TRI - Interim / Quarterly Report 2022

TEST RESEARCH, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT JUNE 30, 2022 AND 2021

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

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INDEPENDENT AUDITORS’ REVIEW REPORT TRANSLATED FROM CHINESE

PWCR22000106

To the Board of Directors and Shareholders of Test Research, Inc.

Introduction

We have reviewed the accompanying consolidated balance sheets of Test Research, Inc. and subsidiaries (the “Group”) as at June 30, 2022 and 2021, and the related consolidated statements of comprehensive income for the three months and six months then ended, as well as the consolidated statements of changes in equity and of cash flows for the six months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for qualified conclusion

As explained in Note 4(3), the financial statements of certain insignificant consolidated subsidiaries were not reviewed by independent auditors. Total assets of these subsidiaries amounted to NT$1,698,377 thousand and NT$1,432,593 thousand, constituting 20% and 17% of the consolidated total assets as at June 30, 2022 and 2021, respectively, total liabilities amounted to NT$144,058 thousand and

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NT$191,840 thousand, constituting 6% and 9% of the consolidated total liabilities as at June 30, 2022 and 2021, respectively, and total comprehensive income amounted to NT$37,772 thousand, NT$51,364 thousand, NT$108,218 thousand and NT$131,806 thousand, constituting 7%, 15%, 10% and 21% of the consolidated total comprehensive income for the three months and six months then ended, respectively.

Qualified conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries been reviewed by independent auditors as described in the Basis for qualified conclusion section above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at June 30, 2022 and 2021, and of its consolidated financial performance for the three months and six months then ended and its consolidated cash flows for the six months then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Pan, Hui-Lin Huang, Pei-Chuan

For and on behalf of PricewaterhouseCoopers, Taiwan August 3, 2022

------------------------------------------------------------------------------------------------------------------------------------------------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 auditing standards generally accepted in the Republic of China, and their applications in practice.

As the 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.

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022, DECEMBER 31, 2021 AND JUNE 30, 2021

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2022 and 2021 are reviewed, not audited)

Assets	Notes	June 30, 2022 AMOUNT % `$` `363,692` `4` `273,578` `3` `24,912` `-` `3,590,944` `41` `34,468` `1` `1,689,192` `20` `30,154` `-` `6,006,940` `69` `2,535,497` `29` `48,224` `1` `24,353` `-` `72,787` `1` `10,833` `-` `2,691,694` `31` `$` `8,698,634` `100`	December 31, 2021 AMOUNT % `$` `1,226,378` `15` `196,790` `3` `37,073` `1` `2,333,311` `29` `32,136` `-` `1,746,923` `22` `35,517` `-` `5,608,128` `70` `2,227,309` `28` `56,977` `1` `26,772` `-` `80,721` `1` `10,075` `-` `2,401,854` `30` `$` `8,009,982` `100`	June 30, 2021	June 30, 2021
		AMOUNT `$` `363,692` `273,578` `24,912` `3,590,944` `34,468` `1,689,192` `30,154` `6,006,940` `2,535,497` `48,224` `24,353` `72,787` `10,833` `2,691,694` `$` `8,698,634`	AMOUNT `$` `1,226,378` `196,790` `37,073` `2,333,311` `32,136` `1,746,923` `35,517` `5,608,128` `2,227,309` `56,977` `26,772` `80,721` `10,075` `2,401,854` `$` `8,009,982`	AMOUNT `$` `1,999,344` `204,435` `166,195` `2,272,695` `39,030` `1,336,005` `24,415` `6,042,119` `2,151,641` `58,953` `23,890` `78,335` `11,345` `2,324,164` `$` `8,366,283`	%
Current assets 1100 Cash and cash equivalents 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventory 1470 Other current assets 11XX Total current assets Non-current assets 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets	6(1) 6(2) 6(3) 6(3) 6(4) 6(5) and 8 6(6)				`24` `2` `2` `27` `1` `16` `-`
					`72`
					`26` `1` `-` `1` `-`
					`28`
					`100`

(Continued)

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022, DECEMBER 31, 2021 AND JUNE 30, 2021

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2022 and 2021 are reviewed, not audited)

					June 30, 2022				December 31, 2021	December 31, 2021			June 30, 2021
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2130	Contract liabilities - current	6(12)		`$`	`44,144`		`1`	`$`	`76,577`		`1`	`$`	`50,876`		`1`
2150	Notes payable				`34,069`		`-`		`30,493`		`-`		`40,539`		`-`
2170	Accounts payable				`937,307`	`11`			`916,403`	`12`			`1,129,106`	`14`
2200	Other payables	6(7)			`590,214`		`7`		`354,683`		`5`		`306,002`		`4`
2230	Current income tax liabilities				`285,221`		`3`		`179,870`		`2`		`171,671`		`2`
2280	Current lease liabilities				`28,507`		`-`		`25,040`		`-`		`23,295`		`-`
2300	Other current liabilities				`9,160`		`-`		`7,948`		`-`		`8,336`		`-`
21XX	Total current liabilities				`1,928,622`	`22`			`1,591,014`	`20`			`1,729,825`	`21`
	Non-current liabilities
2550	Provisions for liabilities - non-
	current				`15,564`		`-`		`39,920`		`1`		`40,602`		`-`
2570	Deferred income tax liabilities				`231,470`		`3`		`194,168`		`2`		`171,624`		`2`
2580	Non-current lease liabilities				`19,406`		`-`		`31,658`		`-`		`35,292`		`-`
2600	Other non-current liabilities	6(8)			`50,697`		`1`		`56,931`		`1`		`58,854`		`1`
25XX	Total non-current liabilities				`317,137`		`4`		`322,677`		`4`		`306,372`		`3`
2XXX	Total liabilities				`2,245,759`	`26`			`1,913,691`	`24`			`2,036,197`	`24`
	Equity attributable to owners of the
	parent
	Share capital	6(9)
3110	Common stock				`2,362,160`	`27`			`2,362,160`	`29`			`2,362,160`	`28`
	Capital surplus	6(10)
3200	Capital surplus				`53,290`		`1`		`53,290`		`1`		`53,290`		`1`
	Retained earnings	6(11)
3310	Legal reserve				`1,533,787`	`18`			`1,415,311`	`18`			`1,306,390`	`16`
3320	Special reserve				`68,362`		`1`		`57,209`		`1`		`67,270`		`1`
3350	Unappropriated retained earnings				`2,482,513`	`28`			`2,276,683`	`28`			`2,613,253`	`31`
	Other equity interest
3400	Other equity interest		`(`		`47,237 ) (`		`1) (`		`68,362 ) (`		`1) (`		`72,277) (`		`1)`
31XX	Equity attributable to owners
	of the parent				`6,452,875`	`74`			`6,096,291`	`76`			`6,330,086`	`76`
3XXX	Total equity				`6,452,875`	`74`			`6,096,291`	`76`			`6,330,086`	`76`
	Significant contingent liabilities and	9
	unrecognized contract commitments
3X2X	Total liabilities and equity			`$`	`8,698,634`	`100`		`$`	`8,009,982`	`100`		`$`	`8,366,283`	`100`

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

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME SIX MONTHS ENDED JUNE 30, 2022 AND 2021

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

(UNAUDITED)

					Three months ended June 30	Three months ended June 30	Three months ended June 30	Three months ended June 30			Six months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30
					2022			2021			2022			2021
	Items	Notes			AMOUNT	%	AMOUNT		%		AMOUNT	%	AMOUNT		%
4000	Operating revenue	6(12)		`$`	`1,839,898`	`100`	`$ 1,552,734`		`100`	`$`	`3,761,071`	`100`	`$`	`2,900,506`	`100`
5000	Operating costs	6(4)(15)(16)	`(`		`821,175 ) (`	`45) (`		`715,084 ) (`	`46) (`		`1,628,185 ) (`	`43) (`		`1,326,965) (`	`46 )`
5950	Gross margin				`1,018,723`	`55`		`837,650`	`54`		`2,132,886`	`57`		`1,573,541`	`54`
	Operating expenses	6(15)(16)
6100	Selling expenses		`(`		`234,245 ) (`	`13) (`		`209,492 ) (`	`13) (`		`461,934 ) (`	`12) (`		`403,304) (`	`13 )`
6200	General and administrative
	expenses		`(`		`42,696 ) (`	`2) (`		`39,266 ) (`	`3) (`		`97,575 ) (`	`3) (`		`83,860) (`	`3 )`
6300	Research and development
	expenses		`(`		`129,774 ) (`	`7) (`		`118,724 ) (`	`8) (`		`274,257 ) (`	`7) (`		`234,183) (`	`8 )`
6450	Expected credit impairment	12(2)
	(loss) gain		`(`		`23,241 ) (`	`1)`		`328`	`- (`		`27,863 ) (`	`1)`		`4,827`	`-`
6000	Total operating expenses		`(`		`429,956 ) (`	`23) (`		`367,154 ) (`	`24) (`		`861,629 ) (`	`23) (`		`716,520) (`	`24 )`
6900	Operating profit				`588,767`	`32`		`470,496`	`30`		`1,271,257`	`34`		`857,021`	`30`
	Non-operating income and
	expenses
7100	Interest income				`3,078`	`-`		`2,184`	`-`		`5,083`	`-`		`4,269`	`-`
7010	Other income	6(13)			`6,465`	`1`		`3,523`	`-`		`9,858`	`-`		`6,533`	`-`
7020	Other gains and losses	6(14)			`78,100`	`4 (`		`37,210 ) (`	`2)`		`163,433`	`5 (`		`38,763) (`	`1 )`
7050	Finance costs	6(6)	`(`		`445 )`	`- (`		`390 )`	`- (`		`874 )`	`- (`		`778)`	`-`
7000	Total non-operating income
	and expenses				`87,198`	`5 (`		`31,893 ) (`	`2)`		`177,500`	`5 (`		`28,739) (`	`1 )`
7900	Profit before income tax				`675,965`	`37`		`438,603`	`28`		`1,448,757`	`39`		`828,282`	`29`
7950	Income tax expense	6(17)	`(`		`151,087 ) (`	`8) (`		`91,235 ) (`	`6) (`		`333,785 ) (`	`9) (`		`185,322) (`	`6 )`
8200	Profit for the period			`$`	`524,878`	`29`	`$`	`347,368`	`22`	`$`	`1,114,972`	`30`	`$`	`642,960`	`23`
	Other comprehensive income
	Components of other
	comprehensive income that will
	be reclassified to profit or loss
8361	Financial statements
	translation differences of
	foreign operations		`($`		`16,974 ) (`	`1) ($`		`9,005 )`	`-`	`$`	`26,406`	`- ($`		`18,835)`	`-`
8399	Income tax relating to the	6(17)
	components of other
	comprehensive income (loss)
	that will be reclassified to
	profit or loss				`3,395`	`-`		`1,801`	`- (`		`5,281 )`	`-`		`3,767`	`-`
8300	Total other comprehensive
	income (loss) for the period		`($`		`13,579 ) (`	`1) ($`		`7,204 )`	`-`	`$`	`21,125`	`- ($`		`15,068)`	`-`
8500	Total comprehensive income for
	the period			`$`	`511,299`	`28`	`$`	`340,164`	`22`	`$`	`1,136,097`	`30`	`$`	`627,892`	`23`
	Profit attributable to:
8610	Owners of the parent			`$`	`524,878`	`29`	`$`	`347,368`	`22`	`$`	`1,114,972`	`30`	`$`	`642,960`	`23`
	Comprehensive income
	attributable to:
8710	Owners of the parent			`$`	`511,299`	`28`	`$`	`340,164`	`22`	`$`	`1,136,097`	`30`	`$`	`627,892`	`23`
	Earnings per share (in dollars)	6(18)
9750	Basic earnings per share			`$`		`2.22`	`$`		`1.47`	`$`		`4.72`	`$`		`2.72`
9850	Diluted earnings per share			`$`		`2.22`	`$`		`1.47`	`$`		`4.71`	`$`		`2.72`

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

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

Notes		Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent
	Share capital - common stock	Capital Reserves			Retained Earnings			Financial statements translation differences of foreign operations
		Capital surplus, additional paid- in capital		Donated assets received	Legal reserve	Special reserve	Unappropriated retained earnings
6(11)	`$ 2,362,160` `-` `-` `-` `$ 2,362,160` `$ 2,362,160` `-` `-` `-` `-` `-` `-` `$ 2,362,160`		`$` `51,874` `-` `-` `-` `$` `51,874` `$` `51,874` `-` `-` `-` `-` `-` `-` `$` `51,874`	`$` `1,416` `-` `-` `-` `$` `1,416` `$` `1,416` `-` `-` `-` `-` `-` `-` `$` `1,416`	`$ 1,306,390` `-` `-` `-` `$ 1,306,390` `$ 1,415,311` `-` `-` `-` `118,476` `-` `-` `$ 1,533,787`	`$` `67,270` `-` `-` `-` `$` `67,270` `$` `57,209` `-` `-` `-` `-` `11,153` `-` `$` `68,362`	`$ 1,970,293` `642,960` `-` `642,960` `$ 2,613,253` `$ 2,276,683` `1,114,972` `-` `1,114,972` `(` `118,476` `)` `(` `11,153` `)` `(` `779,513` `)` `$ 2,482,513`	`($` `57,209)` `-` `(` `15,068)` `(` `15,068)` `($` `72,277)` `($` `68,362)` `-` `21,125` `21,125` `-` `-` `-` `($` `47,237)`	`$ 5,702,194` `642,960` `(` `15,068` `)` `627,892` `$ 6,330,086` `$ 6,096,291` `1,114,972` `21,125` `1,136,097` `-` `-` `(` `779,513` `)` `$ 6,452,875`

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

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TEST RESEARCH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Amortisation

Expected credit impairment loss (impairment gain)

Interest income
Interest expense

Gain on disposal of property, plant and equipment

Changes in operating assets and liabilities
Changes in operating assets
Notes receivable
Accounts receivable
Other receivables
Inventory
Other current assets
Changes in operating liabilities
Contract liabilities
Notes payable
Accounts payable
Other payables
Other current liabilities
Provisions for liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Interest paid
Income taxes paid
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at amortised cost
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Decrease in refundable deposits
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Lease principal repayment
Cash dividends paid

Net cash flows used in financing activities
Effect due to changes in exchange rate
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period Six months ended June30
Notes
2022
2021
$
1,448,757 $
828,282
6(15)
63,099
60,741
6(15)
7,500
7,143
12(2)
27,863 (
4,827 )
(
5,083 ) (
4,269 )
6(6)
874
778
6(14)
(
84 ) (
2,292 )
12,161 (
93,355 )
(
1,285,496 ) (
421,359 )
(
1,876 ) (
19,799 )
46,078 (
439,987 )
5,363
3,843
(
32,433 )
26,574
3,576
23,757
20,904
634,509
96,542
5,699
1,212
477
(
24,356 ) (
741 )
(
6,234 ) (
4,057 )
378,367
601,117
4,627
5,888
(
874 ) (
778 )
(
188,703 ) (
129,479 )
193,417
476,748
(
76,788 )
26,987
6(5)(19)
(
202,684 ) (
35,907 )
2,500
5,707
(
5,074 ) (
6,226 )
(
758 ) (
1,055 )
(
282,804 ) (
10,494 )
(
15,233 ) (
13,293 )
6(11)
(
779,513 )
-
(
794,746 ) (
13,293 )
21,447 (
14,526 )
(
862,686 )
438,435
1,226,378
1,560,909
$
363,692 $
1,999,344

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

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TEST RESEARCH, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2022 AND 2021

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

(UNAUDITED)

1. HISTORY AND ORGANISATION

Test Research, Inc. (the Company) was incorporated in April 1989 under the provisions of the Company Law of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the design, assembly, manufacture, sales, repairs and maintenance of automated inspection and testing equipment.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on August 3, 2022.

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”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

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

(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:

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	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	January 1, 2023
arising 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:

==> picture [478 x 48] intentionally omitted <==

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

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17,’Insurance contracts’	January 1, 2023
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information’
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2023
current’

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2021, except for the compliance statement, basis of preparation, basis of consolidation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.
B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2021.

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(2) Basis of preparation

A. Except for defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation, the consolidated financial statements have been prepared under the historical cost convention.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “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:

The basis for preparation of consolidated financial statements is consistent with the basis used in the 2021 consolidated financial statements.

B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities	% of Ownership	% of Ownership	Description
			June 30, 2022	December 31, 2021
Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. TRI INVESTMENTS LIMITED (TIL)	TEST RESEARCH USA INC. (TRU) TRI TEST RESEARCH EUROPE GMBH (TRE) TRI JAPAN CORPORATION (TRJ) TEST RESEARCH INNOVATION MALAYSIA SDN BHD (TRM) TRI KOREA CO., LTD. (TRK) TRI INVESTMENTS LIMITED (TIL) TRI Electronic (Shenzhen) Limited (TRI (SHENZHEN))	Trading Trading Trading Trading Trading Investment holdings Manufacture and sales of test equipment	100 100 100 100 100 100 100	100 100 100 100 100 100 100	- - - - - - -

~11~

Name of investor	Name of subsidiary	Main business activities	% of Ownership	% of Ownership	Description
			June 30, 2022	December 31, 2021
TRI INVESTMENTS LIMITED (TIL) TEST RESEARCH INNOVATION MALAYSIA SDN BHD (TRM) Name of investor TRI INVESTMENTS LIMITED (TIL)	TRI Electronic (Shanghai) Limited (TRI (SHANGHAI)) TEST RESEARCH INNOVATION VIETNAM COMPANY LIMITED (TRV) Name of subsidiary TRI Electronic (Suzhou) Limited (TRI (SUZHOU))	Manufacture and sales of test equipment Import and export of equipment, consulting and after- sale maintenance service of equipment Trading Main business activities			- - Description -
			June 30,2021
Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. TRI INVESTMENTS LIMITED (TIL) TRI INVESTMENTS LIMITED (TIL) TRI INVESTMENTS LIMITED (TIL)	TEST RESEARCH USA INC. (TRU) TRI TEST RESEARCH EUROPE GMBH (TRE) TRI JAPAN CORPORATION (TRJ) TEST RESEARCH INNOVATION MALAYSIA SDN BHD (TRM) TRI KOREA CO., LTD. (TRK) TRI INVESTMENTS LIMITED (TIL) TRI Electronic (Shenzhen) Limited (TRI (SHENZHEN)) TRI Electronic (Suzhou) Limited (TRI (SUZHOU)) TRI Electronic (Shanghai) Limited (TRI (SHANGHAI))	Trading Trading Trading Trading Trading Investment holdings Manufacture and sales of test equipment Manufacture and sales of test equipment Import and export of equipment, consulting and after- sale maintenance service of equipment	100 100 100 100 100 100 100 100 100		- - - - - - - - -

~12~

Name of investor Name of subsidiary TEST RESEARCH INNOVATION MALAYSIA SDN BHD (TRM) TEST RESEARCH INNOVATION VIETNAM COMPANY LIMITED (TRV)	Main business activities Trading 100 % of Ownership June 30,2021	Description -

The financial statements of the abovementioned subsidiaries included in the Group’s consolidated financial statements for the six months ended June 30, 2022 and 2021 were not reviewed by independent auditors as these subsidiaries did not meet the definition of a significant subsidiary.

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments 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) Employee benefits

Under the defined benefit plans, pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly.

(5) Income tax

The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

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

UNCERTAINTY

There have been no significant changes as of June 30, 2022. Refer to Note 5 of the consolidated financial statements for the year ended December 31, 2021.

~13~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand and revolving funds Checking accounts and demand deposits Time deposits Short-term notes and bills	June 30,2022 512 $ 283,106 80,074 - 363,692 $	December31,2021 452 $ 797,612 148,314 280,000 1,226,378 $	June 30,2021
			427 $ 766,762 202,155 1,030,000
			1,999,344 $

A. 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.
B. The Group has no cash and cash equivalents pledged to others.

(2) Financial assets at amortised cost

Financial assets at amortised cost
Current items: Time deposits maturing over three months	June 30,2022 273,578 $	December31,2021 196,790 $	June 30,2021
			204,435 $

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

below:
Interest income Interest income	Three months ended June 30
	2022 2021 2,297 $ 934 $ Six months ended June 30
	2022 3,784 $	2021
		1,955 $

B. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Group’s investments in certificates of deposits are financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

~14~

(3) Notes receivable, accounts receivable and contract assets

			June 30,2022		December31,2021	December31,2021			June 30,2021
Notes receivable		$	24,912		$	37,073		$	166,195
Accounts receivable		$	2,079,300		$	1,330,647		$	1,902,483
Less: Allowance for uncollectible
accounts	(		27,826)	(		5,332)	(		5,599)
		$	2,051,474		$	1,325,315		$	1,896,884
Contract assets		$	1,545,285		$	1,008,298		$	375,924
Less: Loss allowance	(		5,815)	(		302)	(		113)
		$	1,539,470		$	1,007,996		$	375,811

A. The ageing analysis of accounts receivable, notes receivable and contract assets that were past due but not impaired is as follows:

but not impaired is as follows:
Accounts receivable Not past due 1,654,609 $ Past due Up to 60 days 259,366 61 to 90 days 90,943 91 to 180 days 38,399 181 to 365 days 21,830 Over 365 days 14,153 2,079,300 $	Notes receivable 24,912 $ - - - - - 24,912 $ June30,2022	Contract assets 1,545,285 $ - - - - - 1,545,285 $	December31,2021
			Accounts receivable 1,032,865 $ 186,807 29,755 46,523 32,897 1,800 1,330,647 $	Notes receivable 37,073 $ - - - - - 37,073 $	Contract assets
					1,008,298 $ - - - - -
					1,008,298 $

Not past due Past due Up to 60 days 61 to 90 days 91 to 180 days 181 to 365 days Over 365 days	Accounts receivable 1,651,622 $ 192,078 11,576 27,992 11,101 8,114 1,902,483 $	Notes receivable 166,195 $ - - - - - 166,195 $ June30,2021	Contract assets
			375,924 $ - - - - -
			375,924 $

The above ageing analysis was based on past due date.

B. As at June 30, 2022, December 31, 2021 and June 30, 2021, accounts receivable, notes receivable and contract assets were all from contracts with customers. As of January 1, 2021, the balance of receivables from contracts (including notes receivable and contract assets) with customers amounted to $1,919,349.
C. As at June 30, 2022, December 31, 2021 and June 30, 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 $24,912, $37,073 and $166,195, and

~15~

accounts receivable and contract assets were $3,590,944, $2,333,311 and $2,272,695, respectively.

D. Information relating to credit risk of accounts receivable, notes receivable and contract assets is provided in Note 12(2).

(4) Inventories

Raw materials Work in progress Semi-finished and finished goods Merchandise Raw materials Work in progress Semi-finished and finished goods Merchandise Raw materials Work in progress Semi-finished and finished goods Merchandise	Allowance for Cost valuation loss 1,211,109 $ 102,068) ($ 179,553 6) ( 432,463 39,379) ( 9,955 2,435) ( 1,833,080 $ 143,888) ($ Allowance for Cost valuation loss 1,168,419 $ 94,524) ($ 126,543 6) ( 577,487 35,803) ( 7,191 2,384) ( 1,879,640 $ 132,717) ($ Allowance for Cost valuation loss 832,222 $ 82,739) ($ 153,513 107) ( 462,417 38,082) ( 11,301 2,520) ( 1,459,453 $ 123,448) ($ June 30,2022 December31,2021 June 30,2021	Bookvalue
		1,109,041 $ 179,547 393,084 7,520
		1,689,192 $
		Bookvalue
		1,073,895 $ 126,537 541,684 4,807
		1,746,923 $
		Bookvalue
		749,483 $ 153,406 424,335 8,781
		1,336,005 $

The cost of inventories recognised as expense for the period:

Cost of goods sold Loss on slow-moving inventories Gain on reversal of decline in market value	2022 2021 803,898 $ 712,504 $ 6,956 - - 1,039) ( 810,854 $ 711,465 $ Three months endedJune30

~16~

Cost of goods sold Loss on slow-moving inventories	Six months endedJune30	Six months endedJune30
	2022 1,625,673 $ 11,017 1,636,690 $	2021
		1,317,435 $ 2,891
		1,320,326 $

A. For the six months ended June 30, 2022, the Group reversed overestimated reserve for warranty liabilities (shown as adjustment of cost of goods sold) in proportion to warranty occurrence in the past.
B. The Group reversed a previous inventory write-down for the three months ended June 30, 2021 as some inventories, whose net relisable value was lower than its cost, were subsequently sold.

~17~

(5) Property, plant and equipment

		2022	2022
Land 1,166,021 $ - 1,166,021 $ 1,166,021 $ - - - - - 1,166,021 $ 1,166,021 $ - 1,166,021 $	Buildings and structures	Machinery and equipment Transportation equipment 457,585 $ 6,430 $ 273,525) ( 3,999) ( 184,060 $ 2,431 $ 184,060 $ 2,431 $ 4,091 773 9,150 - 2,290) ( - 17,592) ( 410) ( 5,131 42 182,550 $ 2,836 $ 499,561 $ 7,301 $ 317,011) ( 4,465) ( 182,550 $ 2,836 $	Office equipment	Miscellaneous equipment	Unfinished construction Total 100,667 $ 3,057,021 $ - 829,712) ( 100,667 $ 2,227,309 $ 100,667 $ 2,227,309 $ 330,926 341,673 - 11,653 - 2,416) ( - 47,866) ( - 5,144 431,593 $ 2,535,497 $ 431,593 $ 3,433,209 $ - 897,712) ( 431,593 $ 2,535,497 $	Total
	921,538 $ 267,796) ( 653,742 $ 653,742 $ - - - 9,049) ( - 644,693 $ 921,538 $ 276,845) ( 644,693 $		227,459 $ 155,330) ( 72,129 $ 72,129 $ 2,396 255) ( 123) ( 12,518) ( 45 61,674 $ 224,908 $ 163,234) ( 61,674 $	177,321 $ 129,062) ( 48,259 $ 48,259 $ 3,487 2,758 3) ( 8,297) ( 74) ( 46,130 $ 182,287 $ 136,157) ( 46,130 $
						2,535,497 $

~18~

==> picture [726 x 268] intentionally omitted <==

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

2021
Buildings and Machinery and Transportation Office Miscellaneous Unfinished
Land structures equipment equipment equipment equipment construction Total
At January 1
Cost $ 1,166,021 $ 921,538 $ 414,098 $ 6,752 $ 222,402 $ 164,463 $ 40 $ 2,895,314
Accumulated depreciation - ( 249,696) ( 238,558) ( 3,358) ( 150,498) ( 121,244) - ( 763,354)
$ 1,166,021 $ 671,842 $ 175,540 $ 3,394 $ 71,904 $ 43,219 $ 40 $ 2,131,960
Opening net book
amount as at January 1 $ 1,166,021 $ 671,842 $ 175,540 $ 3,394 $ 71,904 $ 43,219 $ 40 $ 2,131,960
Additions - - 4,774 - 6,355 5,561 19,217 35,907
Transfers from inventories - - 19,602 - 14,961 4,148 - 38,711
Disposals - - ( 3,320) 17 ( 109) ( 3) - ( 3,415)
- -
Depreciation charge ( 9,050) ( 16,369) ( 422) ( 13,944) ( 7,663) ( 47,448)
Net exchange differences - - ( 3,640) ( 112) ( 36) ( 286) - ( 4,074)
Closing net book
amount as at June 30 $ 1,166,021 $ 662,792 $ 176,587 $ 2,877 $ 79,131 $ 44,976 $ 19,257 $ 2,151,641
At June 30
Cost $ 1,166,021 $ 921,538 $ 442,689 $ 6,519 $ 235,584 $ 173,213 $ 19,257 $ 2,964,821
Accumulated depreciation - ( 258,746) ( 266,102) ( 3,642) ( 156,453) ( 128,237) - ( 813,180)
$ 1,166,021 $ 662,792 $ 176,587 $ 2,877 $ 79,131 $ 44,976 $ 19,257 $ 2,151,641
----- End of picture text -----

A. Each property, plant and equipment does not include significant components.

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

~19~

`－` (6) Leasing arrangements lessee

A. The Group leases offices and rental contracts are typically made for periods from 1 to 6 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 shall not be used as security for borrowing purposes.
B. Short-term leases pertain to leases of dormitories and company cars with a lease term of not more than 12 months.
C. The carrying amounts of right-of-use assets and the depreciation charge are as follows:

June 30,2022 December31,2021 June 30,2021 Carrying amount Carrying amount Carrying amount 48,224 $ 56,977 $ 58,953 $ 2022 2021 Depreciation charge Depreciation charge 7,879 $ 6,662 $ 2022 2021 Depreciationcharge Depreciationcharge 15,233 $ 13,293 $ Threemonths ended June 30 Six months ended June 30	December31,2021 June 30,2021 Carrying amount Carrying amount 56,977 $ 58,953 $ Threemonths ended June 30	June 30,2021
		Carrying amount
		58,953 $

	2021
	Depreciation charge
	6,662 $
2022 Depreciationcharge 15,233 $	2021
	Depreciationcharge
	13,293 $

Buildings

D. For the three months and six months ended June 30, 2022 and 2021, the additions to right-of-use assets were $3,545, $28,961, $5,253 and $29,073, respectively.
E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Lease expense of low-value assets Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Lease expense of low-value assets	Threemonths ended June 30	Threemonths ended June 30
	2022 2021 445 $ 390 $ 2,328 $ 3,129 $ 77 $ 77 $ Six months ended June 30	2021
		390 $
		3,129 $
		77 $
	2022 874 $ 4,667 $ 154 $	2021
		778 $
		5,573 $
		154 $

F. For the three months and six months ended June 30, 2022 and 2021, the Group’s total cash outflow for leases were $10,729, $10,258, $20,928 and $19,798, respectively.

~20~

(7) Other payables

Other payables
Salaries and bonus payable Employees’ compensation and directors’remuneration payable Construction payable Others	June 30,2022 December31,2021 266,990 $ 219,628 $ 69,149 35,900 138,989 - 115,086 99,155 590,214 $ 354,683 $	June 30,2021 183,708 $ 52,061 - 70,233
		306,002 $

(8) 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 pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 4% of the employees’ monthly salaries and wages to the retirement fund deposited with 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 for the deficit by next March.
(b) For the aforementioned pension plan, the Group recognised pension costs of $71, $47, $142 and $94 for the three months and six months ended June 30, 2022 and 2021, respectively.
(c) Expected contributions to the defined benefit pension plan of the Group for the year ending December 31, 2023 amount to $4,587.
B. Defined contribution plans
(a) Effective July 1, 2005, the Company and its domestic subsidiaries have 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 not lower than 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) Other overseas companies have a defined contribution plan in accordance with the local regulations, and contributions to endowment insurance and pension reserve are based on employees’ salaries and wages. Other than the monthly contributions, the Group has no further obligations.

~21~

(c) For the aforementioned pension plan, the Group recognised pension costs of $7,338, $6,915, $14,497 and $13,733 for the three months and six months ended June 30, 2022 and 2021, respectively.

(9) Share capital

The Company’s authorised capital was $2,500,000. As of June 30, 2022, the Company’s issued and outstanding capital was $2,362,160. All proceeds from shares issued have been collected.

(10) 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 capitalised mentioned above should not exceed 10% of the paidin capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(11) Retained earnings

A. Under the Company’s Articles of Incorporation, the dividend policy of the Company is based on the Company’s future capital expenditure budget and capital requirements. Dividends shall be appropriated from accumulated distributable earnings, and the distribution amount shall not be lower than 60% of accumulated distributable earnings, of which cash dividends shall not be lower than 50% of the total dividends distributed. The current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ 1osses and then 10% of the remaining amount shall be set aside as legal reserve until the amount of legal reserve is equal to the amount of total capital. After the provision or reversal of special reserve, the remaining earnings constitute the distributable earnings of the current year. The appropriation of the remaining earnings along with the unappropriated earnings of prior years shall be proposed by the Board of Directors and approved by the shareholders at the shareholders’ meeting.
B. The appropriations of 2021 earnings had been proposed by the Board of Directors on February 23, 2022 and the appropriations of 2020 earnings had been resolved at the stockholders’ meeting on July 7, 2021. Details are summarised below:

Year ended December 31

	YearendedDecember31	ecember31	ecember31
Legal reserve Special reserve Cash dividends	Dividends per Dividends per Amount share(in dollars) Amount share(in dollars) 118,476 $ 108,921 $ 11,153 $ 10,061) ($ 779,513 $ 3.3 $ 779,513 $ 3.3 $ 2021 2020	2020
	Amount 118,476 $ 11,153 $ 779,513 $		Dividends per share(in dollars)
			3.3 $

~22~

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. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate-1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.

(12) Sales revenue

A. Disaggregation of revenue from contracts with customers The Group derives revenue from the transfer of goods and services at a point in time in t following major geographical regions. 2022 2021 Revenue from contracts with customers 1,839,898 $ 1,552,734 $ 2022 2021 Revenue from contracts with customers 3,761,071 $ 2,900,506 $ Three months ended June 30 Six months ended June 30 2022 2021 Asia 1,543,989 $ 1,377,868 $ America 203,285 135,873 Europe 70,025 27,106 Others 22,599 11,887 1,839,898 $ 1,552,734 $ 2022 2021 Asia 3,249,089 $ 2,614,637 $ America 351,539 196,129 Europe 136,587 67,557 Others 23,856 22,183 3,761,071 $ 2,900,506 $ Threemonths ended June 30 Six months ended June 30	Three months ended June 30	Three months ended June 30
	2022 2021 1,839,898 $ 1,552,734 $ Six months ended June 30	2021
		1,552,734 $
		2021
		2,900,506 $
	2022 2021 1,543,989 $ 1,377,868 $ 203,285 135,873 70,025 27,106 22,599 11,887 1,839,898 $ 1,552,734 $ Six months ended June 30	2021
		1,377,868 $ 135,873 27,106 11,887
		1,552,734 $
	2022 3,249,089 $ 351,539 136,587 23,856 3,761,071 $	2021
		2,614,637 $ 196,129 67,557 22,183
		2,900,506 $

The Group derives revenue from the transfer of goods and services at a point in time in the following major geographical regions.

~23~

Note: The Group discloses geographical information based on regions where goods are delivered starting from the third quarter of 2021. Accordingly, the presentation of information for the second quarter of 2021 has been amended for comparative purposes. B. Contract liabilities

The Group has recognised the following revenue-related contract liabilities:

==> picture [456 x 29] intentionally omitted <==

For the three months and six months ended June 30, 2022 and 2021, the Group’s contract liabilities on January 1, 2022 and 2021 were realised to revenue amounting to $1,380, $1,628, $75,109 and $23,987, respectively.

(13) Other income

Other income
			Threemonths ended June 30
			2022			2021
Rental income		$	2		$	2,236
Other income			6,463			1,287
		$	6,465		$	3,523
			Six months	ended		June 30
			2022			2021
Rental income		$	310		$	3,948
Other income			9,548			2,585
		$	9,858		$	6,533
Other gains and losses
			Threemonths	ended		June 30
			2022			2021
Gains on disposal of property, plant
and equipment	($		114)		$	842
Net currency exchange gains (losses)			78,254	(		38,045)
Other gains and losses	(		40)	(		7)
		$	78,100	($		37,210)
			Six months ended June 30
			2022			2021
Gains on disposal of property, plant and
equipment		$	84		$	2,292
Net currency exchange gains (losses)			163,414	(		41,012)
Other gains and losses	(		65)	(		43)
		$	163,433	($		38,763)

(14) Other gains and losses

~24~

(15) Expenses by nature

Expenses by nature
Employee benefit expense Employee benefit expense Depreciation charges on property, plant and equipment and right-of-use assets Amortisation charges on intangible assets Employee benefit expense Depreciation charges on property, plant and equipment and right-of-use assets Amortisation charges on intangible assets Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses	2022 2021 327,775 $ 283,689 $ 31,938 30,674 3,797 3,920 363,510 $ 318,283 $ 2022 2021 662,530 $ 551,362 $ 63,099 60,741 7,500 7,143 733,129 $ 619,246 $ Threemonths ended June 30 Six months ended June 30 Threemonths ended June 30
	2022 2021 287,464 $ 247,459 $ 21,705 19,247 7,409 6,962 11,197 10,021 327,775 $ 283,689 $ Six months ended June 30	2021
		247,459 $ 19,247 6,962 10,021
		283,689 $
	2022 578,601 $ 45,984 14,639 23,306 662,530 $	2021
		475,756 $ 40,952 13,827 20,827
		551,362 $

(16) Employee benefit expense

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 2% for directors’ remuneration.
B. For the three months and six months ended June 30, 2022 and 2021, employees’ compensation was accrued at $10,060, $6,894, $21,944 and $12,758, respectively; while directors’ remuneration was accrued at $5,183, $3,552, $11,305 and $6,572, respectively. The aforementioned amounts were recognised in salary expenses. The employees’ compensation and

~25~

directors’ remuneration were estimated and accrued based on the distributable profit of current year for the six months ended June 30, 2022 and 2021 and the percentage as prescribed in the Company’s Articles of Incorporation.

Employees’ compensation and directors’ remuneration for 2021 amounting to $23,694 and $12,206, respectively, as resolved by the Board of Directors on February 23, 2022 were in agreement with those amounts recognised in the 2021 financial statements.

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

(17) Income tax

A. Income tax expense

(a) Components of income tax expense:

Current tax: Current tax on profit for the period Prior year income tax underestimation Tax on undistributed earnings Total current tax Deferred tax: Origination and reversal of temporary differences Total deferred tax Income tax expense Current tax: Current tax on profit for the period Prior year income tax underestimation Tax on undistributed earnings Total current tax Deferred tax: Origination and reversal of temporary differences Total deferred tax Income tax expense	Threemonths ended June 30	Threemonths ended June 30
	2022 2021 131,993 $ 85,858 $ - - 13,781 - 145,774 85,858 5,313 5,377 5,313 5,377 151,087 $ 91,235 $ Six months ended June 30	2021
		85,858 $ - -
		85,858
		5,377
		5,377
		91,235 $
	2022 274,075 $ 5,974 13,781 293,830 39,955 39,955 333,785 $	2021
		150,775 $ 7,018 -
		157,793
		27,529
		27,529
		185,322 $

~26~

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

as follows:
	Threemonths	ended June 30
	2022	2021
Currency translation differences	3,395) ($	1,801) ($
	Six months endedJune30
Currency translation differences	2022 5,281 $	2021 3,767) ($

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

(18) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share 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	Three months endedJune30,2022
	Amount aftertax 524,878 $ - 524,878 $	Weighted average number of ordinary shares outstanding (shares in thousands) 236,216 169 236,385	Earnings per share (indollars)
			2.22 $
			2.22 $

~27~

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share 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 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	Weighted average number of ordinary shares outstanding (shares in Earnings per share Amount aftertax thousands) (indollars) 347,368 $ 236,216 1.47 $ - 214 347,368 $ 236,430 1.47 $ Weighted average number of ordinary shares outstanding (shares in Earnings per share Amount after tax thousands) (indollars) 1,114,972 $ 236,216 4.72 $ - 478 1,114,972 $ 236,694 4.71 $ Threemonths ended June 30,2021 Six months ended June 30,2022	Weighted average number of ordinary shares outstanding (shares in Earnings per share Amount aftertax thousands) (indollars) 347,368 $ 236,216 1.47 $ - 214 347,368 $ 236,430 1.47 $ Weighted average number of ordinary shares outstanding (shares in Earnings per share Amount after tax thousands) (indollars) 1,114,972 $ 236,216 4.72 $ - 478 1,114,972 $ 236,694 4.71 $ Threemonths ended June 30,2021 Six months ended June 30,2022
	Weighted average number of ordinary shares outstanding (shares in Amount aftertax thousands) 347,368 $ 236,216 - 214 347,368 $ 236,430 Six months ended June 30,
	Amount after tax 1,114,972 $ - 1,114,972 $	Weighted average number of ordinary shares outstanding (shares in thousands) 236,216 478 236,694

~28~

Six months ended June 30, 2021

			Weighted average
			number of
			ordinary shares
			outstanding
			(shares in	Earnings per share
	Amount aftertax		thousands)	(indollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent	$	642,960	236,216	2.72 $
Diluted earnings per share
Assumed conversion of all dilutive
potential ordinary shares
Employees’ compensation		-	323
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares	$	642,960	236,539	2.72 $
As employees’ compensation could be distributed in the form of stock, the diluted EPS computation
shall include those estimated shares that would increase from employees’				stock compensation
issuance in the calculation of the weighted-average number of common shares outstanding during
the reporting year, taking into account the dilutive effect of stock compensation on potential
common shares.

(19) Supplemental cash flow information

Investing activities with partial cash payments:

Supplemental cash flow information Investing activities with partial cash payments:
2022 Purchase of property, plant and equipment 341,673 $ Add: Opening balance of payable on equipment - Less: Ending balance of payable on equipment 138,989) ( Cash paid during the period 202,684 $	2021
	35,907 $ - -
	35,907 $

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

The Company’s shares are widely held. The Company does not have an ultimate parent and ultimate controlling party.

~29~

(2) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits Salaries and other short-term employee benefits Post-employment benefits	2022 2021 18,860 $ 14,206 $ 358 355 19,218 $ 14,561 $ 2022 2021 40,262 $ 26,878 $ 713 625 40,975 $ 27,503 $ Threemonths ended June 30 Six months ended June 30	2022 2021 18,860 $ 14,206 $ 358 355 19,218 $ 14,561 $ 2022 2021 40,262 $ 26,878 $ 713 625 40,975 $ 27,503 $ Threemonths ended June 30 Six months ended June 30
		27,503 $

A. Salaries and other short-term employee benefits include regular wages, special responsibility allowances, various bonuses, service execution fees, directors’ remuneration and employees’ compensation, etc.
B. Post-employment benefits represent pension costs.

8. PLEDGED ASSETS

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

Pledged asset Property, plant and equipment - Land - Buildings and structures		Book value	June30,2021 Purpose 388,990 $ Security for lines of credit 49,745 " 438,735 $
	June30,2022 577,252 $ 54,364 631,616 $	December31,2021 577,252 $ 55,283 632,535 $

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

On May 6, 2021, the Company entered into a contract with LEE MING CONSTRUCTION CO., LTD. for the construction of the second-phase plant on its own land in Guishan Dist Huaya Section as approved by the Board of Directors on May 5, 2021. The total price of the construction was $1,828,800 (tax included). As of June 30, 2022, the Company has paid $277,978 and the outstanding billings that have not been paid amounted to $138,989.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

~30~

12. OTHERS

(1) Capital management

The Group’s main objectives when managing capital are to ensure solid and good capital ratio in order to support operations and to provide maximum returns for shareholders. The Group manages and adjusts capital structure based on economic situation and debt ratio, and achieves the purpose of maintaining and adjusting capital structure possibly by adjusting dividend payment or shares issuance.

(2) Financial instruments

A. Financial instruments by category

0 Financial assets Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable (including contract assets) Other receivables Guarantee deposits paid (shown as “other non-current assets”) Financial liabilities Financial liabilities at amortised cost Notes payable Accounts payable Other payables Lease liabilities (including current portion)	June30,2022 363,692 $ 273,578 24,912 3,590,944 34,468 10,833 4,298,427 $ 34,069 $ 937,307 580,238 1,551,614 $ 47,913 $	December31,2021 1,226,378 $ 196,790 37,073 2,333,311 32,136 10,075 3,835,763 $ 30,493 $ 916,403 344,399 1,291,295 $ 56,698 $	June30,2021
			1,999,344 $ 204,435 166,195 2,272,695 39,030 11,345 4,693,044 $
			40,539 $ 1,129,106 295,321
			1,464,966 $
			58,587 $

B. Financial risk management policies

The Group adopts an overall risk management and control system to identify and measure a variety of financial risks including market risk, credit risk, liquidity risk and cash flow interest rate risk. This allows the management of the Group to effectively control and measure market risk, credit risk, liquidity risk and cash flow interest risk.

~31~

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, RMB, JPY and EUR. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.
ii. The Group’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

~32~

		June30,2022	June30,2022	June30,2022
Foreign currency amount (in thousands) 80,963 $ 86,272 - 2,083 422 77,665 4,292 560,832 263,808 4,087 $ 9,392 623 186,899	Exchange rate 29.72 4.44 - 29.72 31.05 0.22 6.47 0.02 4.44 29.72 4.44 31.05 0.22	Book value (NTD) 2,406,220 $ 382,961 - 61,892 13,102 16,947 27,784 12,955 1,093,538 121,466 $ 41,691 19,344 40,781	SensitivityAnalysis
			Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit of loss 24,062 $ 3,830 - - - - - - - 1,215 $ 417 193 408	Effect on other comprehensive income
					- $ - - 619 131 169 278 130 10,935 - $ - - -

~33~

		December	31,2021	31,2021
Foreign currency amount (inthousands) 46,876 $ 92,710 52,305 2,107 395 55,291 3,049 562,918 243,972 3,667 $ 3,933 148,124	Exchangerate 27.68 4.34 0.24 27.68 31.32 0.24 6.36 0.02 4.34 27.68 4.34 0.24	Book value (NTD) 1,297,528 $ 402,732 12,579 58,315 12,372 13,297 19,378 13,229 980,212 101,503 $ 17,085 35,624	SensitivityAnalysis
			Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit of loss 12,975 $ 4,027 126 - - - - - - 1,015 $ 171 356	Effect on other comprehensive income
					- $ - - 583 124 133 194 132 9,802 - $ - -

~34~

		June30,2021	June30,2021	June30,2021
Foreign currency amount (in thousands) 55,312 $ 56,884 87,452 2,386 492 52,862 5,137 711,369 221,341 4,024 $ 7,814 480 138,255 510	Exchange rate 27.86 4.31 0.25 27.86 33.15 0.25 6.44 0.02 4.31 27.86 4.31 33.15 0.25 1,117.98	Book value (NTD) 1,540,992 $ 245,113 22,047 66,468 16,296 13,327 33,082 17,727 861,305 112,109 $ 33,671 15,912 34,854 14,209	SensitivityAnalysis
			Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit of loss 15,410 $ 2,451 220 - - - - - - 1,121 $ 337 159 349 142	Effect on other comprehensive income
					- $ - - 665 163 133 331 177 8,613 - $ - - - -

~35~

iii. Total exchange gain (loss), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the three months and six months ended June 30, 2022 and 2021 amounted to $78,254, ($38,045), $163,414 and ($41,012), respectively.

Price risk

The Group has no equity instruments held for trading; thus, the Group has no price risk.

Cash flow and fair value interest rate risk

The Group has no borrowings; thus, the Group has no cash flow and fair value 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 accounts receivable based on the agreed terms, and the contract cash flows of financial assets stated at amortised cost.
ii. The Group’s credit risk management policy is that for banks and financial institutions, only institutions with good credit rating are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
iii. In accordance with the internal management policy of the Group, if the contract payments were past due over 120 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
iv. In accordance with the internal management policy of the Group, the default occurs when the contract payments are past due over 365 days.
v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
- (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
- (ii) The disappearance of an active market for that financial asset because of financial difficulties;
- (iii) Default or delinquency in interest or principal repayments.
vi. The Group classifies customer’s accounts receivable and contract assets in accordance with credit risk on trade. The Group applies the modified approach using the provision matrix based on the loss rate methodology to estimate expected credit loss.

~36~

vii. The Group writes off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.
viii.The Group used the forecastability to adjust historical and timely information to assess the default possibility of notes receivable, accounts receivable and contract assets. The Group’s notes receivable had no significant loss allowance. As of June 30, 2022, December 31, 2021 and June 30, 2021, the provision matrix based on the loss rate methodology is as follows:

Group A:

Group A:
							91~180		181~365	Over 365
		Not	1~60 days 61~90			days	days		days	days
		past due	past due		past due		past due		past due	past due		Total
June 30, 2022
Expected loss rate		0.03%		1.50%	15.00%		25.00%		40.00%	60%-100%
Total book value	$	715,372	$	27,255	1,575 $		5,839 $		47 $	105 $	$	750,193
Loss allowance		214		409		236	1,460		19	105		2,443
							91~180		181~365	Over 365
		Not	1~60 days 61~90			days	days		days	days
		past due	past due		past due		past due		past due	past due		Total
December 31, 2021
Expected loss rate		0.03%		1.50%	15.00%		25.00%		40.00%	60%-100%
Total book value	$	645,048	$	3,606	$	14	248 $		12,303 $	175 $	$	661,394
Loss allowance		-		54		2	62		4,921	175		5,214
							91~180		181~365	Over 365
		Not	1~60 days 61~90			days	days		days	days
		past due	past due		past due		past due		past due	past due		Total
June 30, 2021
Expected loss rate		0.17%		1.50%	15.00%		25.00%		40.00%	60%-100%
Total book value	$	358,459	$	20,369	$	125	$	-	1,592 $	926 $	$	381,471
Loss allowance		608		306		19		-	637	926		2,496
Group B:
			June30,2022			December		31,2021		June30,	2021
Expected loss rate					0.03%				0.03%	0.03%~0.17%
Total book value		$		2,874,390		$	1,677,551			1,896,936 $
Loss allowance					31,198				420			3,216

Group B:

Group A: Customers excluding Group B.

Group B: Domestic and foreign clients that have good operating conditions, high degree of financial transparency, proceeds of collections of transaction and are rated with optimised internal credit rating. The default possibility that the Group used the forecastability to adjust historical and timely information to assess was 0.03% and credit facilities which were granted by the Group, which was used to assess the default possibility of accounts receivable and contract asstes.

~37~

ix. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable and contract assets are as follows:

Accountsreceivable At January 1 5,332 $ Provision for impairment 22,350 Effect of exchange rate changes 144 At June 30 27,826 $ Accounts receivable At January 1 10,585 $ Provision for impairment - Reversal of provision for impairment 4,885) ( Effect of exchange rate changes 101) ( At June 30 5,599 $	Contract assets Total 302 $ 5,634 $ 5,513 27,863 - 144 5,815 $ 33,641 $ Contract assets Total 55 $ 10,640 $ 58 58 - 4,885) ( - 101) ( 113 $ 5,712 $ 2022 2021

(c) Liquidity risk

i. Cash flow forecasting is performed and aggregated by the Group’s treasury. Surplus cash held by the operating entities over and above balance required for working capital management are invested in interest bearing current accounts and time deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.
ii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
June 30, 2022 Notes payable Accounts payable Other payables Lease liabilities	Less than 1year $ 34,069 937,307 590,214 30,912	Over 1year
		$ - - - 21,396

~38~

December 31, 2021	Less than 1year Over 1year
Notes payable	$ 30,493 $ -
Accounts payable	916,403 -
Other payables	354,683 -
Lease liabilities	30,496 23,489
June 30, 2021	Less than 1 year Over 1year
Notes payable	$ 40,539 $ -
Accounts payable	1,129,106 -
Other payables	295,321 -
Lease liabilities	28,390 26,096

(3) Fair value information

A. The Group has no financial instruments measured at fair value by valuation method.
B. The carrying amounts of cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable (including contract assets), other receivables, guarantee deposits paid, notes payable, accounts payable and other payables are approximate to their fair values.

(4) Other matter

In response to the Covid-19 outbreak and the government's various pandemic prevention measures, the Group provided the applications of work from home for employees, and employees were advised to avoid movement between different sites as much as possible. Also, the Group has implemented several prevention control measures such as conducting meetings online and managing related issues accordingly. The pandemic had no significant impact on the Group's operations and business for the six months ended June 30, 2022.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loan to others: Refer to table 1.
B. Provisions of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): None.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: Refer to table 2.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Refer to table 3.

~39~

H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Refer to table 4.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Refer to table 5.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Refer to table 6.

(3) Information on investments in Mainland China

A. Basic information: Refer to table 7.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Refer to Table 3 to 5.

(4) Major shareholders information

Major shareholders information: Refer to Table 8.

Note: Subsidiaries are the Company’s immaterial subsidiaries, and the disclosure information was not reviewed by independent auditors.

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in the design, assembly, manufacture, sales, repairs and maintenance of automated inspection and testing equipment. The Group operates business only in a single industry. 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) Measurement of segment information

The accounting policies of the operating segments and the Group are the same. The Group uses the operating profit as the measurement for operating segment profit and the basis of performance assessment.

(3) Information about segment profit or loss, assets and liabilities

The segment information provided to the chief operating decision maker for the reportable segments is as follows:

is as follows:
Revenue from external customers Segment profit	Six months ended June 30
	2022 3,761,071 $ 1,271,257 $	2021
		2,900,506 $
		857,021 $

~40~

(4) Reconciliation for segment income (loss)

Net profit (loss) of segments reported to the chief operating decision maker is measured in a manner consistent with revenues and expenses in the income statement. A reconciliation of segment profit (loss) to profit (loss) before tax and discontinued operations is provided as follows:

Reportable segments income Unallocated profit or loss: Non-operating income and expenses Income before tax from continuing operations	Six months endedJune30	Six months endedJune30
	2022 2021 $ 1,271,257 $ 857,021 177,500 ( 28,739) $1,448,757 $ 828,282	2021
		$ 828,282

~41~

Test Research, Inc. and Subsidiaries

Loans to others

Six months ended June 30, 2022

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Maximum outstanding Amount of Collateral General Is a balance during the Balance at Actual transactions Reason for Allowance Limit on loans Ceiling on ledger related six months ended June June 30, amount Interest Nature of with the short-term for doubtful granted to a total loans No. Creditor Borrower account party 30, 2022 2022 drawn down rate loan borrower financing accounts Item Value single party granted Footnote 1 TRI Electronic TRI Electronic Other Yes $ 27,036 $ 26,634 $ 26,634 4.75% Short-term $ - Additional $ - None $ - $ 645,288 $ 1,290,575 Note 1 (Shanghai) Limited (Suzhou) Limited receivables financing operating capital

Note 1: The Board of Directors resolved to amend TRI Electronic (Shanghai) Limited's policy “Procedures for Provision of Loans” and the policy as follows:

Ceiling on total loans to others: 50% of the creditor's net worth. For business transactions, if for short-term financing purpose, the ceiling on loans shall not exceed 40% of the creditor's net worth. Limit to a single party is RMB 4 million. However, limit on loans for financing granted by and to subsidiaries with the same ultimate parent which directly or indirectly holds 100% of its voting shares shall not exceed 20% of parent company's net worth. Ceiling to the aforementioned single party shall not exceed 10% of parent company's net worth.

Table 1 Page 1

Test Research, Inc. and Subsidiaries

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

Six months ended June 30, 2022

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

If the counterparty is a related party, information as to the last transaction of the real estate is disclosed below:

Relationship Original owner between the Reason for Relationship who sold the original owner Date of the Basis or reference acquisition of real Transaction with the real estate to the and original used in setting the estate and status of Other Real estate acquired by Real estate acquired Date of the event amount Status of payment Counterparty counterparty counterparty the acquirer transaction Amount price the real estate commitments Test Research, Inc. Test Research Linkou plant May 5, 2021 $ 1,828,800 Based on the contract LEE MING None Not applicable Not applicable Not applicable Not applicable Price comparison Expansion of future business and None schedule (Note) CONSTRUCTION CO., and price operational needs LTD. negotiation

Note: As of June 30, 2022, the Company has paid $277,978 and the outstanding billings that have not been paid amounted to $138,989.

Test Research, 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 Six months ended June 30, 2022

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accountsreceivable (payable)	Notes/accountsreceivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Test Research, Inc. TRI Electronic (Shenzhen) Limited Test Research, Inc. TRI Electronic (Shenzhen) Limited	TRI Electronic (Shenzhen) Limited Test Research, Inc. TRI Electronic (Shenzhen) Limited Test Research, Inc.	Second-tier subsidiary Parent company Second-tier subsidiary Parent company	Sales Purchases Sales Purchases	282,880 $ 282,880 248,337 248,337	8% 100% 7% 100%	90-120 days after acceptance and same with the third parties 90-120 days after acceptance 90-120 days after acceptance and same with the third parties 90-120 days after acceptance	30% to 60% of the standard price offered to third parties Determined by the parent company 30% to 60% of the standard price offered to third parties Determined by the parent company	90-120 days after acceptance and same with the third parties 90-120 days after acceptance 90-120 days after acceptance and same with the third parties 90-120 days after acceptance	Accounts receivable $68,813 Accounts payable $68,813 Accounts receivable $252,726 Other receivables $59,642 Accounts payable $312,368	2% 76% 9% 91% 99%	None None Note None

Note: Other receivables were reclassified from past due accounts receivable.

Table 3 Page 1

Test Research, Inc. and Subsidiaries

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

June 30, 2022

			June 30, 2022
Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as at June30,2022	Turnover rate	Overdue receivables		Expressed in thousands of NTD (Except as otherwise indicated) Amount collected subsequent to the balance sheet date (Note) Allowance for doubtful accounts
					Amount	Action taken
Test Research, Inc.	TRI Electronic (Suzhou) Limited	Second-tier subsidiary	312,368 $	1.43	236,627 $	In the process of collection	13,764 $	- $

Note: It pertained to the amount collected as of the auditors' review reporting date.

Table 4 Page 1

Test Research, Inc. and Subsidiaries

Significant inter-company transactions during the reporting period

Six months ended June 30, 2022

Table 5


Table 5 Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)		Expressed in thousands of NTD (Except as otherwise indicated) Transactions
				General ledger account	Amount(Note 4)	Transaction terms	Percentage of consolidated total operating revenues or total assets
0 0 0 0 0 1 2 3 4 5	Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. TRI Electronic (Shanghai) Limited TRI Electronic (Shenzhen) Limited TRI Electronic (Suzhou) Limited TEST RESEARCH USA, INC. TRI TEST RESEARCH EUROPE GMBH	TRI Electronic (Suzhou) Limited TRI Electronic (Shenzhen) Limited TRI Electronic (Suzhou) Limited TRI Electronic (Shenzhen) Limited TRI KOREA CO., Ltd. TRI Electronic (Suzhou) Limited Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc.	1 1 1 1 1 3 2 2 2 2	Sales revenue Sales revenue Accounts receivable Accounts receivable Other receivables Other receivables Service revenue Service revenue Service revenue Service revenue	248,337 $ 282,880 252,726 68,813 59,642 26,634 41,821 52,123 22,514 16,747	Note 3 Note 3 Note 3 Note 3 Note 8 Note 5 Notes 6 and 7 Notes 6 and 7 Notes 6 and 7 Notes 6 and 7	7 8 3 1 1 - 1 1 1 -

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:
(1) Parent company is ‘0’.

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

Note 2: Relationship between transaction company and counterparty is classified into the following two categories:
(1) Parent company to subsidiary.
(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 3: Selling prices to the parent company and the Mainland China investees are determined based on 30% to 60% of the standard sales price. The credit term is 90 to 120 days after acceptance and was the same with the third parties.

Note 4: Only related party transactions in excess of $10,000 are disclosed. Corresponding transactions from the other side are not disclosed.

Note 5: Loans to others.
Note 6: Companies signed agency agreements with subsidiaries and second-tier subsidiary, and the subsidiaries and second-tier subsidiary act as product sales agent.

Note 7: Commission revenue was based on agency contract, others were based on agreed conditions.

Note 8: Other receivables refer to reclassifications from past due receivables.
Note 9: The above inter-company transactions between companies within the Group are eliminated when preparing consolidated financial statements.

Table 5 Page 1

Test Research, Inc. and Subsidiaries

Information on investees

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Six months ended June 30, 2022

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as atJune30,2022	Shares held as atJune30,2022	Shares held as atJune30,2022	Net profit (loss) of the investee for the six months ended June 30, 2022	Investment income (loss) recognised by the Company for the six months ended June 30,2022	Footnote
				Balance as at June30,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Bookvalue
Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. TRI MALAYSIA SDN. BHD	TRI INVESTMENTS LIMITED TEST RESEARCH USA, INC. TRI TEST RESEARCH EUROPE GMBH TRI JAPAN CORPORATION TRI MALAYSIA SDN. BHD TRI KOREA CO., Ltd. TEST RESEARCH INNOVATION VIETNAM COMPANY LIMITED	Samoa United States Germany Japan Malaysia South Korea Vietnam	Investment holdings Trading Trading Trading Trading Trading Trading	219,811 $ 61,299 17,679 10,750 2,066 10,591 4,153	219,811 $ 61,299 17,679 10,750 2,066 10,591 4,153	6,724,109 1,518,935 - 720 1,000,000 80,000 -	100 100 100 100 100 100 100	1,093,538 $ 61,892 13,102 16,947 27,784 12,955 9,730	87,798 $ 696) ( 847 5,236 7,772 412 4,647	90,001 $ 696) ( 847 5,236 7,772 41) ( 4,647	Note 2 None Note 1 None None Note 2 None

Note 1: A limited liability company.

Note 2: The investment loss included the elimination of intercompany transactions.

Table 6 Page 1

Test Research, Inc. and Subsidiaries

Information on investments in Mainland China - Basic information

Six months ended June 30, 2022

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Investment method (Note 1)	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the six months ended June 30,2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the six months ended June 30,2022	Accumulated amount of remittance from Taiwan to Mainland China as of June 30, 2022(Note 3)	Net income of investee for the six months ended June 30,2022	Ownership held by the Company (direct or indirect)	Investment income recognised by the Company for the six months ended June 30, 2022(Note 2(2)C.)	Book value of investments in Mainland China as of June 30, 2022(Note 5)	Accumulated amount of investment income remitted back to Taiwan as of June 30,2022
			Remitted to Mainland China	Remitted back to Taiwan
TRI Electronic (Shenzhen) Limited TRI Electronic (Suzhou) Limited TRI Electronic (Shanghai) Limited Companyname	Manufacture and sales of test equipment $ 90,646 Manufacture and sales of test equipment 76,943 Import and export of equipment, consulting and after-sale maintenance service of equipment 115,908 Accumulated amount of remittance from Taiwan to Mainland China as of June 30,2022(Note 3)	2 $ 22,290 2 59,440 2 115,908 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA) (Note 3)	$ - $ - - - - - Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA(Note 4)		$ 22,290 59,440 115,908	$ 30,432 60,144 ( 2,779)	100 100 100	$ 30,432 60,144 ( 2,779)	$ 738,203 275,431 79,904	$ - - -
Test Research, Inc.	$ 197,638	$ 276,688	$ 3,871,725

Note 1: Investment methods are classified into the following three categories:

(1) Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China. (Reinvested through TRI INVESTMENTS LIMITED)
(3) Based on the investees’ financial statements which were not reviewed by audiors.

Note 2: In the ‘Investment income (loss) recognised by the Company for the six months ended June 30, 2022’ column:

(1) It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.
(2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:
A. The financial statements were audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.
B. The financial statements were audited and attested by R.O.C. parent company’s CPA.
C. Others.

Note 3: The amount was originally denominated in USD and was translated to NTD at the exchange rate (1:29.72) prevailing at the balance sheet date.

Note 4: The highest of $80,000, 60% of the stockholder's equity and 60% of consolidated net assets.

Note 5: Including net changes of realised and unrealised profit from sales.

Table 7 Page 1

Test Research, Inc. and Subsidiaries Major shareholders information

June 30, 2022

Table 8

Table 8
Name of major shareholders Shares	Number of shares held	Ownership (%)
Chieh-Yuan, Chen	37,889,235	16.04%
Mei-Hsing, Yeh	17,338,054	7.33%
Der-Hsin Investment Co., Ltd.	13,464,174	5.69%

Note 1: The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation. The share capital reflected in the financial statements may be different from the actual number of shares in dematerialised form due to the difference in the calculation basis.
Note 2: If the aforementioned data contains shares which were held in trust by the shareholders, the data is disclosed as a separate account of the client which was set by the trustee. As for the shareholder who reports share equity as an insider whose shareholding ratio is greater than 10%, in accordance with the Securities and Exchange Act, the shareholding ratio includes the self-owned shares and shares held in trust, and at the same time, the shareholder has the power to decide how to allocate the trust assets. For the information on reported share equity of insider, please refer to the Market Observation Post System.

Table 7 Page 1

AI assistant

TRI — Interim / Quarterly Report 2022

52263_rns_2022-12-22_38b64bdb-1312-49ac-b749-b13bc2b53a23.pdf

TEST RESEARCH, INC. AND SUBSIDIARIES

PWCR22000106

Introduction

Scope of review

Basis for qualified conclusion

Qualified conclusion

TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022, DECEMBER 31, 2021 AND JUNE 30, 2021

TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022, DECEMBER 31, 2021 AND JUNE 30, 2021

TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME SIX MONTHS ENDED JUNE 30, 2022 AND 2021

TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY SIX MONTHS ENDED JUNE 30, 2022 AND 2021

TEST RESEARCH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2022 AND 2021

TEST RESEARCH, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2022 AND 2021

1. HISTORY AND ORGANISATION

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

(4) Employee benefits

(5) Income tax

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

UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

(2) Financial assets at amortised cost

(3) Notes receivable, accounts receivable and contract assets

(4) Inventories

(5) Property, plant and equipment

－ (6) Leasing arrangements lessee

(7) Other payables

(8) Pensions

(9) Share capital

(10) Capital surplus

(11) Retained earnings

(12) Sales revenue

(13) Other income

(14) Other gains and losses

(15) Expenses by nature

(16) Employee benefit expense

(17) Income tax

A. Income tax expense

(a) Components of income tax expense:

(19) Supplemental cash flow information

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

(2) Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

10. SIGNIFICANT DISASTER LOSS

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

12. OTHERS

(1) Capital management

(2) Financial instruments

A. Financial instruments by category

B. Financial risk management policies

Foreign exchange risk

Price risk

Cash flow and fair value interest rate risk

(c) Liquidity risk

(3) Fair value information

(4) Other matter

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

(2) Information on investees

(3) Information on investments in Mainland China

(4) Major shareholders information

14. SEGMENT INFORMATION

(1) General information

(2) Measurement of segment information

(3) Information about segment profit or loss, assets and liabilities

(4) Reconciliation for segment income (loss)

TRI Interim / Quarterly Report 2022

`－` (6) Leasing arrangements lessee