TRI - Interim / Quarterly Report 2022

TEST RESEARCH, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT SEPTEMBER 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

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 September 30, 2022 and 2021, and the related consolidated statements of comprehensive income for the three months and nine months then ended, as well as the consolidated statements of changes in equity and of cash flows for the nine 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$1,636,679 thousand and NT$1,644,610 thousand, constituting 18% and 21% of the consolidated total assets as at September 30, 2022 and 2021, respectively, total liabilities amounted to NT$148,999 thousand and

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NT$152,724 thousand, constituting 7% and 8% of the consolidated total liabilities as at September 30, 2022 and 2021, respectively, and total comprehensive income amounted to NT$16,357 thousand, NT$69,546 thousand, NT$124,575 thousand and NT$201,352 thousand, constituting 3%, 24%, 8% and 22% of the consolidated total comprehensive income for the three months and nine 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 September 30, 2022 and 2021, and of its consolidated financial performance for the three months and nine months then ended and its consolidated cash flows for the nine 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 November 2, 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

SEPTEMBER 30, 2022, DECEMBER 31, 2021 AND SEPTEMBER 30, 2021

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

Assets	Notes	September 30, 2022 AMOUNT % `$` `662,274` `7` `232,442` `3` `37,626` `-` `3,408,929` `38` `15,971` `-` `1,692,003` `19` `47,086` `1` `6,096,331` `68` `2,725,779` `30` `53,100` `1` `25,489` `-` `75,368` `1` `11,671` `-` `2,891,407` `32` `$` `8,987,738` `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`	September 30, 2021	September 30, 2021
		AMOUNT `$` `662,274` `232,442` `37,626` `3,408,929` `15,971` `1,692,003` `47,086` `6,096,331` `2,725,779` `53,100` `25,489` `75,368` `11,671` `2,891,407` `$` `8,987,738`	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 `$` `1,026,075` `290,345` `89,906` `2,371,017` `20,031` `1,662,128` `59,294` `5,518,796` `2,165,802` `52,774` `26,063` `76,491` `10,100` `2,331,230` `$` `7,850,026`	%
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)				`13` `4` `1` `30` `-` `21` `1`
					`70`
					`28` `1` `-` `1` `-`
					`30`
					`100`

(Continued)

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TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2022, DECEMBER 31, 2021 AND SEPTEMBER 30, 2021

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

					September 30, 2022	September 30, 2022			December 31, 2021	December 31, 2021			September 30, 2021	September 30, 2021
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2130	Contract liabilities - current	6(12)		`$`	`102,344`		`1`	`$`	`76,577`		`1`	`$`	`37,103`		`1`
2150	Notes payable				`32,476`		`-`		`30,493`		`-`		`40,780`		`1`
2170	Accounts payable				`853,140`	`10`			`916,403`	`12`			`1,190,946`	`15`
2200	Other payables	6(7)			`421,760`		`5`		`354,683`		`5`		`270,064`		`3`
2230	Current income tax liabilities				`251,302`		`3`		`179,870`		`2`		`129,991`		`2`
2280	Current lease liabilities				`23,412`		`-`		`25,040`		`-`		`22,430`		`-`
2300	Other current liabilities				`8,361`		`-`		`7,948`		`-`		`9,648`		`-`
21XX	Total current liabilities				`1,692,795`	`19`			`1,591,014`	`20`			`1,700,962`	`22`
	Non-current liabilities
2550	Provisions for liabilities - non-
	current				`15,798`		`-`		`39,920`		`1`		`38,087`		`1`
2570	Deferred income tax liabilities				`249,544`		`3`		`194,168`		`2`		`186,345`		`2`
2580	Non-current lease liabilities				`29,287`		`-`		`31,658`		`-`		`30,093`		`-`
2600	Other non-current liabilities	6(8)			`49,602`		`1`		`56,931`		`1`		`57,748`		`1`
25XX	Total non-current liabilities				`344,231`		`4`		`322,677`		`4`		`312,273`		`4`
2XXX	Total liabilities				`2,037,026`	`23`			`1,913,691`	`24`			`2,013,235`	`26`
	Equity attributable to owners of the
	parent
	Share capital	6(9)
3110	Common stock				`2,362,160`	`26`			`2,362,160`	`29`			`2,362,160`	`30`
	Capital surplus	6(10)
3200	Capital surplus				`53,290`		`-`		`53,290`		`1`		`53,290`		`-`
	Retained earnings	6(11)
3310	Legal reserve				`1,533,787`	`17`			`1,415,311`	`18`			`1,415,311`	`18`
3320	Special reserve				`68,362`		`1`		`57,209`		`1`		`57,209`		`1`
3350	Unappropriated retained earnings				`2,968,970`	`33`			`2,276,683`	`28`			`2,023,389`	`26`
	Other equity interest
3400	Other equity interest		`(`		`35,857 )`		`- (`		`68,362 ) (`		`1) (`		`74,568) (`		`1)`
31XX	Equity attributable to owners
	of the parent				`6,950,712`	`77`			`6,096,291`	`76`			`5,836,791`	`74`
3XXX	Total equity				`6,950,712`	`77`			`6,096,291`	`76`			`5,836,791`	`74`
	Significant contingent liabilities and	9
	unrecognized contract commitments
	Significant events after the balance	11
	sheet date
3X2X	Total liabilities and equity			`$`	`8,987,738`	`100`		`$`	`8,009,982`	`100`		`$`	`7,850,026`	`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 NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

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

(UNAUDITED)

					Three months ended	Three months ended	Three months ended	September 30			Nine months ended	Nine months ended	Nine months ended	September 30
					2022			2021			2022			2021
	Items	Notes			AMOUNT	%		AMOUNT	%		AMOUNT	%		AMOUNT	%
4000	Operating revenue	6(12)		`$`	`1,537,964`	`100`	`$`	`1,385,301`	`100`	`$`	`5,299,035`	`100`	`$`	`4,285,807`	`100`
5000	Operating costs	6(4)(15)(16)	`(`		`662,715 ) (`	`43) (`		`638,068 ) (`	`46) (`		`2,290,900 ) (`	`43) (`		`1,965,033) (`	`46 )`
5950	Gross margin				`875,249`	`57`		`747,233`	`54`		`3,008,135`	`57`		`2,320,774`	`54`
	Operating expenses	6(15)(16)
6100	Selling expenses		`(`		`254,318 ) (`	`17) (`		`198,098 ) (`	`14) (`		`716,252 ) (`	`13) (`		`601,402) (`	`14 )`
6200	General and administrative
	expenses		`(`		`50,917 ) (`	`3) (`		`39,090 ) (`	`3) (`		`148,492 ) (`	`3) (`		`122,950) (`	`3 )`
6300	Research and development
	expenses		`(`		`139,179 ) (`	`9) (`		`125,672 ) (`	`9) (`		`413,436 ) (`	`8) (`		`359,855) (`	`8 )`
6450	Expected credit impairment	12(2)
	(loss) gain		`(`		`1,567 )`	`- (`		`834 )`	`- (`		`29,430 ) (`	`1)`		`3,993`	`-`
6000	Total operating expenses		`(`		`445,981 ) (`	`29) (`		`363,694 ) (`	`26) (`		`1,307,610 ) (`	`25) (`		`1,080,214) (`	`25 )`
6900	Operating profit				`429,268`	`28`		`383,539`	`28`		`1,700,525`	`32`		`1,240,560`	`29`
	Non-operating income and
	expenses
7100	Interest income				`1,163`	`-`		`1,810`	`-`		`6,246`	`-`		`6,079`	`-`
7010	Other income	6(13)			`7,574`	`-`		`5,864`	`1`		`17,432`	`1`		`12,397`	`1`
7020	Other gains and losses	6(14)			`168,679`	`11`		`3,916`	`-`		`332,112`	`6 (`		`34,847) (`	`1 )`
7050	Finance costs	6(6)	`(`		`813 )`	`- (`		`410 )`	`- (`		`1,687 )`	`- (`		`1,188)`	`-`
7000	Total non-operating income
	and expenses				`176,603`	`11`		`11,180`	`1`		`354,103`	`7 (`		`17,559)`	`-`
7900	Profit before income tax				`605,871`	`39`		`394,719`	`29`		`2,054,628`	`39`		`1,223,001`	`29`
7950	Income tax expense	6(17)	`(`		`119,414 ) (`	`8) (`		`106,210 ) (`	`8) (`		`453,199 ) (`	`9) (`		`291,532) (`	`7 )`
8200	Profit for the period			`$`	`486,457`	`31`	`$`	`288,509`	`21`	`$`	`1,601,429`	`30`	`$`	`931,469`	`22`
	Other comprehensive income
	Components of other
	comprehensive income that will
	be reclassified to profit or loss
8361	Financial statements
	translation differences of
	foreign operations			`$`	`14,225`	`1 ($`		`2,864 )`	`-`	`$`	`40,631`	`1 ($`		`21,699) (`	`1 )`
8399	Income tax relating to the	6(17)
	components of other
	comprehensive (loss) income
	that will be reclassified to
	profit or loss		`(`		`2,845 )`	`-`		`573`	`- (`		`8,126 )`	`-`		`4,340`	`-`
8300	Total other comprehensive
	income (loss) for the period			`$`	`11,380`	`1 ($`		`2,291 )`	`-`	`$`	`32,505`	`1 ($`		`17,359) (`	`1 )`
8500	Total comprehensive income for
	the period			`$`	`497,837`	`32`	`$`	`286,218`	`21`	`$`	`1,633,934`	`31`	`$`	`914,110`	`21`
	Profit attributable to:
8610	Owners of the parent			`$`	`486,457`	`31`	`$`	`288,509`	`21`	`$`	`1,601,429`	`30`	`$`	`931,469`	`22`
	Comprehensive income
	attributable to:
8710	Owners of the parent			`$`	`497,837`	`32`	`$`	`286,218`	`21`	`$`	`1,633,934`	`31`	`$`	`914,110`	`21`
	Earnings per share (in dollars)	6(18)
9750	Basic earnings per share			`$`		`2.06`	`$`		`1.22`	`$`		`6.78`	`$`		`3.94`
9850	Diluted earnings per share			`$`		`2.06`	`$`		`1.22`	`$`		`6.76`	`$`		`3.94`

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 NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

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

Equity attributable to owners of the parent

2021 Balance at January 1, 2021 Profit for the period Other comprehensive loss for the period Total comprehensive income (loss) Appropriations of 2020 earnings Legal reserve Reversal of special reserve Cash dividends Balance at September 30, 2021 2022 Balance at January 1, 2022 Profit for the period Other comprehensive income for the period Total comprehensive income Appropriations of 2021 earnings Legal reserve Special reserve Cash dividends Balance at September 30, 2022	Notes		Share capital - common stock	Capital Reserves	Capital Reserves	Capital Reserves	Capital Reserves			Retained Earnings	Retained Earnings			Financial statements translation differences of foreign operations		Total equity
				Capital surplus, additional paid-in capital			Donated assets received		Legal reserve		Special reserve		Unappropriated retained earnings
	6(11) 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` `-` `-` `-` `108,921` `-` `-` `$ 1,415,311` `$ 1,415,311` `-` `-` `-` `118,476` `-` `-` `$ 1,533,787`	`$` `67,270` `-` `-` `-` `-` `(` `10,061)` `-` `$` `57,209` `$` `57,209` `-` `-` `-` `-` `11,153` `-` `$` `68,362`		`$ 1,970,293` `931,469` `-` `931,469` `(` `108,921` `)` `10,061` `(` `779,513` `)` `$ 2,023,389` `$ 2,276,683` `1,601,429` `-` `1,601,429` `(` `118,476` `)` `(` `11,153` `)` `(` `779,513` `)` `$ 2,968,970`		`($` `57,209)` `-` `(` `17,359)` `(` `17,359)` `-` `-` `-` `($` `74,568)` `($` `68,362)` `-` `32,505` `32,505` `-` `-` `-` `($` `35,857)`	`$ 5,702,194` `931,469` `(` `17,359` `)` `914,110` `-` `-` `(` `779,513` `)` `$ 5,836,791` `$ 6,096,291` `1,601,429` `32,505` `1,633,934` `-` `-` `(` `779,513` `)` `$ 6,950,712`

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 NINE MONTHS ENDED SEPTEMBER 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) increase 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 in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period Ninemonths ended September 30
Notes
2022
2021
$
2,054,628 $
1,223,001
95,231
92,244
11,528
10,971
12(2)
29,430 (
3,993 )
(
6,246 ) (
6,079 )
1,687
1,188
6(14)
(
1,201 ) (
3,465 )
(
553 ) (
17,066 )
(
1,105,048 ) (
520,515 )
16,389
180
24,209 (
779,302 )
(
11,569 ) (
31,289 )
25,767
12,801
1,983
23,998
(
63,263 )
696,349
67,077 (
30,239 )
413
1,789
(
24,122 ) (
3,256 )
(
7,329 ) (
5,163 )
1,109,011
662,154
6,022
6,718
(
1,687 ) (
1,188 )
(
329,843 ) (
260,231 )
783,503
407,453
(
35,652 ) (
58,923 )
6(5)
(
535,357 ) (
63,089 )
4,643
8,425
(
10,236 ) (
12,227 )
(
1,596 )
190
(
578,198 ) (
125,624 )
(
26,017 ) (
20,548 )
6(11)
(
779,513 ) (
779,513 )
(
805,530 ) (
800,061 )
36,121 (
16,602 )
(
564,104 ) (
534,834 )
1,226,378
1,560,909
$
662,274 $
1,026,075

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 NINE MONTHS ENDED SEPTEMBER 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 November 2, 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:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
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	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.

(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:

~9~

	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:

endorsed by the FSC are as follows:
	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	StandardsBoard
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
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
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.

~10~

B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2021.

(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	% of Ownership
			September 30,2022	December 31,2021	September 30,2021
Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc.	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)	Trading Trading Trading Trading Trading Investment holdings	100 100 100 100 100 100	100 100 100 100 100 100	100 100 100 100 100 100

~11~

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

% of Ownership
Main business September December September
Name of investor Name of subsidiary activities 30, 2022 31, 2021 30, 2021
----- End of picture text -----

Name of investor	Name of subsidiary	Main business activities	September 30, 2022	December 31, 2021	September 30, 2021
TRI	TRI Electronic	Manufacture and	100	100	100
INVESTMENTS	(Shenzhen) Limited	sales of test
LIMITED (TIL)	(TRI (SHENZHEN))	equipment
TRI	TRI Electronic	Manufacture and	100	100	100
INVESTMENTS	(Suzhou) Limited	sales of test
LIMITED (TIL)	(TRI (SUZHOU))	equipment
TRI	TRI Electronic	Import and export of	100	100	100
INVESTMENTS	(Shanghai) Limited	equipment,
LIMITED (TIL)	(TRI (SHANGHAI))	consulting and after-
		sale maintenance
		service of equipment
TEST RESEARCH	TEST RESEARCH	Trading	100	100	100
INNOVATION	INNOVATION
MALAYSIA SDN	VIETNAM COMPANY
BHD (TRM)	LIMITED (TRV)

The financial statements of the abovementioned subsidiaries included in the Group’s consolidated financial statements for the nine months ended September 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.

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

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

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	September	30, 2022	December 31, 2021	December 31, 2021	September 30, 2021	September 30, 2021
Cash on hand and revolving
funds	$	505	$	452	$	400
Checking accounts and demand
deposits		508,093		797,612		575,675
Time deposits		53,676		148,314		100,000
Short-term notes and bills		100,000		280,000		350,000
	$	662,274	$	1,226,378	$	1,026,075

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

Current items: Time deposits maturing over three months	September30,2022 232,442 $	December31,2021 196,790 $	September30,2021
			290,345 $

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

below:
Interest income Interest income	Threemonths ended September30
	2022 2021 71 $ 1,000 $ Ninemonths ended September30	2021
		1,000 $
	2022 3,855 $	2021
		2,955 $

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.

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(3) Notes receivable, accounts receivable and contract assets

		September30,2022	September30,2022		December31,2021	December31,2021		September30,2021	September30,2021
Notes receivable		$	37,626		$	37,073		$	89,906
Accounts receivable		$	1,737,374		$	1,330,647		$	2,034,241
Less: Allowance for uncollectible
accounts	(		29,429)	(		5,332)	(		6,202)
		$	1,707,945		$	1,325,315		$	2,028,039
Contract assets		$	1,706,889		$	1,008,298		$	343,081
Less: Loss allowance	(		5,905)	(		302)	(		103)
		$	1,700,984		$	1,007,996		$	342,978

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

Accounts Notes Contract receivable receivable assets 1,206,570 $ 37,626 $ 1,706,889 $ 376,380 - - 56,398 - - 37,107 - - 43,443 - - 17,476 - - 1,737,374 $ 37,626 $ 1,706,889 $ September30,2022	Accounts Notes Contract receivable receivable assets 1,206,570 $ 37,626 $ 1,706,889 $ 376,380 - - 56,398 - - 37,107 - - 43,443 - - 17,476 - - 1,737,374 $ 37,626 $ 1,706,889 $ September30,2022	December31,2021	December31,2021	December31,2021
Accounts receivable 1,206,570 $ 376,380 56,398 37,107 43,443 17,476 1,737,374 $	Notes receivable 37,626 $ - - - - - 37,626 $	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 $

September30,2021	September30,2021	September30,2021
Accounts receivable 1,735,119 $ 195,719 16,581 72,552 6,912 7,358 2,034,241 $	Notes receivable 89,906 $ - - - - - 89,906 $	Contract assets
		343,081 $ - - - - -
		343,081 $

The above ageing analysis was based on past due date.

B. As at September 30, 2022, December 31, 2021 and September 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.

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C. As at September 30, 2022, December 31, 2021 and September 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 $37,626, $37,073 and $89,906, and accounts receivable and contract assets were $3,408,929, $2,333,311 and $2,371,017, 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		September30,2022
	Allowance for Cost valuation loss 1,200,274 $ 107,117) ($ 133,988 305) ( 492,728 42,014) ( 17,013 2,564) ( 1,844,003 $ 152,000) ($ December31,2021		Bookvalue
			1,093,157 $ 133,683 450,714 14,449
			1,692,003 $

	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) ($ September30,2021		Bookvalue
			1,073,895 $ 126,537 541,684 4,807
			1,746,923 $

	Allowance for Cost valuation loss 1,121,263 $ 86,161) ($ 160,775 171) ( 498,528 34,908) ( 5,142 2,340) ( 1,785,708 $ 123,580) ($		Bookvalue
			1,035,102 $ 160,604 463,620 2,802
			1,662,128 $

~15~

The cost of inventories recognised as expense for the period:

The cost of inventories recognised as expense for the	period:	period:
Cost of goods sold Loss on slow-moving inventories Cost of goods sold Loss on slow-moving inventories	2022 2021 642,068 $ 621,543 $ 8,096 10,152 650,164 $ 631,695 $ 2022 2021 2,267,741 $ 1,938,978 $ 19,113 13,043 2,286,854 $ 1,952,021 $ Threemonths ended September30 Ninemonths ended September30
		1,938,978 $ 13,043
		1,952,021 $

~16~

(5) Property, plant and equipment

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions Transfers from inventories Disposals Depreciation charge Net exchange differences Closing net book amount as at September 30 At September 30 Cost Accumulated depreciation				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	Office equipment	Miscellaneous equipment
		921,538 $ 267,796) ( 653,742 $ 653,742 $ - - - 13,574) ( - 640,168 $ 921,538 $ 281,370) ( 640,168 $	457,585 $ 273,525) ( 184,060 $ 184,060 $ 11,889 20,903 3,261) ( 26,487) ( 7,014 194,118 $ 519,184 $ 325,066) ( 194,118 $	6,430 $ 3,999) ( 2,431 $ 2,431 $ 785 - - 597) ( 67 2,686 $ 7,381 $ 4,695) ( 2,686 $	227,459 $ 155,330) ( 72,129 $ 72,129 $ 3,572 5,676 165) ( 18,244) ( 16 62,984 $ 230,235 $ 167,251) ( 62,984 $	177,321 $ 129,062) ( 48,259 $ 48,259 $ 5,076 4,132 16) ( 12,304) ( 47) ( 45,100 $ 184,518 $ 139,418) ( 45,100 $

~17~

At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions Transfers from inventories Disposals Depreciation charge Net exchange differences Closing net book amount as at September 30 At September 30 Cost Accumulated depreciation			2021	2021
	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 414,098 $ 6,752 $ 238,558) ( 3,358) ( 175,540 $ 3,394 $ 175,540 $ 3,394 $ 11,654 - 28,901 - 4,411) ( 1) ( 24,736) ( 628) ( 3,919) ( 132) ( 183,029 $ 2,633 $ 454,006 $ 6,445 $ 270,977) ( 3,812) ( 183,029 $ 2,633 $	Office equipment	Miscellaneous equipment
		921,538 $ 249,696) ( 671,842 $ 671,842 $ - - - 13,575) ( - 658,267 $ 921,538 $ 263,271) ( 658,267 $		222,402 $ 150,498) ( 71,904 $ 71,904 $ 7,455 17,641 445) ( 21,059) ( 46) ( 75,450 $ 230,661 $ 155,211) ( 75,450 $	164,463 $ 121,244) ( 43,219 $ 43,219 $ 11,248 5,361 103) ( 11,698) ( 397) ( 47,630 $ 178,179 $ 130,549) ( 47,630 $

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.

~18~

`－` (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:

September30,2022 December31,2021 September30,2021 Carrying amount Carrying amount Carrying amount 53,100 $ 56,977 $ 52,774 $ 2022 2021 Depreciation charge Depreciationcharge 8,792 $ 7,255 $ 2022 2021 Depreciation charge Depreciationcharge 24,025 $ 20,548 $ Threemonths ended September30 Nine months ended September 30	December31,2021 September30,2021 Carrying amount Carrying amount 56,977 $ 52,774 $ Threemonths ended September30	September30,2021 Carrying amount
		52,774 $

	2021
	Depreciationcharge
	7,255 $
2022 Depreciation charge 24,025 $	2021
	Depreciationcharge
	20,548 $

D. For the three months and nine months ended September 30, 2022 and 2021, the additions to rightof-use assets were $10,295, $980, $15,548 and $30,053, 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 September30	Threemonths ended September30
	2022 2021 716 $ 410 $ 1,479 $ 2,465 $ 77 $ 77 $ Ninemonths ended September30	2021
		410 $
		2,465 $
		77 $
	2022 1,590 $ 6,146 $ 231 $	2021
		1,188 $
		8,038 $
		231 $

F. For the three months and nine months ended September 30, 2022 and 2021, the Group’s total cash outflow for leases were $13,056, $10,207, $33,984 and $30,005, respectively.

~19~

(7) Other payables

Other payables
September30,2022 Salaries and bonus payable 249,371 $ Employees’ compensation and directors’ remuneration payable 47,470 Others 124,919 421,760 $	December31,2021 219,628 $ 35,900 99,155 354,683 $	September30,2021 170,869 $ 28,107 71,088
		270,064 $

(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, $48, $213 and $142 for the three months and nine months ended September 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 $4,612.
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

~20~

further obligations.

(c) For the aforementioned pension plan, the Group recognised pension costs of $7,484, $7,043, $21,981 and $20,776 for the three months and nine months ended September 30, 2022 and 2021, respectively.

(9) Share capital

The Company’s authorised capital was $2,500,000. As of September 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 and 2020 earnings had been resolved at the stockholders’ meeting on May 25, 2022 and July 7, 2021, respectively. 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 $

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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

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Three months ended September 30
2022 2021
----- End of picture text -----

Revenue from contracts with customers Revenue from contracts with customers

2022 2021 Three months ended September 30	2022 2021 Three months ended September 30
1,537,964 $ 1,385,301 $ Ninemonths ended September30
2022 5,299,035 $	2021
	4,285,807 $

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 the following major geographical regions.

Asia America Europe Others Asia America Europe Others	Threemonths ended September30	Threemonths ended September30
	2022 2021 1,239,967 $ 1,215,417 $ 246,543 118,721 44,565 31,650 6,889 19,513 1,537,964 $ 1,385,301 $ Ninemonths ended September30	2021
		1,215,417 $ 118,721 31,650 19,513
		1,385,301 $
	2022 4,489,056 $ 598,082 181,152 30,745 5,299,035 $	2021
		3,830,054 $ 314,850 99,207 41,696
		4,285,807 $

~22~

B. Contract liabilities

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

==> picture [457 x 26] intentionally omitted <==

For the three months and nine months ended September 30, 2022 and 2021, the Group’s contract liabilities on January 1, 2022 and 2021 were realised to revenue amounting to $125, $223, $75,234 and $24,210, respectively.

(13) Other income

Other income
Rental income Other income Rental income Other income	2022 2021 - $ 774 $ 7,574 5,090 7,574 $ 5,864 $ Threemonths ended September30 Ninemonths ended September30
	2022 310 $ 17,122 17,432 $	2021
		4,722 $ 7,675
		12,397 $

(14) Other gains and losses

Other gains and losses
			Three months ended			September 30
			2022			2021
Gains on disposal of property, plant and
equipment		$	1,117		$	1,173
Net currency exchange gains			167,582			2,785
Other gains and losses	(		20)	(		42)
		$	168,679		$	3,916
			Ninemonths ended			September30
			2022			2021
Gains on disposal of property, plant and
equipment		$	1,201		$	3,465
Net currency exchange gains (losses)			330,996	(		38,227)
Other gains and losses	(		85)	(		85)
		$	332,112	($		34,847)

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(15) Expenses by nature

Employee benefit expense Depreciation charges on property, plant and equipment and right-of-use assets Amortisation charges on intangible assets

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

Three months ended September 30
2022 2021
$ 324,664 $ 274,891
32,132 31,503
4,028 3,828
$ 360,824 $ 310,222
Nine months ended September 30
2022 2021
$ 987,194 $ 826,253
95,231 92,244
11,528 10,971
$ 1,093,953 $ 929,468
----- End of picture text -----

(16) Employee benefit expense

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	Three months ended September 30	Three months ended September 30
	2022 2021 279,173 $ 233,972 $ 25,824 22,463 7,555 7,091 12,112 11,365 324,664 $ 274,891 $ Ninemonths ended September30	2021
		233,972 $ 22,463 7,091 11,365
		274,891 $
	2022 857,774 $ 71,808 22,194 35,418 987,194 $	2021
		709,728 $ 63,415 20,918 32,192
		826,253 $

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 nine months ended September 30, 2022 and 2021, employees’ compensation was accrued at $9,386, $5,793, $31,330 and $18,551, respectively; while directors’ remuneration was accrued at $4,835, $2,984, $16,140 and $9,556, respectively. The aforementioned amounts were recognised in salary expenses. The employees’ compensation and

~24~

directors’ remuneration were estimated and accrued based on the distributable profit of current year for the nine months ended September 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:

Three months ended September 30

	Threemonths ended September30
Current tax: Current tax on profit for the period Prior year income tax overestimation 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	2022 2021 104,885 $ 78,536 $ - 6) ( - 10,542 104,885 89,072 14,529 17,138 14,529 17,138 119,414 $ 106,210 $ 2022 2021 378,960 $ 229,311 $ 5,974 7,012 13,781 10,542 398,715 246,865 54,484 44,667 54,484 44,667 453,199 $ 291,532 $ Nine months endedSeptember30
	2022 378,960 $ 5,974 13,781 398,715 54,484 54,484 453,199 $

Threemonths ended September30

Current tax:
Current tax on profit for the period
Prior year income tax overestimation
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

2022
2021
104,885
$ 78,536
$ -
6)
(
-
10,542
104,885
89,072
14,529
17,138
14,529
17,138
119,414
$ 106,210
$ 2022
2021
378,960
$ 229,311
$ 5,974
7,012
13,781
10,542
398,715
246,865
54,484
44,667
54,484
44,667
453,199
$ 291,532
$ Nine months endedSeptember30

2022
378,960
$ 5,974
13,781
398,715
54,484
54,484
453,199
$

~25~

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

as follows:
	Three months ended September 30
	2022 2021
Currency translation differences	2,845 $ 573) ($
	Ninemonths ended September30
Currency translation differences	2022 2021 8,126 $ 4,340) ($

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

(18) Earnings per share

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Three months ended September 30, 2022
Weighted average
number of
ordinary shares
outstanding
(shares in Earnings per share
Amount after tax thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent $ 486,457 236,216 $ 2.06
Diluted earnings per share
Assumed conversion of all dilutive
potential ordinary shares
Employees’ compensation - 151
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares $ 486,457 236,367 $ 2.06
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Three months ended September 30, 2021

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 Amount aftertax thousands) 288,509 $ 236,216 - 104 288,509 $ 236,320 Ninemonths ended September	Weighted average number of ordinary shares outstanding (shares in Amount aftertax thousands) 288,509 $ 236,216 - 104 288,509 $ 236,320 Ninemonths ended September	Earnings per share (indollars) 1.22 $ 1.22 $ Earnings per share (indollars) 6.78 $ 6.76 $ 30,2022
	Amount aftertax 1,601,429 $ - 1,601,429 $	Weighted average number of ordinary shares outstanding (shares in thousands) 236,216 577 236,793

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Nine months ended September 30, 2021
Weighted average
number of
ordinary shares
outstanding
(shares in Earnings per share
Amount after tax thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent $ 931,469 236,216 $ 3.94
Diluted earnings per share
Assumed conversion of all dilutive
potential ordinary shares
Employees’ compensation - 405
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares $ 931,469 236,621 $ 3.94
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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.

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.

(2) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits	Three months endedSeptember30	Three months endedSeptember30
	2022 17,887 $ 358 18,245 $	2021
		12,618 $ 355
		12,973 $

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Salaries and other short-term employee benefits Post-employment benefits	Nine months endedSeptember30	Nine months endedSeptember30
	2022 58,149 $ 1,071 59,220 $	2021
		39,496 $ 980
		40,476 $

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	Purpose
	September30,2022 577,252 $ 53,905 631,157 $	December31,2021 September 30, 2021 577,252 $ 388,990 $ 55,283 49,347 632,535 $ 438,337 $
			Security for lines of credit "

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 District 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 September 30, 2022, the Company has paid $608,076 and there were no outstanding billings that have not been paid.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

On November 2, 2022, the Board of Directors of the Company resolved the dissolution and liquidation of the subsidiary,TRI Electronic (Shenzhen) Limited Chongqing Branch Office, as the subsidiary has no actual operations. The Board has also authorised the Chairman to handle related liquidation procedures.

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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 September30,2022 Financial assets Cash and cash equivalents 662,274 $ Financial assets at amortised cost 232,442 Notes receivable 37,626 Accounts receivable (including contract assets) 3,408,929 Other receivables 15,971 Guarantee deposits paid (shown as “other non- current assets”) 11,671 4,368,913 $ Financial liabilities Notes payable 32,476 $ Accounts payable 853,140 Other payables 421,760 1,307,376 $ Lease liabilities (including current portion) 52,699 $ Financial liabilities at amortised cost Financial assets at amortised cost	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 $	September30,2021
		1,026,075 $ 290,345 89,906 2,371,017 20,031 10,100 3,807,474 $
		40,780 $ 1,190,946 260,298
		1,492,024 $
		52,523 $

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.

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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:

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September 30, 2022

			September	30,2022	30,2022
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD EUR:NTD Non-monetary items USD:NTD JPY:NTD MYR:NTD KRW:NTD RMB:NTD Financial liabilities Monetary items USD:NTD RMB:NTD JPY:NTD	Foreign currency amount (inthousands) 72,016 $ 59,780 480 2,088 80,134 5,110 535,703 267,144 4,779 $ 8,794 149,457	Exchangerate 31.75 4.47 31.26 31.75 0.22 6.60 0.02 4.47 31.75 4.47 0.22	Book value (NTD) 2,286,508 $ 267,396 15,005 66,299 17,637 33,704 12,000 1,113,959 151,733 $ 39,336 32,895	SensitivityAnalysis
				Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit of loss 22,865 $ 2,674 150 - - - - - 1,517 $ 393 329	Effect on other comprehensive income
						- $ - - 663 176 337 120 11,140 - $ - -

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		December	31,2021	31,2021
Foreign currency amount (in thousands) 46,876 $ 92,710 52,305 2,107 395 55,291 3,049 562,918 243,972 3,667 $ 3,933 148,124	Exchange rate 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 - $ - -

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		September	30,2021	30,2021
Foreign currency amount (in thousands) 50,172 $ 98,889 50,197 2,037 471 60,416 3,768 642,454 241,306 3,312 $ 5,015 648 168,796	Exchange rate 27.85 4.31 0.25 27.85 32.32 0.25 6.38 0.02 4.31 27.85 4.31 32.32 0.25	Book value (NTD) 1,397,290 $ 425,717 12,499 56,722 15,227 15,044 24,033 15,226 956,482 92,239 $ 21,590 20,043 42,030	SensitivityAnalysis
			Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit of loss 13,973 $ 4,257 125 - - - - - - 922 $ 216 200 420	Effect on other comprehensive income
					- $ - - 567 152 150 240 152 9,565 - $ - - -

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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 nine months ended September 30, 2022 and 2021 amounted to $167,582, $2,785, $330,996 and ($38,227), 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.

~35~

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 forecastabi;lity 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 September 30, 2022, December 31, 2021 and September 30, 2021, the provision matrix based on the loss rate methodology is as follows:

Both Group A and Group B that exceeded credit facilities:

							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
September 30, 2022
Expected loss rate		0.03%		1.50%	15.00%		25.00%	40.00%	60%-100%
Total book value	$	1,413,410	$	200,400	$	49,063	9,765 $	22,052 $	16,714 $	$	1,711,404
Loss allowance		418		2,805		6,412	2,161	7,907	10,042		29,745
							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
September 30, 2021
Expected loss rate		0.12%		1.50%	15.00%		25.00%	40.00%	60%-100%
Total book value	$	589,576	$	9,439	$	-	9,988 $	60 $	851 $	$	609,914
Loss allowance		698		141		-	2,497	24	851		4,211
Group B:
		September30,2022				December 31,		2021 September30,2021
Expected loss rate				0.03%			0.03%		0.03%~0.12%
Total book value		$		1,732,859		$	1,677,551 $		1,767,408
Loss allowance				5,589				420		2,094

Group B:

Group A: Customers excluding Group B.

Group B: Domestic and foreign clients that have good operating conditions, high degree of financial transparency, the payment status of past transactions is normal and rated with optimised internal credit rating. The Group used the forecastability to adjust

~36~

historical and timely information to assess the default possibility of accounts receivable and contract assets. The expected default rate used was 0.03%.

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 23,827 Effect of exchange rate changes 270 At September 30 29,429 $ Accountsreceivable At January 1 10,585 $ Provision for impairment - Reversal of provision for impairment 4,041) ( Effect of exchange rate changes 342) ( At September 30 6,202 $	Accountsreceivable 5,332 $ 23,827 270 29,429 $	Contract assets 302 $ 5,603 - 5,905 $ 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.

~37~

September 30, 2022 Notes payable Accounts payable Other payables Lease liabilities December 31, 2021 Notes payable Accounts payable Other payables Lease liabilities September 30, 2021 Notes payable Accounts payable Other payables Lease liabilities Non-derivative financial liabilities: Non-derivative financial liabilities:	Less than 1year Over 1year $ 32,476 $ - 853,140 - 421,760 - 30,920 35,501 Less than 1year Over 1year $ 30,493 $ - 916,403 - 354,683 - 30,496 23,489 Less than 1year Over 1 year $ 40,780 $ - 1,190,946 - 260,298 - 28,416 24,035

(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 nine months ended September 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.

~38~

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.
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.

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(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:
	Nine months ended September 30
	2022	2021
Revenue from external customers	5,299,035 $	4,285,807 $
Segment profit	1,700,525 $	1,240,560 $

(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	2022 2021 $ 1,700,525 $ 1,240,560 354,103 ( 17,559) $2,054,628 $1,223,001 Nine months endedSeptember30

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Test Research, Inc. and Subsidiaries

Loans to others

Nine months ended September 30, 2022

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Maximum outstanding balance during the nine months ended September 30,2022 Balance at September 30,2022 Actual amount drawn down Interest rate Nature of loan Amount of transactions with the borrower Reason for short-term financing Allowance for doubtful accounts No. Creditor Borrower General ledger account Is a related party	Collateral	Limit on loans granted to a singleparty	Ceiling on total loans granted	Footnote
	Item Value
1 TRI Electronic (Shanghai) Limited TRI Electronic (Suzhou) Limited Other receivables Yes 27,036 $ 26,838 $ 26,838 $ 4.75% Short-term financing - $ Additional operating capital - $	None - $	695,071 $	1,390,142 $	Note 1

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

Expressed in thousands of NTD

Test Research, Inc. and Subsidiaries

Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more Nine months ended September 30, 2022

Table 2

(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 September 30, 2022, the Company has paid $608,076 and there were no outstanding billings that have not been paid.

Table 2, Page 1

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

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 Nine months ended September 30, 2022

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/accounts receivable(payable)	Notes/accounts receivable(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 (Suzhou) Limited	TRI Electronic (Shenzhen) Limited Test Research, Inc. TRI Electronic (Suzhou) Limited Test Research, Inc.	Second-tier subsidiary Parent company Second-tier subsidiary Parent company	Sales Purchases Sales Purchases	386,943 $ 386,943 317,190 317,190	8% 100% 6% 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 $29,723 Accounts payable $29,723 Accounts receivable $137,241 Other receivables $97,930 Accounts payable $235,171	1% 63% 5% 94% 98%	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

September 30, 2022

Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as at September 30,2022	Turnover rate	Overdue receivables	Overdue receivables	Expressed in thousands of NTD (Except as otherwise indicated) Amount collected subsequent to the balance sheet date (Note) Allowance for doubtful accounts	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	235,171 $	1.37	152,405 $	In the process of collection	21,610 $	- $

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

Table 4, Page 1

Test Research, Inc. and Subsidiaries

Table 5

Significant inter-company transactions during the reporting period

Nine months ended September 30, 2022


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 0 1 2 3 4 5 6 7	Test Research, Inc. 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 JAPAN CORPORATION TEST RESEARCH INNOVATION VIETNAM COMPANY LIMITED	TRI Electronic (Suzhou) Limited TRI Electronic (Shenzhen) Limited TRI JAPAN CORPORATION TRI Electronic (Suzhou) Limited TRI Electronic (Shenzhen) Limited TRI Electronic (Suzhou) Limited TRI Electronic (Suzhou) Limited Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc. Test Research, Inc.	1 1 1 1 1 1 3 2 2 2 2 2 2	Sales revenue Sales revenue Sales revenue Accounts receivable Accounts receivable Other receivables Other receivables Service revenue Service revenue Service revenue Service revenue Service revenue Service revenue	317,190 $ 386,943 10,255 137,241 29,723 97,930 26,838 57,353 75,086 33,363 22,829 12,118 14,816	Note 3 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 Notes 6 and 7 Notes 6 and 7	6 7 - 2 - 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 pertain to accounts receivable which were reclassified as they have exceeded the normal credit period by more than three months.

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 Nine months ended September 30, 2022

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as atSeptember30,2022	as atSeptember30,2022	Net profit (loss) of the investee for the nine months ended September 30,2022	Investment income (loss) recognised by the Company for the nine months ended September 30,2022	Footnote
				Balance as at September 30, 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 holding 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	1,113,959 $ 66,299 9,901 17,637 33,704 12,000 14,268	102,608 $ 544) ( 2,439) ( 5,696 12,734 119) ( 8,581	101,160 $ 544) ( 2,439) ( 5,696 12,734 614) ( 8,581	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 Nine months ended September 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 nine months ended September 30,2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine months ended September 30,2022	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2022(Note 3)	Net income of investee for the nine months ended September 30, 2022	Ownership held by the Company (direct or indirect)	Investment income recognised by the Company for the nine months ended September 30, 2022(Note 2(2)C)	Book value of investments in Mainland China as of September 30, 2022 (Note 5)	Accumulated amount of investment income remitted back to Taiwan as of September 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 $ 96,838 Manufacture and sales of test equipment 82,198 Import and export of equipment, consulting and after-sale maintenance service of equipment 123,825 Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2022(Note 3)	2 $ 23,813 2 63,500 2 123,825 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)		$ 23,813 63,500 123,825	$ 37,082 68,420 ( 2,894)	100 100 100	$ 35,478 68,560 ( 2,878)	$ 747,778 285,765 80,416	$ - - -
Test Research, Inc.	$ 211,138	$ 276,688	$ 4,170,427

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 nine months ended September 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 reviewed by international accounting firm which has cooperative relationship with accounting firm in R.O.C.

B. The financial statements were reviewed 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 (1:31.75) 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 September 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 8, Page 1

AI assistant

TRI — Interim / Quarterly Report 2022

52263_rns_2022-12-22_7e1e8ce3-4188-4c68-9064-fd9eb3920128.pdf

TEST RESEARCH, INC. AND SUBSIDIARIES

Introduction

Scope of review

Basis for qualified conclusion

Qualified conclusion

TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2022, DECEMBER 31, 2021 AND SEPTEMBER 30, 2021

TEST RESEARCH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2022, DECEMBER 31, 2021 AND SEPTEMBER 30, 2021

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

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

Equity attributable to owners of the parent

TEST RESEARCH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

TEST RESEARCH, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 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

Year ended December 31

B. Contract liabilities

(13) Other income

(14) Other gains and losses

(15) Expenses by nature

(16) Employee benefit expense

(17) Income tax

A. Income tax expense

(18) Earnings per share

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)

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:

Test Research, Inc. and Subsidiaries

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 Nine months ended September 30, 2022

TRI Interim / Quarterly Report 2022

`－` (6) Leasing arrangements lessee