Transcend — Audit Report / Information 2022

Nov 11, 2022

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2022 AND 2021

---

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

~1~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 22000434

To the Board of Directors and Shareholders of Transcend Information, Inc.

Opinion

We have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and its subsidiaries (the “Group”) as at December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for opinion

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

Key audit matters

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

Key audit matters for the Group’s 2022 consolidated financial statements are stated as follows:

~2~

Valuation of inventories

Description

Refer to Notes 4(13), 5(2) and 6(5) to the consolidated financial statements for the information on the Group’s inventory accounting policy, estimates and assumptions and allowance for inventory valuation losses.

The percentage of the Group’s inventories to total assets is material and the Group applies judgements and estimates in determining the net realizable value of inventories at the balance sheet date. The Group mainly produces DRAM and flash memory. As these products have a short life cycle and belong to a highly competitive industry, the market prices change frequently. Since the Group’s inventories and the allowance for inventory valuation losses are material to the financial statements, the valuation of inventories has been identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Obtained an understanding of the Group’s operations and industry. Assessed the reasonableness of the policy and procedures to recognize allowance for inventory valuation losses.

• B. Obtained an understanding of the Group’s inventory control procedures. Reviewed annual inventory count plan and observed the annual physical count of material inventory storage location in order to assess the effectiveness of internal controls over inventory.

• C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information to assess the reasonableness of allowance for inventory valuation losses.

Estimation of allowance for sales discounts

Description

In consideration of business volume, the Group provides a variety of business incentives to specific customers or products, and based on that, the Group can estimate the allowance for sales discounts monthly. Refer to Notes 4(26) and 6(4) to the consolidated financial statements for the information on the estimation of allowance for sales discounts.

Since the contracts are numerous and the result could affect the net revenue in the consolidated financial statements, the estimation of allowance for sales discounts has been identified as a key audit matter.

~3~

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Obtained an understanding of the Group’s operations, industry and the procedures to recognize allowance for sales discounts.

• B. Obtained an understanding of the Group’s sales procedures and interviewed management to assess the appropriateness of sales allowance contracts and internal control over estimation of allowance.

• C. Obtained the evaluation list of allowance for sales discounts, and tested material sales allowance contracts and recalculated it to assess the reasonableness of allowance determined by the Group.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Transcend Information, Inc. as at and for the years ended December 31, 2022 and 2021.

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

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

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

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

~4~

Independent auditors’ responsibilities for the audit of the consolidated financial statements

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

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

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

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

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

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

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

~5~

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

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

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

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

Chen, Ching-Chang Lin, Yi-Fan For and on Behalf of PricewaterhouseCoopers, Taiwan March 2, 2023

---

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice.

As the consolidated financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~6~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(4) 6(5) 6(6) 6(2) 6(7) 6(8) 6(9) and 8 6(10) and 7 6(12) 6(24) 6(13)	December 31, 2022 AMOUNT % $ 3,187,312 15 - - 8,611,357 40 867 - 1,217,936 6 77,626 - 3,143,064 14 - - 16,710 - 16,254,872 75 51,463 - 524,939 3 136,710 1 1,580,372 7 196,190 1 2,593,931 12 137,774 1 52,191 - 5,273,570 25 $ 21,528,442 100	December 31, 2021	December 31, 2021
		AMOUNT $ 3,187,312 - 8,611,357 867 1,217,936 77,626 3,143,064 - 16,710 16,254,872 51,463 524,939 136,710 1,580,372 196,190 2,593,931 137,774 52,191 5,273,570 $ 21,528,442	AMOUNT $ 2,018,106 1,506,595 5,567,177 2,499 1,622,484 108,850 5,774,825 159,976 13,445 16,773,957 111,599 629,576 148,514 1,942,013 124,054 2,602,088 47,355 59,345 5,664,544 $ 22,438,501	%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at amortised cost - current Notes receivable, net Accounts receivable, net Other receivables Inventories Non-current assets held for sale, net Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Investments accounted for using equity method Property, plant and equipment, net Right-of-use assets Investment property, net Deferred income tax assets Other non-current assets Total non-current assets Total assets				9 7 25 - 7 - 26 1 -
				75
				- 3 1 9 - 12 - -
				25
				100

(Continued)

~7~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Liabilities and equity

December 31, 2022 December 31, 2021 Notes AMOUNT % AMOUNT % $ 472,677 2 $ 1,364,835 6 7 27,442 - 52,241 - 7 271,948 2 286,168 1 581,546 3 592,886 3 7 47,806 - 16,917 - 25,348 - 88,606 1 1,426,767 7 2,401,653 11 6(24) 376,447 2 128,784 1 7 132,962 - 26,033 - 6(14) 41,730 - 47,196 - 551,139 2 202,013 1 1,977,906 9 2,603,666 12 6(15) 4,290,617 20 4,290,617 19 6(16) 3,387,781 16 3,730,914 16 6(17) 5,057,967 24 4,803,503 21 190,514 1 117,244 1 6,981,474 32 7,083,072 32 6(18) ( 357,817) ( 2) ( 190,515) ( 1 ) 19,550,536 91 19,834,835 88 9 11 $ 21,528,442 100 $ 22,438,501 100

Current liabilities Accounts payable Accounts payable - related parties Other payables Current income tax liabilities Lease liabilities - current Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities Lease liabilities - non-current Other non-current liabilities Total non-current liabilities Total liabilities Equity attributable to shareholders of parent Share capital Common stock Capital surplus Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Other equity interest Total equity Significant contingent liabilities and unrecognized contract commitments Significant events after the balance sheet date Total liabilities and equity

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

~8~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items

For the years ended December 31 2022 2021 Notes AMOUNT % AMOUNT % 6(19) and 7 $ 12,122,350 100 $ 14,314,815 100 6(5)(23) and 7 ( 9,399,607) ( 77) ( 10,139,129) ( 71) 2,722,743 23 4,175,686 29 6(23) ( 750,015) ( 6) ( 765,171) ( 5) ( 329,213) ( 3) ( 366,696) ( 3) ( 137,105) ( 1) ( 151,458) ( 1) 6(4) 295 - ( 567) - ( 1,216,038) ( 10) ( 1,283,892) ( 9) 1,506,705 13 2,891,794 20 6(3)(20) 114,926 1 79,117 1 6(21) 82,483 1 44,040 - 6(2)(22) 1,643,836 13 62,361 1 6(10) ( 1,973) - ( 1,248) - 6(8) 10,300 - 52,590 - 1,849,572 15 236,860 2 3,356,277 28 3,128,654 22 6(24) ( 901,933) ( 8) ( 595,360) ( 4) $ 2,454,344 20 $ 2,533,294 18 6(14) $ 5,185 - $ 2,344 - 6(7)(18) ( 170,069) ( 1) 11,826 - ( 219) - 200 - 6(18) 892 - ( 95,365) ( 1) 6(18)(24) ( 178) - 19,072 - ($ 164,389) ( 1) ($ 61,923) ( 1) $ 2,289,955 19 $ 2,471,371 17 $ 2,454,344 20 $ 2,533,294 18 $ 2,289,955 19 $ 2,471,371 17 6(25) $ 5.72 $ 5.90 $ 5.71 $ 5.90

Operating revenue Operating costs Gross profit Operating expenses Sales and marketing expenses Administrative expenses Research and development expenses Expected credit impairment gain (loss) Total operating expenses Operating profit Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit of associates and joint ventures accounted for using the equity method Total non-operating income and expenses Profit before income tax Income tax expense Profit for the year Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss Gains on remeasurements of defined benefit plans Unrealized (loss) gain on financial assets at fair value through other comprehensive income Share of other comprehensive (loss) income of associates and joint ventures accounted for using the equity method Components of other comprehensive income (loss) that will be reclassified to profit or loss Financial statements translation differences of foreign operations Income tax related to components of other comprehensive income that will be reclassified to profit or loss Other comprehensive loss for the year Total comprehensive income Net profit attributable to: Shareholders of parent Comprehensive income attributable to: Shareholders of parent Earnings per share (in dollars) Basic earnings per share Diluted earnings per share

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

~9~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

For the year ended December 31, 2021 Balance at January 1, 2021 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2020 earnings Legal reserve Cash dividends Reversal of special reserve Cash payment from capital surplus Net gain on disposal of financial assets at fair value through other comprehensive income Expired unclaimed dividends recognized as capital surplus Balance at December 31, 2021 For the year ended December 31, 2022 Balance at January 1, 2022 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2021 earnings Legal reserve Cash dividends Special reserve Cash payment from capital surplus Net loss on disposal of financial assets at fair value through other comprehensive income Expired unclaimed dividends recognized as capital surplus Balance at December 31, 2022	Notes								Equity attribu	ta	ble to shareholder	s o	f the parent							Total equity
			Common stock				Capital Surplus						Retained Earnings			Other EquityInterest
					Additional paid-in capital		Donated assets received		Net assets from merger		Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(7)(18) 6(17) 6(17) 6(7)(18) 6(7)(18) 6(17) 6(17) 6(7)(18)		$ 4,290,617 - - - - - - - - - $ 4,290,617 $ 4,290,617 - - - - - - - - - $ 4,290,617	$ 3,905,963 - - - - - - ( 214,531 ) - - $ 3,691,432 $ 3,691,432 - - - - - - ( 343,249 ) - - $ 3,348,183			$ 4,278 - - - - - - - - 76 $ 4,354 $ 4,354 - - - - - - - - 116 $ 4,470		$ 35,128 - - - - - - - - - $ 35,128 $ 35,128 - - - - - - - - - $ 35,128		$ 4,683,878 - - - 119,625 - - - - - $ 4,803,503 $ 4,803,503 - - - 254,464 - - - - - $ 5,057,967	$ 130,902 - - - - - ( 13,658 ) - - - $ 117,244 $ 117,244 - - - - - 73,270 - - - $ 190,514		$ 5,738,504 2,533,294 2,544 2,535,838 ( 119,625 ) ( 1,094,107 ) 13,658 - 8,804 - $ 7,083,072 $ 7,083,072 2,454,344 4,966 2,459,310 ( 254,464 ) ( 2,231,121 ) ( 73,270 ) - ( 2,053 ) - $ 6,981,474		($ 121,639 ) - ( 76,293 ) ( 76,293 ) - - - - - - ($ 197,932 ) ($ 197,932 ) - 714 714 - - - - - - ($ 197,218 )	$ 4,395 - 11,826 11,826 - - - - ( 8,804 ) - $ 7,417 $ 7,417 - ( 170,069 ) ( 170,069 ) - - - - 2,053 - ($ 160,599 )		$ 18,672,026 2,533,294 ( 61,923 ) 2,471,371 - ( 1,094,107 ) - ( 214,531 ) - 76 $ 19,834,835 $ 19,834,835 2,454,344 ( 164,389 ) 2,289,955 - ( 2,231,121 ) - ( 343,249 ) - 116 $ 19,550,536

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

~10~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net loss (gain) on financial assets at fair value through profit or loss Share of profit or loss of associates and joint ventures accounted for using the equity method Expected credit impairment (gain) loss Gain on disposal of non-current assets held for sale Loss (gain) on disposal of property, plant and equipment Depreciation Interest income Interest expense Dividend income Changes in assets and liabilities relating to operating activities Changes in assets relating to operating activities Financial assets at fair value through profit or loss - current Notes receivable Accounts receivable Other receivables Inventories Other current assets Changes in liabilities relating to operating activities Accounts payable Accounts payable - related parties Other payables Other current liabilities Other non-current liabilities Cash inflow generated from operations Dividends received Interest received Income tax paid Net cash flows provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through profit or loss - non-current Acquisition of financial assets at fair value through profit or loss - non- current Proceeds from disposal of financial assets at amortised cost Acquisition of financial assets at amortised cost Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of non-current assets held for sale Proceeds from disposal of property, plant and equipment Acquisition of property, plant and equipment Acquisition of right-of-use assets Acquisition of investment property Increase in other non-current assets Dividends received Net cash flows (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends paid (including cash payment from capital surplus) Payment of lease liabilities Expired unclaimed dividends recognized as capital surplus Net cash flows used in financing activities Effect of exchange rate changes Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

For theyears ended December 31 Notes 2022 2021 $ 3,356,277 $ 3,128,654 6(2)(22) 8,271 ( 84,872 ) 6(8) ( 10,300 ) ( 52,590 ) 6(4) ( 295 ) 567 6(22) ( 1,324,180 ) - 6(22) 448 ( 12 ) 6(23) 194,624 253,806 6(20) ( 114,926 ) ( 79,117 ) 6(10) 1,973 1,248 6(7)(21) ( 35,592 ) ( 6,787 ) 1,517,305 2,012,362 1,632 ( 1,740 ) 404,838 ( 188,555 ) 93,247 ( 41,547 ) 2,631,761 ( 2,584,359 ) ( 3,265 ) ( 2,950 ) ( 892,158 ) 230,569 ( 24,799 ) 14,825 ( 14,220 ) 39,533 ( 63,258 ) 15,560 ( 281 ) ( 3,897 ) 5,727,102 2,650,698 35,592 6,787 103,776 83,165 ( 756,207 ) ( 295,582 ) 5,110,263 2,445,068 41,155 841,021 - ( 130,785 ) 3,113,029 2,619,758 ( 6,150,167 ) ( 2,530,400 ) 6(7) 6,179 54,426 ( 71,611 ) ( 561,176 ) 1,800,796 - 162 20 6(26) ( 38,325 ) ( 15,334 ) ( 692 ) - 6(12) ( 4,082 ) ( 2,409 ) ( 5,262 ) ( 11,934 ) 21,885 - ( 1,286,933 ) 263,187 6(17) ( 2,574,370 ) ( 1,308,638 ) ( 55,289 ) ( 56,105 ) 116 76 ( 2,629,543 ) ( 1,364,667 ) ( 24,581 ) ( 62,334 ) 1,169,206 1,281,254 2,018,106 736,852 $ 3,187,312 $ 2,018,106

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

~11~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

Transcend Information, Inc. (the “Company”) was incorporated under the provisions of the Company Law of the Republic of China (R.O.C.) in August 1989. The main activities of the Company and its subsidiaries (collectively referred herein as the “Group”) are manufacturing, processing and sales of computer software and hardware, peripheral equipment and other computer components. The Securities and Futures Commission of the Republic of China had approved the Company’s shares to be listed on the Taiwan Stock Exchange and the shares started trading on May 3, 2001.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on March 2, 2023.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC and became effective from 2022 are as follows:

New Standards,Interpretations and Amendments Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	Effective date by International Accounting Standards Board
	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

~12~

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

	Effective date
	by International
	Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising	January 1, 2023
from a single transaction’

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

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

New Standards,Interpretations and Amendments Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ Amendments to IFRS 16,‘Lease liability in a sale and leaseback’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’ Amendments to IAS 1, ‘Classification of liabilities as current or non- current’ Amendments to IAS 1, ‘Non-current liabilities with covenants’

Effective date by International Accounting Standards Board

To be determined by International Accounting Standards Board January 1, 2024 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

~13~

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

• The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets at fair value through profit or loss.

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

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

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

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group 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. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

~14~

• (c) Profit or loss and each component of other comprehensive income are attributed to the shareholders of the parent and to the non-controlling interests. Total comprehensive income is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

• (d) 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 accounted for as equity transactions, i.e. 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 recognized directly in equity.

• (e) When the Group loses control of a subsidiary, the Group 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 Group 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.

• B. Subsidiaries included in the consolidated financial statements:

Name of Name of Investor Subsidiary Transcend Information, Inc. Saffire Investment Ltd. (Saffire) Transcend Japan Inc. (Transcend Japan) Transcend Information Inc. (Transcend USA) Transcend Korea Inc. (Transcend Korea)	Main Business Activities Investment holdings Wholesale and import of computer memory modules and peripheral products Wholesale and import of computer memory modules and peripheral products Wholesale and import of computer memory modules and peripheral products	December December 31,2022 31,2021 100 100 100 100 100 100 100 100 Ownership (%)	Description
		December 31,2022 100 100 100 100

~15~

Name of Name of Investor Subsidiary Saffire Investment Ltd. Memhiro Pte. Ltd. (Memhiro) Memhiro Pte. Ltd. Transcend Information Europe B.V. (Transcend Europe) Transcend Information Trading GmbH (Transcend Germany) Transcend Information (Shanghai), Ltd. (Transcend Shanghai) Transtech Trading (Shanghai) Co., Ltd. (Transtech Shanghai) Transcend Information (Hong Kong), Ltd. (Transcend Hong Kong)	Main Business Activities Investment holdings Wholesale and import of computer memory modules and peripheral products Wholesale and import of computer memory modules and peripheral products Manufacture and sales of computer memory modules, storage products and disks, and lease of self-owned buildings Wholesale, agent, import and export and retail of computer memory modules, storage products and computer components Wholesale and import of computer memory modules and peripheral products	December December 31,2022 31,2021 100 100 100 100 100 100 100 100 100 100 100 100 Ownership (%)	Description
		December 31,2022 100 100 100 100 100 100

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustment for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing 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

~16~

recognized in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing 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 at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

The operating results and financial position of all the group entities 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; and

• (c) All resulting exchange differences are recognized in other comprehensive income.

(5) Classification of current and non-current items

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

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

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

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

Otherwise they are classified as non-current assets.

~17~

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

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) 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.

Otherwise they are classified as non-current liabilities.

(6) 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 above definition and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. 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.

• C. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

~18~

(9) Financial assets at amortised cost

The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

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

• (11) Financial assets impairment

For financial assets at amortised cost and accounts receivable that have a significant financing component, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

• (13) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on actual operating capacity). It excludes borrowing costs. 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 the estimated cost of completion and the estimated costs necessary to make the sale.

(14) Non-current assets (or disposal groups) held for sale

• Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use, and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.

(15) Investments accounted for using equity method - associates

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are

~19~

accounted for using the equity method and are initially recognized at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’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 Group.

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for using the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

(16) Property, plant and equipment

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

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost 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.

• C. 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.

~20~

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures Machinery and equipment Transportation equipment Office equipment and others

8 ~ 50 years 2 ~ 10 years 3 ~ 5 years 2 ~ 5 years

(17) Leasing arrangements (lessee) - right-of-use assets / lease liabilities

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

• B. 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 are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable; and

• (b) Variable lease payments that depend on an index or a rate.

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

• C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability.

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 useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 10 ~ 55 years.

~21~

(19) Impairment of non-financial assets

The Group 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 costs to sell 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 amortised historical cost would have been if the impairment had not been recognized.

(20) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortised cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Offsetting financial assets and liabilities

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(22) Employee benefits

A. Short-term employee benefits

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

B. Pensions

• (a) 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.

(b) Defined benefit plans

• i. 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 interest rates of

~22~

government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

• ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

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

• C. Employees’ compensation and directors’ remuneration

Employees’ compensation and directors’ 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.

• (23) Income tax

• A. 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.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at 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.

• C. Deferred 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 consolidated balance sheet. Deferred 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 tax asset is realized or the deferred tax liability is settled.

• D. Deferred 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 tax assets are reassessed.

(24) Share capital

• A. 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.

• B. Where the Company repurchases the Company’s shares that have been issued, the consideration paid, excluding any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders.

~23~

(25) Dividends

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 stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(26) Revenue recognition

A. Sales of goods

• (a) The Group manufactures and sells computer software and hardware, computer peripheral equipment, and computer component products. When the right of control is transferred to the customer, sales revenue is recognized. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• (b) Sales revenue is recognized based on contract price, net of sales returns, volume discounts and estimated sales discounts. The goods are often sold with volume discounts based on aggregate sales over a one-month period. Sales discounts and allowances are estimated and provided for based on customer contracts, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date and recognized as allowance for sales discounts. No element of financing is deemed present as the sales are made with a credit term of 30-60 days after monthly billing, which is consistent with market practice.

• (c) A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Incremental costs of obtaining a contract

Given that the contractual period lasts less than one year, the Group recognizes the incremental costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

(27) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Group’s Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chairmen of the Board of Directors that makes strategic decisions.

~24~

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’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; and the related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

Investment property

The Group uses a portion of the property for its own use and another portion to earn rentals or for capital appreciation. When these portions cannot be sold separately and cannot be leased out separately under a finance lease, the property is classified as investment property only if the own use portion accounts for an insignificant portion of the property.

(2) Critical accounting estimates and assumptions

Valuation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. The valuation of inventories is based on recent market price and demand of products in the future specific period, thus there might be significant changes in the valuation.

As of December 31, 2022, the carrying amount of inventories was $3,143,064.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand and petty cash Checking accounts and demand deposits Time deposits	December31,2022 173 $ 2,519,575 667,564 3,187,312 $	December31,2021
		217 $ 1,931,009 86,880
		2,018,106 $

• A. The aforementioned time deposits pertain to high liquidity investments with maturity within three months.

~25~

• B. The Group transacts 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.

• C. The Group has no cash and cash equivalents pledged to others.

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

Items December31,2022 Current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates - $ Valuation adjustments - - $ Non-current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates 61,481 $ Valuation adjustments 10,018) ( 51,463 $	December31,2021
	1,501,948 $ 4,647
	1,506,595 $
	100,976 $ 10,623
	111,599 $

• A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

		For the years ended	For the years ended	December 31,	December 31,
		2022		2021
Financial assets at fair value through profit
or loss
Beneficiary certificates	($	17,262)	$		84,375
Financial products		8,991			497
	($	8,271)	$		84,872

• B. The Group has no financial assets at fair value through profit or loss pledged to others.

(3) Financial assets at amortised cost

Items Current items: Time deposits with original maturity of more than three months	December31,2022 8,611,357 $	December31,2021
		5,567,177 $

~26~

• A. Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed below:

	For the years ended	For the years ended	December 31,	December 31,
	2022		2021
Interest income	87,929 $	$		24,813

• B. The Group has no financial assets at amortised cost pledged to others as collateral.

• C. The Group transacts time deposits with reputable domestic and foreign banks. The Group’s counterparties have good credit quality, and the impairment loss is assessed using a 12-month expected credit loss approach.

(4) Notes and accounts receivable

		December	31, 2022		December	31,2021
Notes receivable		$	867		$	2,499
Accounts receivable		$	1,218,446		$	1,623,284
Less: Loss allowance	(		510)	(		800)
		$	1,217,936		$	1,622,484

• A. As of December 31, 2022 and 2021, the estimated sales discounts and allowances were $92,122 and $63,361, respectively. Since the sales discounts and allowances met the requirements for offset of financial liabilities and financial assets, the net amounts were shown under accounts receivable.

• B. The ageing analysis of accounts receivable and notes receivable is as follows:

Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	December	31,2022
	Accountsreceivable 961,768 $ 238,088 8,809 5,776 4,005 1,218,446 $ December	Notesreceivable
		867 $ - - - -
		867 $
		31,2021
	Accountsreceivable 1,347,477 $ 258,288 11,418 406 5,695 1,623,284 $	Notesreceivable
		2,499 $ - - - -
		2,499 $

~27~

The above ageing analysis was based on past due date.

• C. The Group has credit insurance that covers accounts receivable from major customers. Should bad debts occur, the Group will receive 90% of the losses resulting from non-payment.

• D. As of December 31, 2022 and 2021, notes receivable and accounts receivable were all from contracts with customers. As of January 1, 2021, the balance of notes receivable and accounts receivable from contracts with customers amounted to $1,439,523.

• E. As at December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes receivable were $867 and $2,499, respectively; the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $1,217,936 and $1,622,484, respectively.

• F. The Group classifies customers’ accounts receivable in accordance with the credit rating of the customer. The Group applies the simplified approach to estimate expected credit loss under the provision matrix basis.

• G. The Group wrote-off the financial assets, which cannot reasonably be expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. On December 31, 2022 and 2021, the Group has no written-off financial assets that are still under recourse procedures.

• H. The Group used forecastability, historical and timely information to assess the loss rate of accounts receivable. As of December 31, 2022 and 2021, the provision matrix is as follows:

Not past due December 31, 2022 Expected loss rate 0.003%~0.523% Total book value 961,768 $ Not past due December 31, 2021 Expected loss rate 0.002%~0.496% Total book value 1,347,477 $	1-180 days past due 0.017%~38% 252,673 $ 1-180 days past due 0.015%~36% 270,112 $	Over 180 days past due 25%~100% 4,005 $ Over 180 days past due 25%~100% 5,695 $	Total
			1,218,446 $ Total
			1,623,284 $

~28~

I. The balance of allowance for loss and movements are as follows:

			2022	2022
		Accounts	receivable		Notesreceivable
At January 1		$	800	$	-
Reversal of impairment	(		295)		-
Effect of exchange rate changes			5		-
At December 31		$	510	$	-
			2021
		Accounts	receivable		Notes receivable
At January 1		$	4,310	$	-
Provision for impairment			567		-
Write-offs	(		903)		-
Reclassified to overdue receivables	(		3,132)		-
Effect of exchange rate changes	(		42)		-
At December 31		$	800	$	-

J. The Group does not hold any collateral as security.

(5) Inventories

Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods	Allowance for Cost valuation loss 2,743,592 $ 446,816) ($ 285,227 6,256) ( 601,619 34,302) ( 3,630,438 $ 487,374) ($ December31,2022 December31,2021	Bookvalue
		2,296,776 $ 278,971 567,317
		3,143,064 $
	Allowance for Cost valuation loss 4,555,175 $ 48,311) ($ 604,979 438) ( 667,191 3,771) ( 5,827,345 $ 52,520) ($	Bookvalue
		4,506,864 $ 604,541 663,420
		5,774,825 $

~29~

A. The cost of inventories recognized as expense for the year:

			For theyears ended	For theyears ended	December31,
			2022		2021
Cost of	goods sold	$	8,964,753	$	10,121,771
Loss on	decline in market value of inventory		434,854		17,358
		$	9,399,607	$	10,139,129

B. No inventories were pledged to others.

(6) Non-current assets held for sale

Buildings and structures held for sale Right-of-use assets held for sale - land	December31,2022 December 31, 2021 - $ 143,596 $ - 16,380 - $ 159,976 $

• A. On November 26, 2021, the Board of Directors of the Group’s overseas second-tier subsidiary, Transcend Shanghai, resolved to sell its buildings in response to the land expropriation. As of December 31, 2021, the related assets transferred to non-current assets held for sale amounted to $159,976 which were all disposed in 2022.

• B. On February 18, 2022, the Board of Directors of the Group’s overseas second-tier subsidiary, Transcend Shanghai, resolved to sell land use rights, buildings and ancillary structures located in Fengxian District, Shanghai. As of December 31, 2022, the related assets transferred to noncurrent assets held for sale had all been disposed.

• C. The carrying amount of non-current assets held for sale was lower than the fair value less costs to sell based on the assessment. Thus, no impairment has occurred. Refer to table 4 for related transactions.

(7) Financial assets at fair value through other comprehensive income - non-current

Items December31,2022 Non-current items: Equity instruments Listed stocks 684,413 $ Others 1,125 685,538 Valuation adjustments 160,599) ( 524,939 $	December31,2021
	621,034 $ 1,125
	622,159 7,417
	629,576 $

• A. The Group has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value

~30~

of such investments amounted to $524,939 and $629,576 as at December 31, 2022 and 2021, respectively.

• B. For the years ended December 31, 2022 and 2021, the Group disposed equity investments whose fair value was $6,179 and $54,426, and the cumulative (loss) gain on disposal was transferred to retained earnings in the amount of ($2,053) and $8,804, respectively.

• C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		Forthe years ended	Forthe years ended	December31,
		2022		2021
Equity instruments at fair value through
other comprehensive income
Fair value change recognized in other
comprehensive (loss) income	($	170,069)	$	11,826
Cumulative (loss) gain reclassified to retained
earnings due to derecognition	($	2,053)	$	8,804
Dividend income recognized in profit or loss
Held at end of year	$	35,592	$	6,787
Derecognized during the year		-		-
	$	35,592	$	6,787

• D. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

(8) Investments accounted for using equity method

Investee Company Taiwan IC Packaging Corporation	December31,2022 136,710 $	December31,2021
		148,514 $

• A. The basic information of the associate that is material to the Group is as follows:

Associate name Taiwan IC Packaging Corp.	Principal place of business Taiwan	December December 31,2022 31,2021 12.50% 12.52% Shareholdingratio	Nature of relationship Note	Method of measurement
		December 31,2022 12.50%
				Equity method

• Note: Taiwan IC Packaging Corporation is engaged in IC packaging and testing and is the upstream supplier in the IT and semiconductor industries. In order to reach synergy of vertical integration, Taiwan IC Packaging Corporation processes the raw materials provided by the Group into relevant semi-finished goods.

~31~

• B. The Group held a 12.5% equity interest in Taiwan IC Packaging Corporation, and is the company’s largest single shareholder. However, the Group does not hold the majority of the voting power during the shareholders’ meeting of Taiwan IC Packaging Corporation and the Group does not serve as corporate director of Taiwan IC Packaging Corporation, which indicate that the Group has no control ability to direct the relevant activities of Taiwan IC Packaging Corporation. In addition, the Company’s chairman is the same with Taiwan IC Packaging Corporation; hence, the Group has significant influence over Taiwan IC Packaging Corporation.

• C. The summarized financial information of the associate that is material to the Group is as follows:

Balance sheet

			Taiwan IC Packaging Corporation	Taiwan IC Packaging Corporation	Taiwan IC Packaging Corporation	Taiwan IC Packaging Corporation
		December31,2022			December31,2021
Current assets		$	1,218,268		$	1,408,762
Non-current assets			1,151,953			1,219,160
Current liabilities	(		167,786)	(		374,580)
Non-current liabilities	(		75,327)	(		83,523)
Total net assets		$	2,127,108		$	2,169,819
Share in associate’s net assets		$	265,889		$	271,661
Net equity differences	(		129,179)	(		123,147)
		$	136,710		$	148,514

Statement of comprehensive income

Statement of comprehensive income
A Revenue Profit for the year from continuing operations Total comprehensive income Dividends received from associates	Taiwan IC Packaging Corporation
	For theyears ended December31,
	2022 1,223,212 $ 84,128 $ 96,327 $ 21,885 $	2021
		1,944,950 $
		411,645 $
		409,917 $
		- $

• D. Share of profit of associates accounted for using the equity method is as follows:

InvesteeCompany Taiwan IC Packaging Corporation	For theyears ended December31,	For theyears ended December31,
	2022 10,081 $	2021
		52,790 $

• E. The Group’s investment in Taiwan IC Packaging Corporation has quoted market price. The fair value of Taiwan IC Packaging Corporation was $242,305 and $446,724 as of December 31, 2022 and 2021, respectively.

~32~

(9) Property, plant and equipment

											2022
				Buildings and			Machinery and			Transportation				Office
			Land		structures			equipment			equipment		equipment				Others			Total
At January 1
Cost		$	712,136	$	2,227,274		$	383,459		$	27,859		$	32,077		$	48,096		$	3,430,901
Accumulated depreciation			-	(	1,146,125)	(		268,788)	(		16,915)	(		21,226)	(		35,834)	(		1,488,888)
		$	712,136	$	1,081,149		$	114,671		$	10,944		$	10,851		$	12,262		$	1,942,013
At January 1		$	712,136	$	1,081,149		$	114,671		$	10,944		$	10,851		$	12,262		$	1,942,013
Additions (including transfers)			-		7,259			41,205			-			1,477			800			50,741
Disposals			-		-	(		121)			-	(		6)	(		483)	(		610)
Transfers to non-current assets held for
sale			-	(	285,968)	(		2,182)	(		18)	(		235)	(		2,023)	(		290,426)
Depreciation charge			-	(	54,674)	(		58,517)	(		4,525)	(		4,020)	(		5,697)	(		127,433)
Net exchange differences	(		564)		6,322			104			29			156			40			6,087
At December 31		$	711,572	$	754,088		$	95,160		$	6,430		$	8,223		$	4,899		$	1,580,372
At December 31
Cost		$	711,572	$	1,204,122		$	345,956		$	28,079		$	30,619		$	20,663		$	2,341,011
Accumulated depreciation			-	(	450,034)	(		250,796)	(		21,649)	(		22,396)	(		15,764)	(		760,639)
		$	711,572	$	754,088		$	95,160		$	6,430		$	8,223		$	4,899		$	1,580,372

~33~

									2021
			Buildings and			Machinery and		Transportation			Office
		Land		structures			equipment		equipment	equipment				Others		Total
At January 1
Cost	$	725,983	$	2,601,967		$	418,357	$	26,892	$	28,116		$	52,518	$	3,853,833
Accumulated depreciation		-	(	1,257,196)	(		243,085)	(	12,767)	(	21,134)	(		37,327)	(	1,571,509)
	$	725,983	$	1,344,771		$	175,272	$	14,125	$	6,982		$	15,191	$	2,282,324
At January 1	$	725,983	$	1,344,771		$	175,272	$	14,125	$	6,982		$	15,191	$	2,282,324
Additions (including transfers)		-		500			2,710		1,216		7,731			3,177		15,334
Disposals		-		-			-		-	(	8)			-	(	8)
Transfers to non-current assets held for sale		-	(	143,596)			-		-		-			-	(	143,596)
Depreciation charge		-	(	106,069)	(		63,254)	(	4,328)	(	3,490)	(		6,085)	(	183,226)
Net exchange differences	(	13,847)	(	14,457)	(		57)	(	69)	(	364)	(		21)	(	28,815)
At December 31	$	712,136	$	1,081,149		$	114,671	$	10,944	$	10,851		$	12,262	$	1,942,013
At December 31
Cost	$	712,136	$	2,227,274	$		383,459	$	27,859	$	32,077	$		48,096	$	3,430,901
Accumulated depreciation		-	(	1,146,125)	(		268,788)	(	16,915)	(	21,226)	(		35,834)	(	1,488,888)
	$	712,136	$	1,081,149		$	114,671	$	10,944	$	10,851		$	12,262	$	1,942,013

A. The relevant assets of the Group recognized as property, plant and equipment are all for self-use.

B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

~34~

(10) Leasing arrangements - lessee

• A. The Group leases various assets including land, buildings, and business vehicles. Rental contracts are typically made for periods of 1 to 11 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

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

Land Buildings Transportation equipment (business vehicles) Land Buildings Transportation equipment (business vehicles)	December31,2022 December 31, 2021 Carrying amount Carrying amount 165,858 $ 82,013 $ 28,506 41,158 1,826 883 196,190 $ 124,054 $ Forthe years endedDecember31,	December31,2022 December 31, 2021 Carrying amount Carrying amount 165,858 $ 82,013 $ 28,506 41,158 1,826 883 196,190 $ 124,054 $ Forthe years endedDecember31,
	2022 Depreciationcharge 37,689 $ 15,962 670 54,321 $	2021
		Depreciationcharge
		39,117 $ 18,238 845
		58,200 $

• C. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were $196,118 and $15,494, respectively. Refer to Note 7(2)E. for details.

• D. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	For theyears ended December31,	For theyears ended December31,
	2022 1,973 $ 8,052 1,472	2021
		1,248 $ 8,534 1,455

• E. For the years ended December 31, 2022 and 2021, the Group’s total cash outflow for leases were $64,813 and $66,094, respectively.

• F. On February 18, 2022 and November 26, 2021, the Board of Directors of the overseas secondtier subsidiary, Transcend Information (Shanghai), Ltd., approved a resolution for a sale transaction. Refer to Note 6(6) for details of right-of-use assets transferred to non-current assets held for sale.

~35~

(11) Leasing arrangements - lessor

• A. The Group leases various assets including land and buildings. Rental contracts are typically made for periods of 1 to 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions . To protect the lessor’s ownership rights on the leased assets, leased assets may not be used as security for borrowing purposes, or a residual value guarantee was required.

• B. For the years ended December 31, 2022 and 2021, the Group recognized rent income in the amount of $46,891 and $37,253, respectively, based on the operating lease agreement, which does not include variable lease payments.

• C. The maturity analysis of the lease receivables under the operating leases is as follows:

2023 2024 2025 2026 2027	December31,2022 58,970 $ 2022 37,943 2023 22,309 2024 12,664 2025 815 2026 132,701 $	December31,2021
		38,925 $ 26,757 16,806 9,406 9,406
		101,300 $

(12) Investment property

At January 1 Cost Accumulated depreciation At January 1 Additions Depreciation charge Net exchange differences At December 31 At December 31 Cost Accumulated depreciation		2022

~36~

At January 1 Cost Accumulated depreciation At January 1 Additions Depreciation charge Net exchange differences At December 31 At December 31 Cost Accumulated depreciation		2021

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

Rental income from investment property Direct operating expenses arising from investment property that generated rental income Direct operating expenses arising from investment property that did not generate rental income	Forthe years endedDecember31,	Forthe years endedDecember31,
	2022 46,891 $ 12,169 $ 701 $	2021
		37,253 $
		11,679 $
		701 $

• B. The fair value of the investment property held by the Group were $5,047,960 and $5,702,362 as of December 31, 2022 and 2021, respectively, which were based on the transaction prices of similar properties in the same area.

• C. No investment property was pledged to others.

~37~

(13) Other non-current assets

Guarantee deposits paid Prepayment for business facilities Others	December31,2022 December31,2021 34,888 $ 31,414 $ 2,912 12,416 14,391 15,515 52,191 $ 59,345 $

(14) Pensions

A. Defined benefit plan

• (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering 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 Act. Under the defined benefit 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 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with 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 insufficient 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 contributions to cover the deficit by next March.

• (b) The amounts recognized in the balance sheet are as follows:

		December	31,2022		December	31,2021
Present value of defined benefit obligations		$	36,584		$	38,857
Fair value of plan assets	(		29,193)	(		25,454)
Net defined benefit liability		$	7,391		$	13,403

~38~

(c) Movements in net defined benefit liabilities are as follows:

		Present value of				Net defined
		defined benefit		Fair value of		benefit
		obligations		plan assets		liability
2022
Balance at January 1	$	38,857	($	25,454)	$	13,403
Current service cost		550		-		550
Interest expense (income)		291	(	196)		95
		39,698	(	25,650)		14,048
Remeasurements:
Return on plan assets		-	(	2,071)	(	2,071)
(excluding amounts included
in interest income or expense)
Change in financial	(	2,630)		-	(	2,630)
assumptions
Experience adjustments	(	484)		-	(	484)
	(	3,114)	(	2,071)	(	5,185)
Pension fund contribution		-	(	1,472)	(	1,472)
Balance at December 31	$	36,584	($	29,193)	$	7,391
		Present value of				Net defined
		defined benefit		Fair value of		benefit
		obligations		plan assets		liability
2021
Balance at January 1	$	43,239	($	26,678)	$	16,561
Current service cost		608		-		608
Interest expense (income)		151	(	96)		55
		43,998	(	26,774)		17,224
Remeasurements:
Return on plan assets		-	(	369)	(	369)
(excluding amounts included
in interest income or expense)
Change in demographic		1,941		-		1,941
assumptions
Change in financial	(	1,836)		-	(	1,836)
assumptions
Experience adjustments	(	2,080)		-	(	2,080)
	(	1,975)	(	369)	(	2,344)
Pension fund contribution		-	(	1,477)	(	1,477)
Pension payment	(	3,166)		3,166		-
Balance at December 31	$	38,857	($	25,454)	$	13,403

(d) 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 utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor

~39~

Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation 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 is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 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 Utilisation Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases rate	For theyears ended December31,	For theyears ended December31,
	2022 1.400% 1.625%	2021
		0.750%
		1.625%

Future mortality rate was estimated based on the 6th Taiwan Standard Ordinary Experience Mortality Table.

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

Increase Decrease 0.25% 0.25% December 31, 2022 Effect on present value of defined benefit obligation 1,023) ($ 1,065 $ December 31, 2021 Effect on present value of defined benefit obligation 1,158) ($ 1,208 $ Discountrate	Increase Decrease 0.25% 0.25% 1,038 $ 1,002) ($ 1,170 $ 1,127) ($ Future salaryincreases

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

~40~

  - (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2023 amount to $1,476.

  - (g) As of December 31, 2022, the weighted average duration of the retirement plan is 11.73 years.

• B. Defined contribution plans

  • (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. 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 termination of employment.

  • (b) Transcend Shanghai, Transtech Shanghai and Transcend Hong Kong have defined contribution plans. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage of employees' monthly salaries and wages, ranging from 12.5% to 20%. Other than the monthly contributions, the Group has no further obligations.

  • (c) Transcend Japan, Transcend Korea, Transcend USA, Transcend Europe and Transcend Germany have defined contribution plans. Monthly contributions are based on a certain percentage of employees’ monthly salaries and wages and are recognized as pension costs accordingly. Other than the monthly contributions, the Group has no further obligations.

  • (d) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2022 and 2021 were $40,500 and $41,055, respectively.

• (15) Share capital

As of December 31, 2022, the Company’s authorized capital was $5,000,000, consisting of 500 million shares of ordinary stock (including 25 million shares reserved for employee stock options), and the paid-in capital was $4,290,617 with par value of $10 per share. All proceeds from shares issued have been collected. The Company’s ordinary shares outstanding at the beginning and at the end of the year were 429,062 thousand shares for the years ended December 31, 2022 and 2021.

(16) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of 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 R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paidin capital each year. Capital surplus shall not be used to cover accumulated deficit unless the legal reserve is insufficient.

~41~

(17) Retained earnings

• A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and to offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The Company shall also set aside special reserve in accordance with the regulations. On the premise that there is no effect on the Company’s normal operations and no violation of regulations, the Company shall reserve certain amount for maintaining stability of dividends. The remainder, if any, is the distributable earnings to be appropriated as resolved by stockholders at the stockholders’ meeting. The Board of Directors is authorized by the shareholders to resolve the appropriation of cash dividends and cash payment from capital surplus by a resolution adopted by a majority vote at its meeting attended by two-thirds of the total number of directors, which will then be reported to the shareholders.

• B. The Company distributes dividends taking into consideration the Company’s economic environment, growth phases, future demands for funds, long-term financial planning and the cash flow needs of shareholders. Cash dividends shall account for at least 5% of the total dividends distributed.

• C. 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 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.

• D. 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.

• E.(a) The appropriations of earnings and cash payment from capital surplus for the years ended December 31, 2021 and 2020 have been resolved at the shareholders’ meeting on June 17, 2022 and August 26, 2021, respectively. Details are summarized below:

~42~

Legal reserve Appropriation for (reversal of) special reserve Cash dividends Cash payment from capital surplus	Amount Dividends per share(in dollars) Amount Dividends per share(in dollars) 254,464 $ 119,625 $ 73,270 13,658) ( 2,231,121 5.20 $ 1,094,107 2.55 $ 2,558,855 $ 1,200,074 $ Cash payment per share Cash payment per share Amount (indollars) Amount (indollars) 343,249 $ 0.80 $ 214,531 $ 0.50 $ For the year ended December 31,2021 For the year ended December 31,2020

Actual distribution of retained earnings for 2021 and 2020 was in agreement with the amounts resolved by the Board of Directors and shareholders.

(b) The appropriations of earnings and cash payment from capital surplus for the year ended December 31, 2022 as proposed by the Board of Directors on March 2, 2023 are as follows:

For the year ended December 31, 2022

Legal reserve Special reserve Cash dividends Cash payment from capital surplus	Amount 245,726 $ 167,303 2,059,496 2,472,525 $ Amount 343,249 $	Dividends per share (in dollars)
		4.80 $ Cash payment pershare (indollars)
		0.80 $

As of March 2, 2023, the above appropriations of 2022 earnings have not yet been resolved by the shareholders.

~43~

(18) Other equity items

(19)

Operating revenue Exchange differences Unrealized on translation of gain or loss foreign financial onvaluation statements Total At January 1 7,417 $ 197,932) ($ 190,515) ($ Revaluation adjustment 170,069) ( - 170,069) ( Revaluation transferred to retained earnings 2,053 - 2,053 Currency translation differences - 892 892 Effect from income tax - 178) ( 178) ( At December 31 160,599) ($ 197,218) ($ 357,817) ($ Exchange differences Unrealized on translation of gain or loss foreign financial onvaluation statements Total At January 1 4,395 $ 121,639) ($ 117,244) ($ Revaluation adjustment 11,826 - 11,826 Revaluation transferred to retained earnings 8,804) ( - 8,804) ( Currency translation differences - 95,365) ( 95,365) ( Effect from income tax - 19,072 19,072 At December 31 7,417 $ 197,932) ($ 190,515) ($ 2022 2021 2022 2021 Sales revenue 12,122,350 $ 14,314,815 $ For theyears ended December31,

~44~

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods at a point in time in the following geographical regions:

==> picture [462 x 150] intentionally omitted <==

----- Start of picture text -----

Electronic products
For the year ended Taiwan Asia America Europe Others Total
December 31, 2022
Revenue from external
customer contracts $ 2,803,950 $ 3,805,341 $ 2,038,051 $ 2,741,912 $ 733,096 $ 12,122,350
Electronic products
For the year ended Taiwan Asia America Europe Others Total
December 31, 2021
Revenue from external
customer contracts $ 3,400,049 $ 5,221,283 $ 1,759,042 $ 3,155,301 $ 779,140 $ 14,314,815
----- End of picture text -----

B. Contract assets and liabilities

The Group has no revenue-related contract assets and liabilities.

(20) Interest income

Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	2022 2021 23,550 $ 1,467 $ 87,929 24,813 3,447 52,837 114,926 $ 79,117 $ Forthe years endedDecember31,	2022 2021 23,550 $ 1,467 $ 87,929 24,813 3,447 52,837 114,926 $ 79,117 $ Forthe years endedDecember31,
		1,467 $ 24,813 52,837
		79,117 $

(21) Other income

Rental income Dividend income	For the years ended December 31,	For the years ended December 31,
	2022 46,891 $ 35,592 82,483 $	2021
		37,253 $ 6,787
		44,040 $

~45~

(22) Other gains and losses

			Forthe years ended	Forthe years ended	Forthe years ended	December31,
			2022			2021
(Loss) gain on disposal of property, plant and	($		448)		$	12
equipment
Net currency exchange gain (loss)			320,239	(		14,506)
Net (loss) gain on financial assets and liabilities at
fair value through profit or loss	(		8,271)			84,872
Gain on disposal of non-current assets held for
sale			1,324,180			-
Others			8,136	(		8,017)
		$	1,643,836		$	62,361

(23) Expenses by nature

Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Depreciation charges (including investment property and right-of-use assets)	Forthe years endedDecember31,	Forthe years endedDecember31,
	2022 1,127,443 $ 120,044 41,145 54,914 194,624	2021
		1,167,733 $ 122,002 41,718 53,910 253,806

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 0.2% for directors’ remuneration.

• B. For the years ended December 31, 2022 and 2021, employees’ compensation were accrued at $31,729 and $32,691, respectively; while directors’ remuneration were accrued at $0 and $4,577, respectively. The aforementioned amounts were recognized in salary expenses.

• C. The employees’ compensation and directors’ remuneration were estimated and accrued based on 1% and 0% of distributable profit of current period for the year ended December 31, 2022. The employees’ compensation and directors’ remuneration resolved by the Board of Directors were $30,987 and $2,300, respectively, and the employees’ compensation will be distributed in the form of cash.

• D. The difference between employees’ compensation and directors’ remuneration as resolved by the Board of Directors and the amounts recognized in the 2021 financial statements by $1,149 and $1,377, respectively, have been adjusted in profit or loss for 2022.

~46~

• E. Information about employees’ compensation and directors’ remuneration of the Company as approved at the meeting of Board of Directors and resolved by the stockholders at their meeting will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(24) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

A			Forthe years ended	Forthe years ended	Forthe years ended	December31,
			2022			2021
Current income tax:
Current tax on profits for the year		$	758,410		$	603,473
Prior year income tax overestimation	(		13,543)	(		10,386)
Total current income tax			744,867			593,087
Deferred income tax:
Origination and reversal of temporary
differences			157,066			2,273
Total deferred income tax			157,066			2,273
Income tax expense		$	901,933		$	595,360

• (b) The income tax relating to components of other comprehensive income is as follows:

Financial statements translation differences of foreign operations	2022 2021 178 $ 19,072) ($ Forthe years endedDecember31,

• B. Reconciliation between income tax expense and accounting profit

			Forthe years ended	Forthe years ended	December31,
			2022		2021
Income tax calculated by applying statutory		$	981,142	$	640,025
rate to the profit before tax
Effects from tax exemption and items
disallowed by tax regulation	(		6,458)	(	33,620)
Changes in assessment of realizability of
deferred income tax assets	(		64,893)		-
Prior year income tax overestimation	(		13,543)	(	10,386)
Effect from investment tax credits	(		1,990)	(	659)
Withholding tax in other countries			7,675		-
Income tax expense		$	901,933	$	595,360

~47~

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

						2022	2022	2022
								Recognized in
									other
					Recognized in			comprehensive
			AtJanuary1			profit or loss			income	At		December31
Deferred income tax assets
Amount of allowance for bad debts		$	350	($		68)		$	-		$	282
that exceed the limit for tax purpose
Pension provision amount in excess
of appropriation amount			4,974	(		165)			-			4,809
Royalty fees			2,171	(		2,171)			-			-
Accrued hard drive recycling fees			1,794	(		1,093)			-			701
Unused compensated absences			1,165			581			-			1,746
Unrealized sales discounts and
allowances			9,536			6,507			-			16,043
Unrealized gross profit from sales			2,152	(		1,165)			-			987
Unrealized loss on market value
decline and obsolete and
slow-moving inventories			10,562			86,913			-			97,475
Financial statements translation
differences of foreign operations			11,065			-	(		178)			10,887
Others			3,586			1,258			-			4,844
Total		$	47,355		$	90,597	($		178)		$	137,774
Deferred income tax liabilities
Unrealized exchange gain	($		929)	($		22,098)		$	-	($		23,027)
Net gain on investment accounted for
using equity method	(		127,762)	(		225,570)			-	(		353,332)
Others	(		93)			5			-	(		88)
Total	($		128,784)	($		247,663)		$	-	($		376,447)

~48~

==> picture [455 x 418] intentionally omitted <==

----- Start of picture text -----

2021
Recognized in
other
Recognized in comprehensive
At January 1 profit or loss income At December 31
Deferred income tax assets
Amount of allowance for bad debts $ 2,282 ($ 1,932) $ - $ 350
that exceed the limit for tax purpose
Pension provision amount in excess
-
of appropriation amount 5,137 ( 163) 4,974
-
Royalty fees 4,342 ( 2,171) 2,171
- -
Accrued hard drive recycling fees 1,794 1,794
-
Unused compensated absences 1,336 ( 171) 1,165
Unrealized sales discounts and
allowances 16,108 ( 6,572) - 9,536
-
Unrealized gross profit from sales 2,692 ( 540) 2,152
Unrealized loss on market value
decline and obsolete and
-
slow-moving inventories 7,092 3,470 10,562
Financial statements translation
- -
differences of foreign operations 11,065 11,065
Others 2,483 1,103 - 3,586
Total $ 41,472 ($ 5,182) $ 11,065 $ 47,355
Deferred income tax liabilities
Unrealized exchange gain ($ 2,774) $ 1,845 $ - ($ 929)
Financial statements translation
- -
differences of foreign operations ( 8,007) 8,007
Net gain on investment accounted for
-
using equity method ( 128,821) 1,059 ( 127,762)
Others ( 98) 5 - ( 93)
Total ($ 139,700) $ 2,909 $ 8,007 ($ 128,784)
----- End of picture text -----

D. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

~49~

(25) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Forthe yearendedDecember31,2022	Forthe yearendedDecember31,2022	Forthe yearendedDecember31,2022
	Weighted-average common shares Earnings outstanding per share Profit aftertax (inthousands) (indollars) 2,454,344 $ 429,062 5.72 $ 2,454,344 $ 429,062 - 554 2,454,344 $ 429,616 5.71 $ Forthe yearendedDecember31,2021		Earnings per share (indollars)
			5.72 $
			5.71 $
	Profit aftertax 2,533,294 $ 2,533,294 $ - 2,533,294 $	Weighted-average common shares outstanding (inthousands) 429,062 429,062 485 429,547	Earnings per share (indollars)
			5.90 $
			5.90 $

~50~

(26) Supplemental cash flow information

Investing activities with partial cash payments

			For the years ended	For the years ended	December 31,
			2022		2021
Purchase of property, plant and equipment		$	50,741	$	15,334
Less: Transfers from prepayment for business
facilities	(		12,416)		-
Cash paid during the year		$	38,325	$	15,334

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Group Taiwan IC Packaging Corporation Associate accounted for using equity method Won Chin Investment Inc. (Won Chin) Other related party Cheng Chuan Technology Development Inc. Other related party (Cheng Chuan)

(2) Significant transactions and balances with related parties

A. Operating revenue

Sales of goods Associates accounted for using the equity method	For the years ended December 31,	For the years ended December 31,
	2022 1,309 $	2021
		1,393 $

The sales prices charged to related parties are approximate to those charged to third parties. The credit term to Taiwan IC Packaging Corporation is 30 days after receipt of goods. The credit term to third parties is 30 to 60 days after monthly billings.

B. Purchases

Purchases of goods Associates accounted for using the equity method	Forthe years endedDecember31,
	2022 2021 221,258 $ 235,161 $

The purchase prices charged by related parties are approximate to those charged by third parties. The payment term from Taiwan IC Packaging Corporation is 30 days after monthly billings. The payment term from third parties is 30 to 45 days after monthly billings.

~51~

C. Payables to related parties

	December31,2022	December31,2021
Accounts payable:
Associates accounted for using equity method	27,442 $	52,241 $

The payables to related parties arise mainly from purchase transactions and are due 30 days after the date of purchase. The payables bear no interest.

D. Other payables

December 31, 2022 December 31, 2021 Other payables: Associates accounted for using equity method $ 4 $ -

Other payables to related parties arise mainly from miscellaneous purchases. The payables bear no interest.

E. Leasing arrangements - lessee

The Company renewed a land lease contract with its related party, Won Chin and Cheng Chuan, with a lease term of 5 years from June 12, 2022 to June 11, 2027. The annual rental payment is $38,484 (excluding tax), which was determined based on the appraisal results of Yungcheng Real Estate Appraisers Firm and CCIS Real Estate Joint Appraisers Firm and renewed at $1,350 in dollar per square feet/month (tax included) after having a three-party negotiation. Rent is paid on the contract date and becomes payable on the same date each following year until the end of the lease. As of December 31, 2022 and 2021, the balance of related right-of-use assets amounted to $165,858 and $15,263 while lease liabilities amounted to $149,825 and $0, respectively.

(3) Key management compensation

Salaries and other employee benefits	For theyears ended December31,	For theyears ended December31,
	2022 68,967 $	2021
		44,300 $

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

Book value

		Bookvalue
Pledged assets Property, plant and equipment		December31,2022 December31,2021 121,700 $ 127,675 $	Pledge purpose
			Collateral for general credit limit granted by financial institutions

~52~

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

As of December 31, 2022, except for the provision of endorsements and guarantees mentioned in Note 13(1) B, there are no other significant commitments.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

Information on distribution of 2022 earnings and cash dividends from capital surplus is provided in Note 6(17) E(b).

12. OTHERS

(1) Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’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 Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s own funds are currently sufficient, daily operations can create stable cash inflows, and there are no significant capital expenditure plans in the short term. Except for obtaining loans to reduce the exchange rate exposure, the Group has sufficient funds to cover its own needs. Debt financing is not necessary.

(2) Financial instruments

A. Financial instruments by category

~53~

Financial assets Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Refundable deposits Financial liabilities Financial liabilities at amortised cost Accounts payable (including related parties) Other payables Lease liabilities	December31,2022 51,463 $ 524,939 3,187,312 8,611,357 867 1,217,936 77,626 34,888 13,706,388 $ 500,119 $ 271,948 772,067 $ 180,768 $	December31,2021
		1,618,194 $ 629,576 2,018,106 5,567,177 2,499 1,622,484 108,850 31,414
		11,598,300 $
		1,417,076 $ 286,168
		1,703,244 $
		42,950 $

• B. Financial risk management policies

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

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD. Exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

• ii. The Group’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD; the subsidiaries’ functional currencies: JPY, KRW, USD, EUR, GBP and RMB, etc.). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate

~54~

fluctuations is as follows:

Financial assets Financial liabilities Financial assets Financial liabilities	Foreign currency USD：NTD RMB：NTD EUR：NTD JPY：NTD KRW：NTD USD：EUR GBP：EUR USD：NTD RMB：NTD Foreign currency USD：NTD RMB：NTD EUR：NTD JPY：NTD GBP：EUR USD：EUR USD：NTD	Foreign currency amount Exchangerate Bookvalue 254,448 $ 30.71 7,814,098 $ 23,994 4.408 105,766 5,372 32.72 175,772 474,455 0.2324 110,263 1,728,885 0.0246 42,531 5,905 0.9385 181,343 1,950 1.13 72,326 13,052 $ 30.71 400,827 $ 97,981 4.4080 431,900 Foreign currency amount Exchange rate Bookvalue 104,112 $ 27.68 2,881,820 $ 28,260 4.344 122,761 1,492 31.32 46,729 90,334 0.241 21,725 1,887 1.1909 70,385 1,712 0.8838 47,388 41,900 $ 27.68 1,159,792 $ December31,2022 December31,2021

• iii. The information on total exchange (loss) gain, including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2022 and 2021 is provided in Note 6(22).

• iv. Sensitivity analysis relating to foreign exchange rate risks is primarily for financial reporting period-end date of foreign currency monetary item. If the New Taiwan dollar exchange rate to the U.S. dollar increases or decreases by 1%, the Group’s net income will decrease or increase by $74,133 and $17,220 for the years ended December 31, 2022 and 2021, respectively.

Price risk

• i. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the balance sheet as financial assets at fair value through profit or loss and other comprehensive income. The Group is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio.

• ii. The Group’s investments in listed and unlisted equity securities and financial instruments

~55~

by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2022 and 2021 would have increased/decreased by $515 and $16,182, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $5,249 and $6,296, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Group’s principal interest-bearing assets are cash and cash equivalents and financial assets at amortised cost. Cash and cash equivalents are due within twelve months. Financial assets at amortised cost are maintained at fixed rates. Therefore, it is assessed that there is no significant cash flow interest rate risk.

• ii. The Group has not used any financial instruments to hedge its interest rate risk.

(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the receivables based on the agreed terms.

• ii. The Group manages its credit risk taking into consideration the entire group’s concern. According to the Group’s credit policy, each local entity in the Group 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. To control internal risk, the Group 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 utilisation of credit limits is regularly monitored.

• iii. The Group determines that the default occurs when the contract payments are past due over 180 days.

• iv. If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• v. For details of credit risk in relation to accounts receivable and notes receivable, refer to Note 6(4).

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity

~56~

requirements to ensure it has sufficient cash to meet operational needs.

• ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, time deposits and monetary funds, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As at December 31, 2022 and 2021, the Group held money market position of $11,798,669 and $9,091,878, respectively, that are expected to readily generate cash inflows for managing liquidity risk.

• iii. The Group’s non-derivative financial liabilities are analysed based on the remaining period at the balance sheet date to the contractual maturity date and all the Group’s financial liabilities expire within one year.

(3) Fair value information

• A. 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:

• 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 Group’s investment in listed stocks and beneficiary certificates is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in non-hedging derivatives is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market, financial products and investment property is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(12).

• C. Financial instruments not measured at fair value

Except for those listed in the table below, the carrying amounts of cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable, other receivables, accounts payable (including related parties) and other payables are approximate to their fair values.

• D. The related information on 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 are as follows:

~57~

December 31, 2022 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities December 31, 2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities	Level 1 51,463 $ 523,814 575,277 $ Level 1 1,618,194 $ 628,451 2,246,645 $	Level 2 - $ - - $ Level 2 - $ - - $	Level3 - $ 1,125 1,125 $ Level3 - $ 1,125 1,125 $	Total
				51,463 $ 524,939
				576,402 $
				Total
				1,618,194 $ 629,576
				2,247,770 $

• E. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the closing price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily listed stocks classified as financial assets at fair value through other comprehensive income and beneficiary certificates classified as financial assets at fair value through profit or loss.

• F. For the years ended December 31, 2022 and 2021, there were no transfers between Level 1 and Level 2.

• G. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

• H. The financial products purchased for the years ended December 31, 2022 and 2021 were categorised as Level 3.

• I. Finance segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions and frequently review the fair value.

~58~

• J. The qualitative information of significant unobservable inputs to valuation model used in Level 3 fair value measurement is as follows: financial products are income investments, and the judgements of their valuation technique and significant unobservable inputs are based on the cash flow of individual contract.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: Refer to table 1.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Refer to table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company’s paid-in capital: Refer to table 3.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Refer to table 4.

• G. Purchases or sales of goods from or to relate parties reaching NT$100 million or 20% of the Company’s paid-in capital or more: Refer to table 5.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Refer to table 6.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Refer to table 7.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) : Refer to table 8.

(3) Information on investments in Mainland China

• A. Basic information: Refer to table 9.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Refer to table 7.

(4) Major shareholders information

Major shareholders information: Refer to table 10.

~59~

14. SEGMENT INFORMATION

(1) General information

The Group operates business only in a single industry. The Chairman of the Board of Directors who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2) Segment information

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

Segment revenue Segment income	2022 2021 12,122,350 $ 14,314,815 $ 2,454,344 $ 2,533,294 $ Forthe years endedDecember31,	2022 2021 12,122,350 $ 14,314,815 $ 2,454,344 $ 2,533,294 $ Forthe years endedDecember31,
		2,533,294 $

(3) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external customers reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the statement of comprehensive income.

(4) Information on products and services

All external customer revenue comes from sale of electronic products. Refer to Note 6(19)A for details.

(5) Geographical information

For details of geographical information of the Group’s revenue, refer to Note 6(19)A. The information on the Group’s non-current assets is as follows:

Taiwan Asia America Europe Total	December31,2022 Non-current assets 4,127,633 $ 190,780 59,828 44,443 4,422,684 $	December31,2021
		Non-current assets
		4,052,455 $ 726,026 64,566 44,429
		4,887,476 $

(6) Major customer information

None.

~60~

Transcend Information, Inc. and Subsidiaries

Expressed in thousands of NTD (Except as otherwise indicated)

Provision of endorsements and guarantees to others

For the year ended December 31, 2022

Table 1

Number (Note 1) Endorser/ guarantor	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2022(Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2022(Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 7)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 8)	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
	Companyname Relationship with the endorser/ guarantor (Note 2)
0 Transcend Information, Inc.	2 Transcend Japan Inc.	3,910,107 $	$ 486,400 (JPY2,000,000) (In thousands)	$ 464,800 (JPY2,000,000) (In thousands)	$ -	-	2	7,820,214 $	Y	-	-	-

• Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

• (a) The Company is ‘0’.

• (b) The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

• (a) Having business relationship

• (b) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (c) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

• (d) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

• (e) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

• (f) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

• (g) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

• Note 3: Not exceeding 20% of the Company’s net asset value. ($19,550,536*20%=$3,910,107)

• Note 4: The maximum outstanding endorsement/guarantee amount during and as of December 31, 2022 is JPY$2,000,000 (In thousands).

• Note 5: The amount was approved by the Board of Directors.

• Note 6: The actual amount of endorsement drawn down is $0.

• Note 7: Not exceeding 40% of the Company’s net asset value. ($19,550,536*40%=$7,820,214)

• Note 8: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary.

Table 1, Page 1

Transcend Information, Inc. and Subsidiaries

Table 2

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

December 31, 2022

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by Marketable securities (Note 1) Relationship with the securities issuer(Note 2) General ledger account		As of December31,2022	As of December31,2022	Footnote (Note 4)
	Numberofshares	Book value (Note 3)	Ownership (%) Fairvalue
Transcend Information, Inc. Stocks TrendForce Corporation - Financial assets at fair value through other comprehensive income - non-current Fubon Financial Holding Co., Ltd. Preferred Shares B - " Taiwan Semiconductor Manufacturing Co., Ltd. - " MediaTek Inc. - " Fubon Financial Holding Co., Ltd. - " Cathay Financial Holding Co. Ltd. - " Yuanta Financial Holding Co., Ltd. - " CTBC Financial Holding Co., Ltd - " Formosa Plastics Corporation - " ASUSTek Computer Inc. - " Beneficiary certificates Yuanta Taiwan Top 50 ETF - Financial assets at fair value through profit or loss - non-current	60,816 1,758,000 420,000 40,000 1,120,366 216,323 119,480 100,000 262,000 410,000 467,000	1,125 $ 101,085 188,370 25,000 63,077 8,653 2,593 2,210 22,741 110,085	1 1,125 $ - 101,085 - 188,370 - 25,000 - 63,077 - 8,653 - 2,593 - 2,210 - 22,741 - 110,085 - 51,463 $	- - - - - - - - - - -
		524,939 $
		51,463 $

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’.

Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the

marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

Table 2, Page 1

Transcend Information, Inc. 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

For the year ended December 31, 2022

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Marketable securities （Note 1）	General ledger account	Counterparty （Note 2）	Relationship with the investor （Note 2）	Balance as at January1,2022	Balance as at January1,2022	Addition （Note 3）	Addition （Note 3）		Disposal （Note 3）	Disposal （Note 3）		Balance as at December31,2022	Balance as at December31,2022
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Bookvalue	Gain on disposal	Number of shares	Amount
Transcend Information, Inc.	Taishin 1699 Money Market Fund	Financial assets at fair value through profit or loss - current	-	-	110,142,508	$ 1,501,948	-	$ -	110,142,508	$ 1,508,314	$ 1,501,948	$ 6,366	-	$ -

• Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank. Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more. Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 3, Page 1

Transcend Information, Inc. and Subsidiaries

Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more

For the year ended December 31, 2022

Table 4 Real estate disposed by	Real estate	Date of the event	Date of acquisition	Book value	Net transaction amount	Status of collection	Gain (loss) on disposal	Counterparty	Relationship	Purpose of disposal	Expressed in thousands of NTD (Except as otherwise indicated) Basis or reference used Other in settingtheprice commitments	Expressed in thousands of NTD (Except as otherwise indicated) Basis or reference used Other in settingtheprice commitments
Transcend Information (Shanghai), Ltd. "	Land use rights, buildings and accessories of 106/17 Hill, 2nd Neighborhood, Xidu Town, Fengxian, Shanghai Land use rights, buildings and accessories of No. 300, Lane 3111, Huancheng West Road, Shanghai Industrial Development Zone, 25/6 Hill, 2 Neighborhood, Xidu Town, Fengxian District, and 25/7 Hill, 2 Neighborhood, Xidu Town, Fengxian District	2021/11/26 2022/2/18	May 2005 to December 2010 May 2005 to January 2014	159,976 $ 358,772	508,726 $ 1,342,344	Note 2 1,342,344	345,801 $ 982,255	Shanghai Fengpu Industrial Park Fengxian Comprehensive Bonded Zone (Shanghai Minhang Export Processing Zone Development Co., Ltd.) Shanghai Fengpu Construction Development Co., Ltd.	- -	To cooperate with the government’s expropriation policy Activate assets and enhance working capital	In accordance with the Shanghai Fengpu Industrial Park expropriation policy and expropriation compensation agreement Note 3	- -

Note 1: Date of the event refers to the date of the Board of Directors’ resolution.

Note 2: As of December 31, 2022, $457,854 had been collected. Note 3: The prices were determined in accordance with two valuation reports, amounting to RMB 391,970 thousand and RMB 385,610 thousand, respectively.

Table 4, Page 1

Transcend Information, Inc. and Subsidiaries

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

For the year ended December 31, 2022

Table 5

Expressed in thousands of NTD

(Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to thirdpartytransactions(Note)	Differences in transaction terms compared to thirdpartytransactions(Note)	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Sales (purchases)	Amount	Percentage of total sales (purchases)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Transcend Information, Inc. " " " " " " Transcend Information Europe B.V. Transcend Information, Inc.	Transtech Trading (Shanghai) Co., Ltd. Transcend Japan Inc. Transcend Information Europe B.V. Transcend Information Inc. Transcend Korea Inc. Transcend Information Trading GmbH Transcend Information (H.K) Ltd. Transcend Information Trading GmbH Taiwan IC Packaging Corporation	Subsidiary of Memhiro The Company’s subsidiary Subsidiary of Memhiro The Company’s subsidiary The Company’s subsidiary Subsidiary of Memhiro Subsidiary of Memhiro Controlled by the same ultimate parent company Associate accounted for using equity method	Sales " " " " " " " (Purchase)	$ 672,568 464,600 412,950 466,470 309,457 387,584 159,283 100,490 ( 221,258)	6 4 3 4 3 3 1 18 (4)	120 days after monthly billings " " " " " " 30 days after delivery 30 days after monthly billings	No significant difference " " " " " " " "	30 to 60 days after monthly billings to third parties " " " " " " 7 to 60 days after delivery to third parties 30 to 45 days after monthly billings to third parties	$ 103,703 105,212 74,512 56,737 42,531 36,040 5,112 6,595 ( 27,442)	9 9 7 5 4 3 - 14 (3)	- - - - - - - - -

Note: The Company’s sales to subsidiaries were equivalent to subsidiaries’ purchases from the Company; accordingly, the Company did not disclose the information on subsidiaries’ purchases from the Company.

Table 5, Page 1

Table 6

Transcend Information, Inc. and Subsidiaries

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

For the year ended December 31, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2022	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Transcend Information, Inc. " Transcend Information (Shanghai), Ltd.	Transcend Japan Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information, Inc.	The Company’s subsidiary Subsidiary of Memhiro Ultimate parent company	$ 105,212 103,703 414,212	5.05 5.70 -	$ - - 414,212	- - -	$ 4,545 69,646 -	- - -

Table 6, Page 1

Transcend Information, Inc. and Subsidiaries

Significant inter-company transactions during the period

Expressed in thousands of NTD

For the year ended December 31, 2022

Table 7

(Except as otherwise indicated)

Transaction

						Transaction	(Except as otherwise indicated)
Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 " " " " " " " 1	Transcend Information, Inc. " " " " " " " Transcend Information Europe B.V.	Transtech Trading (Shanghai) Co., Ltd. Transcend Japan Inc. Transcend Information Europe B.V. Transcend Information Inc. Transcend Information Trading GmbH Transcend Korea Inc. Transcend Information (H.K) Ltd. Transcend Information (Shanghai), Ltd. Transcend Information Trading GmbH	1 " " " " " " " 3	Sales " " " " " " Accounts Payable Sales	$ 672,568 464,600 412,950 466,470 387,584 309,457 159,283 414,212) ( 100,490	There is no significant difference in unit price from those to third parties. " " " " " " 120 days after monthly billings There is no significant difference in unit price from those to third parties.	6 4 3 4 3 3 1 2) ( 1

(Individual transactions not exceeding 1% of the consolidated total revenue and total assets are not disclosed.)

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

• (a) Parent company is "0".

• (b) Subsidiaries were numbered 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 to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

(a) Parent company to subsidiary.

• (b) Subsidiary to parent company.

• (c) 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 transaction amount for the period to consolidated total operating revenues for income statement accounts.

Table 7, Page 1

Transcend Information, Inc. and Subsidiaries

Table 8

Information on investees

For the year ended December 31, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2022	Shares held as at December 31,2022	Shares held as at December 31,2022	Net profit (loss) of the investee for the year ended December 31, 2022	Investment income (loss) recognized by the Company for the year ended December 31, 2022	Footnote
				Balance as at December 31, 2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value
Transcend Information, Inc. Saffire Investment Ltd. Memhiro Pte Ltd.	Saffire Investment Ltd. Transcend Japan Inc. Transcend Information Inc. Transcend Korea Inc. Taiwan IC Packaging Corporation Memhiro Pte Ltd. Transcend Information Europe B.V. Transcend Information Trading GmbH Transcend Information (H.K.) Ltd.	B.V.I. Japan United States of America Korea Taiwan Singapore Netherlands Germany Hong Kong	Investment holdings Wholesale of computer memory modules and peripheral products Wholesale of computer memory modules and peripheral products Wholesale of computer memory modules and peripheral products Packaging of Semi-conductors Investment holdings Wholesale of computer memory modules and peripheral products Wholesale of computer memory modules and peripheral products Wholesale of computer memory modules and peripheral products	$ 216,829 89,103 38,592 6,132 354,666 173,702 1,693 2,288 7,636	$ 1,202,418 89,103 38,592 6,132 354,666 1,156,920 1,693 2,288 7,636	6,600,000 6,400 625,000 40,000 21,928,036 8,277,609 100 - 2,000,000	100 100 100 100 12.50 100 100 100 100	1,676,847 $ 222,111 153,808 62,902 136,710 1,632,726 234,933 122,747 35,697	1,174,872 $ 4,004 21,452 4,275 84,128 1,174,490 4,143 5,068 2,474	1,174,872 $ 4,004 21,452 4,275 10,300 1,174,490 4,143 5,068 2,474

Table 8, Page 1

Transcend Information, Inc. and Subsidiaries

Table 9

Expressed in thousands of NTD (Except as otherwise indicated)

Information on investments in Mainland China

For the year ended December 31, 2022

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2022	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2022	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2022	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022	Net income (loss) of investee for the year ended December 31,2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the year ended December 31, 2022 (Note 2)	Book value of investments in Mainland China as of December 31,2022	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Transcend Information (Shanghai), Ltd. Transtech Trading (Shanghai) Co., Ltd.	Manufacture and sales of computer memory modules, storage products and disks, and lease of self-owned buildings Wholesale, agent, import and export and retail of computer memory modules, storage products and computer components Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022	$ 150,787 16,310 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	2 2 Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA	$ 1,134,178 16,310	- -	(983,391) -	$ 150,787 16,310	$ 1,128,705 11,599	100 100	$ 1,128,705 11,599	$ 1,152,072 58,599	$ 1,464,028 -	Note 4 -
	167,097 $	1,150,488 $	11,730,322 $

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area (Memhiro Pte Ltd.), which then invested in Mainland China.

(3) Others.

Note 2: The gain and loss on investment recognized for the year was based on the financial statements that were audited by R.O.C. parent company’s CPA.

Note 3: The numbers in this table are expressed in New Taiwan Dollars.

Note 4: In June 2022, the shareholders of Transcend Information (Shanghai), Ltd. resolved to reduce its capital from US$34.6 million to US$4.6 million, and the proceeds from capital reduction was returned to Memhiro Pte Ltd., Saffire Investment Ltd., and the ultimate parent company, i.e. Transcend Information, Inc.

Table 9, Page 1

Transcend Information, Inc. and Subsidiaries Major shareholders information

Table 10

December 31, 2022

Name of major shareholders	Shares	Shares
	Number of shares held	Shareholdingratio
Won Chin Investment Inc. Wan An Technology Inc. Cheng Chuan Technology Development Inc. Wan Min Investment Inc. Wan Chuan Investment Inc.	74,783,600 34,142,854 32,971,701 29,726,397 29,505,896	17.42 7.95 7.68 6.92 6.87

Table 10, Page 1