective Date Issued by
Amendments to IFRS10and IAS28- “Sale or contribution of assets between an investor and its associate or joint venture” Amendments to IFRS16- “Liabilities of Lease from the Leaseback” IFRS17- “Insurance contracts” Amendment to IFRS17 -“Insurance contracts” Amendments to IFRS17 -"First-time Adoption of IFRS17and IFRS 9- Comparative Information" Amendment to IAS1- "Classification of Liabilities as Current or Non-Current" Amendment to IAS1- "Non-Current Liabilities With Covenants"	IASB
	To be determined by the IASB January 1, 2024 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024

The Company believes that the adoption of aforementioned IFRSs will not have a significant effect on the financial position and performance.

IV. Summary of significant accounting policies

The principal accounting polices applied in the preparation of these parent only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(I) Compliance statement

These parent only financial statements of the Company have been prepared in accordance with the "Rules Governing the Preparation of Financial Statements by Securities Issuers".

• (II) Basis of Preparation

• Except for the following items, these parent only financial statements have been prepared under the historical cost convention.

  • (1) Financial assets and financial liabilities at fair value through profit or loss (including derivatives).

  • (2) Financial assets at fair value through other comprehensive income.

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

• The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent only financial statements are disclosed in Note 5.

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(III) Foreign currency translation

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the "functional currency"). The parent only financial statements are presented in New Taiwan dollars, which is the Company's functional currency and reporting currency.

1. Foreign currency transactions and balances

2. (1) Foreign currency transactions are translated into the functional currency using spot exchange rate at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

3. (2) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated using spot exchange rate at the balance sheet date. Exchange differences arising from re-translation at the balance sheet date are recognized in profit or loss.

4. (3) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated using spot exchange rate at the balance sheet date. Their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated using spot exchange at the balance sheet date. Their translation differences are recognized in other comprehensive income. For those which are not measured at fair value, they measured by the historical exchange rate of the initial transaction date.

5. (4) All foreign exchange gains and losses are presented in the statement of comprehensive income within "Other gains and losses".

6. Translation of foreign operations

7. (1) The operating results and financial position of all corporate group entities and affiliates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

   • A. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet.

   • B. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period.

   • C. All resulting exchange differences are recognized in other comprehensive income.

8. (2) When the foreign operation that is partially disposed of or sold is a subsidiary, the accumulated conversion difference recognized as other comprehensive income is reattributed to the foreign operation's non-controlling interests on a pro rata basis. However, even if the Company retains part of its equity in the former subsidiary, but has lost control of the subsidiary of the foreign operation, it will be treated with as a disposal of the entire equity of the foreign operation

9. (3) Goodwill and fair value adjustments arising on acquisition of a foreign entity are regarded as assets and liabilities of the foreign entity, and are translated at the closing rate.

(IV) Classification of current and non-current items

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

2. (1) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle.

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• (2) Assets held mainly for trading purposes.

• (3) Assets that are expected to be realized within twelve months from the balance sheet date.

• (4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

Assets that do not meet the above criteria are considered non-current.

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

2. (1) Liabilities that are expected to be paid off within the normal operating cycle.

3. (2) Assets held mainly for trading purposes.

4. (3) Liabilities that are to be paid off within twelve months from the balance sheet date.

5. (4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Liabilities that do not meet the above criteria are considered non-current.

(V) Financial assets at fair value through profit and loss

1. Refer to the financial assets that are not measured at amortized cost, or are measured at fair value through other comprehensive gain or loss.

2. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

3. The Company measures financial assets at fair value in initial recognition. The related transaction costs are recognized in profit and loss. These financial assets are subsequently re-measured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss.

4. When the right to receive dividends is established, the economic benefits associated with the dividends are likely to flow in, and the amount of dividends can be reliably measured, the Company recognizes dividend income in profit or loss.

(VI) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

• (VII) Financial assets measured at amortized cost

• Refer to those that meet the following criteria at the same time:

  • (1) The objective of the business model is achieved by collecting contractual cash flows.

  • (2) The assets’ contractual cash flows solely represent payments of principal and interest.

• The Company holds time deposits that are not considered cash equivalents. Due to the short holding period, the impact of discounting is insignificant and is measured by the amount of investment.

(VIII) Accounts and notes receivable

1. Refers to accounts and notes that have been unconditionally charged for the right to exchange

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the value of the consideration due to the transfer of goods or services.

1. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(IX) Impairment Loss of Financial Assets

Regarding debt instruments measured at FVTOCI, financial assets measured at amortized cost, accounts receivable or contract assets and lease receivables that contain significant financing components, the Company, on each balance sheet date, considers all reasonable and supportable information (including forward-looking ones) and measure the loss allowance based on the 12month expected credit losses for those that do not have their credit risk increased significantly since initial recognition. For those that have increased significantly since initial recognition, the loss allowance is measured based on the full lifetime expected credit losses. A loss allowance for full lifetime expected credit losses is also required for contract assets or trade receivables that do not constitute a financing transaction.

• (X) De-recognition of financial assets

A financial asset is derecognized when the Company's rights to receive cash flows from the financial assets have expired.

(XI) Lessor's lease transaction - Operating lease

Lease income from operating leases, less any incentives given to the lessee, is amortized in current profit or loss on a straight-line basis over the lease term.

(XII) Inventories

Inventories are measured at the lower of cost or net realizable value, and the cost is determined by weighted-average method. The cost of finished goods and work-in-progress comprises raw materials, direct labor, other direct costs and related production overheads (amortized according to normal production capacity), but excludes borrowing costs. At the end of year, inventories are evaluated at the lower of cost or net realizable value. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable costs of completion and selling expenses.

(XIII) Investments accounted for using equity method - Subsidiaries and associates

1. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

2. Unrealized gains or losses on transactions between Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

3. The Company recognized the profit and loss upon the acquisition of subsidiaries as the current profit and loss. Other comprehensive profit and loss after the acquisition are recognized as the other comprehensive profit and loss. If the Company's recognized profit and loss of the subsidiaries equal to or exceed the equity in the subsidiaries, the Company will continue to recognize the loss in proportion to its shareholding.

4. Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are equity

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transactions, and they are considered as transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is directly recognized in equity.

1. When the Company loses control of a subsidiary, the Company remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Company loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

2. Associates refer to entities over which the Company has significant influence but is not in control. In general, the associates may have more than 20% of their voting shares directly or indirectly owned by the Company. The Company accounts for its investment in associates using the equity method, and the investment is initially recognized at cost.

3. The Company recognizes the profit and loss upon the acquisition of associates as the current profit and loss. Other comprehensive profit and loss after the acquisition are recognized as the other comprehensive profit and loss. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company will not recognize further losses, unless it has incurred legal or constructive obligations or make payments on behalf of the associate.

4. If an associate has changes in equity not from profit or loss or other comprehensive income, and such changes do not affect the Company's shareholding in the associate, the Company will recognize all changes in equity attributable to the Company's share of the associate as "capital surplus" according to the shareholding percentage.

5. Unrealized gains on transactions between the Company and associates are eliminated to the extent of the Company's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

6. In the event that an associate issues new shares and the Company does not subscribe to or acquire the new shares in proportion, which results in a change to the Company's shareholding percentage but the Company maintains a significant influence on the associate, the increase or decrease of the Company's share of equity interest is the adjustment of "capital surplus" and "investments accounted for under the equity method". If the investment percentage is reduced, in addition to the above adjustments, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionally on the same basis as would be required if the relevant assets or liabilities were disposed of.

7. Pursuant to the “Guidelines Governing the Preparation of Financial Statements by Securities Issuers”, the profit or loss during the period and other comprehensive income presented in consolidated financial statements shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to

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owners of the parent presented in the financial statements prepared on a consolidated basis, and the owners' equity presented in the parent company only financial statements shall be the same as the equity attributable to owners of the parent presented in the financial statements prepared on a consolidated basis.

(XIV) Property, plant and equipment

1. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

2. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the costs of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

3. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

4. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any changes are accounted for as a change in estimate under IAS 8, "Accounting Policies, Changes in Accounting Estimates and Errors," from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

useful lives of property, plant and equipment	are as follows:
Buildings and structures	3 years to 56 years
Machinery and equipment	5 years to 14 years
Transportation equipment	6 years
Office equipment	3 years to 6 years

(XV) Leasing agreements (lessee) - Right-of-use assets/lease liabilities

1. Leases are recognized as right-of-use assets and lease liabilities at the date at which the leased assets are available for use by the Company. For short-term leases or leases of lowvalue assets, lease payments are recognized as expenses on a straight-line basis over the lease term.

2. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments include fixed payments, less any lease incentives receivables.

The Company subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of re-measurement is recognized as an adjustment to the rightof-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

1. At the commencement date, the right-of-use asset is recognized at cost which includes: (1) The amount of initial measurement of lease liability.

2. (2) Any lease payments made at or before the commencement date.

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• (3) Any original direct costs incurred.

• (4) The estimated cost of dismantling, removing the underlying asset and restoring its location, or restoring the underlying asset to the condition required in the lease terms and conditions.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset's service life or the end of lease term. When the lease liability is remeasured, the amount of re-measurement is recognized as an adjustment to the right-of-use asset.

(XVI) Real estate investment

Investment properties are initially measured at cost, and may be subsequently measured using a cost model. Except for land, the service life is recognized on a straight-line basis of depreciation and is about 45 years.

(XVII) Intangible assets

Computer software is recognized at the cost of acquisition, and amortized based on the estimated useful life of 3 years based on the straight-line method.

(XVIII) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less disposal cost or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(XIX) Borrowings

Refers to long- and short-term funds borrowed from banks. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

(XX) Accounts and notes receivable

1. Refers to debts incurred as a result of the purchase of raw materials, goods or services and the notes payable due to business and non-business purposes.

2. The short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XXI) Convertible bonds payable

The convertible bonds payable issued by the Company are embedded with conversion options (i.e., the holder's right to choose to convert to the Company's common stock for a fixed amount of shares), put options and call options. The issuance price is classified as financial assets, financial liabilities or equity at the time of initial issuance according to the terms of issuance, which is treated as follows:

1. Embedded put options and call options: "Financial assets or liabilities at fair value

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through profit or loss" are recorded at their net fair value on initial recognition; subsequently, "Gain or loss on financial assets (liabilities) at fair value through profit or loss" is recognized on the balance sheet date, with the difference valued at current fair value.

1. Master contract of corporate bonds: The difference between the fair value of the corporate bonds and the redemption value is recognized as a premium or discount on the corporate bonds payable at the time of original recognition; subsequently, it is recognized in profit or loss as an adjustment to "finance costs" using the effective interest method under the amortization procedure over the circulation period.

2. Embedded conversion options (which meet the definition of equity): On initial recognition, the remaining value of the issue amount, net of the above "financial assets or liabilities at fair value through profit or loss" and "corporate bonds payable", is recorded as "capital surplus - stock options" and is not subsequently remeasured.

3. Any directly attributable transaction costs of the issuance are allocated to each component of liabilities and equity in proportion to the original carrying amount of each component mentioned above.

4. Upon conversion, the components of liabilities (including "corporate bonds payable" and "financial assets or liabilities at fair value through profit or loss") are subsequently measured according to their respective classifications, and the carrying amount of the aforementioned components of liabilities is added to the carrying amount of "capital surplus - stock options" as the issuance cost of common stock exchanged.

(XXII) Employee benefits

1. Short-term employee benefits

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

1. Pension

2. (1) Defined contribution plans

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

• (2) Defined-benefit plans

• A. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using the current interest rates of government bonds (at the balance sheet date) consistent with the currency and period of the defined-benefit plan instead.

• B. Re-measurements arising on defined-benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as

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retained earnings.

.

• C. The related expenses of the past service cost are immediately recognized as profit or loss.

• Termination benefits

Refer to when companies decide to terminate the employees before the normal retirement date, or when employees decide to accept the benefits in exchange for the termination. The Company recognizes expenses when it is no longer able to withdraw the offer of termination benefits or when the relevant restructuring costs are recognized, whichever is earlier. Liabilities that are not expected to be paid off within twelve months from the balance sheet date should be discounted.

1. Employees' bonuses and directors' and supervisors' remuneration

2. Employees' bonuses and directors' and supervisors' remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(XXIII) Share-based payment to employees

The share-based payment agreement for delivery of equity is a transaction in which employees' labor service received as consideration for the Company's equity instrument at fair value, and it is recognized as compensation costs during the vesting period, and the equity is adjusted accordingly. The fair value of equity instrument shall reflect the effects of vesting and non-vesting conditions of market value. The recognized remuneration costs are adjusted in accordance with the expected service conditions to be met and the nonvesting market value conditions, until the final recognized amount is recognized with the vesting amount on the vesting date.

(XXIV) Income tax

1. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

2. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted by the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

3. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent only balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and

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associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

1. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.

(XXV) Capital

1. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

2. When the Company buys back the issued shares, the consideration paid, including any directly attributable incremental costs, is recognized as a deduction of shareholders’ equity with the net amount after tax. When the purchased shares are subsequently reissued, the difference between the consideration received and the book value after deducting any directly attributable incremental costs and the impact of income tax is recognized as an adjustment to shareholders’ equity.

(XXVI) Dividend distribution

Dividends are recorded in the Company's financial statements in the period in which they are resolved by the Company's shareholders. Cash dividends are recorded as liabilities. Stock dividends are recorded as dividends to be distributed and transferred to be common stocks and share premium on the record date of issuance of new shares.

(XXVII) Recognized revenue

1. The Company manufactures and sells photomasks. The sales revenue is recognized when the control of the product is transferred to the customer. That is, once products are delivered to customers, the customers have discretion on the channel and price of product sales, and the Company has no outstanding performance obligations that may affect customers' acceptance of the products. The delivery of products occurs when products are shipped to a designated location and the risk of obsolescence and loss has been transferred to customers, and the customers accept the products in accordance with the sales contract or have objective evidence that all criteria have been met.

2. The time interval between the transfer products or services promised to customers and the customers' payment has not exceeded one year, so the Company has not adjusted the transaction price to reflect the time value of money.

3. Accounts receivable are recognized when goods are delivered to customers. The Company has unconditional rights to the contract price, and will be able to collect the amount from the customers after the time has passed.

(XXVIII) Government subsidies

Government subsidies are recognized at fair value once it is reasonably convinced that the Company complies with the conditions for subsidies and will be receiving the subsidies. If the nature of the government subsidies is to compensate the expenses

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incurred by the Company, the government subsidies are recognized as current gains and losses on a systematic basis during the period in which the related expenses are incurred.

V. Critical Accounting Judgments and Key Sources of Estimation and Uncertainty

The preparation of these parent only financial statements requires the management to make critical judgments in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Please see the following explanation of critical accounting judgments and key sources of estimation and uncertainty:

(I) Important judgments adopted by the accounting policies

• None.

(II) Critical accounting estimates and assumptions

Evaluation of Inventories

The Company is primarily engaged in photomask and integrated circuit services in the semiconductor industry. Due to rapid technological innovations, short life-cycle and competition within the photomask industry, the risk of price fluctuations, Loss on decline in value of inventories and obsolescence is higher than that of other industries. The Company measures inventory based on the lower of cost and net realizable value. For inventories that are older than a certain period of age or are outdated and obsolete, the Company must use judgment and estimation to determine the net realizable value of the inventory on the balance sheet date. The valuation of inventory may undergo major changes.

As of December 31, 2022, the book value of the Company's inventory was NT$118,709.

VI. Summary of Significant Accounting Items

• (I) Cash and Cash Equivalents

ary of Significant Accounting Items Cash and Cash Equivalents
Demand Deposit Time deposits Total	December 31,2022 $ 474,371 737,040 $ 1,211,411	December31,2021
		$ 948,521 850,320
		$ 1,798,841

1. The Company associates with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

2. The Company has not pledged cash to others.

(II) Financial assets and liabilities at fair value through profit or loss

Items Current items: Financial assets mandatorily measured at fair value through profit or loss Shares of listed and OTC company Convertible bond call/put options	December 31,2022 $ 442,498 -	December 31,2021 $ 830,575 5,000

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Valuation adjustment Financial liabilities mandatorily measured at fair value through profit or loss Convertible bond call/put options Non-current items: Financial assets mandatorily measured at fair value through profit or loss Shares of listed and OTC company Not listed, OTC or emerging stock board stocks Valuation adjustment	442,498 ( 135,050) $ 307,448 $ 5,697 $ 866,133 - 866,133 58,873 $ 925,006	835,575 ( 11,017) $ 824,558 $ - $ 251,343 11,756 263,099 33,701 $ 296,800

1. Details of financial assets/liabilities at fair value through profit or loss recognized in profit or loss are as follows:

loss are as follows:
Financial assets mandatorily measured at fair value through profit or loss Shares of listed and OTC company Not listed, OTC or emerging stock board stocks	2022 ($ 233,499) - ($ 233,499)	2021
		$ 85,508 7,590
		$ 93,098

1. The Company has financial assets at fair value through profit or loss pledged to others.

2. Please see Note 12 (2) and (3) for the price risk and fair value information related to financial assets at fair value through profit or loss.

(III) Financial assets measured at amortized cost

Items December 31, 2022 Current items: Time deposits $ 3,000 Non-current items: Time deposits $ 222,729 Demand Deposit 45 Total $ 222,774 1. Financial assets at amortized cost is recognized in the profit or loss 2022 Interest income $ 246	December 31, 2021 $ 3,000 $ 35,425 - $ 35,425 shown as follows: 2021 $ 118

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1. While not considering the collaterals or other credit enhancements, the financial assets at amortized cost held by the Company had the maximum exposure of credit risk at $225,774 and $38,425 as of December 31, 2022 and 2021, respectively.

2. Please see Note 8 how the Company provides financial assets at amortized cost as a pledged collateral.

(IV) Notes and accounts receivable

collateral. Notes and accounts receivable
Accounts Receivables Accounts Receivables－Related Parties Less: Loss allowance	December 31, 2022	December 31, 2021
	$ 802,337 9,525	$ 594,052 5,112
	811,862 ( 1,906)	599,164 ( 1,085)
	$ 809,956	$ 598,079

1. Aging of accounts receivable notes receivable is as follows:

Not past due Up to 30days 31-90days 91-180days More than 181days past due	December	31, 2022 Notes Receivables $ - - - - - $ -	December	31, 2021
	Accounts Receivables $ 723,205 72,473 13,355 1,581 1,248 $ 811,862		Accounts Receivables $ 504,835 81,417 11,447 1,465 - $ 599,164	Notes Receivables
				$ - - - - -
				$ -

The above is an aging report based on the number of days past due.

1. As of December 31, 2022 and 2021, accounts receivable and notes receivable were from contracts with customers. The balances of notes and accounts receivable as of January 1, 2021 was NT$$434,009.

2. While not considering the collaterals or other credit enhancements, the accounts receivable held by the Company had the maximum exposure of credit risk at $809,956 and $598,079, respectively, as of December 31, 2022 and 2021.

3. Please refer to Note 12 (2) for the information on credit risk of accounts receivable.

(V) Inventories

Inventories
Raw materials Work in process Finished goods Total		December 31,2022
	Cost $ 99,179 22,831 1,814 $ 123,824	(Gain from reversal of) loss allowance on decline in market value of inventories ($ 5,115) - - ($ 5,115)	Bookvalue
			$ 94,064 22,831 1,814
			$ 118,709

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Raw materials Work in process Finished goods Total		December31,2021
	Cost $ 105,224 9,596 1,071 $ 115,891	(Gain from reversal of) loss allowance on decline in market value of inventories ($ 6,002) - - ($ 6,002)	Book value
			$ 99,222 9,596 1,071
			$ 109,889

The cost of inventories recognized as losses by the Company.

Cost of goods sold Loss on falling prices of inventory and inventory obsolescence (gain from recovery)	2022 $ 1,797,466 ( 887) $ 1,796,579	2021
		$ 1,453,362 790
		$ 1,454,152

For 2022, part of the inventory for which the provision for impairment losses had been made in the previous period was sold, resulting in a gain from recovery.

(VI) Investment under Equity Method

Investment under Equity Method
SunnyLake Park International Holdings, Inc. Youe Chung Capital Corporation Innova Vision INC. Advagene Biopharma Co., Ltd. Miracle Technology Co., LTD. Weida Hi-Tech Co., Ltd. Subtotal	2022 $ 5,746 1,140,806 151,324 33,508 482,368 84,080 $ 1,897,832	2021
		$ 5,139 1,737,757 235,591 63,578 430,778 87,898
		$ 2,560,741

For information on the Company's subsidiaries, please refer to Note 4 (3) of 2022 consolidated financial statements.

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(VII) Property, plant and equipment

I) Property, plant and equipment
Buildings and structures (Includingland) January 1, 2022 Cost $ 1,692,966 Accumulated depreciation ( 602,039) $ 1,090,927 2022 January 1 $ 1,090,927 Additions 363,662 Depreciation ( 140,346) Reclassification - Cost ( 172,500) Reclassification - Accumulated depreciation 87,564 December 31 $ 1,229,307 December 31, 2022 Cost $ 1,884,128 Accumulated depreciation ( 654,821) $ 1,229,307	Machinery and equipment	Office equipment	Transportation equipment	Other equipment	Unfinished construction and equipment under acceptance	Total $ 5,105,424 ( 1,926,959) $ 3,178,465 $ 3,178,465 2,044,326 ( 462,023) ( 9,586) 11,146 $ 4,762,328 $ 7,140,164 ( 2,377,836) $ 4,762,328
	$ 3,215,027 ( 1,304,734)	$ 31,105 ( 16,357)	$ 5,635 ( 2,581)	$ 10,942 ( 1,248)	$ 149,749 -
	$ 1,910,293	$ 14,748	$ 3,054	$ 9,694	$ 149,749
	$ 1,910,293 1,280,116 ( 309,183) 31,170 ( 1,616)	$ 14,748 12,159 ( 7,737) 327	$ 3,054 657 ( 844)	$ 9,694 24,528 ( 3,913) 279,588 ( 74,802)	$ 149,749 363,204 - ( 148,171) -
	$ 2,910,780	$ 19,497	$ 2,867	$ 235,095	$ 364,782
	$ 4,526,313 ( 1,615,533) $ 2,910,780	$ 43,591 ( 24,094) $ 19,497	$ 6,292 ( 3,425) $ 2,867	$ 315,058 ( 79,963) $ 235,095	$ 364,782 - $ 364,782

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Buildings and structures (Includingland) January 1, 2021 Cost $ 1,556,325 Accumulated depreciation ( 566,010) $ 990,315 2021 January 1 $ 990,315 Additions 288,982 Depreciation ( 76,853) Reclassification - Cost ( 152,341) Reclassification - Accumulated depreciation 40,824 December 31 $ 1,090,927 December 31, 2021 Cost $ 1,692,966 Accumulated depreciation ( 602,039) $ 1,090,927	Buildings and structures (Includingland)	Machinery and equipment	Office equipment	Transportation equipment	Other equipment	Unfinished construction and equipment under acceptance	Total $ 4,395,500 ( 1,649,297) $ 2,746,203 $ 2,746,203 925,545 ( 318,486) ( 215,621) 40,824 $ 3,178,465 $ 5,105,424 ( 1,926,959) $ 3,178,465
	$ 1,556,325 ( 566,010)	$ 2,678,584 ( 1,070,324)	$ 22,659 ( 11,213)	$ 2,759 ( 1,750)	$ - -	$ 135,173 -
	$ 990,315	$ 1,608,260	$ 11,446	$ 1,009	$ -	$ 135,173
	$ 990,315 288,982 ( 76,853) ( 152,341) 40,824	$ 1,608,260 478,829 ( 234,410) 57,614 -	$ 11,446 8,446 ( 5,144) - -	$ 1,009 2,876 ( 831) - -	$ - 10,942 ( 1,248) - -	$ 135,173 135,470 - ( 120,894) -
	$ 1,090,927	$ 1,910,293	$ 14,748	$ 3,054	$ 9,694	$ 149,749
		$ 3,215,027 ( 1,304,734)	$ 31,105 ( 16,357)	$ 5,635 ( 2,581)	$ 10,942 ( 1,248)	$ 149,749 -
	$ 1,090,927	$ 1,910,293	$ 14,748	$ 3,054	$ 9,694	$ 149,749

1. The Company had no interest capitalization in 2022 and 2021.

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1. The major components of the Company's houses and buildings include land, buildings and factory renovation projects. Except for land, they are depreciated for 5 to 56 years.

2. Information on property, plant and equipment pledged to others as collateral is provided in Note 8.

3. The abovementioned property, plant and equipment of the Company are for self-use.

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• (VIII) Leasing arrangements - lessee

• The underlying assets leased by the Company include land, buildings and company vehicles, and the leasing contracts are typically made for periods of 3 to 20 years. Lease contracts are negotiated separately and include a variety of terms and conditions. There are no restrictions for the leased assets, except that they cannot be used as loan collaterals.

• The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings and structures Transportation equipment (company vehicles) Other equipment Land Buildings and structures Transportation equipment (company vehicles) Other equipment	December 31,2022 Bookvalue $ 506,900 71 9,063 25,404 $ 541,438 2022 Depreciation $ 24,679 936 5,092 1,855 $ 32,562	December31,2021
		Bookvalue
		$ 526,294 1,003 9,385 26,733
		$ 563,415
		2021
		Depreciation
		$ 17,498 984 2,883 -
		$ 21,365

1. For 2022 and 2021, the increases of right-of-use assets were $10,585 and $193,652, respectively. The decreases of right-of-use assets of the Company in 2022 and 2021 were $0 and $4,741, respectively.

2. The information on profit or loss items related to lease contracts is as follows:

Items affecting current profit and loss Interest expenses on lease liabilities Lease of low-value assets	2022 $ 6,787 945	2021 $ 5,596 266

1. The Company's total cash outflow on leases for 2022 and 2021 was $37,469 and $25,774, respectively.

2. Options to extend or terminate leases

In determining lease terms, the Company into consideration all facts and circumstances that create economic incentives to exercise an option to extend or terminate leases. The assessment of lease period is reviewed if a significant event occurs which affects the assessment of options to extend or options not to terminate.

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(IX) Leasing arrangements - lessor

1. The Company leases out assets such buildings. The lease contracts are typically made for periods of 1 to 5 years. The terms of lease contracts are negotiated separately and include various terms and conditions. In order to preserve the condition of leased assets, the Group usually requires lessees not to pledge the underlying leased assets.

2. The Company recognized rental income of $141,022 and $133,714 based on operating lease contracts in 2022 and 2021, respectively, and none of the lease contracts were variable lease payments.

3. The maturity analysis of the lease payments under the operating leases is as follows:

2022 2023 2024 2025 Total	December 31, 2022 $ - 83,026 37,049 26,577 $ 146,652	December 31, 2021
		$ 81,389 63,099 34,580 27,683
		$ 206,751

(X) Real estate investment

Real estate investment
January 1, 2022 Cost Accumulated depreciation 2022 January 1 Reclassification - Cost Reclassification - Accumulated depreciation Depreciation December 31 December 31, 2022 Cost Accumulated depreciation January 1, 2021 Cost Accumulated depreciation 2021 January 1	Buildings and structures
	$ 761,409 ( 57,456)
	$ 703,953
	$ 703,953 9,470 ( 11,146) ( 18,531)
	$ 683,746
	$ 770,879 ( 87,133)
	$ 683,746
	Buildings and structures
	$ 545,788 ( 910)
	$ 544,878
	$ 544,878

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Reclassification - Cost Reclassification - Accumulated depreciation Depreciation December 31 December 31, 2021 Cost Accumulated depreciation	215,621 ( 40,824) ( 15,722)
	$ 703,953
	$ 761,409 ( 57,456)
	$ 703,953

1. Rental income and direct operating expenses of investment real estate:

Rental income from investment property Direct operating expenses incurred by investment properties that generate rent income in the period	2022 $ 91,063 $ 19,305	2021
		$ 86,801
		$ 20,270

1. The fair value of the investment property held by the Group as of December 31, 2022 and 2021 were $1,177,524 and $706,464, respectively. They were valuated using the income method and were of Level 3 fair value, and the major assumptions are as follows:

Discount rate Annual rent (net income) Number of years	December 31, 2022 7.09% $ 87,708 45~50	December 31, 2021
		10.53% $ 86,801 45~50

1. No capitalization of interest for investment property in 2022 and 2021.

2. As of December 31, 2022 and 2021, the investment properties had been used as collaterals. Please refer to Note 8.

3. (XI) Other Non-Current Assets

Prepayments for equipment Refundable deposit	December 31, 2022 $ 1,322,877 8,723 $ 1,331,600	December 31, 2021 $ 643,858 6,353 $ 650,211

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(XII) Short Term Loans

Short Term Loans
Type of borrowings Bank credit loan Type of borrowings Bank credit loan Secured bank borrowings	December 31,2022 $ 1,054,934 December 31,2021 $ 660,000 200,000 $ 860,000	Range of interest rate 1.06%~4% Range of interest rate 1.000%〜1.250% 1.188%	Collateral
			None Collateral
			None Shares of listed and OTC company

The interest expenses recognized in profit and loss in 2022 and 2021 were $24,652 and $7,591, respectively.

(XIII) Other Payables

$7,591, respectively. Other Payables
Payroll and bonus payable Director and supervisor remuneration and employee bonus payable Payable on equipment Machine maintenance payable Others Corporate bonds payable Corporate bonds payable Less: Amount of exercised conversion options Less: discount on corporate bonds payable Less: Corporate bonds matured in one year or a business cycle or have the put option exercised	December 31, 2022 $ 51,825 120,000 105,604 51,362 191,382 $ 520,173 December 31, 2022	December 31, 2021 $ 41,668 188,800 44,545 29,411 141,925 $ 446,349 December 31, 2021 $ 2,000,000 ( 258,700) ( 84,251) 1,657,049 - $ 1,657,049	December 31, 2021 $ 41,668 188,800 44,545 29,411 141,925 $ 446,349 December 31, 2021
	$ 3,000,000 ( 324,400) ( 66,556)
	2,609,044 -
	$ 2,609,044

(XIV) Corporate bonds payable

1. The terms of issuance for the Company's 3rd domestic unsecured convertible bonds are as follows:

2. (1) The Company has been approved by the competent authority to raise and issue $2,000,000 of the 3rd domestic unsecured convertible bonds, with a coupon rate of 0% and an issuance period of 5 years from August 3, 2021 to August 3, 2026. The convertible bonds are repayable in cash at par value on maturity. The convertible bonds were listed for trading on August 3, 2021.

3. (2) The bondholders may request the conversion of the convertible bonds into the Company's common shares at any time from the day after the expiration of three months from the date of issuance of the corporate bonds to the maturity date, except during the period when the transfer of the corporate bonds is suspended in accordance

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with the regulations or laws, and the rights and obligations of the converted common shares are the same as those of the original issued common shares.

• (3) The conversion price of the convertible bonds is determined in accordance with the pricing model stipulated in the Measures, and the conversion price will be adjusted in accordance with the pricing model stipulated in the Conversion Measures in the event that the Company is subject to anti-dilution provisions. The conversion price will be reset on the base date set by the Regulations in accordance with the pricing model stipulated in the Conversion Measures. As of December 31, 2022, the conversion price was NT$85 per share.

• (4) If the closing price of the Company's common stock exceeds 30% of the then conversion price for 30 consecutive business days from the day following the third month of the issuance of the convertible bonds to the 40th business day prior to the expiration of the issuance period, the Company may redeem the outstanding corporate bonds within the next 30 business days at the par value of the corporate bonds in cash.

• (5) If the outstanding balance of the convertible bonds is less than 10% of the total par value of the corporate bonds issued, the Company may redeem the convertible bonds at any time thereafter for cash at the par value of the corporate bonds, from the day following the third month of the issuance of the corporate bonds to the 40th business day prior to the expiration of the issuance period.

• (6) As of December 31, 2022, a total of $324,400 in face value had been converted into 3,733 thousand shares of common stock.

• Upon issuance of convertible bonds, the Company separated the conversion options from the components of liabilities in accordance with IAS 32, "Financial Instruments: Presentation," and recorded "capital surplus - stock options" at $406,616. The embedded repurchase and repurchase rights are separated from the principal contractual debt instruments in accordance with IFRS 9, "Financial Instruments", because they are not closely related to the economic characteristics and risks of the principal contractual debt instruments, and are recorded as "financial assets or liabilities at fair value through profit or loss" on a net basis. The effective interest rate of the master contract debt after the separation was 0.0902%.

• First series domestic secured corporate bonds

• In order to raise the Company's working capital, the board of directors resolved to approve on August 5, 2022 the issue of the first series domestic secured corporate bond. The issue has been reported to and approved by the Taipei Exchange, and the terms are as follows:

• (1) Total amount of issue: According to the different issue conditions, there are two types of bonds, A and B, of which A is issued with an amount of $300,000, and B is issued with an amount of $200,000, totaling $500,000.

• (2) Issue period: Five years, issued on September 28, 2022, and matured on September 28, 2027.

• (3) Coupon rate and repayment method of principal and interest: Both Bond A and Bond B have a fixed annual coupon rate of 1.80%. Simple interest is calculated and paid once a year, and the principal is repaid in cash at the face value of the bond at maturity.

• (4) Guarantee method: The Company's bonds are guaranteed by the joint delegation guarantee contract signed and the obligation and the contract of guarantee for

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performance of corporate bonds signed by major banks.

1. Second series domestic secured convertible corporate bonds

In order to raise the Company's working capital, the board of directors resolved to approve on August 5, 2022 the issue of the second series domestic secured corporate bond. The issue has been reported to and approved by the Taipei Exchange, and the terms are as follows:

• (1) Total amount of issue: According to the different issue conditions, there are two types of bonds, A and B, of which A is issued with an amount of $300,000, and B is issued with an amount of $200,000, totaling $500,000.

• (2) Issue period: Five years, issued on December 27, 2022, and matured on December 27, 2027.

• (3) Coupon rate and repayment method of principal and interest: Bond A has a fixed annual coupon rate of 2.20% and Bond B has a fixed annual coupon rate of 2.38%. Simple interest is calculated and paid once a year, and the principal is repaid in cash at the face value of the bond at maturity.

• (4) Guarantee method: The Company's bonds are guaranteed by the joint delegation guarantee contract signed and the obligation and the contract of guarantee for performance of corporate bonds signed by major banks.

(XV) Long-term Loans

Type of borrowings	Borrowing period and payment method	Range of interest rate	Collateral Houses and buildings and machine and equipment (Note) Buildings and structures Machinery and equipment Buildings and structures and investment properties (Note)	December 31, 2022
Secured borrowings Secured borrowings Secured borrowings Secured borrowings	Repaid in instalments and different amounts according to the agreed period between December 28, 2021 and January 28, 2027. Repaid in instalments and different amounts according to the agreed period between December 27, 2021 and December 27, 2024. Repaid in instalments and different amounts according to the agreed period between December 27, 2021 and December 15, 2026. Repaid in instalments and different amounts according to the agreed period between December 28, 2022 and December 27, 2032.	2.425% 2.410% 2.125% 2.070%		$ 1,250,000 250,000 240,000 850,000

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Secured borrowings Repaid in instalments and different amounts according to the agreed period between December 21, 2022 and December 21, 2027. 2.675% Machinery and equipment Secured borrowings Repaid in instalments and different amounts according to the agreed period between December 27, 2022 and December 27, 2027. 2.000% Machinery and equipment Less: Long-term borrowings (includingcurrent portion)	400,000 400,000
	3,390,000 ( 484,737
	$ 2,905,263

Type of borrowings Borrowing period and payment method	Range of interest rate	Collateral Buildings and structures, machinery equipment and investment properties (Note) Buildings and structures Machinery and equipment Buildings and structures and investment properties (Note)	December 31, 2021
Secured borrowings Repaid in instalments and different amounts according to the agreed period between December 28, 2021 and January 28, 2027. Secured borrowings Repaid in instalments and different amounts according to the agreed period between December 27, 2021 and December 27, 2024. Secured borrowings Repaid in instalments and different amounts according to the agreed period between December 27, 2021 and December 15, 2026. Secured borrowings Repaid in instalments and different amounts according to the agreed period between November 9, 2020 and November 9, 2023.	1.800% 1.580% 1.300% 1.440%		$ 1,250,000 250,000 300,000 850,000
			2,650,000

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Less: Long-term borrowings (includingcurrent portion)	( 60,000)
	$ 2,590,000

• Note: According to the loan contract provisions of some banks, the Company shall maintain a specific debt-to-equity ratio and interest solvency every six months during the loan duration.

(XVI) Pensions

1. (1) The Company operates a defined-benefit pension plan in accordance with the Labor Standards Act, which cover all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standards Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last six months prior to retirement. The Company contributes a monthly amount equal to 2% of employees’ monthly salaries and wages to a retirement fund at the Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is not enough to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contribution for the deficit by the end of next March.

2. (2) The amounts recognized in the balance sheet are as follows:

the deficit by the end of next March. The amounts recognized in the balance	sheet are as follows:
Presentvalueof defined benefit obligations Fair value of plan assets Defined Benefit Liabilities	December 31,2022 ($ 21,153) 4, 947 ($ 16,206)	December31,2021
		($ 22,595) 7,145
		($ 15,450)

• (3) Changes in net defined benefit liabilities are as follows:

2022 Balance on January 1 Current service cost Interest (expense) income	Present value of defined benefit obligations	Fair value of plan assets	Defined Benefit Liabilities ($ 15,450) ( 61) ( 107) ( 15,618)
	($ 22,595) ( 61) ( 169)	$ 7,145 - 62
	( 22,825)	7,207

Re-measurements: Return on plan assets (excluding amounts included in interest income or expenses)

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Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Balance on December 31 2021 Balance on January 1 Current service cost Interest (expense) income Re-measurements: Return on plan assets (excluding amounts included in interest income or expenses) Change in financial assumptions Change in demographic assumptions Pension fund contribution Paid pension Balance on December 31	- 1,620 ( 4,748)	407 - -	407 1,620 ( 4,748) ( 2,721) 2,133 - ($ 16,206) Defined Benefit Liabilities ($ 17,641) ( 61) ( 58) ( 17,760) 396 1,084 ( 1,303) 177 2,133 - ($ 15,450)
	( 3,128)	407
	- 4,800	2,133 ( 4,800)
	($ 21,153)	$ 4,947
	Present value of defined benefit obligations	Fair value of plan assets
	($ 22,557) ( 61) ( 79)	$ 4,916 - 21
	( 22,697)	4,937
	321 1,084 ( 1,303)	75 - -
	102	75
	- -	2,133 -
	($ 22,595)	$ 7,145

(4) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter or private placement equity securities, investment in domestic

~43~

or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings are less than the aforementioned rates, government shall make payments for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating the fund and hence the Company is unable to disclose the classification of fair value of plan asset in accordance with IAS19 paragraph 142. The composition of fair value of plan assets as of December 31, 2022 and 2021 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

• (5) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	2022 1.4% 2.125%	2021
		0.75%
		2.125%

Assumptions for 2022 and 2021 regarding future mortality experience are set based on the Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changes, the present value of defined benefit obligation is affected. The analysis is as follows:

December 31, 2022 Effect on presentvalue of defined benefit obligation December 31, 2021 Effect on presentvalue of defined benefit obligation	Discount rate 0.25% increase 0.25% decrease ($ 631) $ 656 ($ 685) $ 713	Future salaryincreases	Future salaryincreases
	0.25% increase ($ 631) ($ 685)	0.25% increase $ 636 $ 687	0.25% decrease
			($ 616)
			($ 664)

The sensitivity analysis above analyzes the impact from changing one of the assumptions while others remain constant. In practice, more than one assumption may change all at once. The sensitivity analysis is the same with the method used to calculate the net pension liabilities of the balance sheet.

• (6) The expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2023 are $2,133.

• (7) As of December 31, 2022, the weighted average duration of the retirement plan is 13 years.

• (1) Starting July 1, 2005, the Company has established a retirement plan based on the Labor Pension Act applicable to the domestic employees. Under the new plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon

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termination of employment.

• (2) For 2022 and 2021, the pension costs recognized by the Company in accordance with the abovementioned pension measures were $12,196 and $9,982, respectively.

(XVII) Capital

1. As of December 31, 2022, the Company's authorized capital was $5,000,000, consisting of 500,000 thousand shares (including 20,000 thousand shares which can be subscribed to as employee stock options). The paid-in capital was $2,564,465 with a par value of NT$10. All proceeds from shares issued have been collected.

The movements in the number of the Company's common stocks outstanding are as follows:

follows:
January 1 Conversion of convertible bonds Treasury stocks transfer to employees Treasury Stock Buyback Treasury stock donation December 31	2022 214,107 773 - ( 10,000) 350 205,230	Unit: Thousand shares 2021
		205,632 2,960 20,000 ( 14,485) -
		214,107

1. Treasury stock

2. (1) Reasons for repurchase of shares and changes in the quantity:

Company name of the shareholding	Reasons for buyback Subsidiary holds the company's stock Transfer shares to employees Reasons for buyback Subsidiary holds the company's stock Transfer shares to employees	December
		Number of shares (thousand) 36,731 14,485 51,216
Subsidiary - Youe Chung Capital Corporation The Company Company name of the shareholding
		Number of shares (thousand) 37,081 4,485 41,566
Subsidiary - Youe Chung Capital Corporation The Company

(2) For 2022 and 2021, the Company's share-based payment arrangements were as follows:

		Quantity	Contract	Vesting
Type of arrangement	Grant date	granted	Period	conditions

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Transfer of treasury			Immediate
shares to employees	2022.01.26	4,485	vesting	Note
Transfer of treasury			Immediate
shares to employees	2021.05.05	3,000	vesting	Note
Transfer of treasury	2021.03.15	7,000	Immediate	Note
shares to employees			vesting
Transfer of treasury			Immediate
shares to employees	2021.02.03	3,000	vesting	Note

Note: The Company grants treasury stocks to employees of the Company and its subsidiaries.

• (3) Remuneration costs related to the transfer of treasury stocks of the Company in 2022 and 2021 were $14,131 and $119,544, respectively.

• (4) The Securities and Exchange Act stipulates that the percentage of the Company's repurchase of outstanding shares shall not exceed 10% of the Company's total issued shares, and the total value of shares purchased shall not exceed the retained earnings plus the premium of issued shares and the amount of realized capital reserve.

• (5) The shares bought back by the Company in accordance with the Securities and Exchange Act shall not be pledged. Before transfer, shareholders are not entitled to the shareholders' rights.

• (6) According to the provisions of the Securities and Exchange Act, the share repurchased to be transferred to employees shall be transferred within three years from the date of the purchase. If the transfer is not made within the time limit, the shares are deemed as unissued shares, and change of registration shall be made to cancel the shares. In order to maintain the Company’s credit and shareholders equity, the shares bought back should have the registration changed to cancel the shares within six months from the date of the purchase.

• (7) The Company's stock held by the subsidiary Youe Chung Capital is treated as treasury stock. As of December 31, 2022 and 2021, Youe Chung Capital held 36,731 thousand and 37,081 shares, respectively, of the Company. The average book value per share was NT$14.23, and the fair value per share was NT$84.7 and NT$108.00, respectively. The cost of transferring treasury stocks is calculated based on the book value of the Company's stock held by Youe Chung Capital and the Company's indirect shareholding during each period.

• (8) The Company was approved by the Board of Directors on February 3, 2021, to buy back 10,000 thousand shares of the Company in the centralized trading market and transfer them to employees, and the number of shares repurchased accounted for 3.96% of the total issued shares. The buy-back was completed and executed between February 4, 2021 and April 3, 2021.

• (9) The Company was approved by the Board of Directors on November 3, 2021, to buy back 6,000 thousand shares of the Company in the centralized trading market and transfer them to employees, and the number of shares repurchased accounted for 2.37% of the total issued shares. The buy-back of 4,485 thousand shares was completed and executed between November 4, 2021 and January 3, 2022.

• (10) The Company was approved by the Board of Directors on May 6, 2022, to buy back 10,000 thousand shares of the Company in the centralized trading market and transfer

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them to employees, and the number of shares repurchased accounted for 3.91% of the total issued shares. The buy-back of 10,000 thousand shares was completed and executed between May 9, 2022 and July 8, 2022.

(XVIII) Capital surplus

In accordance with the Company Act, any capital surplus arising from paid-in capital in excess of the par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the Securities and Exchange Act requires that the amount of capital surplus to be capitalized, as above, should not exceed 10% of paid-in capital each year. Capital reserves should not be used to cover accumulated deficit unless the legal reserve is insufficient. The following is a breakdown of the capital reserve:

Issue premiums January 1, 2022 $ 269,010 Conversion of convertible bonds 68,829 Distribution of cash from capital surplus ( 241,189) Adjustment of capital reserve by dividends paid to subsidiaries - Changes in ownership interests in subsidiaries recognized - Changes in shares of affiliates recognized under the equity method - Share-based payment transaction - December 31, 2022 $ 96,650 Issue premiums January 1, 2021 $ - Conversion of convertible bonds 269,010 Adjustment of capital reserve by dividends paid to subsidiaries - Changes in shares of affiliates recognized under the equity method - Share-based payment transaction - Convertible bond stock options - Acceptance of gifts from shareholders - Payment of overdue unclaimed dividends to shareholders - December 31, 2021 $ 269,010	Issue premiums	Trading of treasury stock	Changes in ownership interests in subsidiaries recognized	stock option	Equity changes in affiliates $ 47,320 - - - - 21,107 - $ 68,427 Equity changes in affiliates $ 18,540 - - 28,780 - - - - $ 47,320	Others	Total
		$ 695,046 - - 73,463 - - -	$ 4,919 - - - 10,169 - 2,700	$ 295,074 ( 13,357) - - - - 14,131		$ 4,459 - - - - - -	$ 1,315,828 55,472 ( 241,189) 73,463 10,169 21,107 16,831
	$ 96,650	$ 768,509	$ 17,788	$ 295,848		$ 4,459	$ 1,251,681
	Issue premiums	Trading of treasury stock	Changes in ownership interests in subsidiaries recognized	stock option		Others	Total
		$ 411,379 - 55,622 ( 76) 228,121 - - -	$ 6,097 - - ( 1,178) - - - -	$ - ( 52,595) - - ( 58,947) 406,616 - -		$ 3,882 - - - - - 586 ( 9)	$ 439,898 216,415 55,622 27,526 169,174 406,616 586 ( 9)
	$ 269,010	$ 695,046	$ 4,919	$295,074		$ 4,459	$1,315,828

~47~

(XIX) Retained earnings

1. According to the Articles of Incorporation, any surplus from profit concluded at the end of year by the Company is first subject to reimbursement of previous losses and payment of taxes, followed by 10% provision for legal reserve and provision or reversal of special reserve as the laws may require. Any earnings remaining shall be distributed as shareholders’ dividends in whole or partially.

2. The Company takes into account the overall business environment, industrial growth, and the Company's long-term financial planning for stable operation and development to adopt a residual dividend policy, which is mainly based on the Company's future capital budgeting plan to measure the annual capital needs. After using the retained earnings for funding, the remaining surplus will be distributed in the form of dividends, and the distribution steps are shown as follows:

   • (1) Decide on the best capital budgeting.

   • (2) Decide on the financing required for one of the capital budgeting items.

   • (3) Decide on the amount of the financing to be supported by retained earnings (methods such as cash capital increase or corporate bonds and so on can be adopted as support).

   • (4) After retaining the portion required for operation needs out of the earnings remainder, the rest should be distributed to shareholders in the form of dividends. Cash dividends distribution proportion should not be lower than 20% of the total amount of dividends for the distribution proportion of the Company’s dividends.

3. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of the legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

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

5. The Company's Board meeting resolved on March 3, 2023 to distribute a cash dividend of NT$2.3 per common share from the 2022 earnings, with a total dividend of $556,511. In addition, a cash distribution of NT$0.2 per share was made from capital surplus for a total of NT$48,392.

6. The Company's board of directors resolved on May 26, 2022 to distribute a cash dividend of NT$1.00 per ordinary share from the 2021 surplus with a total dividend of $255,674. NT$1.00 per share is to be distributed from the capital surplus, with a total of $255,674. In addition, as the Company implemented the transfer of 14,485 thousand shares of treasury stock to employees, which changed the number of outstanding shares to 241,189 thousand shares, so the cash dividend was adjusted to $241,189 to be distributed from the capital surplus of $241,189.

7. The Company's shareholders’ meeting resolved on July 5, 2021 to distribute a cash dividend of NT$1.50 per common share from the 2020 earnings, with a total dividend of $379,071.

8. (XX) Other equity interests

2022

~48~

(XXI)	Unrealized gains and losses January 1 ($ 2,666) Difference in foreign currency translation - December 31 ($ 2,666) Unrealized gains and losses January 1 ($ 2,666) Difference in foreign currency translation - December 31 ($ 2,666) Operating revenue Revenue from contracts withcustomers $	Unrealized gains and losses ($ 2,666) - ($ 2,666)	Unrealized gains and losses ($ 2,666) - ($ 2,666)	Foreign currency translation $ 6,698 6,476 $ 13,174 2021	Foreign currency translation $ 6,698 6,476 $ 13,174 2021	Total $ 4,032 6,476 $ 10,508 Total $ 889 3,143 $ 4,032 2021 2,773,339
				Foreign currency translation $ 3,555 3,143 $ 6,698 2022 3,887,648 $
				2022 3,887,648
			$		$

1. Segmentation of revenue from contracts with customers

The Company derives its revenue from the transfer of goods and services either over time or at a point in time. The revenue can be divided into the following main product lines:

lines:
2022 Revenue from contracts with externalcustomers Cut-off point of income recognition Income recognized at a particular point in time Income recognized gradually over time 2021 Revenue from contracts with externalcustomers Cut-off point of income recognition Income recognized at a particular point in time Income recognized gradually over time	Photomask and semiconductor segment
	$ 3,887,648
	$ 3,797,006 90,642
	$ 3,887,648
	Photomask and semiconductor segment
	$ 2,773,339
	$ 2,657,485 115,854
	$ 2,773,339

~49~

2. Contract Liabilities

• (1) Contract liabilities related to contracts with customers recognized by the Company:

Contract Liabilities	December 31, 2022 $ 57,323	December 31, 2021 $ 7,660	January 1, 2021
			$ 6,131

• (2) Contract liabilities at the beginning of the period recognized as revenue of the period

period
		2022			2021
Opening balance of contract
liabilities
Revenue recognized for this
period
(Including reclassification of
other income)	$	2,986		$	3,436
erest income
		2022			2021
Interest from bank deposits	$	11,491	$		1,332
Interest income from financial		246			118
assetsmeasured at amortized
cost
Interest income from related parties		-			1,781
Other interest incomes		61			33
	$	11,798	$		3,264
Other Incomes
		2022			2021
Rental income	$	141,022	$		133,714
Dividend income		33,682			3,288
Subsidy income		12,343			4,668
Other income - Others		8,340			11,836
	$	195,387	$		153,506
her Gains and Losses
		2022			2021
Loss on disposal of investments	($	119,316)	$		393
Gains on foreign exchange		47,090			12,107
Gains (losses) of financial
assetsat fairvalue
through profit or loss	(	114,183)			85,115
Other losses -- Depreciation of investment
properties	(	18,531)	(		15,722)
Other miscellaneous expenses	(	73)	(		94)
	($	205,013)	$		81,799

(XXII) Interest income

(XXIII) Other Incomes

(XXIV) Other Gains and Losses

(XXV) Financial Costs

2022

2021

~50~

Interest expenses: Bank borrowings Convertible bonds Lease liabilities (XXVI) Expenses by nature Employee benefits expenditure Depreciation expense (Note) Amortization expense Less: Investmentpropertyand right-of-use assets (XXVII) Employee benefits expenditure Payroll expenses Employee stock options Labor and health insurance fees Pension expense Other personnel expenses	$ 66,804 18,103 6,787 $ 91,694 2022 $ 467,529 513,116 6,284 2022 $ 395,385 14,131 29,229 12,364 16,420 $ 467,529	$ 41,930 8,392 5,596 $ 55,918 2021 $ 592,890 355,573 6,105 2021 $ 429,563 119,544 23,886 10,101 9,796 $ 592,890

1. According to the Articles of Incorporation, the Company shall distribute not less than 10% of the current year’s profit situation for employee remuneration and not more than 2% of current year’s profit situation for director remuneration. However, profits must first be taken to offset against cumulative losses, if any.

2. For 2022 and 2021, employee remuneration was accrued at $102,000 and $158,000, respectively, and director remunerations was accrued at $18,000 and $30,800, respectively. The amounts were listed as payroll expenses.

The remuneration to employees and directors were estimated at 10.05% and 1.77%, respectively, based on the profitability for the year ended December 31, 2022; the remuneration to employees and directors were estimated at 10.18% and 1.98%, respectively, based on the profitability for the year ended December 31, 2021.

The employee remuneration and director remuneration resolved by the Board of Directors for 2021 were $158,000 and $18,000, respectively, which were different from $158,000 and $30,800 recognized in the 2021 financial statements by $0 and 12,800. This is mainly due to changes in estimates which have been adjusted to the profit or loss of 2022.

Information about employees remuneration and director remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System”.

(XXVIII) Income tax

1. Income tax expense

~51~

Components of income tax expense:

						2022	2022			2021	2021
Currenttax:
Currenttaxon profitsfor		the year			$		189,639		$		175,371
Additional surtax on undistributed								-				-
earnings
Under provision of prior	year's income							-				-
tax
Total currenttax							189,639				175,371
Deferred incometax:
Originationand reversal of temporary
differences							2,011					1,847
Total deferred incometax							2,011					1,847
Incometaxexpense					$		191,650		$		177,218
Reconciliation between	income tax expense and						accounting profit
						2022				2021
Taxcalculated based on					$		179,034 $				272,599
profit beforetaxand
statutorytax rate
Fees excluded according	to thetaxlaw						23,042					-
Tax-exempt income under thetaxlaw					(		10,426) (				106,318
Changes in assessment of
realizability of deferred
incometax assets								-				10,937
Incometaxexpense					$		191,650 $				177,218
Amounts of deferred tax assets or liabilities as a							result of temporary differences are as
follows:
							2022
							Recognized in
							other
				Recognized in			comprehensive		Recognized
		January 1		profit or loss			income			in equity	December 31
Temporary differences:
- Deferred income tax assets:
Unrealized exchange loss	$		- $		1,780		$	- $		-	$	1,780
Subtotal	$		- $		1,780		$	- $		-	$	1,780
- Deferred income tax
liabilities:
Unrealized gain on
exchange	($	59) ($			3,791)		$	- $		-	($	3,850)
Total	($	59) ($			2,011)		$	- $		-	($	2,070)

1. Reconciliation between income tax expense and accounting profit

2. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

~52~

Temporary differences: - Deferred income tax assets: Unrealized exchange loss Subtotal - Deferred income tax liabilities: Unrealized gain on exchange Total			2021	Recognized in equity $ - $ - $ - $ -
	January 1	Recognized in profit or loss ($ 2,014) ($ 2,014) $ 167 ($ 1,847)	Recognized in other comprehensive income $ - $ - $ - $ -		December 31
	$ 2,014				$ -
	$ 2,014				$ -
	($ 226)				($ 59)
	$ 1,788				($ 59)

1. Deductible temporary difference not recognized as deferred income tax assets

Deductible temporary difference	December 31,2022 $ 105,407	December 31,2021
		$ 106,261

1. The Company’s income tax returns through 2020 have been assessed and approved by the tax authority.

(XXIX) Earnings per share

the tax authority. rnings per share
Earnings per share Profit attributable to ordinary shareholders Diluted Earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Convertible bonds Employee remuneration Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares		2022
	Amount after tax $ 703,519 $ 703,519 14,422 - $ 717,941	Average weighted share outstanding (thousand shares) 208,572 208,572 19,713 1,473 229,758	Earnings per share (NT$)
			$ 3.37
			$ 3.12

2021

~53~

Amount after tax Earnings per share Profit attributable to ordinary shareholders $1,146,610 Diluted Earnings per share Profit attributable to ordinary shareholders $ 1,146,610 Assumed conversion of all dilutive potential ordinary shares Convertible bonds 6,713 Employee remuneration - Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares $1,153,323	Average weighted share outstanding (thousand shares) 209,770 209,770 3,220 1,791 214,781	Earnings per share (NT$)
		$ 5.47
		$ 5.37

The weighted average number of shares outstanding in 2022 and 2021 has deducted the number of shares held by the Company and the subordinate company Youe Chung Capital deemed as the Company's treasury stock (the number of shares is based on the Company’s shareholding).

(XXX) Supplemental cash flow information

Investing activities with partial cash payments:

Purchase ofproperty,plant and equipment Add: Opening balance of payable on equipment Prepayments for equipment at the end of the period Less: Ending balance of payable on equipment Prepayments for equipment at the beginning of the period Cash paid during the year	2022	2021
	$ 2,044,326 44,545 1,322,877 ( 105,604) ( 643,858)	$ 925,545 41,895 643,858 ( 44,545) ( 4,069)
	$ 2,662,286	$ 1,562,684

(XXXI) Changes in liabilities arising from financing activities

January 1, 2022 Change in cash flow from financing	Short Term Loans $ 860,000 194,934	Corporate bonds payable	Long-term borrowings (including current portion) Lease liabilities $ 2,650,000 $ 568,475 740,000 ( 29,737)	Guarantee Deposits Received	Total liabilities arising from financingactivities
		$ 1,657,049 997,095		$ 4,805 29,069	$ 5,740,329 1,931,361

~54~

activities Interest Incomes Interest Paid Other non-cash transactions December 31, 2022	- - - $1,054,934	18,103 - ( 63,203) $2,609,044	- - -	6,787 ( 6,787) 10,585 $ 549,323	- - -	24,890 ( 6,787) ( 52,618) $ 7,637,175
			$3,390,000		$ 33,874

January 1, 2021 Change in cash flow from financing activities Interest Incomes Interest Paid Other non-cash transactions December 31, 2021	Short Term Loans	Corporate bonds payable	Long-term borrowings (including currentportion)	Lease liabilities $ 399,473 ( 19,912) 5,596 ( 5,596) 188,914 $ 568,475	Guarantee Deposits Received	Total liabilities arising from financingactivities
	$ 1,448,600 ( 588,600) - - -	$ - 2,297,099 8,392 - ( 648,442)	$ 1,721,427 928,573 - - -		$ 4,369 436 - - -	$ 3,573,869 2,617,596 13,988 ( 5,596) ( 459,528)
	$ 860,000	$ 1,657,049	$ 2,650,000		$ 4,805	$ 5,740,329

VII. Related Party Transactions

(I) Related parties' names and relationship

Name of the related parties

Relationship with the Company

Miracle Technology Co., Ltd. Subsidiary Youe Chung Capital Corporation Subsidiary Innova Vision Inc. Subsidiary Aptos Technology Inc. 2nd-tier subsidiary Miracle International Enterprise (Shanghai) Co., 2nd-tier subsidiary Ltd.

Xsense Technology Corporation

2nd-tier subsidiary (Note 1)

Xsense Technology Corporation (B.V.I.) Taiwan Branch

Branch 2nd-tier subsidiary (Note 2) Digital-Can Tech. Co., Ltd. 2nd-tier subsidiary Adl Engineering INC. 2nd-tier subsidiary Weida Hi-Tech Co., Ltd. Affiliates Powerchip Technology Corporation Other related party

Image Match Design Inc. Other related party BKS Tec Corp. Other related party Taiwan Mask Charity Foundation Other related party

Note 1: In April 2021, the Company participated in the management and operating policies of Xsense Technology Corporation, including strategic decisions, and therefore included the firm in the consolidated financial statements as a consolidated entity as of that date.

~55~

• Note 2: Xsense Technology Corporation underwent a physical capital reduction in November 2022, leaving only 1 share held by Youe Chung Capital Corporation; at the same time, Xsense Technology Corporation applied to have the shares of Xsense Technology Corporation (B.V.I.) Taiwan Branch it held transferred to the original shareholders of Xsense Technology Corporation according to the original shareholding percentage; as of December 31, 2022, Youe Chung Capital Corporation held 100% equity of Xsense Technology Corporation and 53.00% of Xsense Technology Corporation (B.V.I.) Taiwan Branch.

(II) Significant transactions with the related parties

1. Operating revenue

Product sales: Subsidiary 2nd-tier subsidiary Affiliates Other related party	2022 $ 14,828 17,609 7,066 1,169 $ 40,672	2021 $ 6,621 29,027 72 1,171 $ 36,891

There are no major abnormalities in the transaction prices and payment terms of the related party compared to that of non-related parties.

2. Account receivable from related parties

Accounts Receivables: Subsidiary 2nd-tier subsidiary Affiliates Subtotal Other receivables: Subsidiary 2nd-tier subsidiary Subtotal Total	December 31,2022 $ 5,221 3,978 326 9,525 7,421 10,022 17,443 $ 26,968	December31,2021 $ 2,204 2,908 5,112 2,168 12,702 14,870 $ 19,982

3. Loans to related parties (recognized as "Other accounts receivable - related parties")

Subsidiary 2nd-tier subsidiary	2022 Balance at the end of period Interest income $ - $ - - - $ - $ -	2021	2021
	Balance at the end of period $ - - $ -	Balance at the end ofperiod $ - - $ -	Interest income
			$ 1,143 638
			$ 1,781

~56~

The loans to subsidiaries and 2nd-tier subsidiaries are to be repaid within one year. The interests in 2021 were charged at an annual interest rate of 2%.

4. Acquisition of other assets

Other related party Other related party 2nd-tier subsidiary Total	Account item Intangibleassets Fixedassets Fixedassets	2022 Acquisitionprice $ - - 32,884 $ 32,884	2021
			Acquisitionprice
			$ 8,926 1,750 -
			$ 10,676

5. Acquisition of financial assets

2022: None.

Subsidiar y	Account item Investment under Equity Method	Number of shares acquired 36,767,141	2021 Acquisitionprice $ 367,671

6. Others

Others
(1)Guarantee deposit received: Subsidiary 2nd-tier subsidiary Other related party (2)Rental income: Subsidiary 2nd-tier subsidiary Affiliates	2022 $ 416 - 95 $ 511 2022 $ 21,577 102,104 891 $ 124,572	2021
		$ 416 792 95
		$ 1,303
		2021
		$ 2,417 112,593 -
		$ 115,010

The Company leases buildings to subsidiaries, 2nd-tier subsidiaries and other related parties. The lease contract period is from 2018 to 2023, and the rent is collected in accordance with the contract.

(3)Prepayments for equipment: 2nd-tier subsidiary	2022 $ 71,804	2021
		$ -

• (4) The Company issued cash dividends of $73,463 and $55,622 to Youe Chung Capital in 2022 and 2021, respectively.

• (5) In 2022 and 2021, the Company donated $4,416 and $31,801, respectively, in cash to the

~57~

Taiwan Mask Charity Foundation.

(III) Compensation of key management personnel

Compensation of key management	personnel
Salary and short-term employee benefits Other long-term employee benefits Share-based payment to employees	2022 $ 16,345 14,852 - $ 31,197	2021
		$ 7,514 18,082 13,990
		$ 39,586

VIII. Pledged assets

Assets pledged by the Company as collateral are as follows:

Assets	Bookvalue December 31, 2022 December 31, 2021 $ 222,729 $ 35,425 45 640,740 149,500 608,646 623,354 683,746 703,953 2,213,811 2,339,034 2,401 $ 4,372,118 $ 3,851,266	Purpose
	December 31, 2022 $ 222,729 45 640,740 608,646 683,746 2,213,811 2,401 $ 4,372,118
Time deposit (Recognized as financial assetsat amortized cost) Demand deposit (Recognized as financialassetsat amortized cost) Stocks of publicly traded and OTC companies (recognized as "Financialassetsat fairvalue through profit or loss") Buildings and structures Investmentproperty Machinery and equipment and equipment under acceptance Office equipment		Guarantee of goods out of free trade zone and lease deposit Short Term Loans Short Term Loans Long-term Loans Long-term Loans Long- and short-term borrowings Long- and short-term borrowings

IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

(I) Contingencies

None.

(II) Commitments

1. Machine equipment maintenance contracts that have been signed but not yet paid

Machine maintenance Capital expenditures that have been signed Property, plant and equipment	December 31,2022 $ 51,362 but not yet incurred December 31,2022 $ 15,539	December31,2021
		$ 29,411
		December 31,2021 $ 119,059

1. Capital expenditures that have been signed but not yet incurred

~58~

3. Lease agreement

Please see Note 6 (8) and (9)

X. Losses due to major disasters

None.

XI. Major Events after Financial Statement Date

The resolution of the Company's Board on March 3, 2023 passed the appropriation of earnings. Please refer to Note 6 (19) for details.

XII. Others

(I) Capital management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including "current and non-current borrowings" as shown in the parent only balance sheet) less cash and cash equivalents. Total capital is calculated as "equity" as shown in the parent only balance sheet plus net debt.

The Company maintained the same strategy in 2022 as in 2021. It is committed to keeping the debt-to-capital ratio under a reasonable risk level. For the years ended December 31, 2022 and 2021, the debt-to-capital ratios were as follows:

Total borrowings Less: Cash and cash equivalents Net debt Total equity Total capital Debt-to-equity ratio	December 31,2022 $ 7,053,978 ( 1,211,411) 5,842,567 4,546,920 $ 10,389,487 41.56%	December31,2021
		$ 5,167,049 ( 1,798,841)
		3,368,208 5,100,527
		$ 8,468,735
		25.11%

(II) Financial instruments

1. Types of financial instrument

December 31, 2022 December 31, 2021

Financial assets

Financial assets at fair value through profit or loss

Financial assets mandatorily measured at fair value through profit or loss

$

1,232,454 $

1,121,358

~59~

Financialassetsmeasured at amortized cost Cash and Cash Equivalents Financialassetsmeasured at amortized cost Accounts receivable (Including related parties) Other accounts receivable (Including related parties) Refundable deposit Financial liabilities Financial liabilities at amortized cost Short Term Loans Accounts Payable Other Payables Corporate bonds payable Long-term borrowings (includingcurrent portion) Guarantee Deposits Received Lease liabilities	$ 1,211,411 225,774 809,956 22,009 8,723 $ 2,277,873 December 31,2022 $ 1,054,934 109,004 520,173 2,609,044 3,390,000 33,874 $ 7,717,029 $ 549,323	$ 1,798,841 38,425 598,079 18,696 6,353
		$ 2,460,394
		December 31,2021
		$ 860,000 81,451 446,349 1,657,049 2,650,000 4,805
		$ 5,699,654
		$ 568,475

2. Risk management policies

(1) The Company’s activities expose it to a variety of financial risks, including market risk (exchange rate, interest rate and price), credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial position and performance.

(2) Risk management is carried out by the Company's finance department under policies approved by the Board of Directors. Company's finance department identifies, evaluates and hedges financial risks in close collaboration with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as currency exchange risk, interest rate risk, credit risk, the use of derivatives and non-derivative financial instruments and investment of excess liquidity.

1. Significant financial risks and degrees of financial risks

2. (1) Market risk

A. Foreign exchange risk

The Company's operations involve certain non-functional currencies (the Company’s functional currency is the New Taiwan dollar (NTD), so it is subject to the impact of exchange rate fluctuation. The details of assets and liabilities

~60~

denominated in foreign currencies whose values would be materially affected by exchange rate fluctuations are as follows:

(Foreign currency: Functional currency) Financialassets Monetary items USD : NTD JPY : NTD Financial liabilities Monetary items USD : NTD JPY : NTD (Foreign currency: Functional currency) Financialassets Monetary items USD : NTD JPY : NTD Financial liabilities Monetary items USD : NTD JPY : NTD	December 31, 2022 Foreign currency (in thousands) Exchange rate Book value (In thousands of NTD) USD 44,731 30.71 $ 1,373,703 JPY 1,496 0.2324 348 USD 3,422 30.71 $ 105,090 JPY 616,283 0.2324 143,224 December31,2021 Foreign currency (in thousands) Exchange rate Book value (In thousands of NTD) USD 14,010 27.68 $ 387,799 JPY 65,669 0.2405 15,793 USD 2,099 27.68 $ 58,113 JPY 188,577 0.2405 45,353	December 31, 2022 Foreign currency (in thousands) Exchange rate Book value (In thousands of NTD) USD 44,731 30.71 $ 1,373,703 JPY 1,496 0.2324 348 USD 3,422 30.71 $ 105,090 JPY 616,283 0.2324 143,224 December31,2021 Foreign currency (in thousands) Exchange rate Book value (In thousands of NTD) USD 14,010 27.68 $ 387,799 JPY 65,669 0.2405 15,793 USD 2,099 27.68 $ 58,113 JPY 188,577 0.2405 45,353
	Foreign currency (in thousands) USD 14,010 JPY 65,669 USD 2,099 JPY 188,577	Exchange rate 27.68 0.2405 27.68 0.2405

• B. Total exchange gain, including realized and unrealized gains from significant foreign exchange variations on monetary items held by the Company amounted to a gain of $47,090 and a gain of $12,107 for the years ended December 31, 2022 and 2021, respectively.

• C. The analysis of foreign currency risk due to significant exchange rate fluctuation is as follows:

	2022
	SensitivityAnalysis
		Other comprehensive
	Effect on profit	profit and loss
Fluctuation	or loss	affected

(Foreign currency: Functional currency) Financial assets

~61~

Monetary items
USD : NTD	1%	$	13,737	$	-
JPY : NTD	1%		3		-
Financial liabilities
Monetary items
USD : NTD	1%	($	1,051)		-
JPY : NTD	1%	(	1,432)		-

2021

		2021	2021
(Foreign currency: Functional currency) Financialassets Monetary items USD : NTD JPY : NTD Financial liabilities Monetary items USD : NTD JPY : NTD		SensitivityAnalysis
	Fluctuation 1% 1% 1% 1%	Effect on profit or loss $ 3,878 158 ($ 581) ( 454)	Other comprehensive profit and loss affected
			$ - - - -

Price risk

• A. The equity instruments owned by the Company exposing to the price risk are financial assets at fair value through profit or loss.

• B. The Company invests primarily in beneficiary certificates and equity instruments. The price of such equity instrument is subject to the uncertainty of the future value of investment target. If the price of such equity instrument increases or decreases by 1%, while all other factors remain unchanged, the net profit after tax affected by equity instruments at fair value through profit or loss after tax for 2022 and 2021 is an increase or decrease of $12,325 and $11,214, respectively.

Cash flow and fair value interest rate risk

• A. The Company’s interest rate risk mainly comes from long-term borrowings issued at floating rates, which exposes the Company to cash flow interest rate risk. For 2022 and 2021, the Company's borrowings issued at floating rates were mainly denominated in New Taiwan Dollars.

• B. The Company's borrowings are measured at amortized cost, and the annual interest rate is re-priced according to the contract, which exposes the Company to the risk of future market interest rate changes.

~62~

• C. If the long- and short-term borrowing rates increase or decrease by 0.25%, while all other factors remain constant, the net profit after tax for 2022 and 2021 is a decrease or increase of $8,890 and $7,020, respectively, mainly due to the interest expense changes caused by the floating interest rate.

• (2) Credit risk

• A. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments under contract obligations, and the defaults are accounts receivable and the contract cash flow from debt instruments measured at amortized cost, measured at fair value through other comprehensive income and measured at fair value through profit or loss.

• B. The management of credit risk is established with a Company perspective. Only the banks and financial institutions with an independent credit rating of at least "A" can be accepted as transaction partners of the Group. According to the internal credit policy, each operating entity of the Company is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored.

• C. The Company considers a contract payment overdue in accordance with the agreed payment terms a breach of contract.

• D. The Company uses IFRS 9 to provide the following assumption as a basis for determining whether there is a significant increase in the credit risk of financial instruments after the original recognition:

  • (A) If the contract payment is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk of the financial asset is significantly increased since the original recognition.

  • (B) For bond investments in Taipei Exchange, if any external rating agency rates it as an investment grade on the balance sheet date, the credit risk of the financial asset is considered low.

• E. The Company uses the following indicators to determine the status of credit impairments of debt instruments:

  • (A) The issuer has suffered significant financial difficulties or is likely to enter bankruptcy or other financial restructuring.

  • (B) The issuer has suffered significant financial difficulties or is likely to enter bankruptcy or other financial restructuring.

  • (C) The issuer delays or does not pay for the interest or principal.

  • (D) Unfavorable changes in the national- or regional-level economic situation resulting in the issuer's default.

• F. The Company categorizes the accounts receivable from customers based on the characteristics of trade credit risks. The simplified approach is adopted for estimating the expected credit loss based on the provision matrix.

• G. The Company may write off the amount of financial assets that cannot be

~63~

reasonably expected to be recovered after recourse. However, the Company will continue the recourse to protect the rights of the claims.

• H. The Company has incorporated forward-looking considerations to adjust the loss rate built according to historic and current data in order to estimate the loss allowance of accounts receivables. The provision matrix for the years ended December 31, 2022 and 2021 are shown as follows:

December 31,2022 Expected loss rate Total book value Loss allowance December 31,2021 Expected loss rate Total book value Loss allowance	Notpast due 0.01% $ 723,205 $ - Notpast due 0.01% $ 504,835 $ -	30 days past due 0.20% $ 72,473 $ - 30 days past due 0.21% $ 81,417 $ -	31 to 90 days past due	91 to 180 days past due	181 to 360 days past due	Total
			1.85% $ 13,355 ($ 729) 31 to 90 days past due	5.23% $ 1,581 ($ 554) 91 to 180 days past due	56.58%~100% $ 1,248 ($ 623) 181 to 360 days past due	$ 811,862 ($ 1,906 Total
			2.03% $ 11,447 ($ 572)	5.11% $ 1,465 ($ 513)	57.18%~100% $ - $ -	$ 599,164 ($ 1,085)

• I. The Company adopts a simplified method in which the loss allowance for the accounts receivable is shown as follows:

accounts receivable is shown as follows:
January 1 Recognize impairment loss December 31 January 1 Recognize impairment loss December 31	2022
	Accounts Receivables
	$ 1,085 821
	$ 1,906
	2021
	Accounts Receivables
	$ 968 117
	$ 1,085

(3) Liquidity risk

• A. Cash flow forecasting is performed by the operating entities of the Company and aggregated by the Company’s finance department. It monitors rolling forecasts of liquidity requirements to ensure the Company has sufficient cash to meet operational needs.

• B. The remaining cash held by each operating entity will be transferred back to the Company's finance department. The finance department of the Company invests the remaining funds in interest-bearing demand deposits, time deposits, financial assets at fair value through profit or loss, financial assets at amortized cost (time deposits with a maturity of more than 3 months and less than 12 months), as the instruments chosen have appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. For the years ended December 31, 2022 and 2021, the position of money market held by the

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Company is at $1,214,411 and $1,801,841, respectively, and is expected to generate immediate cash flow to manage liquidity risk.

• C. The Company's undrawn borrowing facilities are shown as follows:

Floating rate Maturewithinone year Maturity of more than 1 year	December 31, 2022 $ 255,100 120,000 $ 375,100	December 31, 2021
		$ 900,000 -
		$ 900,000

• D. The following table shows the Company’s non-derivative financial liabilities and derivative financial liabilities settled on a net or total amount, grouped according to the relevant maturity date. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contract maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

December 31, 2022 Non-derivative financial liabilities: Short Term Loans Accounts Payable Other Payables Lease liabilities Corporate bonds payable Long-term borrowings (including current portion) Guarantee Deposits Received December 31, 2021 Non-derivative financial liabilities: Short Term Loans Accounts Payable Other Payables Lease liabilities Corporate bonds payable Long-term borrowings (including current portion)	Within 1year $ 1,054,934 109,004 520,173 36,293 - 496,418 - Within 1year $ 860,000 81,452 446,349 33,601 - 61,250	1 to 2years $ - - - 33,544 - 845,808 33,874 1 to 2years $ - - - 31,696 - 782,605	2 to 5years $ - - - 89,277 2,696,140 175,591 - 2 to5 years $ - - - 89,142 1,741,300 1,840,595	Over 5years
				$ - - - 469,121 - 1,664,852 - Over5 years
				$ - - - 490,467 - -

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Guarantee Deposits Received

4,805

---

(III) Fair value information

1. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

2. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in stocks of publicly traded or OTC firms and beneficiary certificates is included in Level 1.

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

4. Level 3:Unobservable inputs for the asset or liability. The fair value of the Company’s investment in stocks of non-publicly traded or non-OTC firms is included in Level 3.

5. Financial instruments not measured at fair value

Cash and cash equivalents, notes receivable, accounts receivable, other receivable, shortterm borrowings, notes payable, accounts payable and other payable as reasonable approximation of fair value.

1. The related information for financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

as follows:
December 31, 2022 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities $ 1,153,154 Liabilities Recurring fair value measurements Convertible bond call/put options $ - December 31, 2021 Level 1 Assets Recurring fair value measurements	Level 2 $ 79,300 $ - Level 2	Level3 $ - $ 5,697 Level3	Total
			$ 1,232,454
			$ 5,697
			Total

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Financial assets at fair value through profit or loss - Equity securities Convertible bonds Total	$ 1,109,226 - $ 1,109,226	$ - - $ -	$ 7,132 5,000 $ 12,132	$ 1,116,358 5,000
				$ 1,121,358

1. The methods and assumptions adopted by the Company for assessing the fair value are as follows:

2. (1) The Company adopt market pricing as the input of fair value (i.e. Level 1), and the breakdown of the characteristics of the instrument is as follows:

Shares of listed and OTC company Open-end funds Market price Closing price Net value

• (2) Except for the abovementioned financial instruments with active markets, the fair value of the remaining financial instruments is obtained using valuation techniques. The fair value obtained through valuation techniques can refer to the current fair value of other financial instruments with similar substantive conditions and characteristics, discounted cash flow method, or other valuation techniques, including the use of market information available on the date of the parent only balance sheet (for example, the Taipei Exchange refers to the yield curve, the Reuters adopts the average quotation of interest rate of commercial promissory notes).

• (3) The output of the valuation model is the estimated value, and the valuation technique may not reflect all the relevant factors of the financial instruments and non-financial instruments held by the Company. Therefore, the estimated value of the valuation model will be appropriately adjusted according to additional parameters, such as model risk or liquidity risk. According to the Company's fair value valuation model management policies and related control procedures, the management believes that in order to properly express the fair value of financial instruments and non-financial instruments in the parent only balance sheet, valuation adjustments are appropriate and necessary. The price information and parameters used in the valuation process are carefully assessed and appropriately adjusted according to current market conditions.

• (4) The Company incorporates credit risk valuation adjustments into the consideration of fair value of financial instruments and non-financial instruments to reflect counterparty credit risk and the credit quality of the Company, respectively.

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

• The following table shows the changes in Level 3 in 2022 and 2021:

January 1, 2022 Disposal this period Recognized in profit or loss	Equityinstruments
	$ 12,132 ( 7,132 ( 10,697)

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December 31, 2022 January 1, 2021 Recognized in profit or loss December 31, 2021	($ 5,697)
	Equityinstruments
	$ 7,132 5,000
	$ 12,132

1. The quantitative information about the significant unobservable input value of the valuation model and the sensitivity analysis of the significant unobservable input value change used in the Level 3 fair value measurements are explained as follows:

2. December 31, 2022: None.

December 31, 2021 Non-derivative equity instruments: Shares of non- listed and non- OTC company	Fair value	Valuation technique	Significant unobservable inputs	Range (Weighted average)	Relationship between inputs and fair value
	$ 7,132	Net asset value method	Net asset value	-	The higher the net asset value, the higher the fair value

1. The Company has carefully assessed the valuation models and parameters used to measure fair value. However, use of different valuation models or parameters may result in different measurement. For financial assets or liabilities classified in Level 3, changes in valuation parameters have the following impacts on the income or other comprehensive income of the period:

December 31, 2022: None.

Inputs Financial assets Equity instruments Net asset value	Chang es ± 1%	December	31,2021	31,2021
		Recognized in profit or loss Favorable changes Adverse changes $ 71 ($ 71)	Recognized in other comprehensive income Favorable changes Adverse changes $ - $ -
		Favorable changes $ 71		Adverse changes
				$ -

(IV) Others

The Company has evaluated the Company's operations and financial information, and amid the novel coronavirus crisis, the Company's ability to continue as a going concern, asset impairment and financing risks have not been greatly affected.

XIII. Supplementary Disclosure

(I) Significant transactions information

1. Loans to others: Please refer to Table 1.

2. Provision of endorsements and guarantees to others: Please refer to Table 2.

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1. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to Table 3.

2. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: Please refer to Table 4.

3. Acquisition of real estate exceeding $300 million or 20% of paid-in capital or more: None.

4. Disposal of real estate exceeding $300 million or 20% of paid-in capital or more: None.

5. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: None.

6. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.

7. Engaged in derivative trading: None.

8. Significant inter-company transactions during the reporting periods: Please refer to Table 5.

(II) Information on investees

Names, locations and other information of investee companies (not including investees in China): Please refer to Table 6.

(III) Information on investments in China

Please see Table 7.

(IV) Information on Major Shareholders

Please see Table 8.

XIV. Segments information

Not applicable.

~69~

Unit: NT$Thousand

Table 1

Taiwan Mask Corporation and Subsidiaries

Loans to Others

January 1 to December 31, 2022

(Unless otherwise specified)

No. (Note 1)	Companythat lent	Borrowing party	General ledger account Relate	Maximum	Balance at the	Amount Actually	Range of	Nature of loan	Amount of	Reason for	Amount of	Colla	teral	Limit on loans	Ceilingon total	Note
												Name	Value
1 2 3 3 3 3	ADL Energy Corp Miracle Technology CO., LTD. Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation	Aptos Technology INC. Aptos Technology INC. Aptos Technology INC. Xsense Technology Corp Xsense Technology Corporation Innova Vision INC.	Other Receivables－Related Parties Y Other Receivables－Related Parties Y Other Receivables－Related Parties Y Other Receivables－Related Parties Y Other Receivables－Related Parties Y Other Receivables－Related Parties Y	28,000 $ 170,000 650,000 470,000 8,000 90,000	7,200 $ 170,000 150,000 270,000 - 90,000	7,200 $ 170,000 150,000 270,000 - 90,000	2.7% 2.7% 2.7% 2.7% 2.0% 2.7%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - -	Business operations Working capital Working capital Working capital Working capital Working capital	- - - - - -	Promissory not Promissory not Promissory not Promissory not - Promissory not	e 7,200 $ e 170,000 e 150,000 e 270,000 - e 90,000	19,166 $ 178,503 1,698,869 1,698,869 1,698,869 1,698,869	19,166 $ 178,503 1,698,869 1,698,869 1,698,869 1,698,869	Note 3 Note 4 Note 6 Note 6 Note 6 Note 6

Note 1: The description of the number columns are as follows: (1). Fill in 0 for the issuer. (2). The investee company is numbered in sequence starting from Arabic numeral 1 according to company type. Note 2: Amendment to the Procedures for Lending Funds to Others:

• (1) Total amount of loans:The total amount of the Company's loans shall not exceed 40% of the Company's net value.

• (2) For companies or businesses that have business dealings with the Company, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

• (3) For companies or businesses that have a short-term financing need, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

• (4) Inter-company loans of funds between overseas companies in which the Company owns, directly or indirectly, 100% of the voting shares, are not restricted by the abovementioned paragraphs. However, the total amount of loans and the amount of loan to a single party shall not exceed 50% of the Co Note 3: Subsidiary - ADL Energy Corp Procedures for Lending Funds to Others: (1) The total loan amount shall not exceed 50% of the Company’s net value. However, for companies or businesses that have a short-term financing need, the loan amount of each individual borrowers shall not exceed 40% of the Company net value.

• (2) In addition to the provisions in (1), the loan amount of each individual borrower of companies or businesses that have business dealings with the Company shall not exceed the amount of transactions between the two parties. The amount of business transactions refers to the higher of the amount of go (3) In addition to the provisions in (1), in which companies or businesses have a short-term financing need, and the loan amount of each individual borrowers not exceeding 40% of the Company net value, the financing amount refers to the accumulated balance of the company's short-term financing. (4) Inter-company loans of funds between overseas companies in which the Company owns, directly or indirectly, 100% of the voting shares, or loans to the Company from any overseas companies in which the Company holds, directly or indirectly, 100% of the voting shares are not restricted by the abo The total amount of loans lent between the overseas companies or to the parent company and the limit for each limit are specified as follows: I. The total amount loans to enterprises shall not exceed 50% of the Company’s net value. However, for companies or businesses that have a short-term financing need, the loan amount of each individual borrower shall not exceed 40% of the Company net value. II. For overseas companies that have business dealings with each other, the individual loan amount shall not exceed the amount of transactions between the two parties. The amount of business transactions refers to the higher of the amount of goods purchased or sold between the parties. III. If there is a need for short-term financing, the loan amount of each individual borrowers shall not exceed 40% of the company's net value, and the financing amount refers to the accumulated balance of the short-term financing between overseas companies. (5) The highest balance for the current period is the amount resolved by the board. Note 4: Subsidiary - Miracle Technology Procedures for Lending Funds to Others

• (1) Total amount of loans:The total amount of the Company's loans shall not exceed 40% of the Company's net value.

• (2) For companies or businesses that have business dealings with the Company, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

• (3) For companies or businesses that have a short-term financing need, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

• (4) Inter-company loans of funds between overseas companies in which the Company owns, directly or indirectly, 100% of the voting shares, are not restricted by the abovementioned paragraphs. However, the total amount of loans and the amount of loan to a single party shall not exceed 50% of the Co Note 5: Subsidiary - Innova Vision Procedures for Lending Funds to Others

• (1) Total amount of loans:The total amount of the Company's loans shall not exceed 40% of the Company's net value.

• (2) The loan amount of each individual borrower of companies or businesses that have business dealings with the Company shall not exceed the amount of transactions between the two parties in the past year. The amount of business transactions refers to the higher of the amount of goods purchased or s

• (3) For companies or businesses that have a short-term financing need, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value. Note 6: Subsidiary - Youe Chung Capital Corporation Procedures for Lending Funds to Others

• (1) Total amount of loans:The total amount of the Company's loans shall not exceed 40% of the Company's net value.

(2) For companies or businesses that have a short-term financing need, the loan amount of each individual borrowers shall not exceed the amount of transactions between the two parties in the most recent year and not exceed 40% of the Company net value.

~70~

Taiwan Mask Corporation and Subsidiaries

Endorsements and Guarantees to Others

January 1 to December 31, 2022

Table 2

Unit: NT$Thousand (Unless otherwise specified)

No. (Note 1)	Endorser/guarantor	Guaranteed Party	Guaranteed Party	ent and guarantee for (Note 3,4,5,6)	a single enterprise Maximum Balance	EndingBalance	Amount	Amount of	Maximum End Ratio of	orsement/ Guarantee Am (Note 3,4,5,6)	ount Allowable Guarantee	Guarantee	Guarantee Note
		Name of Company	ip (Note 2)
0 1 2 3 3	Taiwan Mask Corporation ADL Energy Corp Miko-China Enterprise (Shanghai) Co., Ltd. Miracle Technology CO., LTD. Miracle Technology CO., LTD.	Miracle Technology CO., LTD. Aptos Technology INC. Miracle Technology CO., LTD. Xsense Technology Corporation (B.V.I.) Aptos Technology INC.	2 3 3 1 1	229,550 $ 14,374 344,788 178,503 178,503	225,505 $ 19,500 224,808 150,000 150,000	214,970 $ 19,500 224,808 150,000 -	- $ 19,500 224,808 150,000 -	- $ 19,500 224,808 150,000 -	4.73% 40.70% 65.20% 33.61% -	1,818,768 $ 19,166 344,788 178,503 178,503	Y N N N N	N Y Y N N	N Note 3 N Note 4 N Note 5 N Note 6 N Note 6

• Note 1: The description of the number columns are as follows: (1). Fill in 0 for the issuer.

• (2). The investee company is numbered in sequence starting from Arabic numeral 1 according to company type.

• Note 2: The relationship between the guarantor and the guarantee are one of the seven types indicated below:

• (1) A company with which it does business.

• (2)A company in which the Company directly and indirectly holds more than 50% of the voting shares. (3) A company that directly and indirectly holds more than 50% of the voting shares in the Company. (4) Companies in which the Company holds, directly or indirectly, 90%, or more of the voting shares may make endorsements/guarantees for each other.

• (5) A company that is mutually insured by a contract between peers or co-founders based on the needs of the contracted work.

• (6). A company that is guaranteed by all contributing shareholders in proportion to their shareholdings due to a joint investment relationship.

• (7). Companies that are engaged in joint and several guarantees for the performance guarantee of pre-sale housing sales contracts in accordance with the regulations of the Consumer Protection Act. Note 3: The Company's endorsement and guarantee practices for others provide that: (1). The total amount of the Company's external endorsement guarantee shall not exceed 30% of the Company's paid-in capital. (2). The amount of business transactions refers to the higher of the amount of goods purchased or sold between the parties. (3). Companies with which the Company has a parent-child relationship: The amount of endorsement and guarantee for a single enterprise shall not exceed 10% of the Company's paid-in capital and the paid-in capital of the company being endorsed and guarant (4). The aggregate amount of the endorsement and guarantee of the Company and its subsidiaries as a whole shall not exceed 40% of the net worth of the Company, of which the endorsement and guarantee of a single subsidiary shall not exceed 20% of the net w Note 4: Subsidiary - ADL Energy Corp Endorsement and Guarantee Procedures:

• (1). The aggregate amount of cumulative external endorsement guarantees shall not exceed 40% of the net value of the Company's most recent audited or reviewed financial statements. 2). The amount of the endorsement guarantee for a single enterprise shall not exceed 30% of the net value of the company's most recent audited or reviewed financial statements.

(3). The Company and its subsidiaries shall state in the shareholders' meeting the necessity and reasonableness of any endorsement or guarantee of more than 50% of the net value of the Company's most recent audited or reviewed financial statements. Note 5: Miko-China Enterprise (Shanghai) Co., Ltd. Endorsement and Guarantee Procedures: The total amount of endorsement guarantee liability is limited to RMB 30 million, and the amount of endorsement guarantee for a single enterprise shall not exceed RMB 30 million; however, for the parent company that directly or indirectly holds, through a su Note 6: Subsidiary - Miracle Technology Co., Ltd. Endorsement and Guarantee Procedures:

The aggregate amount of cumulative external endorsement guarantees shall not exceed 40% of the net value of the Company's most recent audited or reviewed financial statements.

~71~

Taiwan Mask Corporation and Subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2022

Table 3

Unit: NT$Thousand (Unless otherwise specified)

Company name of the shareholding	Marketable securities	Relationship	General ledger account		Perio	d end	Fair value Note
				Number of shares	Book value	Ownership
Taiwan Mask Corporation Common stocks of United Microelectronics Corporation Taiwan Mask Corporation Common stock of China Steel Structure Co., Ltd. Taiwan Mask Corporation Common stocks of Avision Inc. through private placement. Youe Chung Capital Corporation Common stocks of United Microelectronics Corporation Youe Chung Capital Corporation Common stocks of Microtek International Youe Chung Capital Corporation Common stocks of Taiwan Mask Youe Chung Capital Corporation Common stock of China Steel Structure Co., Ltd. Youe Chung Capital CoCommon stocks of EVERBRITE Technology Youe Chung Capital Corporation Image Match Design Inc. Youe Chung Capital Corporation B Current Impact Investment Youe Chung Capital Corporation B Current Impact Investment Partnership Youe Chung Capital Corporation Intellectual Property Innovation Corporation Partnership Fund Jing Hao Investment Co., Ltd. G-TECH ELECTRONICS LTD. Jing Hao Investment Co., Ltd. Memchip Technology Co., Ltd. Aptos Technology INC. Common stocks of TOPFUN TECHNOLOGY INC. ADL Energy Corp Franklin Templeton SinoAm Asia Pacific Balanced Fund-Accu. Beneficiary Certificate Miko-China Enterprise (Shanghai) Common stocks of Shenzhen He Mei Jing Yi Semiconductor Technology Co., Ltd.		None None None None None Parent company None None The Company is a director of that company The Company is a director of that company None None None None None None None	Financial Assets at Fair Value Through Profit or Loss - Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Assets at Fair Value Through Profit or Loss - Current Financial Assets at Fair Value Through Profit or Loss - Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Asset at Fair Value Through Profit or Loss - Non Cur Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial Asset at Fair Value Through Profit or Loss - Non Current Financial assets measured at fair value through other comprehensive income - Non Current Financial Assets at Fair Value Through Profit or Loss - Current Financial Asset at Fair Value Through Profit or Loss - Non Current	7,554,000 14,334,000 10,000,000 6,000,000 40,409,000 36,731,440 24,999,000 r 10,831,000 1,890,000 1,000,000 250,000 - 1,097,092 187,915 100,000 50,000 400,000	307,448 $ 845,706 79,300 244,200 1,032,450 3,111,153 1,474,941 439,739 3,213 10,000 2,500 20,000 - - - 500 21,158	0.06% 7.17% 5.18% 0.05% 19.65% 14.37% 12.50% 16.92% 3.17% 10.00% - - 8.08% 3.13% 12.27% - 0.31%	307,448 $ 845,706 79,300 244,200 1,032,450 3,111,153 1,474,941 439,739 3,213 10,000 2,500 20,000 - - - 500 21,158

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Taiwan Mask Corporation and Subsidiaries

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

January 1 to December 31, 2022

Table 4

Unit: NT$Thousand

(Unless otherwise specified)

Companythat buys	Marketable securities	CounterpartyRelationshi General ledger account (Note 2) (Note 2) Financial Assets at Fair Value Through Profit or - - Financial Assets at Fair Value Through Profit or - - Financial Assets at Fair Value Through Profit or - - Financial Assets at Fair Value Through Profit or Financial Assets at Fair Value Through Profit or - -	CounterpartyRelationshi General ledger account (Note 2) (Note 2) Financial Assets at Fair Value Through Profit or - - Financial Assets at Fair Value Through Profit or - - Financial Assets at Fair Value Through Profit or - - Financial Assets at Fair Value Through Profit or Financial Assets at Fair Value Through Profit or - -	p Beginning	ofperiod	Buy (Note 3)	Buy (Note 3)	Number of shares	SellingPrice Sell/Reduce	Book Cost Gains and $ - $ - ( 69,019) 11,376 ( 832,785) ( 14,843) ( 721,815) 278,371 - - (Note 3)	End ofperiod	End ofperiod
				Number of	Amount	Number of shares	Amount				Number of shares	Amount
Taiwan Mask Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation	China Steel Structure Co., Ltd. Microtek International Acer United Microelectronics China Steel Structure Co., Ltd.		- - - -	6,980,000 - 33,460,000 28,200,000 15,923,000	$ 413,216 - 1,018,857 1,833,000 942,642	7,354,000 46,599,000 - 2,500,000 9,076,000	$ 432,193 705,222 - 157,227 540,483	- ( 6,190,000) ( 33,460,000) ( 24,700,000) -	$ - ( 80,395) ( 817,942) ( 1,000,186) -		14,334,000 40,409,000 - 6,000,000 24,999,000	$ 845,706 1,032,450 - 244,200 1,474,941

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities of the abovementioned items. Note 2: For marketable securities that adopt the equity method, the two fields should be filled out and the rest are not required. Note 3: Acquisition or sale of the same securities should be calculated separately at market price to see if they reach NT$300 million or 20% of the Company's paid-in capital.

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Taiwan Mask Corporation and Subsidiaries

Significant inter-company transactions during the reporting periods

January 1 to December 31, 2022

Table 5

Unit: NT$Thousand

(Unless otherwise specified)

Status of transaction

No. (Note 1)	Name of the counterparty	Counterparty	Relationship	General ledger account	Amount	Transaction terms	Percentage of consolidated total (Note 3)
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 2 3 4 4 4 4 4 5 6 6 7 7	Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miko-China Enterprise (Shanghai) Co., Ltd. Sichuan Miracle Power Technology Co., Ltd. Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Aptos Technology INC. ADL Energy Corp ADL Energy Corp Innova Vision INC. Innova Vision INC.	Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle Technology CO., LTD. Miracle International Enterprise(Shanghai) Co., Ltd. Miracle International Enterprise(Shanghai) Co., Ltd. Aptos Technology INC. Aptos Technology INC. Innova Vision INC. Innova Vision INC. Xsense Technology Corporation (B.V.I.) Taiwan Branch Xsense Technology Corporation (B.V.I.) Taiwan Branch DIGITAL-CAN TECH. CO., LTD. DIGITAL-CAN TECH. CO., LTD. ADL Energy Corp Aptos Technology INC. Aptos Technology INC. Xsense Technology Corporation (B.V.I.) Taiwan Branch Miracle International Enterprise(Shanghai) Co., Ltd. Miracle International Enterprise(Shanghai) Co., Ltd. Aptos Technology INC. ADL Energy Corp Miracle Technology CO., LTD. Miracle Technology CO., LTD. Aptos Technology INC. Aptos Technology INC. Xsense Technology Corporation (B.V.I.) Taiwan Branch Xsense Technology Corporation (B.V.I.) Taiwan Branch Innova Vision INC. Miracle Technology CO., LTD. Aptos Technology INC. Aptos Technology INC. Innova Vision Kabushiki Kaisha Innova Vision Kabushiki Kaisha	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Sales Endorsement and guarantee Accounts Receivables Rental income Sales Accounts Receivables Rental income Other Receivables Rental income Other Receivables Rental income Other Receivables Equipment acquisition Prepayments for equipment Equipment acquisition Other Receivables Interest income Endorsement and guarantee Sales Accounts Receivables Sales Sales Endorsement and guarantee Sales Other Receivables Interest income Other Receivables Interest income Other Receivables Sales Other Receivables Endorsement and guarantee Sales Other Receivables	14,828 214,970 5,221 2,811 17,172 3,978 53,332 8,118 18,766 7,064 48,735 1,902 23,087 71,804 9,797 170,000 3,319 150,000 51,234 1,156 3,739 6,894 224,808 17,081 150,000 5,904 270,000 5,274 90,000 6,038 7,200 19,500 24,812 17,002	Net 60 Same with other customers ~~N~~et 60 Same with other customers Net 60 Net 60 Same with other customers Same with other customers Same with other customers Same with other customers Same with other customers Same with other customers Same with other customers Same with other customers Same with other customers Receipt and payment at an agreed time Receipt and payment at an agreed time Same with other customers Net 30 Net 30 Net 60 Net 60 Same with other customers Net 30 Receipt and payment at an agreed time Receipt and payment at an agreed time Receipt and payment at an agreed time Receipt and payment at an agreed time Receipt and payment at an agreed time Net 60 Receipt and payment at an agreed time Same with other customers Net 60 Receipt and payment at an agreed time	0.19% 1.20% 0.03% 0.04% 0.22% 0.02% 0.69% 0.05% 0.24% 0.04% 0.63% 0.01% 0.13% 0.40% 0.05% 0.95% 0.04% 0.84% 0.66% 0.01% 0.05% 0.09% 1.26% 0.22% 0.84% 0.08% 1.51% 0.07% 0.50% 0.08% 0.04% 0.11% 0.32% 0.10%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is "0".

(2) The subsidiaries are numbered in order starting from "1".

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer t for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction):

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiaries.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transact Note 4: Only transactions with an amount of more than NT$1 million will be disclosed, and transactions with related parties will not be disclosed separately.

~74~

Taiwan Mask Corporation and Subsidiaries

Names, locations and other information of investee companies (not including investees in China) January 1 to December 31, 2022

Table 6

Unit: NT$Thousand

(Unless otherwise specified)

Name of Investor	Investee	Location Main business activities	Initial invest	ment amount	Shares he	ld as of the en	d ofperiod	Netprofit(loss)of the	Investment	Note
			ance at the end ofpe n	d of thepreviousy	e Number of shares	Ownership	Book value
Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Taiwan Mask Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Youe Chung Capital Corporation Aptos Technology INC. Aptos Technology INC. ADL Energy Corp Miracle Technology CO., LTD. Jing Hao Investment Co., Ltd. Innova Vision INC. Innova Vision INC. Innova Vision INC. Innova Vision (B.V.I) Inc.	SunnyLake Park International Holdings, Inc. Youe Chung Capital Corporation Advagene Biopharma Co., Ltd. Miracle Technology CO., LTD. Weida Hi-Tech Company Innova Vision INC. Advagene Biopharma Co., Ltd. Xsense Technology Corporation (B.V.I.) T i B h Xsense Technology Corporation (B.V.I.) T i B h Aptos Technology INC. Innova Vision INC. Digital-Can Tech. Co., Ltd. ADL Energy Corp New Sunrise Limited Aptos Global Holding Corp. Jing Hao Investment Co., Ltd. Miko Technology Co., Ltd Innova Technology Innova Vision (B.V.I) Inc. Innova Vision Kabushiki Kaisha Innova Vision Kabushiki Kaisha	British Virgin Islands Re-investment Taiwan Re-investment Taiwan Medical, R&D, manufacturing Taiwan Electronics components manufacturing, electronics materials Taiwan Display panel control chip and other module’s research, design, Taiwan Manufacturing, retail, wholesale and international trade of medical Taiwan Medical, R&D, manufacturing British Virgin I l d Precious metal coating Taiwan Precious metal coating Taiwan Design, packaging and testing of NAND flash memory, solid state drives Taiwan Manufacturing, retail, wholesale and international trade of medical Taiwan 3D Printing and Plastic Mold Design Taiwan Electronic parts and components and h i l i Samoa Re-investment Seychelles Re-investment Taiwan Re-investment Hong Kong Electronics components manufacturing, electronics materials Taiwan Sales of contact lens British Virgin I l d Re-investment Japan Sales of contact lens Japan Sales of contact lens	103,045 $ 1,260,000 165,691 211,332 293,371 578,321 60,021 325,965 - 434,692 151,533 139,072 413,050 - 29,795 10,012 37 64,650 60,157 84,204 56,420	103,045 $ 1,260,000 165,691 229,696 293,371 578,321 60,021 317,965 - 134,928 151,533 139,072 413,050 - 29,795 10,012 37 64,650 60,157 84,204 56,420	3,120,000 534,877,568 12,549,652 22,955,033 12,176,880 36,793,135 2,613,223 1 12,189,191 28,481,161 94,370 7,281,250 11,984,526 - 10,000,000 21,280,774 10,000 3,000,000 1,000,000 6,400 5,900	100% 100% 25.43% 100% 28.20% 91.53% 5.30% 100.00% 53.00% 47.19% 0.23% 57.39% 100% 100% 100% 100% 100% 100% 100% 52.03% 47.97%	5,746 $ 1,140,806 33,508 482,368 84,080 151,324 6,977 6,319 5,469) ( 89,485) ( 425 113,858 47,914 - - 285,851 6,740 3,338) ( 14 169) ( 156) (	43 $ 1,379,376) ( 118,377) ( 63,131 20,213) ( 129,197) ( 118,377) ( 540) ( 160,094) ( 295,477) ( 129,197) ( 20,631) ( 19,975) ( - - 50,890 50) ( 104) ( 573) ( 1,181) ( 1,181) (	43 $ 559,391) ( 30,116) ( 63,131 24,909) ( 125,646) ( 6,271) ( 37,227) ( 18,228) ( 130,031) ( 303) ( 19,641) ( 19,975) ( - - 50,890 50) ( 104) ( 573) ( 614) ( 567) (	Note 1 Note 1 Note 2

Note 1: Xsense Technology Corporation underwent a physical capital reduction in November 2022, leaving only 1 share held by Youe Chung Capital Corporation; at the same time, Xsense Technology Corporation applied to have the shares of Xsense Technology Corporation (B.V.I.) Taiwan Branch it hel

Note 2: As of December 31, 2022, the funds for shares have not been remitted.

~75~

Taiwan Mask Corporation and Subsidiaries

Information on investments in China January 1 to December 31, 2022

Table 7

Unit: NT$Thousand (Unless otherwise specified)

Investee in China	Main business activities	Paid-upcapital	Investment method (Note 1)	Accumulated	Amount re	mitted from	Accumulated amount of	Netprofit(loss)	Ownershipheld bythe	income (loss) (Note 2)	Carrying	Accumulated	Note
					Remitted to	Remitted back
Miko-China Enterprise (Shanghai) Co., Ltd. Miracle International Enterprise(Shanghai) Co., Ltd. Sichuan Miracle Power Technology Co.,	Electronics components manufacturing, electronics materials and precision equipment distribution and power component design Electronics components manufacturing, electronics materials and precision equipment distribution and power component design IC product design,	3,283 $ 10,215 53,676	1 1 3	3,283 $ 10,215 -	- $ - -	- $ - -	3,283 $ 10,215 -	60,510 $ 3,393 3,454) (	100% 100% 100%	60,510 $ 3,393 3,454) (	344,788 $ 93,635 58,754	- $ - -	Note 2 (2) B Note 2 (2) B Note 4 Note 2 (2)

remittance from Taiwan to amount approved China imposed by the Name of Company China as of the end of the by the Investment Commission Miracle Technology CO., LTD. $ 13,498 $ 13,498 $ 267,755

Note 1: Investment methods are classified into the following three categories; fill in the number of categories each case belongs to: (1). Directly invest in a company in China.

(2) Through investing in an existing company in the third area (please specify the company), which then invested in China. (3). Others

Note 2: Investment income recognized by the Company for the current period

(1) If it is still under preparation with no actual gain or loss, it shall be indicated in the box.

(2) The basis for recognition of the investment gains or losses is divided into the following three,

A. Financial statements audited and validated by an international accounting firm that has a collaborative relationship with CPA firms in Taiwan.

B. Financial statements audited and validated by a certified accountant or accounting firm who work with the parent company in Taiwan. C. Unaudited financial statements.

Note 3: The relevant figures in this table should be presented in New Taiwan Dollars. Note 4: It was originally invested through Misun Technology Co., Ltd. Since the aforementioned company has gone through dissolution and liquidation, it has been changed to Miracle Technology Co., Ltd. directly investing in Miracle International Enterprise (Shanghai) Co., Ltd.

~76~

Taiwan Mask Corporation and Subsidiaries Information on Major Shareholders December 31, 2022

Table 8

Name of Main Shareholders	Sha	res
	No. of shares held	Ownership
Youe Chung Capital Corporation Taiwan Mask Corporation	36,731,440 14,485,000	14.32% 5.64%

~77~

Taiwan Mask Corporation Cash and Cash Equivalents Schedule December 31, 2022

Schedule 1 Items Bank deposits Demand deposits - NTD - Foreign currency Time deposits -- Foreign currency	Summary USD 4,966, exchange rate30.71 JPY 1,496, exchange rate0.2324 EUR 1, exchange rate32.72 USD 24,000, exchange rate30.71 Duration: October 6, 2022 to January 20, 2023 Range of interest rate:3.6% to 4.10%	Unit: NT$Thousand Amount $ 321,485 152,517 348 21 737,040 $ 1,211,411

Page 1, Schedule 1

Taiwan Mask Corporation Accounts Receivable Schedule December 31, 2022

Schedule 2

Unit: NT$Thousand

Customer Name General customers Company B Company A Company E Company F Company C Others Less: Allowance for bad debts Related party Miracle Technology Co., Ltd. Miracle International Enterprise (Shanghai) Co., Ltd. Weida Hi-Tech Co., Ltd. Less: Allowance for bad debts	Summary	Amount $ 102,569 92,572 58,466 48,854 44,104 455,772 802,337 ( 1,906) $ 800,431 $ 5,221 3,978 326 9,525 - $ 9,525	Note
			The balance of each separate account did not exceed5%of this account. Account balance that has been more than a year is $0 Account balance that has been more than a year is $0

Page 1, Schedule 2

Taiwan Mask Corporation Inventories Schedule

December 31, 2022

Unit: NT$Thousand

Schedule 3 Items	Summary	Amount Cost Marketvalue $ 99,179 $ 101,269 22,831 22,496 1,814 4,096 123,824$ 127,861 ( 5,115) $ 118,709	Unit: NT$Thousan Note
		Cost $ 99,179 22,831 1,814 123,824 ( 5,115) $ 118,709
Raw materials Work in process Finished goods Add: Loss on falling prices of inventory and inventory obsolescence			Net realizablevalueas the market value Net realizablevalueas the market value Net realizablevalueas the market value

Page 1, Schedule 3

Taiwan Mask Corporation

Financial assets schedule at fair value through profit and loss January 1 to December 31, 2022

Schedule 4

Unit: NT$Thousand

Name	OpeningBalance	OpeningBalance	Increase t	hisperiod	Decrease	thisperiod	Balance at the	end ofperiod	Guarantee or pledge	Note
	Number of Shares	Book value	Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Book value
Common stocks of Pu-Shi Venture Capital Common stocks of Athena Capital Common stocks of Fu-Run Investment Common stocks of Unicon Vision Common stocks of Acer Common stock of China Steel Structure Co., Ltd. Common stocks of Avision Inc. Common stocks of United Microelectronics Corporation Convertible bond call/put options Total	- 82,810 713,235 7,830,197 6,150,000 6,980,000 10,000,000 5,054,000 -	$ - - 7,132 77,832 187,268 413,216 102,400 328,510 5,000	- - - - - 7,354,000 - 2,500,000 -	$ - - - - - 432,490 - 149,084 -	( 82,810) ( 713,235) ( 7,830,197) ( 6,150,000) - - - -	$ - - ( 7,132) ( 77,832) ( 187,268) - ( 23,100) ( 170,146) ( 5,000)	- - - - - 14,334,000 10,000,000 7,554,000 -	$ - - - - - 845,706 79,300 307,448 -	None None None None None Yes None None None
		$ 1,121,358		$ 581,574		($ 470,478)		$ 1,232,454

Page 1, Schedule 4

Taiwan Mask Corporation

Schedule of Investments Changes Accounted for Using Equity Method January 1 to December 31, 2022

Unit: NT$Thousand

Schedule 5 Name	Opening	Balance	Increase in investm	ent for theperiod	Increase (decrease) in investments accounted for using the equity method(Note)	Balance	at the end of	period	Market v	Unit: NT$Tho alue or equity net value Guarante e or pledge Total amount Remar ks	Unit: NT$Tho alue or equity net value Guarante e or pledge Total amount Remar ks
	Number of Shares	Amount	Number of Shares	Amount		Number of Shares	Ownership	Amount	Unit price (NT$)	Total amount
SunnyLake Park International Holdings, Inc. Youe Chung Capital Corporation Innova Vision INC. Advagene Biopharma Co., Ltd. Miracle Technology Co., Ltd. Weida Hi-Tech Co., Ltd. Total	3,120,000 255,567,666 36,793,136 12,549,652 22,955,033 12,176,880	$ 5,139 1,776,924 235,591 63,578 430,778 87,898	- 279,309,902 - - - -	$ - - - - - -	$ 607 ( 636,118) ( 84,267) ( 30,070) 51,590 ( 3,818)	3,120,000 534,877,568 36,793,136 12,549,652 22,955,033 12,176,880	100.00% 100.00% 91.53% 25.43% 100.00% 28.20%	$ 5,746 1,140,806 151,324 33,508 482,368 84,080	$ - - - - - -	$ 5,746 1,140,806 151,324 33,508 482,368 84,080	None None None None None None
		$ 2,599,908		$ -	($ 702,076)			$ 1,897,832

Note: Mainly the share of profit or loss of subsidiaries and affiliates accounted for using the equity method, the share of other comprehensive income, and the cash dividends received from investees.

Page 1, Schedule 5

Taiwan Mask Corporation Property, Plant and Equipment Cost Changes Schedule January 1 to December 31, 2022

Unit: NT$Thousand

Schedule 6 Items Buildings and structures (including land) Machinery and equipment Transportation equipment Office equipment Other equipment Unfinished construction and equipment under acceptance	OpeningBalance $ 1,692,966 3,215,027 5,635 31,105 10,942 149,749 $ 5,105,424	Increase this period $ 363,662 1,280,116 657 12,159 24,528 363,204 $ 2,044,326	Decrease this period $ - - - - - - $ -	Reclassification for theyear ($ 172,500) 31,170 - 327 279,588 ( 148,171) ($ 9,586)	Balance at the end ofperiod $ 1,884,128 4,526,313 6,292 43,591 315,058 364,782 $ 7,140,164	Unit: NT$Thou Guarantee orpledge Yes Yes None Yes None None	sand Note

Page 1, Schedule 6

Taiwan Mask Corporation

Property, Plant and Equipment Accumulated Depreciation Changes Schedule January 1 to December 31, 2022

Unit: NT$Thousand

Schedule 7 Items Buildings and structures Machinery and equipment Transportation equipment Office equipment Other equipment	OpeningBalance $ 602,039 1,304,734 2,581 16,357 1,248 $ 1,926,959	Increase this period $ 140,346 309,183 844 7,737 3,913 $ 462,023	Decrease this period $ - - - - - $ -	Reclassification for theyear ($ 87,564) 1,616 - - 74,802 ($ 11,146)	Balance of the period $ 654,821 1,615,533 3,425 24,094 79,963 $ 2,377,836	Unit: NT Note

Page 1, Schedule 7

Taiwan Mask Corporation Right-of-Use Assets Schedule January 1 to December 31, 2022

Unit: NT$Thousand

Schedule 8 Items Land Buildings and structures Transportation equipment (company vehicles) Other equipment Total	OpeningBalance	Increase thisperiod $ 5,285 4 4,770 526 $ 10,585	Decrease thisperiod $ - - - - $ -	Balance at the end of period	Uni Note
	$ 567,697 3,656 12,650 26,733 $ 610,736			$ 572,982 3,660 17,420 27,259
				$ 621,321

Page 1, Schedule 8

Taiwan Mask Corporation Right-of-Use Assets Accumulated Depreciation Schedule January 1 to December 31, 2022

Unit: NT$Thousand

Schedule 9 Items	OpeningBalance $ 41,403 2,653 3,265 - $ 47,321	Increase thisperiod $ 24,679 936 5,092 1,855 $ 32,562	Decrease thisperiod $ - - - - $ -	Balance at the end of period	Unit Note
Land Buildings and structures Transportation equipment (company vehicles) Other equipment Total				$ 66,082 3,589 8,357 1,855
				$ 79,883

Page 1, Schedule 9

Taiwan Mask Corporation Short-Term Borrowings Schedule December 31, 2022

Schedule 10

Unit: NT$Thousand

Types of borrowings Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan	Explanati on	Balance at the end of period $ 60,000 100,000 100,000 80,000 119,840 21,534 100,000 293,560 80,000 100,000 $ 1,054,934	Contract Duration 2022.10.20~2023.01.18 2022.11.28~2023.01.20 2022.07.25~2023.07.25 2022.12.28~2023.03.28 2022.08.22~2023.03.20 2022.12.30~2023.03.30 2022.12.19~2023.01.19 2022.10.20~2023.06.17 2022.12.13~2023.02.09 2022.12.20~2023.02.17	Range of interest rate 1.890% 1.960% 1.701% 2.361% 1.06%~1.96% 4.000% 1.960% 1.16%~2.125% 1.958% 1.988%	FinancingAmount	Pledge or Guarantee
					$ 60,000 300,000 100,000 80,000 379,840 299,000 100,000 393,560 80,000 100,000	None None None None None None None None None None

Page 1, Schedule 10

Taiwan Mask Corporation - Long Term Borrowings Schedule December 31, 2022

Schedule 11

Unit: NT$Thousand

Creditors King's Town Bank Shanghai Commercial and Savings Bank King's Town Bank Agricultural Bank of Taiwan Taishin International Bank Shanghai Commercial and Savings Bank Less: Maturewithinone year	Summary Intermediate- and long-term secured loans Intermediate- and long-term secured loans Intermediate- and long-term secured loans Intermediate- and long-term secured loans Intermediate- and long-term secured loans Intermediate- and long-term secured loans	Amount Borrowed $ 1,250,000 850,000 400,000 400,000 250,000 240,000 3,390,000 ( 484,737)	Contract Duration 2021.12.28~2027.1.28 2022.12.28~2032.12.27 2022.12.21~2027.12.21 2022.12.27~2027.12.27 2021.12.27~2024.12.27 2021.12.27~2026.12.15	Coupon rate 2.425% 2.070% 2.675% 2.000% 2.410% 2.125%	Pledge or Guarantee	Note
					Houses and buildings and machine and equipment Buildings and structures and investment properties Machinery and equipment Machinery and equipment Buildings and structures Machinery and equipment

Page 1, Schedule 11

Schedule 11

Taiwan Mask Corporation - Long Term Borrowings Schedule December 31, 2022 $ 2,905,263

Unit: NT$Thousand

Page 2, Schedule 11

Taiwan Mask Corporation Sales Income Schedule January 1 to December 31, 2022

Schedule 12 Items Photomask	Quantity 66,608pieces	Unit: NT$Thousand Amount $ 3,887,648

Page 1, Schedule 12

Schedule 13

Taiwan Mask Corporation Operating Costs Schedule January 1 to December 31, 2022

Unit: NT$Thousand

Items Direct materials Opening raw materials Incoming materials in the current period Ending raw materials Consumption in this period Director labor Manufacturing expenses Manufacturing cost Opening work-in-progress Ending work-in-progress Cost of finished goods Add: Opening finished goods Less - Ending finished goods Costof manufacturing and sales Other operating costs Loss on falling prices of inventory and inventory obsolescence Operating costs	Amount $ 105,224 568,537 ( 99,179) 574,582 86,206 1,150,656 1,811,444 9,596 ( 22,831) 1,798,209 1,071 ( 1,814) 1,797,466 ( 887) $ 1,796,579	Note

Page 1, Schedule 13

Taiwan Mask Corporation Manufacturing Expenses Schedule January 1 to December 31, 2022

Schedule 14 Items Summary Depreciation Contract maintenance fee Salaries expense Utilities Others	Amount $ 432,485 310,038 182,619 72,671 152,843 $ 1,150,656	Unit: NT$Thousand Note The balance of each separate account did not exceed 5% of this account.

Page 1, Schedule 14

Taiwan Mask Corporation Operating Expenses Schedule January 1 to December 31, 2022

Unit: NT$Thousand

Schedule 15 Items Marketing expenses: Shipping expenses Salaries expense Export declaration fee Others Administrative Expenses: Salaries expense Service charge Depreciation Others Research and development expenses: Salaries expense Research and experiment fee Experimental material costs Others	Summary	Amount $ 25,527 23,491 7,231 7,246 $ 63,495 $ 96,701 20,196 59,320 95,985 $ 272,202 $ 26,842 35,466 14,377 16,287 $ 92,972	Unit: NT$Thousan Note The balance of each separate account did not exceed 5% of this account. The balance of each separate account did not exceed 5% of this account. The balance of each separate account did not exceed 5% of this account.

Page 1, Schedule 15

Taiwan Mask Corporation

Employee Benefits, Depreciation, Depletion and Amortization in the Current Period January 1 to December 31, 2022

Schedule 16

Unit: NT$Thousand

Function Type		2022	2022			2021	2021
	Operatingcosts	Operatingexpenses	Non-operating income and expenses	Total	Operatingcosts	Operatingexpenses	Non-operating income and expenses	Total
Employee benefits expenditure
Payroll expenses	$ 256,622	$ 132,903	$ -	$ 389,525	$ 190,628	$ 207,880	$ -	$ 398,508
Employee stock options	-	14,131	-	14,131	-	119,544	-	119,544
Labor and health insurance fees	17,476	11,753	-	29,229	14,230	9,656	-	23,886
Pension expense	7,912	4,452	-	12,364	6,150	3,951	-	10,101
Director remuneration	-	5,860	-	5,860	-	31,055	-	31,055
Other employee benefit expenses	8,763	7,657	-	16,420	7,329	2,467	-	9,796
Depreciation	432,485	62,100	18,531	513,116	313,960	25,891	15,722	355,573
Amortization expense	3,153	3,131	-	6,284	3,640	2,465	-	6,105

1. As of the end of the current period and the previous year, there were 379 and 304 employees, respectively, and there were 5 and 5 directors, respectively, who did not hold a concurrent employee position.

2. Stocks are listed on the Taiwan Stock Exchange or the Taipei Exchange and the following information is disclosed:

3. (1) Average employee benefit expenses for the current year were $1,234 thousand ("Total employee benefit expenses for the current year - total directors' remuneration"/"Number of employees for the current year - number of directors who are not also employees").

   • Average employee benefit expenses for the previous year were $1,879 thousand ("Total employee benefit expenses for the previous year - total directors' remuneration"/"Number of employees for the previous year - number of directors who are not also employees").

4. (2) Average employee salary expense for the current year was $1,042 thousand (Total salary expense for the current year / "Number of employees for the current year - Number of directors who were not also employees").

5. Average employee salary expense for the previous year was $1,333 thousand (Total salary expense for the previous year / "Number of employees for the previous year - Number of directors who were not also employees").

6. (3) Change in average employee salary expense adjustment was 21.83% ("Average employee salary expense for the current year - Average employee salary expense for the previous year"/ Average employee salary expense for the previous year)

7. (4) The Company has an audit committee, so there is no supervisor's remuneration.

Page 1, Schedule 16

Taiwan Mask Corporation

Employee Benefits, Depreciation, Depletion and Amortization in the Current Period (continued) January 1 to December 31, 2022

Schedule 16

Unit: NT$Thousand

• (5) The Company has established and regularly reviewed the policies, systems, standards and structure of performance appraisal and salary remuneration of directors and managerial officers according to the Remuneration Committee charter, and abided by the following rules:

• A. The performance evaluation of the directors and managerial officer and their salary and compensation shall be considered in reference to the payment standard among industry peers and individual performances, in relevance to its reasonableness with the Company’s operations performance and future risks.

• B. Shall not lead directors and managerial officer to pursue salary and compensation, engaging in risky conducts that outstrip the company’s capacity to handle.

• C. The bonus proportion of short-term performance for directors and senior level managerial officer and partial changes to remuneration payment time shall be decided in consideration of the industrial characteristics and the nature of the Company’s business.

• (6) Directors' remuneration and employee remuneration are subject to the Company's Articles of Incorporation. The distribution shall be executed after the resolution approval at the Board meeting with more than two-thirds of directors attending and of more than half of the attending directors agreed and passed the resolution, and reported to the shareholders meeting.

• A. Employee remuneration: Allocated based on the Company's operating condition, and is distributed based on employee's position, performance, and tenure of service.

• B. Quarterly bonus: Allocated based on the Company's operating condition, and is given as an incentive for achieving the set targets.

• C. Annual salary adjustment: Carried out in accordance with the Company's operating condition. The salary adjustment range takes into account the Company’s operating condition, salary adjustment in the industry, domestic economic growth, price index, and individual performance appraisal.

Page 2, Schedule 16