WELLTEND — Annual Report 2022

Jun 15, 2023

Stock Code: 3021

Welltend Technology Corporation

2022 Annual Report

The Annual Report is available at website: http://mops.twse.com.tw

The Company’s website: http://www.welltend.com.tw

Printed on May 20, 2023

Notice to readers

This English version is a summary translation of the Chinese version and is not an official document of the Shareholders’ Meeting. If there is any discrepancy between the English version and the Chinese version, the Chinese version shall prevail.

• I. Spokesperson and deputy spokesperson of the Company: Name of the spokesperson: Hsiao-Ching Huang Title: Senior Manager Telephone: (02) 8768-2688 Ext. 8843 E-mail: emmyhuang@welltend.com.tw

Name of the deputy spokesperson: Yi-Lun Pan Title: Senior Manager Telephone: (02) 8768-2688 Ext. 8820 E-mail: annepan@welltend.com.tw

• II. The address and telephone number of the Company’s headquarters: Headquarters address: 6F., No. 59, Dongxing Road, Xinyi Dist., Taipei City Telephone: (02) 8768-2688

III. Stock transfer agency name, address, website, and telephone: Name: CTBC Bank Address: 5F., No. 83, Sec. 1, Chongqing S. Road, Zhongzheng Dist., Taipei City Website: http://www.ctbcbank.com Telephone: (02) 6636-5566

• IV. The name of the certified public accountants who duly audited the annual financial report for the most recent fiscal year, and the name, address, website and telephone number of the said persons’ accounting firm:

Name of accountants: I-Wen Wang, Yiu-Kwan Au Name of the accounting firm: KPMG Address: 68F., No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City Website: http://www.kpmg.com.tw/ Telephone: (02) 8101-6666

• V. Name of the overseas stock exchange and method for accessing information on overseas negotiable securities: None.

• VI. Company’s website: http://www.welltend.com.tw

Annual Re ort Contents p

ONE.	Letter to Shareholders .............................................................................................................. 1
Two.	Company Profile ........................................................................................................................ 5
I.	Date of establishment ............................................................................................................... 5
II.	Company history ...................................................................................................................... 5
**Three. **	Corporate Governance Report ................................................................................................. 8
I.	Organization system ................................................................................................................. 8
II.	Information on directors, the president, vice presidents, associate managers, and
	supervisors of various departments and branches .................................................................. 10
III.	Remuneration paid to directors, supervisors, the president, and vice presidents in the
	most recent year ..................................................................................................................... 20
IV.	Corporate governance status ................................................................................................. 27
V.	Information on CPA professional fees ..................................................................................... 98
VI.	Information on change in accountants: If the Company has changed its accountants in
	the last two years and thereafter, the following should be disclosed ....................................... 99
VII. In case the Chairman, President, Chief Financial Officer or Chief Accounting Officer of
	the Company who has been employed by the CPA firm retained for services or its
	affiliate, disclose the name, occupational title, and the duration of employment by the
	CPA firm or its affiliate. .......................................................................................................... 100
VIII. In the most recent year and as of the date of publication of the annual report, information
	about the shares transferred by and changes to the shares pledged by the directors,
	supervisors, managers and the shareholders holding more than 10% of shares .................. 101
IX.	Information about the relationships among top ten shareholders, such as related parties,
	spouses or relatives within the second degree of kinship ..................................................... 103
X.	The total number of shares and total equity stake held in any single enterprise by the
	Company, its directors and supervisors, managerial officers, and any companies
	controlled either directly or indirectly by the Company: ......................................................... 104
Four.	Status of Fundraising ........................................................................................................... 105
I.	Capital and Shares ............................................................................................................... 105
II.	Issuance of corporate bonds (including overseas corporate bonds). ..................................... 113
III.	Issuance of preferred shares. ................................................................................................ 113
IV.	Issuance of overseas depositary receipts. ............................................................................. 113
V.	Issuance of employee stock options. ..................................................................................... 113
VI.	Handling of restricted employee shares. ................................................................................ 113
VII. Handling of mergers and acquisitions or transfers of shares of other companies to issue
	new shares. ........................................................................................................................... 113
VIII. Matters to be recorded in the implementation of fund utilization plans. .................................. 113
Five.	Overview of Operations ........................................................................................................ 114
I.	Business content ................................................................................................................... 114
II.	Market, Production and Sale ................................................................................................ 121

III.	Information of employees in the latest two years and as of the publication date of the
	annual report ........................................................................................................................ 128
IV.	Environmental protection expenditure information ................................................................ 129
V.	Labor-Management Relation ................................................................................................ 129
VI.	Information Security Management ........................................................................................ 132
VII. Important contracts ............................................................................................................... 135
Six.	Financial Overview ................................................................................................................ 136
I.	Condensed balance sheets and comprehensive income statements for the last five
	years, indicating the names review opinions of CPAs ........................................................... 136
II.	Financial analysis for the last five years ................................................................................ 140
III.	The Audit Committee review report of the most recent financial report ................................. 144
IV.	Parent company only financial statements for the most recent fiscal year audited by
	CPAs .................................................................................................................................... 145
V.	Consolidated financial statements for parent and subsidiary companies for the most
	recent fiscal year audited by CPAs ........................................................................................ 211
VI.	In the most recent year and as of the date of publication of the annual report, if any
	financial difficulties occurred to the Company and its affiliated companies, their effect on
	the Company’s financial status should be listed. ................................................................... 282
**Seven. **	Financial Status and Review and Analysis of Financial Performance .............................. 283
I.	Financial status .................................................................................................................... 283
II.	Financial performance .......................................................................................................... 284
III.	Cash flows ............................................................................................................................ 285
IV.	Impact of major capital expenditures on financial business in recent years .......................... 285
V.	Reinvestment policy in the most recent year, main reasons for its profit or loss,
	improvement plan and investment plan for the next year ...................................................... 285
VI.	Risk matters (risk matters should be analyzed and evaluated for the following matters in
	the most recent year and up to the publication date of the annual report) ............................. 285
VII. Other important matters....................................................................................................... 288
**Eight. **	Special Disclosures .............................................................................................................. 289
I.	Profiles of the affiliates ......................................................................................................... 289
II.	Handling of privately placed securities in the most recent year and as of the date of
	publication of the annual report............................................................................................. 293
III.	Status of holding or disposing of the Company’s stocks by subsidiaries in the most
	recent year and as of the date of publication of the annual report. ........................................ 293
IV.	Supplementary information. .................................................................................................. 293
Nine.	The occurrence of the incidents as stated in subparagraph 2 of Paragraph 3 under
	Article 36 of this law that caused significant influence on shareholders equipment
	or stock price in the previous period to the date this report was printed ......................... 293

ONE.

Letter to Shareholders

Esteemed Shareholders, Greetings:

Given the spread of the pandemic in recent years, the global economy has exhibited an extremely uncertain outlook that has shaken the confidence of consumers and businesses and also affected economic activity. Compounded by increasing raw materials costs, global supply chains have thus been strained and this in turn has impacted the recovery of the global economy. In the prior period, the Company’s performance continued to grow steadily in the face of rapid changes in the external market and in the industrial environment. In respect to business development, the Company will step beyond consolidating existing customers’ business to continue investing in the development of new products and customers, actively develop the electric vehicle market, and strive for new types of state-of-the-art product power cords and related peripheral products. In this way, we should gain an accurate grasp of the Group’s inventories and future market demand. In terms of production, the Company will continue to integrate production resources, accelerate the deployment of automated production equipment in each factory, improve production efficiency and scale, and reduce workforce requirements. In respect to factory management, we will continue to update equipment and promote process improvement and integration so as to reduce overall costs and improve efficiency to maintain the Company’s profitability and growth.

In the future, our management team will uphold the management attitude of Sincerity and Diligence with a steady, down-to-earth, and hard-working spirit. We shall thus prudently face future challenges while standing firmly on the basis of our existing competitive advantage in order to fulfill our obligation of trust toward all shareholders. On behalf of the management team and all employees, I would like to hereby thank our shareholders for your long-term support and attention.

I. Business Results Report for 2022:

1. Consolidated operating revenue and gross profit margin: The Group’s consolidated operating revenue in 2022 was NT$3,908,184,000, marking growth of 15.85% compared to 2021’s consolidated operating revenue of NT$3,373,438,000. Net profit after tax in 2022 was NT$184,190,000, an increase of NT$53,462,000 from the NT$130,728,000 in net profit after tax seen in 2021, and the 2022 earnings per share came to NT$1.92.

2. In respect to operating gross profit: the operating gross profit margin for 2022 and 2021 came to 18.73% and 20.23%, respectively.

3. Faced with the impact of industrial transformation and market integration in recent years, and under the influence of unfavorable factors such as price competition across all industries as well as rising raw material prices and pandemic conditions, the Company is still actively investing in the development of new customers and new products so that the revenue in 2022 can maintain stable growth and can strive for the mainstream consumer products business. Moreover, we are actively controlling costs and improving internal operating efficiency to allow overall profitability to remain at a certain level.

4. 1 -

(I) Consolidated operating and financial revenues and expenditures:

Unit: NT$ thousand

Item	2021	2022	Increase/decrease	Growth rate %
Operating revenue	3,373,438	3,908,184	534,746	15.85
Operating costs	2,690,890	3,185,291	494,401	18.37
Operating expenses	446,452	429,011	(17,441)	-3.91
Operating profit	236,096	293,882	57,786	24.48
Non-operating income and expenses	(24,423)	17,971	42,394	-173.58
Net profit for the period	130,728	184,190	53,462	40.90

• (II) Budget implementation status: The Company’s financial forecast for 2022 has not been disclosed to the public, and this is therefore not applicable.

• (III) Consolidated profitability analysis:

Item	2021	2022
Debt to assetratio (%)	55	52
Ratio of long-term funds to property, plant, and equipment (%)	320	370
Currentratio (%)	151	165
Quick ratio (%)	90	112
Returnonassets (%)	6.39	6.58
Returnonequity (%)	13.33	13.37
Net profit before tax to paid-in capital ratio (%)	22.52	32.52
Net profitrate (%)	5.00	5.00
Earningsper share(NT$)	1.36	1.92

II. Business plan summary for 2023

• (I) Strengthen the production base in Southeast Asia, improve factory management efficiency and division of labor among factories, strengthen inventory management capabilities, effectively control production costs, and improve production and sales mechanisms.

• (II) Actively deploy international cooperation, participate in international business exhibitions, expand sales reach, quickly collect industry intelligence and strengthen marketing capabilities, and commit to product diversification development and operation to expand our business niche.

• (III) Strengthen the R&D team, improve R&D capabilities, grasp the development trends of new markets, new specifications and new technologies, develop a diversified product line, create corporate competitive advantages, and strive to establish long-term and stable relationships with large international customers.

• (IV) Be customer-oriented and close to market leaders, provide customers with a variety of products and services, strengthen customer relationship management, continue to promote the development and introduction of new customers, and expand overall market share.

• (V) Effectively integrate group resources, undertake flexible allocation of positions to preserve growth momentum, and cultivate talent needed for sustainable operations;

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promote the optimization of operating processes to ensure the flow of information while improving overall operating efficiency.

III. Future development strategy of the Company

In recent years, the Company has continued to provide customers with high-quality products; comprehensively improved the process level and energy in design, process, quality control and testing; and continued to achieve the goal of high growth and diversified development of product lines. At the same time, we will continue to deepen our existing product lines and customers, expand service levels, and be customer-oriented and close to market leaders. We can thus provide customers with a variety of products and services while taking advantage of economies of scale in production. Today, the development of network and digitalization has far exceeded prior visions of the structure of the digital age. It is not only mobile applications that have become the main media products for public information, services, and transactions. In terms of living, popular requirements for the quality of life and digital home appliances can provide more personalized and precise services. In respect to driving, there is safer traffic quality through the Internet of Vehicles to communicate and exchange information between owners, vehicles, and traffic systems to provide a safer and more comfortable experience. Above, we can see the blueprints of the future world under development and the Company is committed to working closely with customers in the relevant industrial chains whether in automotive electronics, medical care, or smart homes, to provide more services and high-end products.

In terms of operations management, the Group will uphold the principle of prudent and pragmatic operations to train and reserve technical, business and management talent over the long term to strengthen human capital, cultivate the Company’s development potential, and continue to conduct product research and development to meet future product demand. In the future, we will also strengthen the market ties between the two sides of the Taiwan Strait and Southeast Asia. We shall coordinate production capacity to fully grasp market changes and needs for the sake of providing all-round customer satisfaction and trust so that we can increase market share among clients. We shall continue to strengthen project management capabilities and improve project management quality and human resource utilization efficiency as we strive for robust and large-scale long-term service customers, thereby improving the quality of earnings to create more fruitful and stable operating results. In addition to actively developing new products and providing integrated services, the Group shall also improve operational efficiency and personnel productivity through the integration of information systems. Furthermore, the resources of the Group’s reinvested companies can be integrated to maximize the benefits of the Group.

IV. Impact of external competitive environment, regulatory environment, and overall business environment:

In recent years, changes in product preferences among end consumers for products have made market competition more intense. In addition to raw material prices and international exchange rate fluctuations, the acquisition of labor and cost control have to be appropriate for the opportunity to maintain an advantageous profit. Due to rising wage costs in China and the rise of red supply chains, the domestic connector industry began to move production lines to emerging countries in Southeast Asia. Some peers with more capital and technology advantages expanded the deployment of production line automation and imported more automation equipment to reduce operating costs. The Group will continue to deploy production bases in Southeast Asia, expand our economies of scale, strengthen the operation of automated equipment and of upstream and downstream integration, and improve production efficiency. We shall do so in order to reduce overall costs, make production quality more reliable, and improve customer trust and dependence. In addition, we shall strengthen the development of niche products and continue to develop new products, expanding the market for high value-added products and improving product

• 3 -

competitiveness.

We consider ourselves to be the best supplier of connection harnesses. The products we provide are important components of electronic products and the basic backbone structure of information systems. As consumer terminal products and digital services continue to develop, the application scope of wire harness products and information system services is also becoming increasingly extensive. Welltend’s management team has been deeply involved in the electronics industry for many years. We have profound production management experience and the operating performance of a multinational enterprise, and have a timely grasp of market demand and trends. Although there are still many uncertainties in the economic environment and industries across all countries, we will continue to improve quality, reduce costs, cultivate talent, and increase per capita output value. We shall thus grow and thrive on a stable foundation, continuously expanding to new customers and new markets, strengthening new product development capabilities, and improving our market acumen to fully grasp the development trends of new products. Looking to the future, the Company will be committed to good corporate governance and sustainable operations. We shall continue to strengthen customer relationship management, increase the efficiency of competition, and make good use of technology and systems to master production efficiency. We believe that in the new year, the Group’s management team must be able to operate with a good performance to repay the trust and investment of all our shareholders. Finally, I would like to wish you all good health and all the best.

Chairman: Yun-Teng Chang

Manager: Accounting Supervisor: Hsiang-Yu Wang Wen-Pin Chen

• 4 -

Two.

Company Profile

I. Date of establishment : May 25, 1993

II. Company history

• 1993 • The Cradle Technology Corporation was established with registered capital of NT$10 million.

• Major business activities comprise information product agency, sales, and after-sales services.

• 1997 • Cash capital increase of 30 million, with paid-in capital increased to 40 million.

• Established Taichung office.

• 1998 • Obtained Hewlett-Packard Technology Co., Ltd. (HP) gold dealer qualification.

• Cash capital increase of 60 million, with paid-in capital increased to 100 million.

• Purchased land and buildings on Dongxing Road to serve as Taipei office.

• 1999 • Agency and sales of IBM multimedia-integrated digital collection systems.

• Carried out public offering and capitalization of retained earnings, approved by Letter (1999) Tai-Cai-Zheng-(I) No. 97059.

• Annual cash capital increase of 129.6 million, with paid-in capital increased to 280 million.

• 2001 • Issued first domestic unsecured convertible corporate bonds with total issuance amount of NT$600 million.

• 2002 • Transferred shares in Zixian Technology, Qiao Peng Technology Co., Ltd., and Baoyan Technology Co., Ltd. to increase capital and issue new shares.

• In August, transferred from TPEx listed to TWSE listed.

• Issued amount of overseas convertible corporate bonds came to US$30 million.

• Obtained joint purchasing sales rights in the entire CTC region.

• 2003 • Agency and distribution of Apple’s visual effects synthesis software.

• Agency and distribution of Hewlett-Packard Technology Co., Ltd. (HP) full range of network management products.

• Issued amount of overseas convertible corporate bonds came to US$10 million.

• 2004 • Distribution and sales of Symantec’s full range of network security and antivirus software products.

• 2005 • Capital increase of NT$104,400 thousand.

• 2006 • Letter Jin-Guan-Zheng-Yi-Zi No. 0950111707 approved the Company’s capital reduction, with a 90% capital reduction ratio; paid-in capital was NT$245,023,000 after capital reduction.

• Letter Jin-Guan-Zheng-Yi-Zi No. 0950146668 approved the Company’s capital increase through issuance of 13,614,192 common shares for merger with Zixian Technology Co. Ltd.

• 2007 • Private offering of NT$142,343 thousand.

• 2008 • Short-form merger with subsidiary Weihua Investment Co., Ltd.

• Private offering of NT$282,000 thousand.

• Short-form mergers with subsidiaries Minjie Technology Co., Ltd. and Qiao Peng Technology Co., Ltd.

• Company name changed to Welltend Technology Corporation

• 2009 • The Investment Review Committee approved the Company’s indirect investment in mainland China (Shanghai Celeraise Electronic Co., Ltd.) through Letter Shen-Er-Zi No. 09800023010.

• Established Celeraise Technology Corporation.

• Invested in Bor Sheng Indutrial Co., Ltd.

• Private offering of NT$250,000 thousand.

• The Investment Review Committee approved the Company’s indirect investment in mainland China (Shenzhen Celeraise Electronic factory) through Letter

• 5 -

Shen-Er-Zi No. 09800443410.

• 2010 • Invested in (Hong Kong) Jiun Tai Corporation Limited to indirectly acquire 100% equity of Shanghai Celeraise Electronic Co., Ltd.

• Invested in (Hong Kong) Celeraise Investment Limited to indirectly acquire 99.9997% equity of Shenzhen Celeraise Electronic factory.

• Invested in (Hong Kong) Yield Profit International Enterprise Limited.

• Invested in (Hong Kong) Jet Success Technology Development Limited.

• 2011 • The Investment Review Committee approved the Company’s indirect investment in the Hunan region of mainland China (Chenzhou Zhansheng Technology Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 10000147180.

• The Investment Review Committee approved the Company’s indirect investment in the Kunshan region of mainland China (Kunshan Celeraise Electronic Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 10000317970.

• The Investment Review Committee approved the Company’s indirect investment in the Hunan region of mainland China (Chenzhou Zhansheng Technology Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 10000476640.

• 2012 • The Investment Review Committee approved the Company’s indirect investment in the Kunshan region of mainland China (Kunshan Celeraise Electronic Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 10100282180.

• The Investment Review Committee approved the establishment of Shenzhen Celeraise Electronic Co., Ltd. and revocation of Shenzhen Celeraise Electronic factory through Letter Jing-Shen-Er-Zi No. 10100405060.

• 2013 • A total of 83,192,915 shares of privately placed common shares were issued for supplementary public offering, approved by the Financial Supervisory Commission on May 8, 2013, effective through Letter Jin-Guan-Zheng-Fa-Zi No.1020016192. Furthermore, it was approved for listing by the Taiwan Stock Exchange Corporation through letter Tai-Zheng-Shang-Yi-Zi No. 1020009464 (the trading date of the listed stocks was May 24, 2013).

• The Investment Review Committee approved the Company’s indirect investment in the Huizhou region of mainland China (Zhan Mao (Huizhou) Electronic Co., Ltd.) through Letter Jing-Shen-Er-Zi No.10200477630.

• Repurchased 1,500 thousand treasury shares.

• Company name changed to Welltend Technology Corporation.

• 2014 • The Investment Review Committee approved the Company’s indirect investment in the Huizhou region of mainland China (Zhan Mao (Huizhou) Electronic Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 10300141420.

• Repurchased 2,500 thousand treasury shares.

• 2015 • The Investment Review Committee approved the Company’s investment in the Philippines (Celeraise Electronic Corporation) through Letter Jing-Shen-Er-Zi No. 10400053050.

• Repurchased 300 thousand treasury shares.

• Canceled 300 thousand treasury shares.

• 2016 • Letter Jin-Guan-Zheng-Fa-Zi No. 1050028242 approved the Company’s capital reduction, with a 10% capital reduction ratio; paid-in capital was NT$971,634,670 after capital reduction.

• 2017 • Canceled 1,350 thousand treasury shares.

• The Investment Review Committee approved the Company’s investment in Thailand (Celeraise (Thailand) Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 10600292130 and Letter Jing-Shen-Er-Zi No. 10600352280.

• 2018 • The Investment Review Committee approved the Company’s indirect capital increase in the Huizhou region of mainland China (Zhan Mao (Huizhou) Electronic Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 10700035490.

• The Investment Review Committee approved the Company’s application for the deregistration of mainland invested business Chenzhou Zhansheng Technology

• 6 -

Co., Ltd. through Letter Jing-Shen-Er-Zi No. 10700176500.

• 2019 • Repurchased 1,000 thousand treasury shares.

• The Investment Review Committee approved the Company’s investment in Thailand (Celeraise (Thailand) Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 10800214490.

• 2020 • Repurchased 1,813 thousand treasury shares.

• Canceled 1,813 thousand treasury shares.

• 2021 • The Investment Review Committee approved the Company’s investment in Thailand (Celeraise (Thailand) Co., Ltd.) through Letter Jing-Shen-Er-Zi No. 11000039010.

• 2022 • Canceled 1,000 thousand treasury shares.

• Issued 2,790 thousand new shares through capitalization of retained earnings.

• Issued 100 thousand shares through capitalization of employee compensation.

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Three. Corporate Governance Report

==> picture [784 x 387] intentionally omitted <==

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

I. Organization system:
Shareholder’s
meetings
Audit Committee
Board of Directors
Remuneration
Committee Audit Office
Chairperson
President
Wire and Connector Business System Integration
General Administration
Accounting Office Group Business
Center
Thailand Eastern China Southern China Philippines Northern Region South-Central Region
Operations Office Operations Office Operations Office Operations Office Operations Office Operations Office
----- End of picture text -----

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Audit Office	 Responsible for auditing the implementation of the Company’s internal rules and regulations, and putting forward suggestions for improvement and reporting regularly.  Audit of reinvested enterprises and important subsidiaries.
Wire and Connector Business Group	 Responsible for the research and development, production, sale and quality of various electronic related components, wire sets, wires, connectors, electronic components and other products domestically and abroad.  Production and factory maintenance.  Sales and customer relationship maintenance.  Assessment of opportunities for setting up factories in various locations.
System Integration Business	 Responsible for government and enterprise information system equipment integration consulting, construction, and sale.  Maintenance of system software and hardware equipment.  Project outsourcing station maintenance service and software project development.  Purchasing Department: Purchasing management operations, supplier evaluation and development, supplier credit limit management operations, warehouse management operations.
Accounting Office	 Responsible for Group accounting, fund scheduling, and issuance and receipt of payments.  Provide relevant financial management information to business units and senior executives as a reference for decision-making.  Preparation and implementation of Group budgets.  All major financial plans.  Operation and evaluation of reinvested enterprises.
General Administration Center	 Management Department: Planning and implementation of Group human resources and salary management.  Information Department: Cooperate with relevant departments to provide management reports and maintenance of computer-related equipment.  Investment Management Department: Coordinate shareholders’ meetings and Board of Directors’ matters, external information releases, investor relations, and announcements of related public information.  Legal Affairs Department: Contract drafting, modification and review, provision of legal opinions, follow-up of litigation cases, and management of intellectual property rights of patents and trademarks.  General Affairs Department: Repair, maintenance, and management of fixed assets.

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II. Information on directors, the president, vice presidents, associate managers, and supervisors of various departments and branches:

Director information (I):

																	April 15,2023	April 15,2023	April 15,2023	April 15,2023
Job Title	Nationality or Place of Registration	Name	Gender (Age)	Date of Election (Appointment)	Term of office	Date first appointed	Shares held at the time of appointment		Number of shares currently held		Number of shares currently held by spouse and minor children		Shares held in the name of others		Main Educational and Professional Background	Positions concurrently held in the Company and in other companies	Spouse or relatives within the second degree of kinship or closer serving as other supervisors, directors, or supervisors			Notes
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Job Title	Name	Relationship
Chairman	Republic of China	Yun-Teng Chang	Male (41-50 years old)	2022/06/14	3 years	2016/06/17	3.136,400	3.37%	3,230,492	3.37%	27,810	0.03%	0	0%	University of Florida Kunshan Celeraise Electronic Shanghai Celeraise Electron Year Jan Industrial Co., Ltd.	Note 1	Director	Kuei-Yu Chang	Sibling	None
Director	Republic of China	Hsuan-Bin Kuo	Male (61-70 years old)	2022/06/14	3 years	2005/12/19	1,000,000	1.08%	1,000,000	1.04%	0	0.00%	0	0.00%	Graduated from the Department of Electrical Engineering, National Chiao Tung University Senior Technician, International Telecommunications Bureau, Ministry of Transportation and Communications Senior Sales Engineer, Taiwan Philips Sales Manager, STMicroelectronics Founder, Supreme Electronics	Note 2	None	None	None	None
Director	Republic of China	Hung-Liang Hsieh	Male (71-80 years old)	2022/06/14	3 years	2007/06/13	1,395,000	1.50%	1,436,850	1.50%	1,070,685	1.12%	0	0.00%	Graduated from Tsinghua University Chairperson of Scientech Corporation	Note 3	None	None	None	None
Director	Republic of China	Kuei-Yu Chang	Female (41-50 years old)	2022/06/14	3 years	2007/06/13	1,917,450	2.06%	1,974,973	2.06%	210,000	0.22%	0	0.00%	Graduated from University of Northumbria	Note 4	Director	Yun-Teng Chang	Sibling	None
	Republic of China	Year Jan Industrial Co., Ltd.	-	2022/06/14	3 years	2022/06/14	10,827,800	11.64%	11,152,634	11.63%	0	0%	0	0%	Not applicable	None	None	None	None	None
Director	Republic of China	Representative Ming-Jie Cheng	Male (61-70 years old)	2022/06/14	3 years	2019/06/14	0	0.00%	0	0.00%	0	0.00%	0	0%	Associate Professor, Department of Information Engineering, Chung Yuan Christian University	None	None	None	None	None

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Job Title	Nationality or Place of Registration	Name	Gender (Age)	Date of Election (Appointment)	Term of office	Date first appointed	Shares held at the time of appointment	Shares held at the time of appointment	Number of shares currently held	Number of shares currently held	Number of shares currently held by spouse and minor children	Number of shares currently held by spouse and minor children	Shares held in the name of others	Shares held in the name of others	Main Educational and Professional Background	Positions concurrently held in the Company and in other companies	Spouse or relatives within the second degree of kinship or closer serving as other supervisors, directors, or supervisors	Spouse or relatives within the second degree of kinship or closer serving as other supervisors, directors, or supervisors	Spouse or relatives within the second degree of kinship or closer serving as other supervisors, directors, or supervisors	Notes
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Job Title	Name	Relationship
Director	Republic of China	Hsiu-Li Chen	Female (60-65 years old)	2022/06/14	3 years	2022/06/14	740,500	0.80%	762,715	0.80%	0	0%	0	0%	Department of Accounting and Statistics, Chihlee University of Technology Marine Division, Fuji Industries Co., (Taiwan)Ltd.	None	None	None	None	None
Independent Director	Republic of China	Meng-Chung Wu	Male (71-80 years old)	2022/06/14	3 years	2016/06/17	60,000	0.06%	70,000	0.07%	0	0.00%	0	0.00%	National Nantou Commercial High School Finance Division, Panasonic Taiwan Co., Ltd. Sales Office Director, Kuotu Motor Company,Ltd.	Responsible person, Qian Yao Enterprise Co., Ltd.	None	None	None	None
Independent Director	Republic of China	Ching-Ju Wu	Female (50-60 years old)	2022/06/14	3 years	2022/06/14	0	0.00%	0	0.00%	0	0.00%	0	0.00%	Department of Accounting, Tunghai University CPA partner, Yujin United Accounting Firm CPA partner, CKH & W CPA Office	Note 5	None	None	None	None
Independent Director	Republic of China	Chang-Kuo Feng	Male (40-50 years old)	2022/06/14	3 years	2022/06/14	0	0.00%	0	0.00%	0	0.00%	0	0.00%	LL.M, National Taiwan University LL.M, Northwestern University, USA Partner, Zhong Yin Law Firm	Note 6	None	None	None	None

Note 1: Director, Celeraise Technology Corporation; director, Leadpak Industrial Co., Ltd.; director, Celeraise (Thailand) Co., Ltd.; director, Shanghai Celeraise Electronic Co., Ltd.; director, Kunshan Celeraise Electronic Co., Ltd.; director, Celeraise Electronic Corporation.

Note 2: Director, Celeraise Technology Corporation; director, A Team Tech Inc.; director, Minshi Computer Technology (Shanghai) Co., Ltd.; director, Celeraise Electronic Corporation; director, Leadpak Industrial Co., Ltd.; director, Allied Circuit Co., Ltd.

Note 3: Chairperson, Scientech Corporation; chairperson, Acromass Technologies Inc.; director, Yoho Beach Resort Co., Ltd.; director, Natgem Inc.

Note 4: Chairperson, Celeraise Technology Corporation; director, Celeraise Electronic Corporation; chairperson, Leadpak Industrial Co., Ltd.; director, Celeraise (Thailand) Co., Ltd.; director, Jiun Tai Corporation Limited; director, Celeraise Investment Limited; director, Yield Profit International Enterprise Limited; director, Jet Success Technology Development Limited. Note 5: CPA partner, Yujin United Accounting Firm; independent director, Gongwin Biopharm Co., Ltd.; independent director, Hongpu Construction Co., Ltd. Note 6: Partner, Zhong Yin Law Firm; independent director, GTM Holdings Corporation; chairperson, Zhongying Consulting Co., Ltd.; chairperson, Haohao Jiao Co., Ltd.; director, Rextek Integration Inc.; corporate director, Miho International Cosmetic Co., Ltd.

• 11 -

Table 1: Major Shareholders of Institutional Shareholders

April 15, 2023

Name of institutional shareholder (Note 1) Major shareholders of institutional shareholder (Note 2)

Year Jan Industrial Co., Ltd. Kuan Yi Investment Co., Ltd.: 78.64%

• Note 1: If the Director is the representative of an institutional shareholder, put down the name of the institution.

• Note 2: Put the names of the dominant shareholders of this institutional shareholder (Top 10 by shareholding) and proportion of shareholding. If the dominant shareholders are institutional shareholders, fill in Table 2 below.

• Note 3: If the institutional shareholder is not a body corporate, the name of the institutional shareholder and proportion of shareholder for disclosure as mentioned shall be the name of the benefactor or donor, and the proportion of funding or donation.

Table 2: Major institutional shareholders serving as major shareholders of juridical persons as referred to in Table 1

April 15, 2023 Name of institutional shareholder (Note 1) Major shareholders of institutional shareholder (Note 2) Kuei-Yu Chang 40% Kuan Yi Investment Co., Ltd. Yun-Teng Chang 24%

• Note 1: If the dominant shareholder exhibited in Table 1 is an institutional shareholder, put down the name of the institution.

• Note 2: Put down the names of the dominant shareholders of this institutional shareholder (top 10 by shareholding) and the proportion of shareholding.

• Note 3: If the institutional shareholder is not a body corporate, the name of the institutional shareholder and proportion of shareholder for disclosure as mentioned shall be the name of the benefactor or donor, and the proportion of funding or donation.

• 12 -

Director information (II) I. Disclosure of information on the professional qualifications of directors and the independence of independent directors:

Terms Name	Professional qualifications and experience	Status of independence	Number of other public companies where the director concurrently serves as independent director
Director Yun-Teng Chang	Qualifications: Has more than 16 years of required industry and corporate work experience; current chairperson of the Company; has been committed to fields related to the connector industry for nearly 15 years; possesses professional leadership, professional market competition judgment, and strategic planning capabilities. Education and experience: Graduated from the University of Florida 1. Vice President, Shanghai Celeraise Electronic Co., Ltd. 2. Director, Kunshan Celeraise Electronic Co., Ltd. 3. Director, Celeraise Technology Corporation 4. Director, Leadpak Industrial Co., Ltd. 5. Director, Celeraise (Thailand) Co., Ltd. 6. Director, Celeraise Electronic Corporation	During the tenure of directors, none of the following events occurred: 1. As stipulated in Paragraph 3 of Article 26-3 of the Securities and Exchange Act, not more than half of the seats among the directors are spouses or relatives within the second degree of kinship. 2. No circumstances specified under Article 30 of the Company Act.	0
Director Kuei-Yu Chang	Qualifications: Has more than 18 years of work experience in legal affairs, finance, accounting and corporate business; is committed to business operation management, corporate finance, and accounting affairs; and has abundant industry experience. Experience: 1. Audit Personnel, CKH & W CPA Office 2. Finance Manager, Year Jan Industrial Co., Ltd.		0
Director Hsuan-Bin Kuo	Qualifications: Has more than 20 years of work experience in business, finance, and corporate business; is specialized in business promotion and marketing strategy capabilities. Education and experience: Graduated from the Department of Electrical Engineering, National Chiao Tung University 1. Senior Technician, International Telecommunications Bureau, Ministry of Transportation and Communications 2. Senior Sales Engineer, Taiwan Philips 3. Founder, SupremeElectronics		0
Director Hung-Liang Hsieh	Qualifications: Has more than 20 years of work experience in business, legal affairs, finance and corporate business; possesses abundant experience in operations management, risk management, and industry planning. Education and experience: Graduated from Tsinghua University 1. Chairperson, Scientech Corporation 2. Chairperson, Acromass Technologies Inc.		0

• 13 -

Terms Name	Professional qualifications and experience	Status of independence	Number of other public companies where the director concurrently serves as independent director
Director Hsiu-Li Chen	Qualifications: Has more than 10 years of work experience in business, finance, accounting, and corporate business; is specialized in business operations, financial planning, and accounting affairs; and has abundant experience in industrial planning. Experience: General Administration Center, You Ting Enterprise Co., Ltd. / Shipping Department,Fuji Industries Co., (Taiwan)Ltd.		0
Year Jan Industrial Co., Ltd. Representative: Ming-Jie Cheng	Qualifications: Has more than 8 years of work experience in business, legal affairs, finance, accounting, or corporate business; graduated from the University of Florida with a Ph.D. in electrical engineering; previously Associate Professor, Department of Information Engineering, ChungYuanChristianUniversity.		0
Independent Director Meng-Chung Wu	Qualifications: Has more than 20 years of work experience in business, finance and corporate business; served as convener of the Company’s Remuneration Committee; has work experience in business and crisis management. Experience: 1. Chairperson, Qian Yiao Enterprise Co., Ltd. 2. Finance Division, Panasonic Taiwan 3. Director,KuotuMotorCo.,Ltd.	All meet the following independent evaluation criteria during the two years before election and during terms of office. 1. No circumstances specified under Article 30 of the Company Act. 2. The director, spouse, and relatives within the second degree of kinship do not serve as directors or employees of the Company or its affiliated companies. 3. The director, spouse, or relatives within the second degree of kinship (or acting in the name of others) hold no shares of the Company. 4. Not serving in the position of director or employee of a company that has a specific relationship with the Company (Article 3, Paragraph 1, Subparagraphs 5-8 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies). No provision of business, legal,financial,accounting,	0
Independent Director Ching-Ju Wu	Qualifications: Has more than 10 years of work experience in business, finance, accounting, and corporate business; is specialized in financial accounting related matters; has experience leading corporate finance functions; and has provided corporate professional advice. Education and experience: Graduated from the Department of Accounting, Tunghai University 1. CPA Partner, Yujin United Accounting Firm 2. Audit Assistant Manager, Ernst & Young 3.CPA Partner, CKH&WCPAOffice		2
Independent Director Chang-Kuo Feng	Qualifications: Has more than 10 years of work experience in business, legal affairs and corporate business; is specialized in legal and business-related matters to assist the Company’s business legal professional consulting. Education and experience: LL.M, National Taiwan University EMBA, National Taiwan University LL.M, Northwestern University, USA 1. Partner, Zhong Yin Law Firm 2. Independent Director, GTM Holdings Corporation 3.Chairperson,Zhongying Consulting Co.,		1

• 14 -

Terms Name	Professional qualifications and experience	Status of independence	Number of other public companies where the director concurrently serves as independent director
	Ltd. 4. Chairperson, Haohao Jiao Co., Ltd. 5. Director, Rextek Integration Inc. 6. Corporate Director Representative, Miho InternationalCosmetic Co.,Ltd.	and other services to the Company or its affiliates in the last two years.
Independent Director Tine-Shi Keo (Dismissed following election of June 14, 2022)	Qualifications: Has more than 20 years of work experience in business, finance, accounting, and corporate business; is specialized in financial accounting related matters; and has provided corporate professional advice. Independent director statement issued with no circumstances specified under Article 30 of the Company Act. 1. Passed accountancy exam 2. Passed college entrance examination to educate administrative staff Education and experience: Graduated from the Department of Business Administration, Tatung Institute of Technology 1. Accounting Office Head, Ministry of Education 2.CPA Partner, CKH&WCPAOffice		0

• 15 -

• II. Diversity and independence of the Board of Directors:

• (I) Board diversity:

  • (1) Board of Directors’ membership diversity policy:

    1. To enhance the functions of the Board of Directors as stipulated under Article 20 of the Company’s Corporate Governance Best Practice Principles, the composition of the Board of Directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the Company’s business operations, operating dynamics, and development needs. The policy shall include, without being limited to, the following two general standards: (1) Basic conditions and values: Gender, age, nationality, culture, and so on. (2) Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience.

    2. Each board member shall have the necessary knowledge, skill, and experience to perform their duties. In order to achieve the ideal goals of corporate governance, the Board of Directors as a whole are required have the following capabilities: (1) Operational judgment ability. (2) Accounting and financial analysis ability. (3) Business management ability. (4) Crisis management ability. (5) Knowledge of the industry. (6) An international market perspective. (7) Leadership ability. (8) Decision-making ability. (9) Sustainable management ability.

  • (2) Specific management objectives for Board of Directors’ membership diversity:

    • The Board of Directors of the Company shall guide the Company’s strategy, supervise management, be responsible to the Company and its shareholders. The various operations and arrangements of its corporate governance system shall ensure that the Board of Directors exercises its functions and powers in accordance with the provisions of laws and regulations, the Company’s Articles of Incorporation, or resolutions of the shareholders’ meeting. Specific management objectives are as follows:

    • The Company’s Board of Directors also pays attention to gender equality among members, and Board membership includes three female directors.

    • The Company’s Board of Directors focuses on operational judgment, operations management, and crisis handling capabilities, and more than two-thirds of directors have relevant core item capabilities.

    • Independent directors shall not serve more than three consecutive terms to maintain their independence. Two independent directors have served for six years and are familiar with the Company’s financial and business operations.

    • Directors’ backgrounds include accounting and industrial operations. Board members have diverse backgrounds in terms of industry, education, and knowledge and can give professional advice from different angles. This is great help to improve the Company’s business performance and management efficiency.

  • (3) Board of Directors’ membership diversity achievement status: There are nine members in the current Board of Directors; among them are three independent directors to ensure the independence of the Board of Directors. There are two directors concurrently serving as employees for a proportion of 22.22%. Moreover, there are three female directors in place to achieve the goal of gender equality. Among the members of the Board of

• 16 -

Directors, there is one independent director who qualifies as an accountant and specializes in accounting, and one is a lawyer who specializes in the legal profession. The other directors have extensive qualifications in operations management, industry experience, and market strategy, and each has a relevant professional background and the professional knowledge necessary to perform their duties. In terms of core item capabilities, at least one half of members have the ability to carry out relevant business; and the Company focuses on core items such as industry experience, operational judgment, operation management and crisis management. More than 80% of members have these core competencies.

Diversity policy and implementation status

Diversity core Director name	Diversity core Director name		Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition			Industry experience	Industry experience	Industry experience	Professional ability	Professional ability	Professional ability	Professional ability
		Nationality	Gender	Holding employee status			Age			Tenure of independent directors		Electronic components	Information and technology	Metals and machinery	Finance and accounting	Business management	Law	Risk management
					40-50 years old	51-60 years old	61-70 years old	71-80 years old	80 years old and over	Under 3 years	6-9 years
Yun-Teng Chang		Republic of China	Male	v	v							v		v	v	v		v
Hsuan-Bin Kuo		Republic of China	Male				v					v	v		v	v
Hung-Liang Hsieh		Republic of China	Male					v				v		v	v	v	v	v
Kuei-Yu Chang		Republic ofChina	Female	v	v							v	v		v	v	v	v
Hsiu-Li Chen		Republic of China	Female				v					v			v	v
Year Jan Industrial Co., Ltd. representative: Ming-Jie Cheng		Republic of China	Male					v					v	v		v		v
Independent Director Ching-Ju Wu		Republic of China	Female			v				v		v			v	v	V	v
Independent Director Meng-Chung Wu		Republic of China	Male					v			v	v		v	v	v		v
Independent Director Chang-Kuo Feng		Republic of China	Male		v					v		v	v			v	v	v

• 17 -

• (4) Specific management objectives and achievement status of the Board of Directors’ membership diversity policy:

		Management objective	Achievement status
	Directors who concurrently serve as company managers should not exceed one-third of director positions		Achieved
	Boardmembershipincludes threewomen		Achieved
	Independent directors shall serve no more than three consecutive terms		Achieved
	Sufficient and diverse professional knowledge and skills		Achieved

• (II) Independence of the Board of Directors:

• (1) There are nine current directors, comprising three independent directors (accounting for 33.33% of seats) and six non-independent directors (accounting for 66.67% of seats). Two directors have employee/manager status (22.22%), constituting less than one-third of all directors. More than half of director seats do not involve relationships of a spouse or relative within the second degree of kinship, in compliance with the provisions of Paragraph 3 and Paragraph 4 of Article 26-3 of the Securities and Exchange Act.

• (2) The Company established the Audit Committee on June 14, 2022, comprising three independent directors, so that independent directors may exercise their powers objectively. To avoid a reduction in independence due to long-term tenure, the term of office of independent directors shall not exceed three terms.

• 18 -

(II) Information on the president, vice presidents, associate managers, and supervisors of various departments and branches:

April 15, 2023

Job Title	Nationality	Name	Gender	Election (Appointment) Date	Number of shares held	Number of shares held	Number of shares held by spouse and minor children	Number of shares held by spouse and minor children	Shares held in the name of others	Shares held in the name of others	Main Educational and Professional Background	Positions Concurrently Held in Other Companies	Spouse or relatives within the second degree of kinship or closer serving as managerialofficers	Spouse or relatives within the second degree of kinship or closer serving as managerialofficers	Spouse or relatives within the second degree of kinship or closer serving as managerialofficers	Notes
					Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Job Title	Name	Relationship
President	Republic of China	Hsiang- Yu Wang	Male	2017/08/21	210,000	0.22%	1,974,973	2.06%	0	0.00%	College of Design, Shih Chien University Manager, Year Jan Industrial Co., Ltd.	Note 1	None	None	None	No such situation
President of Business Group	Republic of China	Jia-Xian g Lin	Male	2016/01/26	74,800	0.08%	0	0.00%	0	0.00%	Department of Civil Engineering, Feng Chia University Institute of Civil Engineering, New Jersey Institute of Technology, USA Vice President, HP President,Imation Taiwan	None	None	None	None	No such situation
Senior Vice President	Republic of China	Yu-Da Xin	Male	2013/01/01	66,209	0.07%	0	0.00%	0	0.00%	Electronic Engineering Department, United Technical College Associate, Zixian Technology	None	None	None	None	No such situation
Vice President	Republic of China	Zhi-Xian Zhu	Male	2013/01/01	70,120	0.07%	0	0.00%	0	0.00%	Electronics and Computer Department, Chin-Yi University of Technology	Senior Vice President, Celeraise Technology Corporation	None	None	None	No such situation
Senior Associate Manager	Republic of China	Lin-Cing Hu (Note 3)	Male	2013/12/01	43,200	0.05%	0	0.00%	0	0.00%	Mechanical Engineering Department, Hwa Hsia Industrial College Project Manager, NetPro Information Service Ltd. ProjectManager,FeyaTechnologies	None	None	None	None	No such situation
Financial Supervisor	Republic of China	Wen-Pin Chen	Male	2011/11/01	30,750	0.03%	0	0.00%	0	0.00%	Department of Accounting, Chinese Culture University Auditor, Ernst & Young Manager, CKH&WCPAOffice	Note 2	None	None	None	No such situation
Associate Manager	Republic of China	Jheng-R ong Jhang	Male	2022/03/22	36,150	0.04%	0	0.00%	0	0.00%	CHINA UNIVERSITY OF SCIENCE AND TECHNOLOGY Manager,MEC IMEX INC. Director. CHYAO SHIUNN ELECTRONIC INDUSTRIAL LTD. CEOLiangRom IndustrialCo.,Ltd.	None	None	None	None	No such situation
Corporate Governance Officer	Republic of China	Yi-Lun Pan	Female	2022/05/10	1,000	0.00%	0	0.00%	0	0.00%	Department of Accounting, Chung Yuan Christian University Department Manager, Investment Management Department/Finance Department, Welltend Technology	None	None	None	None	No such situation

Note 1: Director, Celeraise Electronic Corporation; director, Celeraise (Thailand) Co., Ltd.; director, Jiun Tai Corporation Limited; director, Celeraise Investment Limited; director, Yield Profit International Enterprise Limited; director, Jet Success Technology Development Limited; director, Shenzhen Celeraise Electronic Co., Ltd.; director, Zhan Mao (Huizhou) Electronic. Note 2: Supervisor, Shanghai Celeraise Electronic Co., Ltd.; supervisor, Kunshan Celeraise Electronic Co., Ltd.; supervisor, Shenzhen Celeraise Electronic Co., Ltd.; supervisor, Zhan Mao (Huizhou) Electronic.

Note 3: Resigned on April 30, 2023.

• • 19 - -

III. Remuneration paid to directors, supervisors, the president, and vice presidents in the most recent year (I) Remuneration paid to directors and independent directors

																December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand
Title	Name	Remuneration for Directors								Sum of A, B, C, and D as percentage of net income after tax		Remuneration from concurrently				serving as employee				Sum of A, B, C, D, E, F, and G as percentage of net income after tax		Renumeration received from investee companies outside of subsidiaries, or from the parent company
		Remuneration (A)		Retirement pension (B)		Compensation for directors (C)		Business execution expenses (D)				Salaries, bonuses, special expenditures, etc. (E)		Retirement pension (F)		Compensation for employees (G)
		The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company		All companies included in the financial statements		The Company	All companies included in the financial statements
																Amount in cash	Amount in shares	Amount in cash	Amount in shares
Chairman	Yun-Teng Chang	0	0	0	0	5,150	5,150	220	220	2.92%	2.92%	2,760	9,932	58	58	0	0	0	0	4.45%	8.34%	0
Director	Kuei-Yu Chang
Director	Hsuan-Bin Kuo
Director	Hung-LiangHsieh
Director (Note1)	Yu-I Ko
Director (Note 2)	Hsiu-Li Chen
Director (Note 1)	Shih Chieh Wei Co., Ltd. Representative: De-WeiJi
Director (Note 1)	Wei Yi Investment Co., Ltd. representative: Ming-Jie Cheng
Director (Note 2)	Year Jan Industrial Co., Ltd. representative: Ming-Jie Cheng
Independent Director	Ching-Ju Wu (Note 2)	180	180	0	0	850	850	85	85	0.61%	0.61%	0	0	0	0	0	0	0	0	0.61%	0.61%	0
Independent Director	Meng-Chung Wu
Independent Director	Chang-Kuo Feng (Note 2)
Independent Director	Tine-Shi Keo (Note 1)

• 20 -

• Please state the policies, systems, standards and structure of independent directors’ remuneration, and according to the responsibilities, risks, time invested and other factors, describe the relevance to the remuneration amount: Independent directors of the Company perform business according to the scope of their duties, and the standard of remuneration for independent directors considers the time invested and responsibilities of independent directors in the operation of the Company. Outside of receiving transportation reimbursement for each meeting of the Board of Directors, independent directors are given no severance pay and job bonuses. In addition, in accordance with the provisions of Article 27 of the Company’s Articles of Incorporation, the Board of Directors is authorized to pay the remuneration of all directors according to the degree of their participation in the operation of the Company and the value of their contribution, regardless of the operating profit or loss, according to the normal level of the industry.

• Other than the content revealed in the table above, remuneration received by directors of the Company for their services for all companies in the financial statements in the most recent year (such as serving as an external consultant to the parent company, any company listed in the financial statements, or a reinvested company): No such situation.

Note 1: Dismissed following election on June 14, 2022. Note 2: Took office following election on June 14, 2022.

• 21 -

Remuneration Scale

Payment to individual Directors along the payment scale	Name of Director	Name of Director	Name of Director	Name of Director
	Sum total of the above 4 items (A+B+C+D)		Sum total of the above 7 items (A+B+C+D+E+F+G)
	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements
Less than NT$1,000,000	11 Hsuan-Bin Kuo,Hung-Liang Hsieh, Hsiu-Li Chen,Yu-I Ko,Tine-Shi Keo, Meng-Chung Wu, Ching-Ju Wu, Chang-Kuo Feng, Wei Yi Investment Co., Ltd. representative: Ming-Jie Cheng, Shih Chieh Wei Co., Ltd. Representative: De-Wei Ji Year Jan Industrial Co., Ltd. representative: Ming-Jie Cheng	11 Hsuan-Bin Kuo,Hung-Liang Hsieh, Hsiu-Li Chen,Yu-I Ko,Tine-Shi Keo, Meng-Chung Wu, Ching-Ju Wu, Chang-Kuo Feng, Wei Yi Investment Co., Ltd. representative: Ming-Jie Cheng, Shih Chieh Wei Co., Ltd. Representative: De-Wei Ji Year Jan Industrial Co., Ltd. representative: Ming-Jie Cheng	11 Hsuan-Bin Kuo,Hung-Liang Hsieh, Hsiu-Li Chen,Yu-I Ko,Tine-Shi Keo, Meng-Chung Wu, Ching-Ju Wu, Chang-Kuo Feng, Wei Yi Investment Co., Ltd. representative: Ming-Jie Cheng, Shih Chieh Wei Co., Ltd. Representative: De-Wei Ji Year Jan Industrial Co., Ltd. representative: Ming-Jie Cheng	10 Hung-Liang Hsieh, Hsiu-Li Chen,Yu-I Ko,Tine-Shi Keo, Meng-Chung Wu, Ching-Ju Wu, Chang-Kuo Feng, Wei Yi Investment Co., Ltd. representative: Ming-Jie Cheng, Shih Chieh Wei Co., Ltd. Representative: De-Wei Ji Year Jan Industrial Co., Ltd. representative: Ming-Jie Cheng
NT$1,000,000 (inclusive)~NT$2,000,000 (exclusive)	2 Yun-Teng Chang Kuei-Yu Chang	2 Yun-Teng Chang Kuei-Yu Chang
NT$2,000,000 (inclusive)~NT$3,500,000 (exclusive)			2 Yun-Teng Chang Kuei-Yu Chang	1 Hsuan-Bin Kuo
NT$3,500,000 (inclusive)~NT$5,000,000 (exclusive)
NT$5,000,000 (inclusive)~NT$10,000,000 (exclusive)				2 Yun-Teng Chang Kuei-Yu Chang
NT$10,000,000 (inclusive)~NT$15,000,000 (exclusive
NT$15,000,000 (inclusive)~NT$30,000,000 (exclusive)
NT$30,000,000 (inclusive)~NT$50,000,000 (exclusive)
NT$50,000,000 (inclusive)~NT$100,000,000 (exclusive)
More than NT$100,000,000
Total	13	13	13	13

(II) Remuneration paid to supervisors

The Company’s supervisors were dismissed after the establishment of the Audit Committee on June 14, 2022.

				December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand
Job Title	Name			Remuneration forSupervisors				Sum of A, B, and C as percentage of net income after tax		Renumeratio n received from investee companies outside of subsidiaries, or from the parent company
		Remuneration (A)		Compensation (B)		Business execution expenses (C)
		The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements
Supervisor	C.H.Chen	0	0	200	200	15	15	0.12%	0.12%	0
Supervisor	Hsan-AuWu	0	0	200	200	15	15	0.12%	0.12%	0

• 22 -

(III) Remuneration Paid to the President and Vice Presidents

						December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None	December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None	December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None	December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None	December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None	December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None	December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None	December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None	December 31, 2022/Unit: NT$ thousand Bonuses, special expenditures, etc. (C) Employee compensation amount (D) Sum of A, B, C, and D as percentage of net income aftertax(%) Renumeratio n received from investee companies outside of subsidiaries, or from the parent company The Company All companies included in the financial statements The Company All companies included in the financialstatements The Company All companies included in the financial statements Amount in cash Amount in shares Amount in cash Amount in shares 2,676 4,440 674 0 674 0 4.96% 7.63% None
Job Title	Name	Salary (A)		Retirement	pension (B)	Bonuses, special expenditures, etc. (C)		Employee compensation amount (D)				Sum of A, B, C, and D as percentage of net income aftertax(%)		Renumeratio n received from investee companies outside of subsidiaries, or from the parent company
		The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company		All companies included in the financialstatements		The Company	All companies included in the financial statements
								Amount in cash	Amount in shares	Amount in cash	Amount in shares
President	Hsiang-Yu Wang	5,493	8,549	292 (Note 1)	387 (Note 1)	2,676	4,440	674	0	674	0	4.96%	7.63%	None
President of Business Group	Jia-Xiang Lin
Senior Vice President	Yu-Da Xin
Senior Vice President	Guan-Yu Lin (Note2)
Vice President	Zhi-Xian Zhu

Note 1: Classified under appropriation of retirement pensions in 2022. Note 2: Resigned on April 30, 2022

• 23 -

Remuneration Scale

Remuneration to individual President and Vice Presidents along the payment scale	Names of President and Vice Presidents	Names of President and Vice Presidents
	The Company	All companies included in the financial statements
Less than NT$1,000,000	2 Guan-Yu Lin, Zhi-Xian Zhu	1 Guan-Yu Lin
NT$1,000,000 (inclusive)~NT$2,000,000 (exclusive)	1 Hsiang-Yu Wang	0
NT$2,000,000 (inclusive)~NT$3,500,000 (exclusive)	1 Yu-Da Xin	3 Hsiang-Yu Wang, Yu-Da Xin, Zhi-Xian Zhu
NT$3,500,000 (inclusive)~NT$5,000,000 (exclusive)	1 Jia-XiangLin	1 Jia-XiangLin
NT$5,000,000 (inclusive)~NT$10,000,000 (exclusive)
NT$10,000,000 (inclusive)~NT$15,000,000 (exclusive
NT$15,000,000 (inclusive)~NT$30,000,000 (exclusive)
NT$30,000,000 (inclusive)~NT$50,000,000 (exclusive)
NT$50,000,000 (inclusive)~NT$100,000,000 (exclusive)
More than NT$100,000,000
Total	5	5

• (IV) Individual disclosure of top five executives with the highest remuneration: Not applicable.

• (V) Names of managerial officers entitled to employee compensation and amounts entitled

			December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand	December 31, 2022/Unit: NT$ thousand
	Title	Name (Note 1)	Amount in shares (Note 1)	Amount in cash (Note 1)	Total	As percentage of net income aftertax(%)
Managers	President	Hsiang-YuWang	0	958	958	0.52%
	President of Business Group	Jia-Xiang Lin
	Senior Vice President	Yu-Da Xin
	Senior Vice President	Guan-Yu Lin (Note2)
	VicePresident	Zhi-Xian Zhu
	Senior Associate Manager	Lin-Cing Hu (Note 3)
	Financial Supervisor	Wen-Pin Chen
	Associate Manager	Jheng-Rong Jhang
	Corporate Governance Officer	Yi-Lun Pan

Note 1: Employee compensation for 2022 is estimated based on the proportion of employee

• 24 -

compensation paid in 2021. Net income after tax refers to the net income after tax in the parent company only or individual financial statements in the most recent year. Note 2: Resigned on April 30, 2022. Note 3: Resigned on April 30, 2023.

• (VI) Separate comparison and explanation of the ratios of remuneration payment to directors, supervisors, the president and vice presidents of the Company and of all companies in the consolidated financial statements to the net income after tax in the parent company only or individual financial statements in the last two years, and an explanation of the correlation between the policies, standards, and combinations of payment, procedures for determination of remuneration, business performance and future risks.

• Total remuneration in proportion to net income in the last two years：

Item	Total remuneration inproportion to net income(%)	Total remuneration inproportion to net income(%)	Total remuneration inproportion to net income(%)	Total remuneration inproportion to net income(%)
		2022		2021
	The Company	All companies included in the financialstatements	The ompany	All companies included in the financialstatements
Directors(including Independent Directors)	5.06	8.95	5.37	10.32
Supervisor	0.24	0.24	0.46	0.46
President and Vice Presidents	4.96	7.63	7.75	11.37

1. Policies, standards, and combinations for remuneration:

2. (1) Remuneration for directors (including independent directors): In accordance with the Company’s “Measures for Remuneration of Directors and Managers”, the Company must pay fixed monthly remuneration, and the Board of Directors may, in accordance with the degree of participation in the Company’s operations and the value of its contribution, report to the Remuneration Committee for adjustment. Travel expenses for each meeting of the Board of Directors are NT$5,000. Director compensation is stipulated in the Articles of Incorporation. If the Company makes profits for the year, no more than 3% may be appropriated as compensation by a resolution of the Board of Directors, giving reasonable remuneration based on the Company’s “Remuneration Distribution Policy for Directors and Supervisors” and the relevant results of director performance evaluations.

3. (2) Managers: Fixed remuneration is to be paid in accordance with the standard of industry peers and the Company’s internal salary regulations. Adjustments are made based on individual performance and contributions to the Company’s overall operations, positions held, and responsibilities and risks assumed. In addition to referring to the Company’s overall operating plan, bonus distribution shall be made in accordance with the Company’s “Performance Management Measures” and “Measures for Remuneration of Directors and Managers”, consideration shall be given to annual operating performance and individual work performance. Furthermore, if the Company makes a profit in the year, an amount not higher than 10% shall be allocated for participation in annual (once per year) employee compensation distribution.

4. 25 -

5. Correlation between determination of remuneration, business performance, and future risks:

6. (1) Procedures for determining remuneration: Performance indicators shall first be set for the current year and re-implementing annual performance appraisals (twice a year); after remuneration amounts are approved, they shall be sent to the Remuneration Committee for review and issued after discussion and approval by the Board of Directors.

7. (2) Correlation with business performance and future risks: Distributions of performance bonuses and employee compensation are based on the Company’s revenue and profit status and issued in accordance with each unit and individual performance evaluation.

8. (3) Remuneration considerations for the Company’s directors (including independent directors) and its managers include personal professional ability, the practice of the Company’s core values, operational management ability, financial and business performance indicators, continuous education and participation in sustainable management; measure operational engagement and other exceptional contributions or material adverse events; and incorporate performance appraisals and salary distributions.

9. (4) In the Company’s remuneration policy, the main consideration is the overall operating conditions of the Company. Furthermore, review is made of future operational risks and of environmental protection and corporate social responsibility at all times, referring to industry salary standards to review the remuneration system in a timely manner and strike a balance between sustainable operations and risk control.

10. 26 -

IV. Corporate governance status:

(I) Information on the operation and execution of the Board of Directors:

The Board of Directors met a total of 7 times in 2022 (A) and director attendance was as follows:

Title	Name	Number of actual attendances (in non-voting capacity) (B)	Frequency of attendance	Actual attendance (in non-voting capacity) rate (%) (B/A)	Notes
Chairman	Yun-Teng Chang	7	0	【7/7】100%	Continuing term 2022/6/14
Director	Kuei-Yu Chang	7	0	【7/7】100%	Continuing term 2022/6/14
Director	Hsuan-Bin Kuo	7	0	【7/7】100%	Continuing term 2022/6/14
Director	Hung-Liang Hsieh	6	1	【6/7】86%	Continuing term 2022/6/14
Director	Yu-I Ko	3	0	【3/3】100%	Dismissed 2022/6/14
Director	Wei Yi Investment Co., Ltd. Representative: Ming-Jie Cheng	3	0	【3/3】100%	Dismissed 2022/6/14
Director	Shih Chieh Wei Co., Ltd. Representative: Te-WeiChi	3	0	【3/3】100%	Dismissed 2022/6/14
Director	Year Jan Industrial Co., Ltd. Representative: Ming-Jie Cheng	3	1	【3/4】75%	New term 2022/6/14
Director	Hsiu-Li Chen	4	0	【4/4】100%	New term 2022/6/14
Independent Director	Tine-Shi Keo	2	1	【2/3】67%	Dismissed 2022/6/14
Independent Director	Meng-Chung Wu	7	0	【7/7】100%	Continuing term 2022/6/14
Independent Director	Ching-Ju Wu	4	0	【4/4】100%	New term 2022/6/14
Independent Director	Chang-Kuo Feng	3	1	【3/4】75%	New term 2022/6/14

• 27 -

Date	Period	Motion content	Opinions of all independent directors	The Company’s handling of the opinions of the independent directors
2022.01.18	2022 1st Meeting	Approved the 2021 director and manager bonus distribution	No opinion	Not applicable
2022.03.22	2022 2nd Meeting	1. Approved the Company’s 2021 business report and financial statements 2. Approved the application for a working capital loan from CTBC Bank and the provision of joint and several guarantees for affiliated companies 3. Approved the 2021 Internal Control System Statement 4. Approved the Company’s capitalization of retained earnings to increase capital and issue new shares 5. Approved the amendment of the “Company’s Articles of Incorporation” 6. Approved the amendment of the Company’s “Measures for Loans and Endorsements/Guarantees” 7. Approved the amendment of the Company’s “Measures for Acquiring or Disposing of Assets” 8. Approved the Company’s 2021 employee remuneration, distribution of directors’ and supervisors’ remuneration, new manager positions, and changes in remuneration	No opinion	Not applicable
2022.05.10	2022 3rd Meeting	1. Approved the application for a working capital loan from the Shipai Branch of First Commercial Bank and the provision of joint and several guarantees for affiliated companies 2. Approved the appointment of a Corporate Governance Officer	No opinion	Not applicable
2022.08.09	2022 5th Meeting	1. Approved the financial statements audited by CPAs for the second quarter of 2022 2. Approved the amendment of the Company’s “Regulations Governing Establishment of Internal Control Systems”	No opinion	Not applicable

• 28 -

						1.	Approved the establishment of the
							“Measures for Remuneration of Directors
							and Managers” by the Remuneration
	2022.08.18			6th		2022 Meeting 2.	Committee of the Company Approved the review of employee	No opinion	Not applicable
							remuneration distribution for managers in
							2021 by the Remuneration Committee of
							the Company
	2022.11.08			7th		2022 Meeting 1.	Approved financial statements audited by CPAs for the third quarter of 2022.	No opinion	Not applicable
		(II) Further to the aforementioned matters, any adverse opinion or qualified opinion of
			the	independent			directors against the resolutions of the Board of Directors that
			have been noted				in the record or declared in writing: None.
II.		For recusal of directors					from motions due to conflicts of interest, specify the names of
		the directors, the content of the motions, the reasons for recusal, and the participation
		in	voting:
			Meeting			Director	name Proposal Reason for	Participation in
			date				content recusal	voting
						Ching-Ju The Company’s Each		With the	exception
						Wu	Remuneration independent	of the three
						Meng-Chu Committee’s director shall		independent
						ng Wu	review of the recuse	directors	recusing
			2022.8.18 Chang-Kuo Feng remuneration of independent themselves for issues of					themselves due to self-interest, the
							directors. their own	remaining directors
							remuneration.	passed the
								proposal	without
								objection.
III. Information on the							evaluation cycle and period, evaluation scope, method and
		evaluation				content of	the Board of Director’s self (or peer) assessment		that should		be
		disclosed by TWSE/TPEx listed companies:
		Implementation status of the Board of Directors’ evaluation:
		Evaluation cycle				Evaluation period Evaluation scope Evaluation method		Evaluation content
							1. Degree of participation
								in the Company’s
								operation
							2. Improvement in the
		Implemented once per year				January 1, 2022 to December 31, 2022 Board of Directors Board of Directors internal self-assessment quality of board decisions 3. Board composition and
								structure
							4. Selection and
								continuous	education of
								directors

• 29 -

				5. Internal control
		Individual director members	Board of Directors Member self-assessment	1. Mastery of the Company’s goals and tasks 2. Awareness of directors’ responsibilities 3. Degree of participation in the Company’s operation 4. Internal relationship management and communication 5. Directors’ professional and continuous education 6. Internal control
	January 1, 2022 to December 31, 2022	Functional Committees	Remuneration Committee internal self-assessment	1. Degree of participation in the Company’s operation 2. Recognition of functional committee responsibilities 3. Quality of decisions made by the functional committee 4. Functional committee composition and member selection 5. Internal control
	June 14, 2022 to December 31, 2022		Audit Committee internal self-assessment

At the end of each year, the Company’s Chairperson’s Office collects information related to the activities of the “Board of Directors and distributes the Self-Evaluation Questionnaire for Performance Appraisals of the Board of Directors the Remuneration Committee, and the Audit Committee” as well as the “Board Member (Self) Performance Appraisal Self-Evaluation Questionnaire” to be filled in. Finally, after the data is collected by the coordinating executive unit, a report is made of the evaluation results and the report is submitted to the Board of Directors as the basis for review and improvement. Performance evaluation results should be used as reference for selecting or nominating directors, while the performance evaluation results of individual directors are used as reference for determining their individual remuneration. The 2022 self-evaluations of the performance of the Board of Directors, individual directors, and functional committees were reported to the Board of Directors on January 10, 2023, and announcement of the results of the self-evaluations was made on the Company’s website: http://www.welltend.com.tw/information.php?#slide-sec-5. The average performance evaluation of the Board of Directors, board members, and functional committees is above 95%, showing that overall operations are good.

IV. Evaluation of targets for strengthening of the functions of the Board of Directors during

• 30 -

the current and immediately preceding fiscal years (e.g. setting up an Audit Committee, enhancing information transparency, etc.), and assessment of the implementation:

1. The Company’s Board of Directors operates in accordance with the rules of the Board of Directors. In addition to providing regulations related to directors at any time, reports are made of the current state of the Company’s business at the meeting of the Board of Directors to keep the directors informed, and materials related to proposals are prepared for examination and inquiry. There are three independent directors, all of whom draw on their professional ability to provide good advice to the Board of Directors in respect to the Company’s business, finances, and other related proposals.

2. The Company regularly arranges for each director to take at least six hours of relevant courses every year in order to maintain its core values and professional advantages and capabilities.

3. The Company upholds transparency of operations. The Company’s website has areas for “Investor Information”, “Corporate Governance”, “Financial Information”, and “Stakeholders”. Important information of the Board of Directors that needs to be announced in accordance with regulations has been disclosed on the Market Observation Post System. Furthermore, a spokesperson system has been established to ensure that all important information can be disclosed in a timely and appropriate manner.

4. The Company regularly procures liability insurance for all directors and supervisors every year to reduce and disperse the risk of significant damage to the Company and shareholders caused by mistakes or omissions by directors, and reports to the next Board of Directors’ meeting after the insurance is purchased.

5. Re-elections were held at the Company’s shareholders’ meeting on June 14, 2022, and an Audit Committee was set up to replace supervisors.

6. After the meeting of the Board of Directors, the Company posts the important resolutions on the Market Observation Post System or the Company’s website to ensure that all information disclosed is accurate and timely and to safeguard the rights and interests of shareholders. Furthermore, we regularly hold institutional investor conferences to improve investors’ understanding of the Company.

7. 31 -

(II) Operation of the Audit Committee:

A total of 2 meetings of the Audit Committee were held in 2022 (A). The attendance of independent directors was as follows:

Job title	Name	Actual number of attendances (B)	Frequency of attendance	Actual attendance rate (%) (B/A)(Note 1, Note2)	Notes
Independent Director	Ching-Ju Wu	2	0	100%	Convener
Independent Director	Meng-Ch ungWu	2	0	100%	-
Independent Director	Chang-K uoFeng	1	1	50%	-
Other matters to be recorded: I. If any of the following circumstances arises in the operation of the Audit Committee, the meeting date, period, motion content, and any objections of independent directors should be stated, as well as contents of reserved opinions or major recommendations, the results of the Audit Committee’s resolutions, and the Company’s handling of the Audit Committee’s opinions. (I)Matters listed in Article 14-5 of the Securities and Exchange Act. Audit Committee date/session Motion content Resolution result The Company’s handling of the Audit Committee’s opinions 2022.08.09 1st meeting of the 1st term 1. Reviewed the Company’s consolidated financial statements for the second quarter of 2022. 2. Reviewed the amendment of the Company’s “Regulations Governing Establishment of Internal Control Systems”. 3. Reviewed the application for a working capital loan with the Tienmu Branch of Mega Commercial Bank. Approved by all members present Approved by all directors present 2022.11.08 2nd meeting of the 1st term 1. Reviewed the Company’s consolidated financial statements for the third quarter of 2022. 2. Reviewed the submission of the Company’s 2023 annual audit plan. Approved by all members present Approved by all directors present (II) Further to the aforementioned matters, motions rejected by the Auditing Committee but passed by the Board of Directors with the consent of more than two-thirds of the directors: None. II. Implementationstatus of independent directors’ recusals due to conflicts of interest,

• 32 -

including the name of the independent director, content of the proposal, reasons for recusal, and voting status: No such situation.

• III. The communication between the independent directors and the Chief Internal Auditor and CPAs (should include the materiality, means, and result of communication of the financial position and operation of the Company). (I) Independent directors on the implementation and effectiveness of internal audit matters: Communication is good and independent directors have no other opinions.

Date	Communication focus	Communic ation result
2022.03.22	1. Report on the implementation of internal audit matters from the fourth quarter of 2021 to January 2022 2. 2021 “InternalControlSystemStatement”	No objections
2022.05.10	Report on the implementation of internal audit matters from February to March 2022	No objections
2022.08.09	Report on the implementation of internal audit mattersfrom Aprilto June2022	No objections
2022.11.08	1. Report on the implementation of internal audit matters from July to September 2022 2. 2023 Audit Plan	No objections

(II) Independent directors communicate well with the Chief Internal Auditor and CPAs. Independent directors have no other opinions.

Communication focus	Communic ation result
Communication item: 1. Independence 2. Responsibility of audit personnel for auditing interim financial reports 3. Audit scope and audit findings 4. Annual audit plan 5. Reminders and suggestions 6. Important accounting standards or explanation letters, securities management laws, and updates to tax laws and regulations 7. Audit qualityindex	No objections

• 33 -

(III) Participation of supervisors in the operation of the Board of Directors:

The Board of Directors met a total of 3 times in 2022 (A) and supervisor attendance was as follows:

Job Title	Name	Number of actual attendances (B)	Actual attendance rate (%) (B/A)	Notes
Supervisor	C.H. Chen	3	100%	Dismissed following shareholders’ meeting election ofJune14,2022.
Supervisor	Hsan-Au Wu	3	100%
Other matters to be recorded: None I. Composition and duties of supervisors: (I) Communication between supervisors and company employees and shareholders: For a meeting of the Board of Directors of the Company, a notice of the meeting is issued to invite supervisors to attend as observers to understand the Company’s operational status and track the Company’s internal control and audit. Communication channels may be established with the audit supervisor and the chairperson of the Board of Directors; and, if necessary, supervisors can communicate with the Company’s managers to understand the Company’s current operating conditions. (II) Communication between supervisors, internal audit supervisors, and accountants: 1. For internal auditors, in addition to conducting internal audit reports for each meeting of the Board of Directors, monthly audit reports are regularly submitted to the supervisors for review after completion of audit projects. After reviewing the audit report for the current year, supervisors did not raise any objections. Communication is optimal and communication can be made directly with the audit supervisor. 2. The Company’s supervisors communicate with the internal audit supervisor and accountants if necessary, and can arrange various business information communication and discussion in the form of meetings or in written form, and the implementation is optimal. II. If supervisors have attended the Board of Directors’ meeting and stated their opinions, the date and period of the Board of Directors’ meeting, the content of the proposals, and the conclusion of the Board of Directors should be stated, as well as the Company’s handling of the opinions expressed by supervisors: No such situation.

• 34 -

(III) Status of corporate governance and deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof

Evaluation item			Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
I. Has the Company prepared and disclosed the “Corporate Governance Best Practice Principles” in accordance with the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies?	V		The Company has established “Corporate Governance Best Practice Principles”, “Ethical Corporate Management Best Practice Principles”, and “Code of Ethical Conduct”, and has a sound internal control system and a range of management methods. Furthermore, we refer to relevant laws and regulations to meet the requirements of the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies, and this is disclosed on the Company’s website and the Market Observation Post System: http://www.welltend.com.tw/information.php?#slide-sec-5	No significant deviation
II. Shareholding Structure and Shareholders’ Equity (I)Does the Company have internal operating procedures in place to deal with shareholder recommendations, doubts, disputes and litigation matters according to the procedures? (II)Does the Company have a list of the major shareholders who actually control the Company, and the ultimate controllers of	V V		(I) The Company has a spokesperson, a deputy spokesperson, and a stock affairs unit to handle and respond appropriately to shareholder suggestions, concerns, disputes and other related matters; and in accordance with the nature and manner of shareholders’ inquiries, we respond in writing, by email or by telephone. In addition, a Stakeholder Area has been set up on the Company’s website and there is a shareholder contact window for shareholders/investors to submit suggestions or questions. (II) The Company can gain a timely grasp on the list of major shareholders and ultimate controllers, and entrusts a professional stock affairs agency to assist in handling stock affairs related matters. Directors and major shareholders report their shareholdings on a monthly basis in accordance with regulations.	No significant deviation

• 35 -

Evaluation item			Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
the major shareholders? (III)Has the Company established and implemented risk management, control and prevention mechanisms for affiliated companies? (IV)Has the Company established internal regulations that prohibit insiders from using unpublished information in the market to buy and sell securities?	V V		(III) The Company and affiliated companies operate independently and in accordance with the Company’s internal control and provisions of the “Measures for Management of Financial Business Operations among Associated Enterprises”. Furthermore, they implement the same auditing system and methods as the Company and keep abreast of the latest laws and regulations and Group control systems. (IV) The Company’s employees, managers and directors, etc. comply with the provisions of the Securities Exchange Act. In addition, the Company has also formulated “Management Procedures for the Prevention of Insider Trading”, “Material Information Handling Procedures”, “Code of Ethical Conduct”, “Procedures for Ethical Management and Guidelines for Conduct”, and other specifications. Relevant personnel are prohibited from using unpublished information they have learned to engage in insider trading, nor can they divulge it to others, in order to prevent others from using the undisclosed information to engage in insider trading. Moreover, the Company also promotes information awareness of relevant laws and regulations for the benefit of directors and managers from time to time; and it provides legal advocacy tonewdirectors andmanagersfromtime to time.
III. Composition and Duties of the Board of Directors (I)Has the Board of Directors formulated a diversity policy and specific management objectives, and	V		(I) Pursuant to Article 20 of the Company’s “Corporate Governance Best Practice Principles”, to achieve the specific management objectives of corporate governance, the Board of Directors as a whole should have the following capabilities:	No major deviation.

• 36 -

Evaluation item									Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)								Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No							Summary description
implemented them?																					Risk management V V V V
				Diversity core Director name	Basic composition										Industry experience			Profess	ional ability
					Nationality	Gender	Holding employee status	Age					Tenure of independent directors		Electronic components	Information and technology	Metals and machinery	Finance and accounting	Business management	Law	Risk management
								40-50 years old	51-60 years old	61-70 years old	71-80 years old	80 years old and over	Under 3 years	6-9 years
				Yun-Teng Chang	Republic of China	Male	V	V							V		V	V	V		V
				Hsuan-Bin Kuo	Republic of China	Male				V					V	V		V	V
				Hung-Liang Hsieh	Republic of China	Male					V				V		V	V	V	V	V
				Kuei-Yu Chang	Republic of China	Female	V	V							V	V		V	V	V	V
				Hsiu-Li Chen	Republic of China	Female				V					V			V	V
				Year Jan Industrial Co., Ltd. representative: Ming-Jie Cheng	Republic of China	Male					V					V	V		V		V

• 37 -

Evaluation item								Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)								Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No							Summary			description
																				nal ability Law Risk management V V V V V V
				Diversity core Director name				Ba	sic composition						Industry experience			P	rofessio	nal ability
					Nationality	Gender	Holding employee status			Age			Tenure of independent directors		Electronic components	Information and technology	Metals and machinery	Finance and accounting	Business management	Law	Risk management
								40-50 years old	51-60 years old	61-70 years old	71-80 years old	80 years old and over	Under 3 years	6-9 years
				Independent Director Ching-Ju Wu	Republic of China	Female			V				V		V	V		V	V	V	V
				Independent Director Meng-Chung Wu	Republic of China	Male					V			V	V		V	V	V	V	V
				Independent Director Chang-Kuo Feng	Republic of China	Male		V					V		V	V		V	V	V	V
			Diversity policy,			specific		management objectives, and implementation status:
			(1) The Company adopts a “Candidate Nomination System”. All directors (including independent directors) candidates are nominated and qualified and are approved by the Board of Directors for submission to the shareholders’ meeting for election.

• 38 -

Evaluation item	Status (Note1)	Status (Note1)	Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
			(2) In terms of the Company’s business development scale and its major shareholders’ shareholdings, and measuring its practical operational needs, nine director seats have been established. Among the current nine directors, directors with employee roles account for about 33% and independent directors account for about 33%; there are also three female directors. After re-election of the three independent directors, the average tenure is three years. (3) Among the Company’s directors, there are three individuals aged 40-49, three individuals aged 60-69, and three individuals aged 70-79 and above. Director background diversity: In addition to the three directors who actually participate in the operation of the Company, the remaining directors (including independent directors) are external professionals. Among them, there are two with business management backgrounds, one with a professional technical background, one with an accountancy background, one with a background in law, and one with industry research expertise.

• 39 -

Evaluation item				Status (Note1)	Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description
			(4) (5)	In order to enable the Board of Directors to achieve the aforementioned goals and enhance their effectiveness, the Company has a diversity policy for board members. The composition of board members should consider diversity. The number of directors who concurrently serve as company managers shall not exceed one-third of the directors, and the Company shall formulate appropriate diversity policies based on its own operations, business models, and development needs. It is advisable that it include, without being limited to, the following two general standards: 1. Basic conditions and values: Gender, age, nationality, culture, and so on; and 2. Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience. Physical management objectives and implementation status: Management objective Achievement status Directors who concurrently serve as company managers should not exceed one-third of director positions Achieved Board membership includes three women Achieved Independent directors shall serve no more than three consecutive terms Achieved Sufficient and diverse professional knowledge and skills Achieved
				Management objective	Achievement status
				Directors who concurrently serve as company managers should not exceed one-third of director positions	Achieved
				Board membership includes three women	Achieved
				Independent directors shall serve no more than three consecutive terms	Achieved
				Sufficient and diverse professional knowledge and skills	Achieved

• 40 -

Evaluation item			Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
(II) Has the Company voluntarily set up other functional committees other than the Remuneration Committee and the Audit Committee according to law? (III) Does the Company formulate the Board’s performance assessment and evaluation method, conduct performance evaluation annually and regularly, and report the results of the performance evaluation to the board of directors, and apply it to individual directors’ remuneration and nomination renewal?	V	V		In the future, it will be planned and set in accordance with operational needs. No major deviation.
			(II) The Company has set up a Remuneration Committee and an Audit Committee
			in accordance with the law, and will set up other functional committees in the
			future depending on operational needs.
			(III) The Company has established the “Board of Directors Performance Evaluation Measures” and conducts a board performance evaluation at the end of each year. The 2022 evaluation assignment was completed and reported to the Board of Directors on January 10, 2023, and the performance evaluation results all exceeded the standard. The performance evaluation results will be used as a reference when selecting or nominating directors, and the performance evaluation results of individual directors are linked with the Company’s operating performance and used as a reference for individual salaries. In addition, for the performance of members of the Board of Directors, the chairperson evaluates the Company’s performance based on the “Measures for Remuneration of Directors and Managers” and with reference to the individual contributions to Company’s performance, and sends it to the Remuneration Committee for review. The performance of the Board of Directors will depend on the Company’s operating conditions, future business risks and development trends of the industry, and director remuneration is appropriated in accordance with the provisions of the Articles of Incorporation.

• 41 -

Evaluation item			Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
(IV) Does the Company assess the independence of CPAs on an annual basis?	V		(IV) The Company regularly refers to Audit Quality Indicators (AQI) each year to evaluate the independence and appropriateness of CPAs, checking and evaluating that the results of each project are in line with independence and appropriateness. Furthermore, a Declaration of Detached Independence is obtained, whose statements include material financial interests, positions held, close business relationships, maintenance of an objective position, avoidance of providing non-audit services that may affect detached independence, and other matters. It has also been confirmed that there is no matter affecting the independence of CPAs. The appointment of CPAs and evaluation results for 2023 were reported to the Board of Directors on March 23, 2023. The Company’s evaluation of the independence and appropriateness of accountants is as follows: Item Accountant self-evaluation 1. As of the most recent attestation work, no replacements have been made for 7 years. ■Yes□No 2. There is no relationship of material financial interest with the client. ■Yes□No 3. Any inappropriate relationship with the client has been avoided. ■Yes□No 4. The accountant shall ensure the honesty, impartiality, and independence of its assistants. ■Yes□No 5. Financial statements of the service organization shall not be audited for attestation within 2 years prior to the practice. ■Yes□No	No significant deviation

• 42 -

Evaluation item				Status (Note1)		Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description
				6. The name of the accountant shall not be used by others.	■Yes□No
				7. Shares are not held in the Company or in affiliated enterprises.	■Yes□No
				8. No loans of funds have been made with the Company or its affiliated enterprises.	■Yes□No
				9. No joint investment or interest-sharing relationship has been undertaken with the Company or its affiliated enterprises.	■Yes□No
				10. No concurrent regular work with receipt of a fixed salary has been undertaken with the Company or its affiliated enterprises.	■Yes□No ■Yes□No
				11. There is no involvement with the management functions related to decision-making for the Company or its affiliated enterprises.
				12. No concurrent engagement in other businesses that may be subject to a loss of independence.	■Yes□No
				13. No relationship with management personnel of the Company as a spouse, direct blood relative or immediate in-law, or collateral blood relative within the second degree of kinship.	■Yes□No
				14. No charging of business-related commissions.	■Yes□No
				15. Not subject to disciplinary action or damage to the principle of independence as of this time.	■Yes□No

• 43 -

Evaluation item			Status (Note1)	Status (Note1)	Status (Note1)		Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
			2. Explanation of Audit Quality Indicator (AQI) dimensions: Dimension 1: Professionalism Item Indicator 1-1 Audit experience Audit experience of Accountant Hsin Yu-Ting Audit experience of Accountant Chu Yao-Chun Audit experience as an Engagement Quality Control Review (EQCR) accountant Audit experience of the audit personnel on the audit team (excluding accountants) at the management level and above			2021 Attestation service was performed for the first time in the fourth quarter of 2022 16 years 17 years 14.7 years
					Item	2021
				Indicator 1-1 Audit experience	Audit experience of Accountant Hsin Yu-Ting	Attestation service was performed for the first time in the fourth quarter of 2022
					Audit experience of Accountant Chu Yao-Chun	16 years
					Audit experience as an Engagement Quality Control Review (EQCR) accountant	17 years
					Audit experience of the audit personnel on the audit team (excluding accountants) at the management level and above	14.7 years

• 44 -

Evaluation item					Status (Note1)			Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No			Summary description
					Item	2021	Industry average
				Indicator 1-2 Training hours (firm level)	CPA training hours	101.7 hours	93.4 hours
					Training hours of audit personnel (excluding accountants) at the management level and above	84.1 hours	89.1 hours
				Indicator 1-3 Turnover rate (firm level)	Turnover rate of audit personnel (excluding accountants) at the management level and above	17.0%	17.4%
				Indicator 1-4 Professional support (firm level)	Proportion of professionals supporting the Audit Department during audits	7.1%	5.4%
					Proportion of professional case hours dedicated to listed companies	9.9%	6.5%

• 45 -

Evaluation item							Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)			Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No					Summary description
							Dimension 2: Quality control
							Item						2021			Industry average
					Indicator 2-1 Accountant workload (case level).		Number of public companies for which Accountant Yu-Ting Hsin acts as the main signatory						Attestation service performed for the first time in the fourth quarter of 2022			7 companies 54.7%
							Available working hours of Accountant Yu-Ting Hsin
							Number of public companies for which Accountant Yao-Chun Chu acts as the main signatory						9 companies
							Available working hours of Accountant Yao-Chun Chu						54.4%
					Item	Proportion of audit hours		2021 Audits (		case level)			2021 Audits (industry average)
								Accountant	Manage- ment	Audit personnel	Total		Accountant	Manage- ment	Audit personnel		Total
				Indicator 2-2 Audit input		Planning phase		1.1%	7.1%	20.6%	28.8%		2.3%	5.0%	23.5%		30.8%
						Execution phase		2.1%	20.1%	49%	71.2%		4.8%	12.7%	51.7%		69.2%
						Total		3.2%	27.2%	69.6%	100%		7.1%	17.7%	75.2%		100%

• 46 -

Evaluation item						Status (Note1)	Status (Note1)				Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No				Summary description
						Item		2021 Audits		(industry average)
				Indicator 2-3 Engagement Quality Control Review (EQCR) (case level)		Ratio of EQCR accountant review hours		0.6%		1.26%
				Indicator 2-4 Quality control support capability (firm level)		Number of people working as quality control personnel equivalent to full-time		35.1		47.4
						Proportion of quality control personnel supporting the Audit Department		2.5%		3.0%
						Dimension 3: Independence				2021 10.3% 10 yeasrs
							Item			2021
					Indicator 3-1 Non-audit service fees (caselevel)		Proportion of non-audit service fees inaudit cases			10.3%
					Indicator 3-2 Familiarity with customers (case level)		Cumulative number of years of auditing cases in the firm’s annual financialstatements			10 yeasrs

• 47 -

Evaluation item				Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description
				Dimension 4: Supervision Indicator 4-1 Absence of external inspections and sanctions (firm level) Item 2020 2017 2014 Financial Supervisory Commission firm inspection Number of quality control deficiencies 1 2 2 Industry range (lowest to highest) 0~4 1~2 0~4 Note: In response to the investigation of deficiencies by the competent authorities, the firm has specifically analyzed the causes of deficiencies and strengthened the formulation of improvement measures while simultaneously strengthening advocacy and control. Based on the results of the examinations during the above years, no repeated inspection has occurred. Disciplinary actions and sanctions 2021 2020 2019 2018 2017 The number of cases of disciplinary actions for accountants and the number of cases classified under Article 37 of the Securities and ExchangeAct 0 0 2 1 0
				Disciplinary actions and sanctions	2021	2020	2019	2018	2017
				The number of cases of disciplinary actions for accountants and the number of cases classified under Article 37 of the Securities and ExchangeAct	0	0	2	1	0

• 48 -

Evaluation item				Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description
				Indicator 4-2 Issuance of improvement letters by the competent authority (case level) Ratio of deficiency improvement letters issued by the competent authority 2021 2020 2019 Lead signing accountant (number of letters/average number of listed firms attested) Attestation service was performed for the first time in the fourth quarter of 2022 Deputy signing accountant (number of letters/average number of listed firms attested) 0.0% 0.0% 0.0% (0/13) (0/10) (0/7) Industry range (lowest to highest) 0%~0.59% 0.25%~1.20% 0.30%~1.20%
				Ratio of deficiency improvement letters issued by the competent authority	2021	2020	2019
				Lead signing accountant (number of letters/average number of listed firms attested)	Attestation service was performed for the first time in the fourth quarter of 2022
				Deputy signing accountant (number of letters/average number of listed firms attested)	0.0%	0.0%	0.0%
					(0/13)	(0/10)	(0/7)
				Industry range (lowest to highest)	0%~0.59%	0.25%~1.20%	0.30%~1.20%
IV. Is the TWSE/TPEX listed company equipped with qualified and an appropriate number of corporate governance personnel, and does it appoint a corporate governance officer responsible for corporate governance related matters (including but not limited to providinginformation needed	V		The Company passed a resolution of the Board of Directors on May 10, 2022, to set up a Corporate Governance Officer responsible for corporate governance related matters. The main responsibilities include providing directors with the information needed to carry out their business and arranging continuing education; handling matters related to the Board of Directors’ meetings, shareholders’ meetings and other functional committees in accordance with the law; handling company registration, making minutes of Board of Directors’ meetings and shareholders’ meetings; preparing annual reports of shareholders’ meetings, etc.; and after meetings, the Corporate Governance Officer is responsible for reviewing the release of important information on important resolutions oftheBoard of Directors’ meetings and shareholders’ meetings and					No major deviation.

• 49 -

Evaluation item			Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
by directors and supervisors to carry out business, assisting directors and supervisors to comply with laws and regulations, handling matters related to Board of Directors’ meetings and shareholders’ meetings in accordance with the law, and producing minutes of Board of Directors’ meetings and shareholders’ meetings)?			ensuring the legality and correctness of the contents of releases in order to ensure the equivalence of investor transaction information; implement corporate governance; protect the rights and interests of shareholders; and strengthen the functions of the Board of Directors.
V. Has the Company established communication channels with stakeholders (including but not limited to shareholders, employees, customers and suppliers), set up a special section for stakeholders on the Company’s website, and does it respond appropriately to important corporate social responsibility issues of concernto stakeholders?	V		The Company’s website features a “Stakeholder Area” where stakeholders can communicate with the Company by e-mail, telephone, fax, etc., if necessary. Furthermore, a spokesperson has been established as a communication channel with stakeholders to properly respond to any material corporate social responsibility issues of stakeholders’ concerns. The Company has smooth communication channels with customers, suppliers, banks, and employees, respecting their legitimate rights and interests.	No major deviation.
VI. Has the Company appointed a professionalshare	V		The company has appointed CTBC Bank to handle matters related to the shareholders’ meeting and stockaffairs.	No significant deviation

• 50 -

Evaluation item			Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
registration and investors service agent for handling matters pertaining to the shareholders’ meeting?
VII. Public Disclosure (I) Has the Company set up a website for the disclosure of information on the financial position and operation, as well as corporate governance? (II) Has the Company adopted other means for disclosure (such as setting up an English-language website, appointing designated persons for the collection and disclosure of information on the Company, implementing a spokesperson system, and placing institutional investor conferences on the website)? (III) Does the Company announce and declareits	V V	V	(I) The Company has disclosed the relevant financial, business and corporate governance implementation on the Company’s website. The URL is:https://www.welltend.com.tw. Investors can check relevant information on the website. (II) For the collection and disclosure of the Company’s information, all is collected and reported by the responsible person designated by the supervisor. Furthermore, a spokesperson and deputy spokesperson system is implemented to explain the Company’s operating performance and other information to the outside world, ensuring information that may affect the decision-making of shareholders and stakeholders can be disclosed in a timely manner. In addition, stock affairs personnel disclose the Company’s information on the Market Observation Post System in accordance with laws and regulations. (III) The Company is currently reporting financial statements and operating conditionsforeach month inaccordancewiththe specified date of “Business	No significant deviation

• 51 -

Evaluation item	Status (Note1)	Status (Note1)	Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
annual financial report within two months after the end of the fiscal year, and announce and declare the first, second, and third quarter financial reports and the monthly operating situation as early as possible within the prescribed timelimit?			Matters to be Undertaken by Issuers of Listed Securities”. It has not announced and submitted annual financial statements within two months after the end of the fiscal year or announced operations in advance before the specified deadline.
VIII. Is there any other material information that would facilitate an understanding of the implementation of corporate governance (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholder rights, the continuing education of directors and supervisors, the implementation of a risk management policy and standard of risk assessment, the implementation of a	V		(I) Employee rights and interests: The Company has a comprehensive salary and welfare system to give employees reasonable treatment and rewards. Furthermore, we emphasize the rights and interests of employees and there are measures for the implementation of labor-management conferences to ensure that the implementation of employees’ rights and interests have channels that can be followed. The Company has established an employee Welfare Committee and appropriates a monthly benefit fund. The Welfare Committee regularly arranges birthday parties, employee travel, bonuses for the three major holidays, health checks, and other benefit matters. (II) Investor relations: Through the exchange website and the annual report published every year, regular disclosure is made of the Company’s financial statements and analysis of the business situation and data. We have set up a dedicated unit for investor relations, and dedicated personnel are assigned to deal with investor suggestions and questions in order to maintain good communication channels. (III) Stakeholder rights: The Company upholds the principle of integrity and good	No significant deviation No significant deviation

• 52 -

Evaluation item	Status (Note1)	Status (Note1)	Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
customer policy, and professional liability insurance coverage for the directors and supervisors)?	V		communication channels, and has established a spokesperson as a channel to communicate with stakeholders and safeguard their due legal rights and interests. (IV) Employee rights and employee care: The Company attaches great importance to the rights and interests of employees and expresses concern for employees, and fosters harmonious labor relations. We have formulated sexual harassment prevention and control measures in the workplace and complaint management measures to establish a working environment of gender equality. The Employee Welfare Committee organizes various travel activities from time to time, and the Company also has comprehensive education and training courses and lean professional skills in order to assist new colleagues to be ready for work as soon as possible. We do so through pre-employment training, arranging education and training courses in accordance with job categories, and assisting new colleagues to understand industry positioning and the Company’s future development direction as quickly as possible. The Company also conducts regular security checks and announces safety inspections including alarm systems, escape systems, fire extinguishers, etc., to ensure the personal safety of employees. (V) Supplier relations: the Company has always maintained good relationships and communication channels with suppliers, and passed the CMMI-SW V1.2 Maturity Level 2 evaluation. Its relevant content has certain standards for the management process of the supplier agreement. Therefore, the relationships with suppliers can be long-term and stable. (VI) Community care: We hold regular meetings with the supervisory commission to communicate about environmental health and safety and maintain good relationships with community residents.

• 53 -

Evaluation item	Status (Note1)	Status (Note1)	Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
			(VII) Implementation of risk management policies and risk measurement standards: The Company attaches great importance to risk management and formulates various internal regulations for various risks in accordance with the law, carrying out various kinds of risk management and evaluation. (VIII) Customer policy implementation: The Company attaches great importance to the opinions of customers. There is a customer complaint handling unit with maintaining high-quality customer service as the highest goal, to fully understand and implement customer policies and regularly review and propose improvement plans while insisting on continuous improvement of service quality, actively maintaining a good relationship with customers, paying attention to customer commitments, and providing attentive service. (IX) The Company’s purchase of liability insurance for directors: The Company has purchased liability insurance for directors (for the period of October 25, 2022, to November 25, 2023). (X) Continuing education of directors: Disclosed in the “Corporate Governance Area of the Market Observation Post System” (https: //www.mops.twse.com.tw )

• 54 -

Evaluation item	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)	Status (Note1)		Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
	V		(XI)Corporategovernance officer Date Organizer 2022.07.26 Internal Audit Association of the Republic of China 2022.08.23 2022.10.12 Securities & Futures Institute 2022.11.11			training: advanced trainingin 2022:		No significant deviation
				Date	Organizer	Course title	Hours
				2022.07.26	Internal Audit Association of the Republic of China	“Insider Trading” and “Report Falsification”: Practical Discussion and Countermeasures	6
				2022.08.23		“Manufacturing Material System” Audit Practice	6
				2022.10.12	Securities & Futures Institute	“2022 Compliance Advocacy Seminar	3
						for Compliance with Insider Trading
						Laws”
				2022.11.11		“TWSE and TPEx Listed Companies:	3
						Seminar on Derivatives Trading
						Strategies and Market Outlook”
IX. Corrective actions taken in response to the results of the Corporate Governance Evaluation conducted by the Corporate Governance Center of the Taiwan Stock Exchange Corporation, and the priority of actions for issues pending corrective action in the most recent year. (Not applicable for companies not evaluated by TSEC) In 2022, the following items were improved for corporate governance evaluation: (I) Continued to increase the number of disclosures on the Company website, improving information transparency. (II) Specifically disclosed the diversity policy of the Board of Directors, specific management objectives, and implementation. (III) Remuneration Committee members all comprise independent directors and their terms of office shall not exceed nine years. (IV) Set up an Audit Committee and disclosed its professional qualifications and experience, annual work priorities, and operational status. (V) A Corporate Governance Officer has been established for the Company, and the terms of reference and training status were also stated in the annual report and onthewebsite.

• (V) A Corporate Governance Officer has been established for the Company, and the terms of reference and training status were also stated in the annual report and on the website.

• 55 -

Evaluation item	Status (Note1)	Status (Note1)	Status (Note1)	Deviation from the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
Priorities that are expected to be strengthened for 2023: (I) The feasibility of Chinese and English financial statements during the disclosure period and the simultaneous reporting of major information in English, in order to facilitate foreign-funded institutions to obtain English-language information and serve more investors. (II) In the future, the Company will promote the operation of social responsibility in accordance with the actual situation and needs, and set up a dedicated unit to strengthen disclosure on the website. (III) Continually evaluate thefeasibility of futureimprovementforportions thathavenot yet beenscored.

• (II) In the future, the Company will promote the operation of social responsibility in accordance with the actual situation and needs, and set up a dedicated unit to strengthen disclosure on the website.

• 56 -

• (IV) Membership and operational status of the Remuneration Committee: 1. Information of Remuneration Committee Members

			December31,2022 Professional qualifications and experience (Note 2) Status of independence (Note 3) Number of other public companies where the member concurrently serves as remuneration committee member The Company’s Remuneration Committee comprises three independent directors. For the professional qualifications, experience and independence of the committee members, please refer to Disclosure of Directors’ Professional Qualifications and Independence in this Annual Report (page 14-15 ). 2 0 1 0 Qualifications: Has more than 20 years of work experience in business, finance, accounting, and Company business, and has not been involved in any of the circumstances specified under Article 30 of the Company Act. Experience: Chairperson, Taiwan Goods Corporation In line with independence given the absence of any of the circumstances specified in Article 6, Paragraph 1 of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded overthe Counter. 0	December31,2022 Professional qualifications and experience (Note 2) Status of independence (Note 3) Number of other public companies where the member concurrently serves as remuneration committee member The Company’s Remuneration Committee comprises three independent directors. For the professional qualifications, experience and independence of the committee members, please refer to Disclosure of Directors’ Professional Qualifications and Independence in this Annual Report (page 14-15 ). 2 0 1 0 Qualifications: Has more than 20 years of work experience in business, finance, accounting, and Company business, and has not been involved in any of the circumstances specified under Article 30 of the Company Act. Experience: Chairperson, Taiwan Goods Corporation In line with independence given the absence of any of the circumstances specified in Article 6, Paragraph 1 of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded overthe Counter. 0	December31,2022 Professional qualifications and experience (Note 2) Status of independence (Note 3) Number of other public companies where the member concurrently serves as remuneration committee member The Company’s Remuneration Committee comprises three independent directors. For the professional qualifications, experience and independence of the committee members, please refer to Disclosure of Directors’ Professional Qualifications and Independence in this Annual Report (page 14-15 ). 2 0 1 0 Qualifications: Has more than 20 years of work experience in business, finance, accounting, and Company business, and has not been involved in any of the circumstances specified under Article 30 of the Company Act. Experience: Chairperson, Taiwan Goods Corporation In line with independence given the absence of any of the circumstances specified in Article 6, Paragraph 1 of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded overthe Counter. 0
	Identity (Note 1)	Terms Name	Professional qualifications and experience (Note 2)	Status of independence (Note 3)	Number of other public companies where the member concurrently serves as remuneration committee member
	Independent Director (Convener)	Ching-Ju Wu	The Company’s Remuneration Committee comprises three independent directors. For the professional qualifications, experience and independence of the committee members, please refer to Disclosure of Directors’ Professional Qualifications and Independence in this Annual Report (page 14-15 ).		2
	Independent Director	Meng-Chung Wu			0
	Independent Director	Chang-Kuo Feng			1
	Independent Director	Tine-Shi Keo (Note 1)			0
	Others	Keng-Lin Chen (Note 1)	Qualifications: Has more than 20 years of work experience in business, finance, accounting, and Company business, and has not been involved in any of the circumstances specified under Article 30 of the Company Act. Experience: Chairperson, Taiwan Goods Corporation	In line with independence given the absence of any of the circumstances specified in Article 6, Paragraph 1 of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded overthe Counter.	0
Note 1: Resigned on August 9,			2022.

1. Responsibilities of the Remuneration Committee:

2. The Remuneration Committee holds at least two meetings per year in accordance with regulations, and members should exercise the due care of a good administrator to faithfully perform the following duties, and put forward suggestions to the Board of Directors for discussion:

3. (1) Formulate and regularly review the policies, systems, standards and structures of directors and managers’ performance evaluation and remuneration.

4. (2) Regularly evaluate and determine the remuneration of directors and managers.

5. (3) Regularly evaluate the achievement of the performance objectives by the Company’s directors and managers, and determine the details and amounts of salary and compensation for individual managers based on the evaluation results from the performance evaluation criteria.

6. The Remuneration Committee of the Company counts 3 members.

7. 57 -

8. The current term of members: August 13, 2019, to June 13, 2022. The Remuneration Committee met 2 times (A) in the most recent year (in 2022 to the expiration of the current term). The qualifications and attendance of members were as follows:

Job Title	Name	Actual number of attendances (B)	Number of attendances by proxy	Actual attendance rate (%) (B/A)	Notes
Convener	Meng-Chung Wu	2	0	100%	-
Member	Tine-Shi Keo	2	0	100%	-
Member	Keng-Lin Chen	2	0	100%	-

1. Term of office for new members: August 9, 2022, to June 13, 2025. The Remuneration Committee met 1 time (A) in the most recent year (from assumption of office in 2022 through December 31). The qualifications and attendance of members were as follows:

Job Title	Name	Actual number of attendances (B)	Number of attendances by proxy	Actual attendance rate (%) (B/A)	Notes
Convener	Ching-Ju Wu	1	0	100%	New term since August 9,2022
Member	Meng-Chun g Wu	1	0	100%	Consecutive term since August 9, 2022
Member	Chang-Kuo Feng	1	0	100%	New term since August 9,2022
Other matters to be recorded: I. If the Board of Directors does not adopt or amend the recommendations of the Remuneration Committee, the date and period of the Board of Directors, the content of the proposal, the resolution of the Board of Directors, and the Company’s handling of the opinions of the Remuneration Committee should be stated (if the remuneration approved by the Board of Directors exceeds the recommendation of the Remuneration Committee, the differences and reasons should be stated): None. II. On resolutions of the Remuneration Committee, if members have objections or reservations and have records or written declarations, the date, period, proposal content, opinions of all members, and the handling of the opinions of the members shall be stated: None. III. Operations in the most recent year: Meeting date/session Proposal content Resolution result Company’s response to Remuneration Committee’s opinions 2022.1.18 9th meeting of 1. Reviewed the 2020 annual bonus distribution for current directors and Approved by all members Submitted to the Board of Directors

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	the 4th term	managers.	present	and approved by all directors present
	2022.3.22 10th meeting of the 4th term	1. Deliberated the Company’s remuneration distribution for directors and supervisors and remuneration distribution for employees for 2021. 2. Deliberated new manager positions and salaryreceived.	Approved by all members present	Submitted to the Board of Directors and approved by all directors present
	2022.8.18 1st meeting of the 5th term	1. Deliberated the formulation of the “Measures for Remuneration of Directors and Managers” by the Remuneration Committee of the Company. 2. Deliberated the review of employee remuneration distribution for managers in 2021 by the Remuneration Committee of the Company. 3. Deliberated the review made by the Company’s Remuneration Committee and the changes in manager salaries. 4. Deliberated the review made by the Company’s Remuneration Committee of theremunerationof independent directors.	Approved by all members present	Submitted to the Board of Directors and approved by all directors present

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• (V) Implementation of sustainable development promotions and the deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof:

Evaluation item				Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description (Note 2)
I. Does the Company establish a			1.	In accordance with the Company’s “Sustainable Development			No significant deviation
governance structure to promote	V			Best Practice Principles”, the executive team comprises a
sustainable development, and set up a				high-level management team to implement sustainable
designated full-time (or part-time) unit to				operations, including the Chairperson’s Office, General Administration Office, Audit Office, and business implementation units to effectively manage the risks undertaken.
promote sustainable development, while
the Board of Directors authorizes senior
management to handle this and the			2.	Organizational operations: The Corporate Governance Officer is
Board of Directors supervises the				appointed with the approval of the Board of Directors through the
situation?				manager of the Investment Management Department. The
				General Administration Office operates across departments in the
				form of a team and reviews the goals and plans of each group
				from time to time, reporting the effectiveness of operations in
				management meetings on a quarterly basis. Group Implementation unit Handling instructions Corporate Governance Investment Management Department 1. Establish and implement various policies and measures related to corporate governance, and promote the quality and performance of the Board of Directors. 2. Improve the corporate governance structure and information disclosure in line with corporate governance trends. 3. Implement internal control mechanisms to ensure that relevant personnel genuinely comply with orderspecifications.
				Group	Implementation unit	Handling instructions
				Corporate Governance	Investment Management Department	1. Establish and implement various policies and measures related to corporate governance, and promote the quality and performance of the Board of Directors. 2. Improve the corporate governance structure and information disclosure in line with corporate governance trends. 3. Implement internal control mechanisms to ensure that relevant personnel genuinely comply with orderspecifications.

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Evaluation item					Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No			Summary description (Note 2)
				Group	Implementation unit	Handling instructions
				Ethical management	Management Office	1. Establish and continuously improve ethical management policies and norms while implementing ethical policy advocacy, training, and promotions. 2. Implement labor relations, employee health and safety.
					Business Office	1. Maintain customer privacy and benefits and implement product life cycle management. 2. Evaluate raw material purchases and optimize supply chain management.
				Environmental development	General Affairs Department	1. Promote environmental protection and energy saving policies and implement waste recycling plans. 2. Provide employees with a friendly workplace environment that is safe and healthy.
				Employee care	Management Department	1. Formulate talent cultivation and development plans and recruit outstanding talent. 2. Construct and improve the salary and welfare system and implement the rights and interests of employees. 3. Establish multiple communication channels with a commitment to labor-management harmony and promoting employee health protection.

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Evaluation item			Status (Note 1)	Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			3. In order to pursue the goal of corporate and environmental sustainability, Welltend Technology has established a sustainable management policy that calls for adhering to Sincerity and Diligence; complying with all laws and regulations; protecting rights and interests; strengthening the functions of the Board of Directors; and reducing corporate risks. We also devote attention to the quality of customers, products, and services while reducing operating costs, improving the happiness of all employees, and fulfilling social responsibility as our mission. Furthermore, we consider the environment, employee health and safety, and human rights in order to protect the rights and interests of stakeholders. Moreover, beyond regularly promoting our Sustainable Development Best Practice Principles in all management meetings and business meetings, we have established an internal awareness of respecting social ethics and paying attention to the rights and interests of stakeholders while pursuing sustainable operations and profit, with an emphasis on the environment, society, and corporate governance.
II. Does the Company follow the principle of materiality, conduct risk assessments on environmental, social and corporate governance issues related to company operations, and formulate relevant risk management policies or strategies?	V		The Company environmental Major topic Environment		and its subsidiaries have dedicated management units for management to assist relevant departments. Risk assessment Risk management policies or strategies Environmental protection 1. We have introduced the ISO 14001 environmental management system (valid from August 7, 2020, to August 6, 2023) to raise environmental awareness among departments. In addition, we manufacture RoHS compliant products in accordance with customer standard
				Major topic	Risk assessment	Risk management policies or strategies
				Environment	Environmental protection	1. We have introduced the ISO 14001 environmental management system (valid from August 7, 2020, to August 6, 2023) to raise environmental awareness among departments. In addition, we manufacture RoHS compliant products in accordance with customer standard

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Evaluation item					Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No			Summary description (Note 2)
						specifications. 2. The Company has obtained certification in the ISO 9001 quality management system (valid from August 7, 2020, to August 6, 2023), the ISO 14001 environmental management system (valid from August 7, 2020, to August 6, 2023), and the IATF 16949 automotive industry quality management system (valid from January 13, 2020, to January 12, 2023). Through continuous operation of the above management systems, the Company’s risks in its operating activities can be grasped and responded to in real time in respect to the environment, employee safety, customers, suppliers, and so on.		No significant deviation
				Social	Safe work environment	1. Provide employees with a safe and healthy living and work environment. 2. Conduct employee health checks. 3. Provide employee training and safety protection. 4.Set up a dedicated breastfeedingroom.
				Corporate governance	Information security legal compliance	We ensure that all the Company’s personnel comply with relevant laws and regulations. Due to the increasing dependence on information technology in business activities, we have strengthened the management of information security risks and formulated information security policies: 1. The Company has established an “Information Security Committee” to improve information security management with the head of the

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Evaluation item					Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No			Summary description (Note 2)
						management office serving as the head of security. The committee holds regular meetings, confirms the achievement status and review of information security performance indicators as a basis for continuous improvement, and ensures the continued steady operation of the information security management system. 2. The Company attaches great importance to information security and the protection of confidential material. We have set up firewalls, information security equipment, anti-virus software, and other information security protection measures to ensure stable operation of the Company’s operating systems. 3. We regularly conduct disaster recovery drills for critical systems to ensure that critical systems are not affected by external factors in the normal operation of the Company. 4. We regularly conduct information security advocacy among employees.
III. Environmental Issues (I) Has the Company established an appropriate environmental management system based on its industry characteristics?	V			(I) The Company continues to operate the ISO 9001 quality management system (valid from August 7, 2020, to August 6, 2023) and the ISO14001 environmental management system (valid from August 7, 2020, to August 6, 2023) to fulfill the social responsibility of protecting the Earth’s environment. All comply with national and local environmental protection laws, effectively control waste water, waste gas and noise, rationally dispose of waste, recycle as much as possible, and gradually use environmentally-friendlymaterials toreduce environmental				No significant deviation

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Evaluation item	Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			damage. Garbage disposal is handled in accordance with the relevant regulations of the building management committees. Moreover, fire safety inspections are carried out regularly every year. Usage of resources such as electricity, water, and air-conditioning aremanaged by setting targets.
(II) Has the Company committed itself to improving energy efficiency and to using recycled materials with low impact on the environment?	V		(II) The Company actively promotes various energy reduction measures, choosing equipment with high-energy and energy-saving designs and improving energy efficiency (including paperless, power saving, waste reduction and recycling, etc.). We also classify and reuse recyclable resources or sell them to resource recovery yards for energy reuse, optimizing energy usage efficiency. Introduction of office energy-saving equipment and reduction of carbon emissions: We prioritize the use of energy-saving standard LED lighting fixtures, implement energy saving and carbon reduction, and encourage employees to save energy. Resource utilization and regeneration: Offices can recycle and disassemble and reuse resources, including information computer equipment and parts, which are used for the maintenance of employee computer parts and as maintenance accessories, and the ecological load is reduced by recycling. Packaging material recycling and reuse and usage of environmentally friendly packaging materials: Empty boxes left over after purchases are recycled and used for shipping packaging, and the decomposable inflatable mat packaging material is used in the boxes. For bulk shipments using reusable “turnover crates”, waste and defective products generated during the manufacturing process are entrusted to	No significant deviation

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			qualified waste disposal companies for disposal to reduce damage to the environment and ecology.
(III) Does the Company assess the potential risks and opportunities of climate change for the Company now and in the future, and has it taken relevant countermeasures?	V		(III) In assessing potential risks confronted due to climate change, at the operational level, there are mainly resource shortages, increased cost of raw materials, instability in transportation demand, and extreme weather that will threaten the safety of employees, and so on. All of these may directly impact the Company’s operations and cause losses. To alleviate the increasingly serious problems of global warming and climate change, all countries are actively promoting energy conservation and carbon reduction measures and the use of various green energy sources to reduce carbon dioxide emissions. Governments of all countries have policies to subsidize electric vehicles, encouraging automobile manufacturers to produce electric vehicles, and build charging stations, and encouraging people to buy electric vehicles instead of internal combustion engine vehicles. Compared with traditional internal combustion engine vehicles, electric vehicles use more electronic components. The demand for wires and wire harnesses as a transmission medium between the manufacture of electronic components will also increase, and this will additionally drive the development of green energy industries and the green economy.	No significant deviation
(IV) Does the Company count greenhouse gas emissions, water consumption and the volume of total waste in the past two years, and formulate policies for greenhouse gasreduction,water	V		(IV) The Company sets clear goals for environmental protection and energy conservation, and has management policies for the use of various resources and environmental protection and a commitment to achieving a friendly low-pollution, easy-to-recycle environment. The Company continues to pass	No significant deviation

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
reduction, or other waste management?			the evaluation of external audit units every year, obtaining ISO 14001 environmental management system certification. The Company continues to care about and implement environmental protection related issues and environmental improvement, which is why the environmental protection policy mainly focuses on energy saving, volume reduction, habit changes, and effective control. 1. Energy savings and carbon reduction policies: (1) Office area lighting has been replaced with energy-saving LED fluorescent lamps. In analyzing electricity usage through monthly bills, it is estimated that this has already saved more than 5% in 2022 compared with the traditional lighting in the past. (2) Timely adjustments are made to external air in the office area according to seasonal changes. When the weather turns cooler and the temperature is low, it can effectively reduce the power consumption of the air conditioners and fans. The air-conditioning temperature in the office area is set at a normal temperature of 26-28 degrees to avoid excessive energy consumption.

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			(3) In summer, when the sun is strong, we add curtains to doors and windows to prevent radiant heat from entering the rooms. (4) We turn off several fluorescent lamps during lunch breaks and siestas. (5) Office areas are completely non-smoking and maintains air circulation. 2. Water conservation policies: (1) We put up water saving slogans and get into the habit of turning off the water at all times. (2) If a water leak is found, it is reported immediately to avoid wasting water. (3) We control the ambient temperature of offices through central monitoring equipment, reducing the operating capacity of air-conditioning equipment to do a good job in saving water. 3. Greenhouse gas reduction policies: (1) We promote paperless policies and promote electronic forms to reduce paper usage. (2) We promote the reuse of recycled paper to reduce paper usage. (3) We replace old equipment, improve work efficiency, and align with the trend of green environmental protection. (4) The Company cooperates with the government to actively promote green procurement. For suppliers who require their materials and production processes to meet environmental protection standards, we select products andraw materials that conformto the green	No significant deviation

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			manufacturing process. We hope that through green procurement, we can reduce the environmental impact and create an environmental ecological balance of coexistence and mutual benefit. 4. Waste management policies: (1) Resource recycling and classification mechanisms should be implemented for batteries, optical discs, toner cartridges, paper, etc. (2) We promote the reduction of waste among all employees. (3) Waste generated by the Company is handled in accordance with laws and regulations and a resource recovery mechanism is implemented. (4) We uphold mandatory compliance with resource recycling regulations to implement environmental protectionpolicies.
			5. Annual greenhouse gas emissions in the past two years (water and electricity discharge): The environment is deteriorating in the face of global climate change. The Company will continue to promote energy saving, carbon reduction, and reduction of greenhouse gas emissions as we take environmental sustainable development as our main focus. Furthermore, we shall fulfill our corporate social citizenship responsibilities in response to the government’s environmental policies, letting colleagues develop the habit of saving energy and reducing carbon in daily life. We do so to achieve the goal of reducing carbon emissions by 3-5% every year,withthemedium/long-term	No significant deviation

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Evaluation item				Status (Note 1)	Status (Note 1)	Status (Note 1)	Status (Note 1)	Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description (Note 2)
				goal of reducing carbon emissions by 15-20% within 5-10 years. Annual greenhouse gas emissions in the last two years: Item Year Water usage Electricpower/Mobile combustion Degrees Carbon emissions (kg) Degrees Carbon emissions (kg) Scope 1 Scope 2 2021 2,229 133.86 278,053 147,243 5,714 141,529 2022 2,841 159.00 299,280 156,518 5,333 151,185 Ratio of increase (decrease) 27.45% 18.78% 7.63% 6.29% (6.67%) 6.82%
				Item Year	Water usage		Electricpower/Mobile combustion
					Degrees	Carbon emissions (kg)	Degrees	Carbon emissions (kg)	Scope 1	Scope 2
				2021	2,229	133.86	278,053	147,243	5,714	141,529
				2022	2,841	159.00	299,280	156,518	5,333	151,185
				Ratio of increase (decrease)	27.45%	18.78%	7.63%	6.29%	(6.67%)	6.82%
IV. Social Issues (I) Has the Company established relevant policies and procedures in accordance with applicable legal rules and the International Convention on Human Rights?	V		(I) In addition to formulating work rules in accordance with relevant government labor laws and regulations such as the “Labor Standards Act” and “Gender Equality in Employment Act”, and in strict compliance with the laws and regulations of the location of each operating base, labor committee members can submit their opinions through quarterly labor-management meetings. The Company recognizes and supports compliance with the “United Nations Universal Declaration of Human Rights”, the “Global Compact”, the “International Labour Organization Convention”and other international human rights conventions,								No significant deviation

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			and respects internationally recognized basic human rights. Furthermore, in accordance with the guiding principles of the aforementioned norms, all members of the Company can be treated fairly and with dignity, and the Company’s internal management plans are formulated thereby. 1. Creating an environment of gender equality: The Company follows the provisions of the “Gender Equality in Employment Act” and practices no gender discrimination against employees. Therefore, no distinction is made between men and women in relation to employee performance, department performance, and salary systems to formulate relevant operating standards. 2. The Company treats all employees fairly and with respect, and implements human rights management in accordance with government labor laws and our own policies. 3. Helping employees maintain physical and mental health and work-life balance: We pay attention to the health of employees, offering regular employee health checks every two years for active employees to prevent potential health risks. We thus help employees maintain physical and mental health and work balance to enhance the competitiveness of the Company. 4. Establishing channels for sexual harassment complaints: We provide telephone, fax and e-mail for accepting sexual harassment complaints. If a complaint is received, a dedicated handler will be designated to coordinate and handle it. At the same time, we set up a sexual harassment complaint handling investigation committee where not less than halfofthe committeemembers arewomen.

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			5. Establishing effective communication channels: We have established effective multi-directional communication channels to actively understand the needs of employees and their expectations of the Company. This serves as an important reference for formulating corporate social responsibility policies and related plans. Staff communication channels include: personnel announcements, internal employee complaints, channels for sexual harassment complaints, complaint mailboxes for stakeholders, the employee welfare committee, labor-management meetings, and so on. 6. Prohibition of forced labor: The Company’s daily and weekly normal working hours and extended working hours, vacations, special vacations, and all other leave stipulations for employees are in compliance with laws and regulations. We do not force or coerce any unwilling personnel to perform labor services. 7. Elimination of unlawful discrimination to reasonably ensure equal employment opportunities: The Company does not discriminate against employees and job seekers based on factors such as race, class, language, ideology, religion, party affiliation, place of origin, place of birth, gender, sexual orientation, age, marital status, appearance, facial features, physical and mental disabilities, horoscope, blood type or other factors resulting in unfair treatment in respect to labor rights and interests in employment, salary and benefits, training opportunities, promotion, dismissal, or retirement.

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
(II) Has the Company formulated and implemented reasonable employee welfare measures (including salary, vacation and other benefits, etc.), and does it appropriately reflect business performance or results in employee compensation?	V		(II) The Company has established relevant benefit measures and remuneration and incentive policies and bonuses, and compensation is issued in accordance with the Company’s operating conditions and the achievement rate of personal performance goals, thus encouraging employees to grow together with the Company. 1. Employee benefit measures: In addition to the Company’s commitment to creating harmonious labor relations, we are even more committed to improving employee benefits. All leave systems are in accordance with labor laws and regulations, and we have set up an employee welfare committee in accordance with the law to offer appropriate benefit funds for various activities (including travel activities, birthday parties, and departmental dinner parties). In addition, the Company also provides various welfare subsidies for regular health checkups, weddings and funerals, and emergency relief. Moreover, to implement diversity in the workplace, we ensure that employees do not suffer any discrimination or unfair treatment based on factors such as gender, age, class, etc. At present, women account for 28% of employees and 13% of senior executives. In addition to handling statutory insurance in accordance with relevant government laws and regulations, the Company further plans employee group insurance and annual health checkups to protect the health and safety of employees, and all related expenses are borne by the Company.	No significant deviation

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			2. In addition to employees receiving a fixed salary, the Company pays performance bonuses in accordance with the “Employee Performance Evaluation Measures” and the “Business Bonus Measures”. The quarterly payment of performance bonuses offers an immediate incentive and has a high performance correlation. It not only reflects the Company’s overall operating profit, but is also issued based on individual performance. This forms a reasonable linkage between the Company’s operating performance and employee salaries and bonuses. We conduct performance appraisals twice a year to fairly and reasonably assess the work performance of colleagues and evaluate their future development potential. We do so in order to facilitate the effective use of the Company’s human resources, and as the basis for personnel salary adjustment, promotion, job rotation, and bonus issuance. Furthermore, the operating performance is reflected in employee dividends in accordance with the Company’s Articles of Incorporation.
(III) Has the Company provided a safe and healthy work environment for the employees, and related education on occupational safety and health for the employees at regular intervals?	V		(III) 1. Insurance and condolence pay: The Company complies with relevant provisions of labor laws and regulations and both management and employees formulate employment contracts, work rules and various management regulations in accordance with regulations. All operations are in proper compliance with the norms of the Labor Standards Act. All employees participate in labor insurance and health insurance, group and travel safety insurance are also provided for employees for employee illness and death and for relief provision of spouse and casualty assistance.	No significant deviation

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			2. Maintenance and inspection of all equipment: The Company conducts regular fire safety inspections every year, including alarm systems, escape systems, fire extinguishers, etc., as well as public safety inspections. We regularly invite external manufacturers to conduct fire safety inspections every year and conduct public safety inspections every four years. We regularly entrust manufacturers to maintain and inspect the water quality, ensuring the safety of drinking water for employees to provide a safe and healthy environment. 3. Disaster preparedness measures and response: In order to maintain the safety and health of employees, we promote safety and health operations and disseminate fire protection advocacy videos and provide relevant health education information by email every six months. We thus cultivate employees’ emergency response capabilities and safety concepts and strengthen the cognitive ability of employees to reduce accidents caused by unsafe behavior. The Company has two Class A occupational safety and health business supervisors and one first-aider. 4. Access control security: The Company’s buildings are equipped with strict access control monitoring systems during the day and at night. During holidays, we contract with a security company to maintain office security. 5. Physical health: We have smoking-free management in office buildings to provide a safe and healthy work environment for employees. We regularly implement office cleaning and disinfection and carry out pandemic prevention advocacy. We also conduct health checks for employees every two years, and we send a short video on fire prevention advocacy and provide relevant health and education information by email every six months. We thus cultivate employees’ emergency response capabilities and safety concepts to reduce accidents caused by

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Evaluation item			Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			unsafe behavior. 6. Mental health: The Company has set up a “Sexual Harassment Prevention Committee” and established a reporting mechanism to provide protection for the workplace safety of colleagues. The Company’s internal website has an independent reporting mailbox and dedicated line for internal use of the Company, and a dedicated unit addressing complaints. Supervisors at all levels communicate and coordinate with employees on a regular basis and hold labor-management meetings regularly to facilitate smooth communication between labor and management and harmonious labor relations. There were no occupational accidents in the Company in 2022.
(IV) Has the Company provided effective training in career planning for employees?	V		(IV)In order to strengthen the professional knowledge and work skills of the Company’s employees and to meet the needs of the Company’s future human development, we have specially formulated the “Education and Training Measures” to provide staff with professional skills training and management function training. The Company subsidizes employees to participate in external professional education and training and obtain professional licenses to improve their own abilities and professionalism and foster long-term growth potential. At the same time, we draw on the personal training data of employees as a reference for future promotions and job changes to achieve career planning goals. 1. Pre-job training for newcomers: The Company’s organizational vision, business philosophy and environmental safety education, etc. assist new employees to understand the Company culture and operating procedures, gradually enriching their range of professional knowledge and skills to adapt to the team. 2. Professional ability: In accordance with the professional field ofeachdepartment,welet personnel have a corresponding	No significant deviation

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Evaluation item				Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description (Note 2)
				series of courses in each professional field to follow and strengthen their own professionalism and improve their abilities. 3. Management leadership: For management talent, we establish business and management thinking to develop judgment and problem-solving skills in order to improve the quality of decision-making at the management level and prepare high-quality personnel for the Company’s long-term development. 4. General education: We cultivate the necessary basic abilities and personal safety education and training for colleagues. Implementation status: Digital internal training (colleagues, supervisors at all levels, and new recruits): Course Number of trainees Training duration (hours) Environmental Safety: Typhoon Prevention Instructions 184 46 Environmental Safety: Earthquake Response Environmental Safety: Concepts Before a Fire Occurs Environmental Safety: Concepts When a Fire Occurs Personnel Management: Prevention of Sexual Harassment in the Workplace 190 63 Information Security Advocacy: Introduction to the Information Security Management System 190 570 Attendance Management Concepts 38 3
				Course	Number of trainees	Training duration (hours)
				Environmental Safety: Typhoon Prevention Instructions	184	46
				Environmental Safety: Earthquake Response
				Environmental Safety: Concepts Before a Fire Occurs
				Environmental Safety: Concepts When a Fire Occurs
				Personnel Management: Prevention of Sexual Harassment in the Workplace	190	63
				Information Security Advocacy: Introduction to the Information Security Management System	190	570
				Attendance Management Concepts	38	3

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Evaluation item				Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description (Note 2)
				External training (business/administrative unit colleagues and supervisors at all levels): Course Number of trainees Training duration (hours) Audit Practice Course 2 24 Accounting Supervisor Continuing Education Course 2 24 Corporate Governance Personnel Continuing Education Course 1 18 Corporate Spokesperson Selection and Practical Training Lectures 1 6.5 General safety and health education and training 7 6 ASP.NET Unit Testing by Example (online) 1 6 Preliminary Exploration of .NET Parallel Program Design (online) 1 5 Comp TIA Security + International Network Information Security Certification Course 1 32 Microsoft Azrue Administrator Aossociate 1 1 EC-Council-CASENet 1 40 ASP.NET Core MVC Website Development Framework PART I & II 1 32 EC-Council Case .NET Application Security Engineer Certification Course 1 24 HPE Sales Certified-Hybird Cloud Solutions(2022) 1 3.5 HPE Silver Partner Reseller Contract Qualification Exam (2022) 1 3 ISO 27001 LA Lead Auditor 1 40			No significant deviation
				Course	Number of trainees	Training duration (hours)
				Audit Practice Course	2	24
				Accounting Supervisor Continuing Education Course	2	24
				Corporate Governance Personnel Continuing Education Course	1	18
				Corporate Spokesperson Selection and Practical Training Lectures	1	6.5
				General safety and health education and training	7	6
				ASP.NET Unit Testing by Example (online)	1	6
				Preliminary Exploration of .NET Parallel Program Design (online)	1	5
				Comp TIA Security + International Network Information Security Certification Course	1	32
				Microsoft Azrue Administrator Aossociate	1	1
				EC-Council-CASENet	1	40
				ASP.NET Core MVC Website Development Framework PART I & II	1	32
				EC-Council Case .NET Application Security Engineer Certification Course	1	24
				HPE Sales Certified-Hybird Cloud Solutions(2022)	1	3.5
				HPE Silver Partner Reseller Contract Qualification Exam (2022)	1	3
				ISO 27001 LA Lead Auditor	1	40

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Evaluation item				Status (Note 1)	Status (Note 1)			Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description (Note		2)
				Class C Computer Hardware Renovation		1	7
				New recruit training:
				Course	Number of trainees		Training duration (hours)
				Company Profile (Business philosophy, related specifications, operating procedures)	19		1.5
(V) Regarding issues such as customer health and safety, customer privacy, marketing and labeling of products and services, does the Company comply with relevant regulations and international standards, and formulate relevant consumer and customer protection policies and complaint procedures?	V		(V) The Company aims to establish excellent and preferred connector suppliers, complies with relevant international laws and regulations and all standards, and maintains good communication channels with customers. Quality is the priority requirement for the procurement, production, operation and service process of all component products, with protecting the rights and interests of consumers as our own responsibility. The Company has established the “Customer Complaint Handling Procedures” to ensure that when customers complain about product quality problems, we can address the real cause of the problem, take effective countermeasures and prevent recurrence to meet the needs of customers. We regularly hold business management meetings and business meetings so that we can communicate with customers in a timely manner and understand customers’ needs. The Stakeholder Area on the website provides channels for customers to ask questions and offer complaints or suggestions, which the Company handles properly by upholding the principle of sincerity. There are strict written contracts for product quality specifications and product delivery time points to protect the interests of customers and consumers.					No significant deviation
(VI) Has the Company formulated supplier	V		(VI) The Company aims to establish a supply chain with

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Evaluation item	Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
management policies, where suppliers are required to follow relevant regulations on issues such as environmental protection, occupational safety and health or labor and their implementation?			environmental protection, social responsibility, safety, health and human rights development, treating suppliers as long-term partners to lead their long-term development and enhance their competitiveness. The Company implements supplier management, establishing “Supplier Control Operating Procedures” to ensure that the organization’s procurement counterparties can provide raw materials and suppliers that meet environmental quality requirements. In addition to requiring close cooperation from suppliers, suppliers are also evaluated regularly to ensure that all purchased raw materials comply with EU Restriction of Hazardous Substances Directive (RoHS) specifications, and we ask suppliers to submit a third-party inspection report (typically SGS) to confirm that the materials comply with the RoHS standard; moreover, the third-party inspection report needs to be updated once a year to ensure quality and safety. We further require suppliers to reduce pollution, waste, and material losses while conserving natural resources, recycling materials, and so on to reduce the impact on the Earth’s environment. Beyond this, needs must be assessed and surveyed before developing new suppliers. The evaluation and investigation process involves safety and sanitation, compliance with environmental regulations, and so on. Furthermore, existing suppliers are evaluated every quarter. Evaluation indicators include quality, delivery, cooperation, safety, sanitation, environmental protection, and other project evaluations; and their data analysis is included in the quarterly evaluation for reference. Thisis the basisforconfirmingwhethera supplier	No significant deviation

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Evaluation item	Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			continues to be a qualified supplier. Also, for suppliers of automotive products, they must pass certification for IATF 16949 automotive industry quality management systems and ISO 14001 environmental management systems. Labor rights and human rights: Suppliers agree that the employment of labor must comply with relevant labor laws and regulations and protect the legitimate rights and interests of internal employees. Suppliers must follow internationally recognized basic labor human rights principles and emphasize issues of human dignity, basic human rights, and labor rights. Implementation: 1. Conditions for the approval of qualified suppliers can be one of the following; however, relevant ISO certification materials must be obtained. (1) New suppliers are formally evaluated using the “Supplier Evaluation Form” and the “Report on Supplier Evaluation Results”. Those who reach the standard of 70 points or above can become a qualified supplier and are divided into evaluation levels according to the evaluation results. (2) It can be listed as a qualified supplier through sample acceptance. Relevant operating procedures are be carried out in accordance with the “New Parts Acceptance Control Procedures”. (3) Excellent manufacturers with excellent performance before the organization introduced ISO 9001 can be listed as qualified suppliers. (4) Parts suppliers designated or approved by customers can become qualified suppliers without on-site evaluation. 2. Existing qualified suppliers are subject to periodic evaluations

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Evaluation item	Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			conducted on a quarterly basis, and the evaluation results are recorded in the “Quarterly Supplier Evaluation Form”. Evaluation is carried out according to the attached quarterly supplier evaluation criteria. The quality control section provides statistics on quality abnormalities, and its data analysis is included for reference in the quarterly evaluation. This is the basis for confirming whether suppliers continue to be qualified suppliers. 3. An evaluation of 90 points (inclusive) and above constitutes a Grade A supplier while one of 70-80 points (inclusive) constitutes a Grade B supplier. Furthermore, each supplier evaluation item shall be above 3 points; only then can it be listed as a qualified supplier. An evaluation below 70 points constitutes Grade C and listing as a non-qualified supplier. The Procurement Department shall preside over the re-evaluation review meeting to decide whether to continue to purchase, keep it under observation, or terminate transactions. Based on the actual conditions of the supplier’s quality status, suppliers kept under observation and continued procurement shall be subject to measures ranging from a quality control scheduling evaluation plan to on-site evaluation and counseling. For those who require improvement but fail to reach 70 points three consecutive times, we shall gradually reduce order quantity or switch vendors. 4. The Company conducts on-site visits of major suppliers once or twice a year (with inventorying that including interviews) to confirm whether suppliers correctly understand the latest EU prohibition regulations and that production adheres to these regulations.

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Evaluation item	Status (Note 1)	Status (Note 1)	Status (Note 1)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description (Note 2)
			5. Suppliers will be evaluated by telephone, email, meetings, or written communication. If any abnormalities are found, improvement is required in writing. If persistent major abnormalities are found, the supplier will be disqualified.
V. Does the Company refer to internationally-prepared reporting standards or guidelines in the preparation of sustainability reports and other reports that disclose the Company’s non-financial information? Is the confidence or assurance opinion of a third-party verification unit obtained for the aforementionedreport?		V	The Company is not required to prepare a sustainability report.	To be prepared according to actual future needs.
VI. If the Company has its own sustainable development code in accordance with the “Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies”, please describe the differences between its operationand the principles: Nomaterialdifferences.
VII. Other important information helpful to understand the implementation of the promotion of sustainable development: Environment: We actively make full use of resources, using environmentally-friendly materials to reduce damage to the environment, improving processes to reduce the generation of waste. Human rights: We provide employment opportunities for persons with disabilities. Implemented in accordance with provisions of the Labor Standards Act, we thus protect the legitimate rights and interests of employees.

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(VI) Ethical business performance conditions and deviation from the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and causes thereof:

Evaluation item			Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
I. Formulation of ethical management policy and plans (I) Has the Company formulated an ethical management policy approved by the Board of Directors, and in the regulations and external documents expressed the policies and practices of operating in good faith, and the commitment of the Board of Directors and senior management to actively implement business policies? (II) Has the Company established an assessment mechanism for the risk of dishonesty, regularly analyzing and evaluating business activities with a high risk of dishonest conduct in the business scope, and formulated a plan to prevent dishonest conduct, and coverat aminimumthe	V V		(I) The Company has formulated the “Ethical Corporate Management Best Practice Principles”, “Procedures for Ethical Management and Guidelines for Conduct”, and a “Code of Ethical Conduct” to standardize the Company’s policy of honest management. These are disclosed on the Company’s website and the Market Observation Post System to make employees, managers and directors aware of them and to follow them. When employees perform business, all uphold the business philosophy based on ethics and also abide by the Company Act, the Securities and Exchange Act, the Public Procurement Act, and other laws and regulations related to business conduct as the basic premise of implementing honest management, and advocacy and promotion are carried out on a regular basis. (II) In our “Procedures for Ethical Management and Guidelines for Conduct”, the Company expressly prohibits dishonest conduct such as receiving or accepting bribes, offering or accepting improper benefits, offering or promising facilitation payments, providing illegal political contributions, engaging in unfair competition, making inappropriate charitable donations orsponsorships, disclosing business	No significant deviation

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Evaluation item			Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
preventive measures for various acts under Article 7, Paragraph 2 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”? (III) Has the Company defined and enforced operating procedures, behavioral guidelines, penalties and grievance systems as part of its preventive measures against dishonest conduct, and are the above measures reviewed and revised on a regular basis?	V		secrets, and harming the rights and interests of stakeholders. We have adopted preventive measures and carry out educational campaigns to implement ethical management policies. In order to implement monitoring of the occurrence of dishonest conduct, the Company conducts internal control operations, engages auditors, and regularly checks the compliance of relevant systems and reviews them at any time to ensure that the risk of all types of dishonest conduct is reduced. (III) The Company stipulates the reward and disciplinary system in the “Measures for Employee Rewards and Disciplinary Actions” and the “Employee Work Rules” and announces it on the Company’s internal website. The disciplinary and appeal system for violations is thus clearly defined and implemented. In the “Employment and Non-Disclosure Agreement” with employees, employees expressly agree to make the best use of their knowledge, experience and talents, comply with laws, Company policies and management regulations to faithfully perform assigned duties at designated places.
II. Ethical Corporate Management (I) Does the Company assess a trading counterparty’s ethical managementrecord	V		(I) When entering into a business relationship with another entity, the Companywill first evaluate thelegality and	No significant deviation

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Evaluation item			Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
and expressly state the ethical management clause in the contract to be signed with the trading counterparty? (II) Has the Company set up a special unit under the Board of Directors to promote corporate ethical management and regularly report (at least once a year) to the Board of Directors on its ethical management policies and plans to prevent dishonest conduct and supervision and implementation?	V		honesty of the agents, suppliers, customers or other business contacts, and whether there are records of dishonest conduct, to ensure that it conducts business in a fair and transparent manner and does not demand, offer, or accept bribes. Furthermore, in the “Commitment to Honesty, Integrity, and Confidentiality” signed with suppliers, it is clearly stipulated that the supplier shall be engaged in relevant business activities, and that the principles of honesty and trustworthiness, and integrity and confidentiality obligations shall be strictly observed. Also, the financial institutions that the Company deals with are all commercial banks that are legally registered and well-known to the public. The rights and obligations of both parties and transaction conditions are clearly stipulated in the credit contracts. (II) The Company designated the Group Management Office as the responsible unit responsible for the supervision and implementation of ethical management policies and prevention plans, reporting any violations to the Board of Directors regularly or as needed. In addition, there is also an internal audit unit that conducts regular inspections and report regularly to the Board of Directors at least annually. In addition to regularly promoting the Code of Ethics and the Company’s corevalues of “Sincerity andDiligence”, the

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Evaluation item			Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
(III) Has the Company developed a policy to prevent conflicts of interest, provided a proper presentation channel, and put such policy in place?	V		management unit also educates and trains new recruits to promote matters that should be paid attention to when performing business, and encourages employees to be vigilant in detecting or discovering violations and taking the initiative to report them to management. (III) The Company has formulated the “Ethical Corporate Management Best Practice Principles”, “Procedures for Ethical Management and Guidelines for Conduct”. It is clearly stipulated that no colleagues may accept benefits, so as to prevent colleagues from sacrificing the interests of the Company for personal interests. When the Company’s colleagues are performing company business and it is found that there is a conflict of interest with oneself or the juristic person they represent, relevant matters shall be directly reported to the direct supervisor or the Company’s management unit simultaneously, while the supervisors provide appropriate guidance. Both the Company’s internal network and the Company’s website provide smooth channels for colleagues to express their opinions. For an accused individual, opportunities are provided for them to state their opinions or appeals in the “Stakeholder Area”ofthe Company’swebsite.
(IV) Has the Company established an effective accounting system fortheimplementationof	V		(IV) The Company has established an effective accounting systemandinternalcontrolsystem. Internalauditors alsolist	No significant deviation

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Evaluation item			Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
ethical management, internal control system, and the evaluation result of the risk of dishonesty by the internal audit unit, to formulate relevant audit plans, and check the compliance with the plan to prevent dishonest conduct, or entrusted an accountant to perform the audit? (V) Does the Company hold education and training in ethical corporate management inside and outside the Company on a regular basis?	V		high-risk operations as the primary inspection items of the annual audit plan based on risk evaluation to strengthen preventive measures. Furthermore, they shall regularly report the audit results to the Board of Directors; and, through the annual self-evaluation of the Company’s internal controls, the Company departments and subsidiaries must self-examine under the internal control system to ensure the effectiveness of the design and implementation of the system and appoint an accountant to check the implementation of internal controls and issue an internal accounting control proposal, thereby fulfilling the responsibility of honest management. (V) The Company formulates education and training plans every year for targeted individuals, including new recruits and current employees. The content includes professional functions and general on-the-job education. During classes or internal meetings, we conduct advocacy or case sharing on ethical management to make employees understand the meaning and importance of honest management and implement it in daily work. We assign dedicated personnel to participate in ethical management education and training courses organized by competent authorities or external professional institutions. In addition,we plan relevantinternaltraining coursesin

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Evaluation item				Status (Note)	Status (Note)	Status (Note)	Status (Note)	Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No		Summary description
				accordance with actual business needs every year, improving colleagues’ awareness of legal compliance through education and training so as to reduce the risk of violations of the law in business conduct.
				Time	Training unit	Course content	Duration (Hours)	Number of participants
				2022/02/17	President’s Office	Corporate Governance: Ethical Management Advocacy	0.5	5
				2022/03/22	Board of Directors Discussion unit	Advocacy of laws and regulations related to directors and independent directors (including the prohibition of insider trading and legal liability for violating regulations)	0.5	9

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Evaluation item					Status (Note)	Status (Note)	Status (Note)			Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No			Summary description
				Time	Training unit	Course content	Duration (Hours)	Number of participants		No significant deviation
				2022/08/08	Management Office	Corporate Governance: Ethical Management Concept Advocacy	1.0	7
				2022/08/17	President’s Office	Prohibition of insider trading and legal liability for violating regulations	1.0	6
				2022/09/14	President’s Office	Advocacy of Corporate Ethical Management Practice Cases	0.5	7
III. Operation of the Company’s Reporting System (I) Has the Company put in place a specific whistleblowing and reward system, established a convenient reporting channel, and assigned appropriate personnel to deal with whistleblowing?	V		(I) The Company has established and announced an independent internal reporting mailbox on the Company’s website and internal website for use by the Company’s personnel, and has assigned the Audit Office as the responsible unit. For reports of dishonesty or misconduct, a bonus of up to NT$3,000 will be given according to the seriousness of the report. Insiders making false or malicious accusations shall be subject to disciplinary action and shall be dismissedifthe circumstance are serious.							No significant deviation

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Evaluation item			Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
(II) Has the Company established standard operating procedures for accepting complaints, follow-up measures to be taken after the investigation is completed, and relevant confidentiality mechanisms? (III) Has the Company taken measures to protect whistleblowers from retaliation due to reporting?	V V		(II) In accordance with the provisions of Article 23 of the Company’s “Ethical Corporate Management Best Practice Principles” and Article 21 of the “Behavioral Guidelines for Ethical Management Operating Procedures”, records are kept and preserved for the acceptance, investigation process, and results of whistleblowing cases. The identity and content of the whistleblower shall be kept strictly confidential. If major violations are found, a report shall immediately be made and notification given to the independent director or supervisor in writing. There were no such instances in the Company in 2022. (III) In accordance with the provisions of Article 23 of the Company’s “Ethical Corporate Management Best Practice Principles” and Article 21 of the “Behavioral Guidelines for Ethical Management Operating Procedures”, the identity of the whistleblower and the content of the whistleblowing shall be kept confidential, and the whistleblower shall not be subject to improper treatment for whistleblowing.
IV. Strengthening Information Disclosure Has the Company on its website and on the Market Observation Post System, disclosed the content and promotioneffectiveness of	V		The Company has formulated the Ethical Corporate Management Best Practice Principles, and after reporting to the shareholders’ meeting, relevant information is disclosed on the Company’swebsite and theMarket Observation Post System.	No significant deviation

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Evaluation item	Status (Note)	Status (Note)	Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
its Ethical Corporate Management Best Practice Principles?			The Company discloses its ethical management policies and implementation thereof in its internal rules, annual reports, on the company’s websites, and in other promotional materials, and makes timely announcements of the policies in events held for outside parties such as product launches and investor press conferences, in order to make its suppliers, customers, and other business-related institutions and personnel fully aware of its principles and rules for ethical management. Sincerity and Diligence stands as the Company’s most important core value and business philosophy. Employees must abide by clear ethical standards and conduct of character with commitments to the original manufacturers, customers, employees, shareholders, and society, and do their utmost to take the interests of all related partiesinto account.
V. If the Company has established the Ethical Corporate Management Best Practice Principles in accordance with the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”, please describe the difference between its operation and the principles: The Company has established the Ethical Corporate Management Best Practice Principles and complies with laws and regulations, and there arenomajordifferences.
VI. Other information that enables a better understanding of the Company’s ethical corporate management: (for example, the Company’s review and revision of the Ethical Corporate Management Best Practice Principles, etc.): 1. The Company has formulated the “Ethical Corporate Management Best Practice Principles” and “Procedures for Ethical Management and Guidelines for Conduct”. In order to align it with the establishment of the Audit Committee to replace supervisors, adjustments were made to the relevant content with approval of the Board of Directors on March 22, 2022, and it was reported to the shareholders’ meeting on June 14, 2022. 2. The Companyhasformulated the“ManagementProceduresforthePreventionof Insider Trading”, prescribing directors,managers,

• V. If the Company has established the Ethical Corporate Management Best Practice Principles in accordance with the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”, please describe the difference between its operation and the principles: The Company has established the Ethical Corporate Management Best Practice Principles and complies with laws and regulations, and there are no major differences.

• VI. Other information that enables a better understanding of the Company’s ethical corporate management: (for example, the Company’s review and revision of the Ethical Corporate Management Best Practice Principles, etc.):

• The Company has formulated the “Ethical Corporate Management Best Practice Principles” and “Procedures for Ethical Management and Guidelines for Conduct”. In order to align it with the establishment of the Audit Committee to replace supervisors, adjustments were made to the relevant content with approval of the Board of Directors on March 22, 2022, and it was reported to the shareholders’ meeting on June 14, 2022.

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Evaluation item	Status (Note)	Status (Note)	Status (Note)	Deviation from Ethical Corporate Management Best-Practice Principles for TWSE/TPEX Listed Companies and causes thereof
	Yes	No	Summary description
and employees not to disclose financial and business information related to the Company that has a material impact on the price of the Company’s stock, or information that has a significant impact on the investment decisions of legitimate investors. Within eighteen hours of the news being withdrawn or made public, they are not allowed to buy or sell the Company’s stocks listed on the market ortradedinthe business premises ofsecurities companies orothersecuritieswithanequitynature.

• (VII) If the Company has established the Corporate Governance Best Practice Principles and the related regulations, it should disclose how to inquire about such principles: Please refer to the investor information/corporate governance related information on the Company’s website for details (http://www.welltend.com.tw).

• (VIII) Other important information that is sufficient to enhance the understanding of corporate governance and operational conditions must be disclosed together:

• In order to establish a good internal material information processing and disclosure mechanisms of the Company, and to strengthen the prevention of insider trading, protect investors, and safeguard the rights and interests of the Company, the Company has formulated the “Procedures for Handling Material Inside Information” and “Management Procedures for the Prevention of Insider Trading” for insiders to follow.

• The Company’s website has a corporate governance section providing corporate governance-related regulations for reference by internal and external parties, and which disclose important information in a timely manner.

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• (IX) Implementation status of the internal control system should be disclosed in the following matters:

• Statement of Internal Control:

Welltend Technology Corporation Internal Control System Statement

Date ： March 23, 2023

For the Company’s Internal Control System of 2022, the following is hereby declared based on the results of self-assessment:

• I. The Company acknowledges and understands that the establishment, implementation and maintenance of the internal control system is the responsibility of the Board of Directors and managerial officers of the Company. The Company has established such a system. The purpose of the system is to reasonably ensure achievement of the effectiveness and efficiency of operations (including profits, performance, and protecting the security of assets), reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance with applicable laws, regulations, and bylaws.

• II. An internal control system has inherent limitations. No matter how perfect the internal control system is, it can only provide a reasonable assurance of the fulfillment of the three objectives referred to above. Moreover, the effectiveness of the internal control system could be affected by changes of the environment and circumstances. However, the Company’s internal control system has a self-supervision mechanism. Once a missing element is recognized, the Company takes corrective action.

• III. The Company examined the design and effective implementation of its internal control system according to the criteria prescribed in the “Regulations Governing Establishment of Internal Control Systems by Public Companies” (called the “Regulations below”). The “Regulations” divide internal control into five constituents in line with the process of management control: 1. Control environment, 2. Risk assessment, 3. Control operation, 4. Information and communication, and 5. Supervision. Each constituent contains several criteria. Please refer to the “Regulations” for more details. The Company has evaluated the effectiveness of the design and implementation of its internal control system in accordance with the above criteria.

• IV. The Company has adopted the said criteria to validate the effectiveness the design and implementation of its internal control system.

• V. Based on the assessments described above, the Company considers the design and implementation of its internal control system to be effective as at December 31, 2022. This system (including supervision and management of subsidiaries) has provided assurance with regards to the Company’s business results, target accomplishments, reliability, timeliness and transparency of reported financial information, and its compliance with relevant laws.

• VI. This Statement of Declaration will be the major content of the annual report and prospectus of the Company and will be publicly disclosed. The Company shall be held liable for misrepresentation or nondisclosure in the above content, in accordance with Articles 20, 32, 171, and 174 of the Securities and Exchange Act.

• VII. This Statement has been approved by the Company’s Board of Directors at the meeting held on March 23, 2023, at which this Statement was unanimously endorsed by all 9 attending directors without any opposing opinions.

Welltend Technology Corporation

Chairman: Yun-Teng Chang President: Hsiang-Yu Wang l

1. If a CPA is retained for the conduct of the internal audit system, disclose the

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Auditor’s Report: None.

• (X) In the most recent year and as of the date of publication of the annual report, if the Company and its internal personnel have been disciplined according to law, or if the Company has disciplined its internal personnel for violating the provisions of the internal control system, the content of the disciplinary measures shall be listed, as well as the main deficiencies and improvements: None.

• (XI) In the most recent year and as of the date of publication of the annual report, important resolutions of the shareholders’ meeting and Board of Directors: Important Resolutions and Implementations of the 2022 General Meeting of Shareholders:

Date	Resolution	Implementation
2022/6/14	Approval of the 2021 business report and financial statements.	Implemented following the meeting’s approval
	Approval of the 2021 profit distribution	The resolution was completed to set the ex-dividend reference date as August 31, 2022. The distribution and payment of cash dividends and stock dividends were completed onSeptember30,2022.
	Amendment of the Company’s Articles of Incorporation	Sent to the Ministry of Economic Affairs to complete the change registration following thevote.
	Amendment of the Company’s “Measures for Loans and Endorsements/Guarantees”	Implemented following the meeting’s approval
	Amendment of the Company’s “Measures for Acquiring or Disposing of Assets”	Implemented following the meeting’s approval
	Re-election of directors	Sent to the Ministry of Economic Affairs to complete the change registration following the election.
	Lifting of non-compete obligations ondirectors	Implemented following the meeting’s approval

In 2022 and as of the printing date of the annual report, important resolutions of the Board of Directors:

Date	Importantresolution
2022/1/18	1. Approved the Remuneration Committee’s deliberation on the distribution of directors andmanagers’bonusesin 2021
2022/3/22	1. Approved the review of the Company’s 2021 employee remuneration, distribution of directors’ and supervisors’ remuneration, new manager positions, and remuneration changes. 2. Approved the Company’s 2021 self-prepared annual financial statements. 3. Approved the Company’s 2021 annual business report and financial statements. 4. Approved the Company’s 2021 profit distribution proposal. 5. Approved the Company’s 2021 profit distribution cash dividend proposal. 6. Approved the Company’s capitalization of retained earnings and issuance of newshares.

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• Date Important resolution 7. Approved the Company’s 2021 Internal Control System Statement. 8. Approved the amendment of the Company’s Articles of Incorporation. 9. Approved the amendment of the Company’s “Rules of Procedure for Shareholders’ Meetings”.

• 1. Approved the amendment of the Company’s “Procedures for Election of Directors”.

  2. Approved the amendment of the Company’s “Measures for Loans and Endorsements/Guarantees”.

  3. Approved the amendment of the Company’s “Measures for Acquiring or Disposing of Assets”.

  4. Approved the amendment of the Company’s “Code of Procedures of the Board of Directors”.

• Approved the amendment of the Company’s “Corporate Governance Best Practice Principles”, “Ethical Corporate Management Best Practice Principles”, “Code of Ethical Conduct” and “Procedures for Ethical Management and Guidelines for Conduct”.

• Approved the amendment of the Company’s “Corporate Social Responsibility Best Practice Principles”.

• Approved the establishment of the Company’s “Audit Committee Organizational Rules”.

• Approved the application for a working capital loan from CTBC Bank and the provision of joint and several guarantees for affiliated companies.

• Approved the transfer and replacement of CPAs. 19. Approved the Company’s plan to invest indirectly in mainland China. 20. Approved the full re-election of directors. 21. Approved the lifting of non-compete obligations on new directors. 22. Approved the nomination period for candidates for directors and independent directors, the number of candidates, and the acceptance premises.

• Approved the nomination and review of the list of candidates for directors and independent directors by the Board of Directors.

• Approved the establishment of the time, venue, and agenda for the 2022 General Meeting of Shareholders.

• Approved the application for a working capital loan from the Shipai Branch of First Commercial Bank and the provision of joint and several guarantees for

2022/5/10 affiliated companies.

1. Approved the appointment of the Corporate Governance Officer.

2022/6/14 1. Approved the election of the new chairperson. 1. Approved the Company’s financial statements reviewed by accountants in the second quarter of 2022.

1. Approved the appointment of the Remuneration Committee members. 3. Approved the determination of the reference date for the capitalization of

2022/8/9 retained earnings allotment and shareholder dividend distribution. 4. Approved the amendment of the Company’s “Regulations Governing Establishment of Internal Control Systems”.

1. Approved the application for a working capital loan from the Tienmu Branch of Mega Commercial Bank.

2. Approved the determination of the reference date for the capitalization of employee compensation.

2022/8/18 2. Approved the formulation of the “Measures for Remuneration of Directors and Managers” by the Remuneration Committee of the Company.

1. Approved the review of employee remuneration distribution for managers in

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Date	Importantresolution
	2021 by the Remuneration Committee of the Company. 4. Approved the review made by the Company’s Remuneration Committee and the changes in manager salaries. 5. Approved the Company’s Remuneration Committee’s review of the remunerationof independent directors.
2022/11/8	1. Approved the Company’s financial statements reviewed by accountants in the third quarter of 2022. 2. Approved the Company’s 2023 audit plan. 3. Approved the amendment of the Company’s “Code of Procedures of the Board of Directors”. 4. Approved the amendment of the Company’s “Board of Directors Performance Evaluation Measures”. 5. Approved the discussion of the Company’s 2023 annual business plan and future business direction. 6. Approved the amendment of the Company’s “Procedures for Handling Material Inside Information”. 7. Approved the discussionofthe Company’s2023 budget.
2023/1/10	1. Approved the Company’s 2023 audit fees and accountant appointment. 2. Approved the Remuneration Committee’s deliberation on the distribution of directors andmanagers’bonusesin 2022
2023/3/23	1. Approved the review of the Company’s 2022 employee remuneration, distribution of directors’ and supervisors’ remuneration, new manager positions, and remuneration changes. 2. Approved the Company’s 2022 self-prepared annual financial statements. 3. Approved the Company’s 2022 annual business report and financial statements. 4. Approved the Company’s 2022 profit distribution proposal. 5. Approved the Company’s 2022 profit distribution cash dividend proposal. 6. Approved the Company’s 2022 Internal Control System Statement. 7. Approved the application for a working capital loan from CTBC Bank and the provision of joint and several guarantees for affiliated companies. 8. Approved the transfer and replacement of CPAs. 9. Approved the establishment of the time, venue, and agenda for the 2023 General Meeting ofShareholders.

• (XII) In the most recent year and as of the date of publication of the annual report, the major contents of the opposition to or qualified opinions expressed by directors or supervisors about the significant resolutions passed by the Board of Directors that have been any recorded or declared in writing: None.

• (XIII) In the most recent year and as of the date of publication of the annual report, summary of resignation or relief from office of the chairperson, president, chief accountant, chief financial officer, chief internal auditor, corporate governance officer, and chief R&D Officer of the Company: No such situation.

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IV. Information on CPA professional fees:

Information on payment to CPAs of the Company

						Unit: NT$ thousand	Unit: NT$ thousand
	Name of CPA firm	CPA audit period	Name of Independent Auditor	Auditing fee	Non-auditing fee	Total	Remarks
	KPMG Taiwan	2022/01/01 ~ 2022/12/31	Yi-Wen Wang	2,869	320	3,189	Non-audit fees service content: Audit certification for profit-seeking enterprise income tax settlement. Service fees for capitalization of retained earnings and employee remuneration.
		2022/01/01 ~ 2022/12/31	Yiu-Kwan Au

• (I) If the accounting firm is changed and the accounting fees during the year when the accounting firm is replaced are less than the previous year, the amount of audit fees before and after the replacement should be disclosed and reasons thereof: No such situation.

• (II) If the audit fees are reduced by more than 10% compared with the previous year, the amount, proportion and reasons for the reduction in the audit fees shall be disclosed: No such situation.

• 98 -

• VI. Information on change in accountants: If the Company has changed its accountants in the last two years and thereafter, the following should be disclosed:

• (I) About previous CPAs

Date ofchange	March 22,2022	March 22,2022	March 22,2022	March 22,2022	March 22,2022
Reason of change and description	Due to adjustments of the internal positions of KPMG, from the first quarter of 2022, the CPAs changed from Yi-Wen Wang and Jui-Lan Luo toYi-Wen Wang andYiu-Kwan Au.
Description on whether or not the appointer or CPA terminated or refused the appointment	Contractual party Status			Accountant	Appointer
	Voluntary termination ofappointment			-	-
	No longer accepted (continued) appointment			-	-
Comments and reasons for audit reports other than unqualified opinions issued in the last two years	None
Whether there is any disagreement with the issuer	Yes		Accounting principle or practice
			Financialstatement disclosures
			Audit scope orstep
			Others
	None	V
	Explanation
Other disclosures (contents required for disclosure according to Subparagraphs 1-4 to 1-7 of Paragraph 6 of Article 10 of this Standard)	None

• 99 -

(II) About succeeding CPAs

About succeeding CPAs
Firm Name	KPMGTaiwan
Name ofCPAs	CPA Yi-Wen Wang and CPA Yiu-Kwan Au
Date ofappointment	March 22,2022
Accounting treatment methods or accounting principles for specific transactions, and advisory matters and results that may be issued for financial reporting priorto appointment	Not applicable
Written opinions of succeeding CPAs different from opinions of previous CPAs	Not applicable

• (III) Former accountants’ reply to Article 10, Subparagraph 6, Item 1 and item 2-3 of this Standard: None.

• VII. Where the Company’s chairperson, president, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm, the name and position of the person, and the period during which the position was held, shall be disclosed: No such situation.

• 100 -

VIII. In the most recent year and as of the date of publication of the annual report, information about the shares transferred by and changes to the shares pledged by the directors, supervisors, managers and the shareholders holding more than 10% of shares:

(I) Changes in equity of the Directors, Managers and major shareholders：

Occupational title	Name	2022	2022	In current period to April 15,2023	In current period to April 15,2023
		Change in the quantity of shareholding	Change in the quantity of shares under lien	Change in the quantity of shareholding	Change in the quantity of shares under lien
Chairman	Yun-Teng Chang	94,092	0	0	0
Director	Hsuan-Bin Kuo	30,000 (30,000)	0	0	0
Director	Hung-Liang Hsieh	41,850	0	0	0
Director	Kuei-Yu Chang	57,523	0	0	0
Director	Hsiu-Li Chen (Note 1)	22,215	0	0	0
Director(Note 1)	Year Jan Industrial Co., Ltd.	324,834	0	0	0
more than 10% of the shares
Independent Director	Meng-Chung Wu	6,800	0	8,200	0
Independent Director	Chang-Kuo Feng(Note 1)	0	0	0	0
Independent Director	Ching-Ju Wu (Note 1)	0	0	0	0
President	Hsiang-Yu Wang	10,000	0	0	0
President of Business Group	Jia-Xiang Lin	24,800	0	2,000	0
Senior Vice President	Yu-Da Xin	7,753	0	0	0
Vice President	Zhi-Xian Zhu	4,954	0	0	0
Senior Associate Manager	Lin-Cing Hu	3,200	0	0	0
Financial Supervisor	Wen-Pin Chen	5,750	0	0	0
Associate Manager	Jheng-Rong Chang (Note 2)	22,150	0	14,000	0
Corporate Governance Officer	Yi-Lun Pan (Note 3)	1,000	0	0	0
Director	Shih Chieh Wei Co., Ltd. (Note 4)	0	0	0	0
Director	Yu-I Ko (Note 4)	0	0	0	0
Director	Wei Yi Investment Co., Ltd.(Note4)	0	0	0	0
Supervisor	C.H. Chen (Note 4)	40,000	0	0	0
Supervisor	Hsan-Au Wu (Note 4)	0	0	0	0
Independent Director	Tine-Shi Keo (Note 4)	0	0	0	0
Senior Vice President	Guan-Yu Lin (Note 5)	0	0	0	0

Note 1 ： Took office on June 14, 2022. Note 4 ： Dismissed on June 14, 2022. Note 2 ： Took office on March 22, 2022. Note 5 ： Resigned on April 30, 2022. Note 3 ： Took office on May 10, 2022.

• 101 -

• (II) Information about the assignees of shares who are related parties: No such situation

• (III) Information about the pledgees of shares who are related parties: No such situation

• 102 -

IX. Information about the relationships among top ten shareholders, such as related parties, spouses or relatives within the second degree of kinship

Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding	Information on the relation of the top10 shareholders by proportion of shareholding
Name	Holding of share by the person		Quantity of shareholding by spouse and underage children		Joint holding of share in the name of a third party		If the top 10 shareholders by proportion of shareholding are related parties, spouse, kindred within the 2nd tier to one another, specify the names and relation.		Remark
	Quantity of shares	Proportion of shareholding	Quantity of shares	Proportion of shareholding	Quantity of shares	Proportion of shareholding	Title (or name)	Relation
Year Jan Industrial Co., Ltd. Representative： JHANG KE JIN CYUE	11,152,634 10,300	11.63% 0.01%	0 0	0.00% 0.00%	0 0	0.00% 0.00%	JIA YU INVESTMENT CO. LTD JHANG KAI YA CHANG KUEI YU YUN TENG CHANG	same person in charge first degree relative	- -
JIA YU INVESTMENT CO. LTD Representative： JHANG KE JIN CYUE	9,485,167 10,300	9.89% 0.01%	0 0	0.00% 0.00%	0 0	0.00% 0.00%	Year Jan Industrial Co., Ltd. JHANG KAI YA CHANG KUEI YU YUN TENG CHANG	same person in charge first degree relative	- -
JU SHENG INVESTMENT CO. LTD Representative： WANG SHENG JHONG	8,842,241 0	9.22% 0.00%	0 0	0.00% 0.00%	0 0	0.00% 0.00%	None None	None None	-
Wei Yi Investment Co., Ltd. Representative： KO YU I	7,792,774 1,672,278	8.13% 1.74%	0 0	0.00% 0.00%	0 0	0.00% 0.00%	None None	None None	- -
SHIH CHIEH WEI CO. LTD Representative: CHANG KUEI YU	7,768,421 1,974,973	8.10% 2.06%	0 210,000	0.00% 0.22%	0 0	0.00% 0.00%	CHANG KUEI YU JHANG KAI YA CHANG KUEI YU	SHIH CHIEH WEI CO. LTD Representativ e second degree relative first degree relative	- -
							JHANG KE JIN CYUE
YUN TENG CHANG	3,230,492	3.37%	27,810	0.03%	0	0.00%	JHANG KAI YA	second degree relative	-
							CHANG KUEI YU
							JHANG KE JIN CYUE	first degree relative
KE YOU FEN	2,781,000	2.90%	0	0.00%	0	0.00%	None	None	-
JHANG KAI YA	2,265,279	2.36%	0	0.00%	0	0.00%	YUN TENG CHANG	second degree relative	-
							CHANG KUEI YU
							JHANG KE JIN CYUE	first degree relative
CHANG KUEI YU	1,974,973	2.06%	210,000	0.22%	0	0.00%	YUN TENG CHANG	second degree relative	-
							JHANG KAI YA
							JHANG KE JIN CYUE	first degree relative
							SHIH CHIEH WEI CO. LTD	SHIH CHIEH WEI CO. LTD Representative
KO YU I	1,672,278	1.74%	0	0.00%	0	0.00%	Wei Yi Investment Co., Ltd.	Wei Yi Investment Co., Ltd. Representative	-

• 103 -

• X. The total number of shares and total equity stake held in any single enterprise by the Company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the Company:

Comprehensive Shareholding Ratios

	December31,2022/Unit:Shares; %	December31,2022/Unit:Shares; %	December31,2022/Unit:Shares; %	December31,2022/Unit:Shares; %	December31,2022/Unit:Shares; %	December31,2022/Unit:Shares; %
Investees (Note)	The Company’s investment		Investment by directors, supervisors, managers and directly or indirectly controlled businesses		Comprehensive investment
	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage
A Team Tech Inc.	500,000	100%	-	-	500,000	100%
JIUN TAI CORPORATION LIMITED	59,920,000	100%	-	-	59,920,0000	100%
Celeraise Investment Limited	50,299,832	99.9997%	168	0.0003%	50,300,000	100%
Celeraise Technology Corporation	3,000,000	100%	-	-	3,000,000	100%
Leadpak Industrial Co., Ltd.	2,981,000	99.36%	-	-	2,981,000	99.36%
Yield Profit International Enterprise Limited	-	-	15,600,000	100%	15,600,000	100%
Jet Success Technology Development Limited	-	-	7,800,000	100%	7,800,000	100%
Minshi Computer Technology (ShanghaI) Co., Ltd.	-	-	-	100%	-	100%
Celeraise (ShanghaI) Electronic Co., Ltd.	-	-	-	100%	-	100%
Kunshan Celeraise Electronic Co., Ltd.	-	-	-	100%	-	100%
Shenzhen Celeraise Electronic Co., Ltd.	-	-	-	100%	-	100%
Zhan Mao (Huizhou) Electronic Co., Ltd.	-	-	-	100%	-	100%
Celeraise Electronic Corporation (Philippines)	399,995	99.995%	5	0.005%	400,000	100%
Celeraise (Thailand) Co., Ltd.	18,274,997	99.9997%	3	0.0003%	18,275,000	100%

Note: Investment made by the Company using the equity method.

• 104 -

Four.

Status of Fundraising

I. Capital and Shares

(I) Sources of equity:

(1)

(1)	(1)
		Unit: Shares/ NT$thousand
Year Month	Issuing price	Authorized share capital		Paid-incapital		Notes
		Number of shares	Amount	Number of shares	Amount	Source of share capital	Property other than cash contributed as equity capital	Others
1993/6	10	1,000,000	10,000	1,000,000	10,000	Cash establishment	None	-
1997/6	10	4,000,000	40,000	4,000,000	40,000	Cash capital increase 30,000	None	-
1998/6	10	24,000,000	240,000	9,000,000	90,000	Cash capital increase 50,000	None	-
1998/8	10	24,000,000	240,000	10,000,000	100,000	Cash capital increase 10,000	None	-
1999/2	10	24,000,000	240,000	15,000,000	150,000	Cash capital increase 50,000	None	-
1999/5	27	24,000,000	240,000	18,000,000	180,000	Cash capital increase 30,000	None	-
1999/7	10	24,000,000	240,000	23,040,000	230,400	Capitalization of retained earnings 50,400	None	1999/6/30 (1999) Tai-Cai-Zheng-(I) No.57622
1999/12	18	40,000,000	400,000	28,000,000	280,000	Cash capital increase 49,600	None	1999/11/6 (1999) Tai-Cai-Zheng-(I) No.97059
2000/7	10	60,000,000	600,000	40,650,000	406,500	Capitalization of retained earnings and capitalization of capital reserves 126,500	None	2000/7/12 (2000) Tai-Cai-Zheng-(I) No. 59969
2001/5	10	110,000,000	1,100,000	66,272,800	662,728	Capitalization of retained earnings and capitalization of capital reserves 256,228	None	2001/5/23 (2001) Tai-Cai-Zheng-(V) No. 132164
2002/1	92.9	110,000,000	1,100,000	66,387,472	663,875	Exchange of corporate bonds for new shares 1,147	None	2002.01.09 Jing-Shou-Shang- Zi No. 09101005350
2002/3	106.25	110,000,000	1,100,000	68,601,376	686,014	Transferee company to issue new shares 22,139	None	2002/3/19 (2002) Tai-Cai-Zheng-(I)- Zi No. 109910
2002/5	91.10	110,000,000	1,100,000	70,486,624	704,866	Exchange of corporate bonds for new shares 18,852	None	2002.05.03 Jing-Shou-Shang- Zi No. 09101155350
2002/9	10	150,000,000	1,500,000	95,770,611	957,706	Capitalization of retained earnings 252,840	None	2002/8/12 (2002) Tai-Cai-Zheng-Yi- Zi No. 0910144734
2003/6	10	150,000,000	1,500,000	101,082,505	1,010,825	Capitalization of retained earnings 53,118	None	2003/6/27 (2003) Tai-Cai-Zheng-Yi- Zi No. 0920128570
2004/4	13.95	270,000,000	2,700,000	114,523,005	1,145,230	Exchange of corporate bonds	None	2004.04.12 Jing-Shou-Shang-

• 105 -

Year Month	Issuing price	Authorized share capital	Authorized share capital	Paid-incapital	Paid-incapital	Notes	Notes	Notes
		Number of shares	Amount	Number of shares	Amount	Source of share capital	Property other than cash contributed as equity capital	Others
						for new shares 134,405		Zi No. 09301057370
2005/10	0.8	270,000,000	2,700,000	245,023,005	2,450,230	Private placement of common shares 130,500 (Note 6)	None	2005.10.28 Jing-Shou-Shang- Zi No. 09401216310
2006/8	10	270,000,000	2,700,000	24,502,300	245,023	Capital reduction 2,205,207	None	2006.8.1 Fu-Jian-Shang-Zi No.09580305010
2007/2	10	270,000,000	2,700,000	38,116,492	381,165	Merger 136,142	None	2007.2.2 Fu-Jian-Shang-Zi No.09680621310
2007/2	9.4	270,000,000	2,700,000	51,059,407	510,594	Private placement 129,429 (Note 1)	None	2007.2.14 Jing-Shou-Shang- Zi No. 09601036080
2007/4	9.4	270,000,000	2,700,000	53,259,407	532,594	Private placement 22,000 (Note 1)	None	2007.4.24 Jing-Shou-Shang- Zi No. 09601088370
2008/4	9.4	270,000,000	2,700,000	83,259,407	832,594	Private placement 300,000 (Note 1)	None	2008.4.11 Jing-Shou-Shang- Zi No. 09701086310
2009/9	10	270,000,000	2,700,000	108,259,407	1,082,594	Private placement 250,000 (Note 1)	None	2009.09.24 Jing-Shou-Shang- Zi No. 09801220390
2015/9	10	270,000,000	2,700,000	107,959,407	1,079,594	Treasury shares to reduce capital 3,000	None	2015.09.04 Jing-Shou-Shang- Zi No. 10401184710
2016/8	10	270,000,000	2,700,000	97,163,467	971,634	Cash capital reduction 1,079,591	None	2016.08.18 Jing-Shou-Shang- Zi No. 10501199160
2017/2	10	270,000,000	2,700,000	95,813,467	958,135	Treasury shares to reduce capital 13,500	None	2017.03.07 Jing-Shou-Shang- Zi No. 10601029310
2020/7	10	270,000,000	2,700,000	94,000,000	940,000	Treasury shares to reduce capital 18,135	None	2020.07.06 Jing-Shou-Shang- Zi No. 10901110120
2021/1	10	270,000,000	2,700,000	93,000,000	930,000	Treasury shares to reduce capital 10,000	None	2022.01.17 Jing-Shou-Shang- Zi No. 11101008880
2022/9	10	270,000,000	2,700,000	95,790,000	957,900	Capitalization of retained earnings 27,900	None	2022.09.20 Jing-Shou-Shang- Zi No. 11101176680
2022/9	10	270,000,000	2,700,000	95,890,000	958,900	Capitalization of employee compensation 1,000	None	2022.09.20 Jing-Shou-Shang- Zi No. 11101176680

Note: The private placement was completed by the supplementary public offering and declared effective on May 8, 2013, by the Financial Supervisory Commission as per Letter Jin-Guan-Zheng-Fa-Zi No. 1020016192.

• 106 -

(2)

(2)
Class of shares	Authorized share capital			Notes
	Outstanding shares	Unissued shares	Total
Common stock	95,890,000	174,110,000	270,000,000	Shares of TWSE-listed companies

(3) Information concerning the collective reporting system: Not applicable

(II) Shareholder Structure：

April 15, 2023

						April 15,2023
Shareholder Structure	Governmen t institutions	Financial institutions	Other institutions	Individuals	Foreign institutions and nationals	Total
Number of persons	0	0	17	6,312	18	6,347
Quantity of shareholding	0	0	46,244,867	46,594,127	3,051,006	95,890,000
Proportion of shareholding	0.00	0.00	48.23%	48.59%	3.18%	100%

(III) Dispersion of shareholding：

April 15, 2023

			April 15,2023
Level of shareholding (share)	Number of shareholders	Quantity of shareholding	Proportion of shareholding
1 to 999	3,173	645,108	0.67%
1,000 to 5,000	2,230	4,295,269	4.48%
5,001 to 10,000	414	2,757,722	2.88%
10,001 to 15,000	178	2,020,466	2.11%
15,001 to 20,000	77	1,348,504	1.41%
20,001 to 30,000	82	1,953,228	2.04%
30,001 to 40,000	42	1,436,778	1.50%
40,001 to 50,000	31	1,384,713	1.44%
50,001 to 100,000	52	3,548,293	3.70%
100,001 to 200,000	32	4,505,910	4.70%
200,001 to 400,000	13	3,518,891	3.67%
400,001 to 600,000	3	1,289,450	1.34%
600,001 to 800,000	1	762,715	0.80%
800,001 to 1,000,000	4	3,835,225	4.00%
1,000,001 and above	15	62,587,728	65.26%
Total	6,347	95,890,000	100.00%

• 107 -

(IV) List of Dominant Shareholders：

April 15, 2023

t of Dominant Shareholders：		April 15,2023
Shares Names of Dominant Shareholders	Quantity of shareholding	Proportion of shareholding
Year Jan Industrial Co.,Ltd.	11,152,634	11.63%
CHIA YU Industrial Co.,Ltd.	9,485,167	9.89%
CHU SHENG Industrial Co.,Ltd.	8,842,241	9.22%
Wei Yi Investment Co.,Ltd.	7,792,774	8.13%
Shih Chieh Wei Co.,Ltd.	7,768,421	8.10%
Yun-TengChang	3,230,492	3.37%
YU-FEN KO	2,781,000	2.90%
KAI-YA CHANG,	2,265,279	2.36%
Kuei-Yu Chang	1,974,973	2.06%
KO YU I	1,672,278	1.74%

• 108 -

(V) Information about market price, net value, earnings, and dividends per share in the most recent two years:

Item	Year	Year	Year	2021	2022	Current year up to March 31, 2022 (Note 8)
Market price per share (Note 1)	Highest			33.80	25.90	22.13
	Lowest			14.00	18.90	20.40
	Average			24.32	22.54	21.79
Net value per share (Note 2)	Before distribution			13.65	15.49
	After distribution			13.20	14.79
Earnings per share	Weighted average number of shares (thousand shares)			95,790	95,868
	Earnings per share (Note 3)		Beforeretrospective	1.41	1.92
			After retrospective	1.36	1.92
Dividend per share			Cashdividend	0.3	0.7	Undistributed
	Stock dividend	Stock dividend from capitalization of retained earnings		0.3	-	Undistributed
		Additional paid-in capital share distribution		-	-	Undistributed
	Accumulated unpaid dividends (Note4)			-	-	-
Return on investment analysis	P/E ratio (Note 5)			17.25	11.74	-
	Price to dividend ratio (Note 6)			81.07	32.20	Undistributed
	Cash dividend yield (Note 7)			1.23	3.11	Undistributed

• If there is a capital increase through capitalization of retained earnings or capital reserves, the market price and cash dividend information retrospectively adjusted according to the number of issued shares shall also be disclosed.

• Note 1: The highest and lowest market prices of common shares for each year are listed, and the average market price of each year is calculated according to the transaction value and volume of each year.

• Note 2: Please use the number of shares issued at the end of the year as the standard and fill in the distribution according to the resolution of the Board of Directors or the next year’s shareholders’ meeting.

• Note 3: If retrospective adjustment is required due to gratis allotment of shares, etc., earnings per share before and after the adjustment should be presented.

• Note 4: If the equity securities issuance conditions stipulate that the dividends not paid in the current year will be accumulated to the surplus year, the accumulated and unpaid dividends up to the current year shall be disclosed separately.

• Note 5: P/E ratio = average closing price per share for the year/earnings per share.

• Note 6: Price to dividend ratio = average closing price per share for the year/cash dividend per share.

• Note 7: Cash dividend yield = cash dividend per share/average closing price per share for the year.

• Note 8: The net value per share and earnings per share shall be filled with the information audited (reviewed) by CPAs for the most recent quarter up to the date of publication of the annual report. The rest of the columns should be filled with the current year’s data as of the publication date of the annual report.

(VI) Company dividend policy and implementation status:

1. Dividend policy as set out in the Articles of Incorporation:

2. In response to the growth of operations and investment needs, the Company has adopted the following dividend distribution principles at this stage:

The Company is in a period of business growth. The dividend policy depends on factors such as the Company’s current and future investment environment, capital needs, domestic and foreign competition conditions, and capital budgets, taking into

• 109 -

account the interests of shareholders, balancing dividends, the Company’s long-term financial planning, and so on. In accordance with the provisions of Article 240, Paragraph 5 of the Company Act, the Company authorizes the Board of Directors to pay dividends and bonuses for all or part of the legal reserve and additional paid-in capital as provided for in Article 241, Paragraph 1 of the Company Act per resolution passed by the majority of directors present at a Board meeting attended by more than two thirds of the directors. The dividends and bonuses shall be paid by way of issuing cash, and it shall be reported to the shareholders’ meeting. Shareholders’ dividends may be distributed in cash or stock, and shareholder dividends are to be distributed to shareholders based on 0-80% of the distributable surplus for the year. The proportion of cash dividend distribution shall be no less than 10% of the total dividends. However, the cash dividend distribution ratio can still be adjusted according to the operating conditions of the current year.

1. Proposed dividend distribution for presentation to this year’s shareholders’ meeting: The Company refers to the distribution of dividends in the past years, and in accordance with the Company’s Articles of Incorporation, the ratio of cash dividend distribution should in principle not be less than 10% of total dividends.

   • The Company was approved by the Board of Directors on March 23, 2023 to appropriate NT$67,123,000 from the 2022 earnings as cash dividends (an allocation of NT$0.7 per share). After the above resolution was passed by the Board of Directors on March 23, 2023, the Chairman was separately authorized to set the ex-dividend record date.

2. (VII) The influence of stock dividends planned to the paid in the shareholders’ meeting of this year on the operating performance and earnings per share of the Company: Not applicable.

3. (VIII) Remuneration of employees and directors:

   • (1) The percentage or scope of compensation for employees and directors as set out in the Articles of Incorporation:

     • If the Company has a profit for the year no less than 1% and no more than 10% shall be allocated for employee compensation by a resolution of the Board of Directors and in the form of stock or cash distributions. Distribution recipients are to include employees of affiliated companies who meet certain conditions. Out of the aforementioned profit amount of the Company, no more than 3% shall be allocated as director remuneration by a resolution of the Board of Directors.

     • Employee compensation and directors’ compensation distribution proposals shall be reported to the shareholders’ meeting.

However, when the Company still has accumulated losses, an amount for compensation should first be reserved before the remuneration of employees and the remuneration of directors is allocated according to proportions given in the first paragraph.

• (2) The accounting of the difference between the amounts calculated on the basis of the estimation of the remuneration to the employees and directors, the calculation of shares for paying stock dividends to the employees as remuneration and the actual amount paid: No difference.

• (3) Remuneration distribution approved by the Board of Directors:

• Distribution of employee remuneration and director remuneration in cash or stock:

  • The Company’s 2022 distribution of earnings was approved by resolution of the Board of Directors on March 23, 2023, with the distribution as follows:

• 110 -

Unit: NT$ dollar

Distribution status Distribution item	Board of Directors distribution amount	Estimated amount of recognized expenses for the year	Difference	Reason for difference
Employee compensation - cash	7,700,000	7,700,000	-	No difference
Compensation of directors and supervisors	6,400,000	6,400,000	-	No difference
Total	14,100,000	14,100,000	-	No difference

1. The amount of employee bonuses distributed by stocks and its proportion to the total after-tax net profit and total employee bonuses in the parent company-only financial report for the current period: No distribution of employee remuneration by stock is planned this year, so this is not applicable.

2. (4) The actual payment of remuneration to the employees, directors, and supervisors in the previous year (including the number of distributed shares, amounts, and stock price); if there is a difference with the recognized amount of remuneration for employees, directors, and supervisors, the amount of the difference, the reasons and the handling should be stated:

The Company approved by resolution of the Board of Directors on March 22, 2022, and reported to the shareholders meeting on June 14, 2022; its distribution was as follows:

Unit: NT$ dollar

Distribution status Distribution item	Board of Directors distribution amount	Estimated amount of recognized expenses for the year	Difference	Reason for difference
Employee compensation - cash	2,565,000	2,565,000	-	No difference
Employee compensation - stock	2,275,000	2,275,000	-	No difference
Compensation of directors and supervisors	4,500,000	4,500,000	-	No difference
Total	9,340,000	9,340,000	-	No difference

The number of shares allotted for employee compensation in this instance was calculated based on the closing price of NT$22.75 on the day before the resolution of the Board of Directors to issue new shares, totaling 100,000 shares, and directors’ remuneration was paid in cash.

• 111 -

(IX) Repurchases of shares by the Company:

(1) Repurchases of shares by the Company (already completed):

May20,2023	May20,2023	May20,2023	May20,2023
Repurchase instance number (Note)	1st instance	2nd instance	3rd instance
Purpose of repurchase	Shares transferred to employees	Shares transferred to employees	Maintain company credit and shareholders’ rights and benefits
Repurchase period:	2013.12.27 - 2014.2.24	2014.11.4 - 2014.12.27	2015.7.9 - 2015.9.8
Price range of repurchase	NT$8.33 - NT$16.79	NT$8.51 - NT$18.75	NT$8.51 - NT$18.75
Type and quantity of repurchased shares	Common stock 1,500,000 shares	Common stock 2,000,000 shares	Common stock 300,000 shares
Type and quantity of repurchased shares (after capital reduction/Note1)	Common stock 1,350,000 shares	Common stock 1,800,000 shares	-
Amount of repurchased shares	NT$20,148,847	NT$26,019,295	NT$3,315,805
Ratio of repurchases to scheduled repurchases for the amount of repurchased shares (%)	100%	100%	100%
Number of shares canceled or transferred	1,350,000 shares	1,800,000 shares	300,000 shares
Accumulated shares held	0 shares	0 shares	0 shares
Shares cumulatively held to total shares authorized for issuance (%)	0%	0%	0%

Note 1: The Company undertook a 10% cash capital reduction in 2016.

• 112 -

Repurchases of shares by the Company (already completed)

May20,2023	May20,2023	May20,2023
Repurchase instance number (Note)	4th instance	5th instance
Purpose of repurchase	Shares transferred to employees	Maintain company credit and shareholders’ rights and benefits
Repurchase period:	2018.11.9 - 2019.1.7	2020.3.20 - 2020.5.19
Price range of repurchase	NT$9.31 - NT$20.52	NT$7.42 - NT$21.80
Type and quantity of repurchased shares	Common stock 1,000,000 shares	Common stock 1,813,467shares
Amount of repurchased shares	NT$14,261,733	21,427,637
Ratio of repurchases to scheduled repurchases for the amount of repurchased shares (%)	100%	60.45%
Number of shares canceled or transferred	1,000,000 shares	1,813,467 shares
Accumulated shares held	0 share	0 share
Shares cumulatively held to total shares authorized for issuance (%)	0%	0%

• (2) Repurchases of shares by the Company (still underway): No such situation.

• II. Issuance of corporate bonds (including overseas corporate bonds): None.

• III. Issuance of preferred shares: None.

• IV. Issuance of overseas depositary receipts: None.

• V. Issuance of employee stock options: None.

• VI. Handling of restricted employee shares: None.

• VII. Handling of mergers and acquisitions or transfers of shares of other companies to issue new shares: None.

• VIII. Matters to be recorded in the implementation of fund utilization plans: None.

• 113 -

Overview of O erations p

Five.

I. Business content:

• (I) Business scope:

• The Company’s business scope:

  • (1) Computers, home appliances, automobiles, business equipment related components, cable sets, cables, connectors, research and development, production and sale of electronic components, and other products.

  • (2) Computer software and hardware sales, computer system and peripheral integration and sales, system construction, import and maintenance services.

• Main sources of operating revenue and revenue distribution: The domestic consumption market continues to develop and brands, manufacturing and related industries have taken advantage of this trend. In addition to developing connectors related to electronic products, China’s major domestic manufacturers also understand the ups and downs of electronic products, and red ocean markets have low barriers to entry. On the other hand, China’s strong domestic demand for home appliances, the automobile market, and even the development needs of the aerospace industry also provide a good growth environment for related businesses. Through cooperation with automobile brand manufacturers or the acquisition of foreign technical production capacity, we can take advantage of these trends to enter the highly profitable automotive connector market.

Mainsources ofoperatingrevenue	Revenue distribution
Cables and connectors	58.66%
Computer information system integrationandmaintenance services	41.34%
Total	100.00%

1. The Company’s current products and services:

2. (1) The Company primarily constitutes a professional manufacturer that manufactures and sells cables and related component products. They are mainly used in industries such as information products, consumer electronics products, communication systems, home appliances, game consoles, automation equipment, automotive multimedia, and transactional machines. The Company produces diversified products and provides the best service quality to become the preferred supplier of customers. In recent years, we have also aimed at the application of smart home appliances, medical care, the cloud, and automotive wiring harnesses. We cooperate with leading Japanese manufacturers to enter the relevant supply chains and provide high-quality products from major brand manufacturers in Asia.

3. (2) Computer hardware-related equipment trading (including computer workstations, storage devices, server hosts, personal computers, notebook computers, data input hosts and related application software and hardware, etc.), maintenance services and on-site services, undertaking the development of information system projects for government units and applying cloud

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technologies to develop and maintain equipment and facility management systems related to public utilities (electricity, water, and telecommunications).

1. New products and services under planning for development: In addition to continuing to provide customers with high-quality products to meet customer needs, the Company also continues to improve our technological level and product performance in terms of manufacturing process, quality control and testing. As we continue to achieve our long-term goals, we also spare no effort in the development of new products and actively integrate product and market information to gradually develop related products and technical services such as digital home appliances, medical care, the cloud, environmental protection and green energy industries, and automotive multimedia. Furthermore, we continue to explore the markets of Southeast Asian countries, scaling up operations based on the Company’s existing technical foundation and production management capabilities.

2. (II) Industry overview:

3. Current status and development of the industry:

   • (1) Cable and connector industry:

Connectors refer to connecting components used in electronic signals and power supplies. They can be used as a necessary cables for electronics, electrical appliances, computers and communications. Their industry is highly related, and they constitute an important aspect of electronic components in the information electronics industry. Cables refer to cables with connectors at both ends or at one end and in the middle is the signal transmission device of the signal cable. By means of cables, each independent subsystem can transmit electrical signals to achieve complete system functionality. The connector is the bridge between all signals. Common computer cables include keyboard cables, printer cables, ATA disk cables, monitor cables, SCSI cables, and so on. Cables for communication and information appliances include hands-free cable assemblies, automobile linkage cable assemblies, home video game hosts, cables for satellite positioning and automotive electronic computers, and so on.

Cable connectors are mainly used for signal and power transmission of various computer, communications and consumer electronics products, and computer, communications and consumer electronics products use many types and quantities of electronic cables mostly in order to align with the market launch of various information and communication products and the diversification of specifications. Since the application range of consumer electronics product cables and their assembled products have expanded to many fields such as computers, communications, and consumer electronics, and given the introduction of new electronic products, new market demand is therefore created as a result, and this also drives the rapid growth of related cables. The Company mainly produces and sells cables. The main target markets are computers and peripherals, consumer electronics, network communications, business machines, optoelectronics, smart home appliances, notebooks,

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the automobile industry, and other industries. Products include USB cables and transmission cables used in game consoles, digital cameras, and mobile phones. Connector shipments have been driven in recent years by hot sales of smart mobile devices and the rise of various applications in medicine, biotechnology, green energy, industry, and elsewhere.

The Company is a professional manufacturer of electronic components belonging to the upstream industry of the electronics information industry. Demand for downstream products will thus affect the Company’s revenues. Connectors are all developed and produced for consumer electronics, communication systems, computers and associated peripherals, business machines, automobiles, information appliances and other multi-demand markets, and we avoid fluctuations in individual markets that affect the growth and decline of operations.

• (2) Computer information system integration and maintenance services:

The Company’s “information service industry” is part of the high-tech industry. Over the years, the Company has adhered to the concept of “stable operations” with professional technical ability and complete marketing channels. In addition to actively obtaining product distribution rights, we also integrate downstream customers’ demand for products as we purchase from upstream manufacturers to obtain a greater price advantage. At the same time, this also makes the Company strong enough to withstand the impact of economic downturns. The overall economic environment has been recovering slowly in recent years. The Company provides high-tech information services with overall solutions according to market demand, integrating network software and hardware solutions and strengthening the professionalism of service provision to increase product profitability. With the current development of technology markets, the domestic information and peripheral equipment industries have continued to grow due to the rapid development of wireless network applications, cloud services and e-commerce, as well as the policies of businesses and government agencies to promote electronic business.

In addition to integrating the original technology and expertise, and providing the best solutions for customer needs and future planning, the Company will remain in the competitive mainstream in the future information service industry in the short term. In the long run, the operation concept of cloud computing applications will be widely used in various industries, and it will be a topic for the overall information market management team in the future. The prevalence of e-commerce and personal data protection laws will bring continuous business opportunities for information security, while the implementation of cloud computing application technology is also a part of our system integration business that cannot be ignored.

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1. Relationships with upstream, midstream, and downstream industries: As shown below, the connector industry structure can be divided into three parts, namely upstream raw materials, midstream connector manufacturing, and downstream applications:

==> picture [405 x 308] intentionally omitted <==

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

Upstream Plastic Metal Components Cables
materials materials
Midstream Professional manufacturing of
connectors and cables/assemblies
Downstream
Medical electronics equipment industry Computer peripheral communication Mobile electronics Consumer appliances Information home systems Satellite navigation Automotive industry
----- End of picture text -----

The Company is a professional manufacturer of connectors and cables/assemblies. Situated in the midstream of the electronics industry, we affect a wide range of related industries. We mainly cover consumer electronics cables, home appliances, IT, business machines, computers and associated peripherals, and other related components. In terms of upstream materials, they are mainly metal materials and plastic materials. In terms of downstream industry applications, they are mainly computer systems and components, communication product manufacturing, computer peripheral manufacturing, and consumer electronics industries. We have long maintained a good supply-demand relationship between the upstream and downstream. 3. Each product development trend category:

The Company primarily constitutes a professional manufacturer of cables and related trading business with production lines and connector assembly combination. Connector technology is closely related to the development of electronic products, covering almost every important industry. As electronic products strive for thinner and higher speeds, both aspects require the support of connectors. Our products have a wide range of applications, mainly covering the fields of computers and associated peripherals, communication network products, multi-function OA business machines, home appliances, consumer electronics, instruments and equipment, automobile-related

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products, and medical equipment. The main growth drivers include smartphones, tablets, and other products, as well as the rise of emerging markets driving the output value of connectors. In short, most areas of electronics require the use of connector and cable assemblies. Therefore, this product already falls under the component of electronic products with wide application therein. Moreover, diversification of product applications makes output value less susceptible to fluctuations caused by individual application industries. In addition, it is also a mature product and so steady growth will be

maintained in the future.

Over the years, global information products and communications and consumer electronics have consistently trended towards diversified functions, and thinner, shorter, and smaller appearances. Communication network products are developing towards a range of requirements such as broadband, high speed, and stable quality. Under the rapid development of connector products in the fields of downstream information, communications, consumer electronics and other fields, and in response to the strategic development of downstream manufacturers and the industrial revolution of comprehensive digitalization and high transmission, the Company’s future research and development direction will be to develop smart home appliances, smart phones, smart TVs, e-books, tablet computers, in-car infotainment devices, antenna sets for wireless communications, and green energy applications. In addition to the Company’s continuous improvement in this industry, we will also further develop and design new connectors and related line sets so that connector manufacturers can keep abreast of product application market trends and make timely launches of new products with relevant specifications. With the rapid product development and adaptability, this presents an opportunity to win optimal profits and markets. 4. Product competition:

There is a short time-to-market cycle of connector application products and the computer, communications and consumer electronics industry. Technological innovation is accelerating, and, given the rise of a new generation of smart portable products, light and thin technology products will become the future trend. In addition, there is price and technology competition among industry peers as there are many manufacturers engaged in manufacturing in related industries. As a result, all connector manufacturers will see compressed profit margins. In view of this, the Company actively strengthens its own manufacturing and R&D technology and rapid product development while strengthening the depth and intensity of customer service. We also effectively control all costs and gain a more real-time grasp of product application market dynamics. We additionally undertake timely launches of product specifications that meet market demand while actively adjusting our operational strategy, in addition to strengthening the Company’s ability to respond to market changes. We thereby become more actively market-oriented while establishing strong business relationships and actively developing new customer groups. We are strengthening the control of raw material costs and long-term cooperation with raw material suppliers to obtain more reasonable input costs in order to increase profits and reduce production costs.

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Beyond this, we are also strengthening the improvement of product yield and efficiency, reducing unnecessary costs, moving production bases to lower-cost regions in China, and trying to be adjacent to downstream customers. In addition to reducing shipping costs and delivery times, such efforts can also provide customers with timely production services as we serve nearby local clients and obtain real-time information, thereby establishing long-term strategic partnerships with customers. The related electronics industry is gathered in the Kunshan area of Jiangsu Province in eastern China because of low costs; in addition, there are some emerging industries and products, and a majority of downstream manufacturers are in the region. Therefore, the development of some related infrastructure, preferential treatment, and technology is quite stable.

• (III) Technology and R&D overview: None.

• Research and development expenses invested in the most recent and up to the printing date of the annual report: The Company has no research and development department; hence, there is no such situation.

• Technologies or products successfully developed in the most recent year and as of the publication date of the annual report: No such situation.

• (IV) Long-term and short-term business development plans:

• Short-term development plans:

  • (1) Continue to integrate and effectively use the resources of the Group’s factories; promote the comprehensive connection of Group information to improve operational efficiency; actively and fully grasp market information to meet the diverse product needs of customers; expand operations and production scale; continue to deepen the Southeast Asian market.

  • (2) Actively participate in international business exhibitions to gain insight into the latest market dynamics, quickly collect industry intelligence, and strengthen marketing capabilities; further get in touch with high-quality customers with potential with a commitment to product diversification development and operations to expand our business niche.

  • (3) In line with the Group’s business objectives and strategies and in view of the rapid changes in the market and the short delivery time required by customers, rapid delivery has become an inevitable trend. Our primary working goals shall be efficient control of the production process, a timely grasp of online real-time information and control of delivery times, and gradual implementation of computerized production control in each factory. Actively introduce new core expertise; develop new product lines and technologies; develop in step with customers and consolidate existing long-term customers; build long-term relationships with customers and meet customer needs.

  • (4) In producing products, we will continue to develop new products and improve product quality and technical levels in addition to continuously strengthening the training of R&D personnel. We shall also strengthen the improvement of production processes, actively expanding production capacity to meet the needs of major

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markets and with the pursuit of quality and stability as our production goals. This lets us increase the rates of automated production and mitigate the need for direct labor, thereby reducing manufacturing costs.

• (5) Software and hardware sales and maintenance services: Strengthen new products and services; actively expand the product lines of agents and distributors; engage in innovative professional value-added services; further develop customers and cross-selling, and expand market share; establish a complete customer consultation and support service system; improve customer satisfaction. In addition to signing computer hardware equipment maintenance contracts with customers who provide system integration services to provide relevant maintenance services, the Company also actively strives for the warranty service of computer hardware equipment products for large customers.

• Long-term development plans:

• (1) Expand production equipment automation; increase production capacity, reduce production cost and defect rates; make production lines smoother. Furthermore, continue to integrate group resources to increase output value, providing customers with needed products in a timely manner and offering them a full range of services.

• (2) Continue to expand market operation and product development technology, and develop multiple products, and actively seek long-term, and stable orders from customers. Moreover, continue to strengthen factory and logistics management capabilities in a stable manner, reducing inventory and improving the yield rates of product processes. Furthermore, continue to carry out talent training and retain outstanding talent in order to obtain a long-term competitive advantage in the market.

• (3) In the future, computer manufacturers will focus operations on the operation modes of different markets; and computer markets in emerging markets have attracted considerable attention due to hardware upgrades and related preferential policies and guarantees promoted by local governments to enhance their national informatization. Therefore, emerging markets are expected to grow driven by the informatization of enterprises and governments to improve work efficiency, as well as by the goal of school education coupled with the needs for learning and work of the general public.

• (4) With expanding scales of operations, we shall strengthen operational efficiency and management to make communicating business information to the management more efficient and timely. Furthermore, we shall strengthen our ability to collect and analyze new markets and new product data to obtain more cooperation opportunities and expand the product market sales territories.

• (5) Information integration business still forms an important part of our revenues. The Company will establish a competitive advantage as we continue to improve core capabilities and comprehensively improve quality and exceed customer requirements. We shall deeply cultivate distribution partnerships, continuously improve service quality for customers, and improve customer satisfaction, thereby becoming an irreplaceable high-quality business partner.

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Beyond this, the cultivation and development of information talent is also very important. The Company will continue to train professional and technical certification personnel and improve overall technical capabilities to provide customers with overall technical support and perfect after-sales service. Moreover, through the irreplaceability of our value-added services, we shall maintain the future competitiveness that has become the foundation of sustainable business operations.

     - (6) In response to the trend of cloud computing applications, information integration technologies have also produced structural changes. We plan to establish a project technology department to integrate the professional and technical IT personnel of the whole Company under one roof. In this way, resources can be managed and utilized more fully and it will be easier to train new skills. In the future, we can thus implement an overall market strategy that will focus on expanding information security and cloud virtualization. At the same time, we will also add online signoff and voice functions of the cloud network to our own process engine product BPMFlow, not only to serve existing customers but also to open up new markets.

• II. Market, Production and Sale:

• I. Market analysis:

  1. Main product (service) sales (provision) areas

Unit: NT$ thousand

		Unit: NT$ thousand
Sales region	2022	Proportion (%)
Asiaregion	2,292,450	58.66
Taiwan region	1,615,734	41.34
Total	3,908,184	100.00

1. Market share With the diversified development of downstream applications and the advancement of connectors in various industries, connectors and wire harnesses have become the media for power transmission and information transmission in a range of devices. The global connector industry is in a steady growth cycle, and the overall market size has basically maintained a stable growth trend and the global market is still large and growing. With years of accumulated technical and marketing experience, the Company maintains a steady growth strategy. We still have room to grow in terms of downstream applications, customer product launches and production, and future growth and declining trends of the industry.

2. Future market supply and demand and future growth

3. (1) The automotive industry is currently in the top three of terminal application fields in connector products. However, due to the pandemic, as well as supply chain disruptions caused by shortages of automotive chips in recent years, automotive-related connectors accounted for a slight decline in the global connector market. The communication industry constitutes a growing application category. Other larger application categories are: industrial applications, rail transit, defense, consumer electronics,

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and other industries.

Downstream applications like smart phones, computers and other products are introduced at a faster rate. Meanwhile, emerging industries such as electric vehicles and new energy vehicles, the Internet of Things, cloud computing servers, and related computer equipment are developing rapidly. The development of the downstream application market will promote the continuous growth of the connector industry.

• (2) From the perspective of major market regions around the world, China currently holds the largest market in the connector industry. Main manufacturers include Luxshare Precision, Foxconn, and Deren Electronics. The world’s leading companies are basically concentrated in the United States, including TE Connectivity and Ampheno. In the European market, German companies are the main manufacturers. Representative manufacturers in the Japanese market include JAE and JST.

• (3) US manufacturers focus on high-value-added applications such as automobiles, military aerospace, and industry. The US government has launched multiple stimulus packages, and consumer confidence and purchases of durable goods such as automobiles are expected to increase. In addition, government-led manufacturing industries have returned to the US with consumption and manufacturing returning to that country as the main body of production and sales. This has attracted leading connector manufacturers to transfer high value-added products back to the US. It can be observed in recent years that the industry continues to expand its global deployment and acquisition strategies. This in turn should strengthen the high-end connector market in areas such as infrastructure construction and 5G deployment, automotive connectors, industrial control, communication, health care, aerospace, defense, and other industries. Product strategies continue to move towards high added value.

• (4) Taiwanese manufacturers are one of the important production partners of global electronics brand manufacturers. With the introduction of new electronic products, terminal prices have fallen rapidly and related components are also facing strong pressure to survive. In recent years, industries have been horizontally consolidated and vertically integrated. The strategic trend of regional deployment thus continues. The growth of smartphones has slowed down as new products continue to be launched in mobile communications, cloud technology and other related applications, but major star goods such as iPhone still bring huge business opportunities to Taiwanese supply chain manufacturers, derived from storage, servers, peripheral device needs, or other products such as in-vehicle electronics and entertainment systems. Looking ahead, as emerging applications such as self-driving cars, drones, and robots continue to integrate software and hardware technologies, coupled with AI technology, the Internet of Things, and 5G applications becoming more intelligent, it is expected to

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form another new market momentum that will continue to replace new business opportunities with a new wave of global applications.

• (5) China’s domestic consumption market continues to develop and brands, manufacturing and related industries have taken advantage of this trend. In addition to developing connectors related to electronic products, China’s major domestic manufacturers also understand the ups and downs of electronic products, and red ocean markets have low barriers to entry. On the other hand, China’s strong domestic demand for home appliances, the automobile market, and even the development needs of the aerospace industry also provide a good growth environment for related businesses. Through cooperation with automobile brand manufacturers or the acquisition of foreign technical production capacity, we can take advantage of these trends to enter the highly profitable automotive connector market.

• Competitive niche

• (1) With the continuous development of information and computer, communications and consumer electronics industry, related products have a wide range of applications and are expanding to many fields such as computers and peripheral equipment, communication systems, home appliances, game consoles, automation equipment, and business machines. Innovation is gradually increasing in electronic products such as smartphones, smart home appliances, and consumer and communication products. Meanwhile, demand is increasing continuously for power transmission lines for computer systems and electrical appliances, and for cables for information peripheral products. The Company has accumulated substantial manufacturing experience over the years. Our optimal production system has passed TS 16949 automobile quality control system certification, ISO 9001 international quality certification, and ISO 14001 international environmental protection certification, and is a qualified professional factory as stipulated in UL safety standards. Product quality is stable and the breadth and depth of our products can meet customer needs.

• (2) The connector and cable set forms the bridge between all signals. With the continuous development of information, communication, and other industries, related peripheral industries are gradually increasing and the product application range is quite wide. At present, it is used in computers and associated peripherals, telecommunications equipment, OA equipment, industrial machines, instruments and equipment, transportation equipment, aerospace, and medical equipment. In short, almost all fields using electricity require connector and cable assemblies. Therefore, this product already falls under the original structure of electronic products with wide application therein. Moreover, diversification of product applications makes output value less susceptible to fluctuations caused by individual application industries. In addition, it is also a mature product so steady growth will be maintained in the future.

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• (3) In order to develop towards internationalization, the Company actively participates in international business exhibitions to expand sales reach and accurately grasp the industry market dynamics of related products, in addition to our continued cultivation of existing customers. Furthermore, we expect to establish a diversified source of application product manufacturers and are committed to product diversification development and operation to expand our business niche, thereby creating a stable source of revenue.

• (4) In consideration of production costs, we will continue to expand overseas factories and reduce manufacturing costs while increasing market competitiveness. Moreover, we shall move close to downstream customers; in addition to reducing transportation costs and shortening customer delivery times, this helps us establish long-term cooperative relationships with customers.

• Favorable and unfavorable factors of development prospects and countermeasures

• (1) Favorable factors

  • A. In terms of industry development trends, connectors are important components of electronic products such as computers and associated peripherals, telecommunications equipment, OA equipment, industrial machines, instruments and equipment, and transportation equipment. Furthermore, in response to the comprehensive digitalization and the development of portable electronic products and the wireless communication industry, we will promote the development of the Company’s component products in a more favorable direction. The Company’s future research and development direction will be to develop new antenna assemblies for mobile phones, digital TVs, and wireless communications. In response to changes in the industry, and in addition to the Company’s continuous improvement in this industry, we will also further develop nanotechnology and environmental protection material design cable assemblies. Given the recovery of the global information and communication industry markets, this will drive the electronic components market. Therefore, the connector industry still has considerable room for growth.

  • B. In view of the advantages of low land and labor costs in China, large manufacturers in various countries have invested in setting up factories there. The company has successively established production bases in Shenzhen, Kunshan and Huizhou to supply the market to serve the needs of customers, and successively completed production deployment to maintain the advantages of nearby supply.

  • C. Related products are constantly being introduced with the rapid development of global information, communications, and consumer electronics products. These products are widely used in information technology, consumer electronics, automobiles, telecommunications, industry, green energy, medical and other industries. The Company has a complete product line and has been deeply involved in the field of cable components for many years, and we have accumulated abundant production experience. Our quality and technology have also earned our customers’ deepest trust.

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D. We have abundant and excellent human resources

The Company has long adhered to the concept of “joint operations and sharing of results” and attaches great importance to employee welfare to attract talented individuals. At the same time, we have implemented staff training and long-term training plans to enable employees to continuously improve their professional ability and related management skills. Moreover, the management team is entirely made up of experienced industry professionals. The Company has abundant and excellent human resources that provide a comparative advantage for its future growth.

• (2) Unfavorable factors

• A. Most production processes must rely on a substantial amount of labor, and high labor costs result in increased operating costs.

  • Countermeasures: To the extent permitted by transportation conditions, we shall carefully assess the investment environment and labor levels in Southeast Asia and gradually shift investment to lower wage regions for production work requiring a large amount of human resources.

• B. Peer competition is becoming increasingly fierce as electronic product cycles become ever shorter; and in recent years, manufacturers across industries have more often adopted the competitive strategy of price-cutting and are turning to lower prices among component suppliers to reduce manufacturing costs. This compresses the latter’s profit margins and forces them to reduce their own costs even as they must still maintain their product quality.

Countermeasures: We make good use of automated production equipment and processes, increasing productivity to reduce labor costs; we strengthen employee on-the-job training to make colleagues more specialized; we strengthen production and sales coordination and management capabilities while reducing inventories; and we improve shipping efficiency and product quality to maintain customer satisfaction.

• C. Market price competition is fierce and there are many manufacturers engaged in connector manufacturing at present. Price-cutting competition in the same industry has reduced component profit margins and earnings are getting slimmer. Countermeasures: We segment the market with diversified products or high value-added products; and for raw materials, labor, manufacturing costs and other costs, we evaluate and make improvements to maintain competitiveness.

• D. The Company’s export ratio is high due to the interference of many uncertain factors in the international economy. Therefore, exchange rate risk has a considerable impact on the Company’s operations. Countermeasures: We receive professional consulting services provided by correspondent banks and external professionals and avoid exchange rate risk when the exchange rate is relatively volatile. Relevant personnel of the Company are also in close contact with bank professionals at all times while continually monitoring international financial

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conditions and exchange rate developments to determine more favorable exchange timing.

• (II) Important uses and production processes of main products:

Major product	Main application	Production process
Wires and connectors	Various connectors for computers and peripheral equipment, general communication systems, home appliances, game consoles, automation equipment, automotive multimedia, business machine cables, consumer and communicationproducts.	1. Product design 2. Mold development 3. Electronics assembly 4. Quality inspection 5. Storage 6. Shipping

(III) Supply status of primary goods:

Main material	Supplier	Supply status
Plastic pellets	Supplier A, Supplier B	Stable, good
Terminals	Supplier C, Supplier D	Stable, good

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(IV) List of main purchase and sales customers in the last two years:

(1) Purchase:

Information on major suppliers in the last two years

Unit: NT$ thousand

									Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
	2021				2022				2023 up to the prior quarter
Item	Name	Amount	Percentage of total annual net purchases (%)	Relationship with issuer	Name	Amount	Percentage of total annual net purchases (%)	Relationsh ip with issuer	Name	Amount	Proportion of net purchases in the current year up to the prior quarter(%)	Relations hip with issuer
1	Supplier A	374,831	17	None	Supplier A	361,118	15	None	Supplier A	39,541		None
	Others	1,865,036	83	-	Others	2,073,870	85	-	Others	383,270	91	-
	Net purchase	2,239,867	100	-	Net purchase	2,434,988	100	-	Net purchase	422,811	100	-

(2) Sales:

Information on major sales customers in the last two years

Unit: NT$ thousand

	2021	2021	2021	2021	2022	2022	2022	2022	2023 up to the prior quarter	2023 up to the prior quarter	2023 up to the prior quarter	2023 up to the prior quarter
Item	Name	Amount	Percentage of total annual net sales (%)	Relationshi p with issuer	Name	Amount	Percentag e of total annual net sales (%)	Relations hip with issuer	Name	Amount	Proportion of the net value of discontinued products in the current year up to the prior quarter (%)	Relationsh ip with issuer
1	customers A	373,767	11	None	customers A	435,891	11	None	customers A	72,152		None
2	Others	2,999,670	89	-	Others	3,472,293	89	-	Others	673,834	90	-
	Net sales	3,373,437	100	-	Net sales	3,908,184	100	-	Net sales	745,986	100	-

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(Ⅴ) Table of production value and volume in the most recent two years:

	Unit: Thousanditems/NT$/NT$ thousand	Unit: Thousanditems/NT$/NT$ thousand	Unit: Thousanditems/NT$/NT$ thousand	Unit: Thousanditems/NT$/NT$ thousand	Unit: Thousanditems/NT$/NT$ thousand	Unit: Thousanditems/NT$/NT$ thousand
Year Production value Principal product (ordepartment)	2021			2022
	Production capacity	Production yield	Production value	Production capacity	Production yield	Production value
Cables and connectors	269,390	283,569	1,872,246	215,871	227,233	1,977,948
Total	269,390	283,569	1,872,246	215,871	227,233	1,977,948

(VI) Sales volume in the last two years

Unit: Thousanditems/NT$thousand	Unit: Thousanditems/NT$thousand	Unit: Thousanditems/NT$thousand	Unit: Thousanditems/NT$thousand	Unit: Thousanditems/NT$thousand	Unit: Thousanditems/NT$thousand	Unit: Thousanditems/NT$thousand	Unit: Thousanditems/NT$thousand	Unit: Thousanditems/NT$thousand
Year	2021				2022
Sales value	Domestic sales		Exports		Domestic sales		Exports
Principal product	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Cables and connectors	-		268,766	2,116,717	-	-	232,344	2,292,450
Others	-	1,256,721			-	1,615,734
Total	-	1,256,721	268,766	2,116,717	-	1,615,734		2,292,450

III. Information of employees in the latest two years and as of the publication date of the annual report:

nual report:	nual report:	nual report:	nual report:	nual report:
	Year	2021	2022	The current year up to May 20, 2023
Number of employees	Indirect employees	553	494
				515
	Direct employees	1,103	1,169
				1,315
	Total	1,656	1,663	1,830
Average age		35.4	35.8	35.2
Averageyears of service		3.7	4.0	3.9
Education distribution ratio	Ph.D.	0	0	0
	Master’s degree	0.72	0.84	0.66
	College and university	20.05	17.38	15.74
	High school	49.82	51.65	56.39
	Below high school	29.41	30.13	27.21

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• IV. Environmental protection expenditure information: In the most recent year and as of the date of publication of the annual report, losses due to environmental pollution: No such situation.

• V. Labor-Management Relation:

• (I) Various employee welfare measures, continuing education, training, retirement systems and their implementation status and agreements between labor and management and various employee rights protection measures:

  1. Employee benefit measures:

     • (1) In addition to handling statutory insurance in accordance with relevant government laws and regulations, the Company further plans employee group insurance and annual health checkups to protect the health and safety of employees, and all related expenses are borne by the Company.

     • (2) The Company established the Employee Welfare Committee in accordance with the law. The Employee Welfare Committee is elected by the employees to represent all the employees. It prepares a budget every year to implement various benefits, with a range of subsidies given to employees for marriage, funerals, and childbirth; and it regularly handles various travel activities for employees as well as birthday parties, departmental dinners, and New Year’s gifts and other activities to balance employees in mind and body and strengthen camaraderie among them.

     • (3) In accordance with the annual performance appraisal of employees, annual bonuses are issued to encourage personnel; and, in accordance with provisions the Company’s Articles of Incorporation, employee dividends are shared and employee momentum is gathered while ensuring that both labor and management share in profits and losses.

  2. Retirement system and implementation: The Company obtained the approval of the Taipei City Labor Bureau on November 21, 2011, to officially settle employees under the prior seniority before July 1, 2005, in accordance with the “Labor Retirement Measures”. Therefore, under the Company’s current retirement system, seniority is calculated from July 1, 2005, and in accordance with the relevant provisions of the government’s “Labor Retirement Regulations”, with the exception of “defined contribution plans”. At the same time, 6% of the employee salaries is allocated to the personal pension accounts every month.

  3. Staff continuing education and training and implementation: The Company attaches great importance to staff education and training and formulates annual education and training plans in accordance with the functional needs of employees. We assist each unit to implement education and training, train employees to fully leverage their functions in the organization, improve the quality of personnel, and improve employee skills and knowledge, thereby improving work efficiency.

     • (1) We arrange training courses in accordance with different job categories in order to assist new colleagues to work effectively as soon as possible through pre-employment training. Department colleagues assist new colleagues in understanding the Company’s industrial positioning, corporate culture, systems and regulations, basic operating system operations and future development directions, and adapting to the workplace environment as soon as possible and familiarizing themselves with future job duties so as get to work as quickly as

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possible.

• (2) For employees, they may themselves arrange to participate in the professional ability and technical training required by training institutions in accordance with the needs of each unit, in order to grasp the Company’s policy needs and meet the requirements of relevant laws and regulations.

• (3) In accordance with the needs of each functional profession, we hire external lecturers to hold training sessions and improve the professionalism of employees.

• Agreement between employer and employees, and measures for protection of employee rights and benefits:

• (1) Insurance and condolence pay: The Company complies with relevant provisions of labor laws and regulations, and both management and employees formulate employment contracts, work rules and various management regulations in accordance with regulations. All operations are in proper compliance with the norms of the Labor Standards Act. All employees participate in labor insurance and health insurance, and group and travel safety insurance are also provided for employees for employee illness and death and for relief provision of spouse and casualty assistance.

• (2) Maintenance and inspection of all equipment: The Company conducts regular fire safety inspections every year, including alarm systems, escape systems, fire extinguishers, etc. as well as public safety inspections. We conduct public safety inspections every four years. We regularly entrust manufacturers to maintain and inspect the water quality, ensuring the safety of drinking water for employees, and comply with government regulations.

• (3) Disaster preparedness measures and response: In order to maintain the safety and health of employees, we promote safety and health operations. The Company have two Class A occupational safety and health business supervisors and one first-aider.

• (4) Access control security: The Company’s buildings are equipped with strict access control monitoring systems during the day and at night. During holidays, we contract with a security company to maintain office security.

• (5) Physical health: We have smoking-free management in office buildings to provide a safe and healthy work environment for employees. We regularly implement office cleaning and disinfection and carry out pandemic prevention advocacy. We also conduct health checks for employees every two years, and we send a short video on fire prevention advocacy every six months and provide relevant health and education information by email. We thus cultivate employees’ emergency response capabilities and safety concepts, strengthen cognitive abilities, and reduce accidents caused by unsafe behavior.

• (6) Mental health: The Company has set up a “Sexual Harassment Prevention Committee” and established a reporting mechanism to provide protection for the workplace safety of colleagues. The Company’s internal website has an independent reporting mailbox and a dedicated line for use by internal personnel. The dedicated unit maintains an independent and objective attitude towards complaints, investigates the cause, responds to employees in a timely and correct manner, and reviews improvement measures in the follow-up.

• (7) We have set up “On-Site Employee Health Consultation Services” to handle on-site health services. For three fixed days per month,

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professional nursing staff provide health consultations (such as explanations of personal health examination reports, recommendations for medical treatment, personal disease consultation, etc.). This aims to prevent occupational accidents and occupational illnesses for the sake of improving the physical and mental health of employees.

  - (8) Supervisors at all levels communicate and coordinate with employees on a regular basis and hold labor-management meetings regularly to facilitate smooth communication between labor and management and harmonious labor relations.

• (II) In the most recent year and as of the date of publication of the annual report, any losses suffered due to labor disputes (including labor inspection results that violate the Labor Standards Act, sanction date, sanction code, regulatory provisions that were violated, details of the regulatory violation, and sanction details), disclosing the current and future estimated amounts and possible measures; if it cannot be reasonably estimated, the fact that it cannot be reasonably estimated shall be stated:

• (1) In the most recent year and as of the date of publication of the annual report, the Company has had no cases of losses due to labor disputes.

• (2) The Company complies with the Labor Standards Act and related laws and regulations. Labor and management have established a good interactive relationship; therefore, it is predicted that there will be no losses due to labor disputes in the future.

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VI. Information Security Management:

• (I) State the information security risk management framework, the information security policy, the specific management plan, resources invested in the security management of information, etc.

• Information security risk management framework: We have an information security team to strengthen the Company’s information security management and ensure the security of data, systems, and networks. With the vice president acting as convener, the Information Department constitutes the responsible unit for information security. It is responsible for the formulation of information security policies, planning and implementation of information security operations (including network management and system management), and promotion and implementation of information security policies. The Company’s audit office constitutes the audit unit for information security and is responsible for conducting information security audits. If an audit finds deficiencies, the audited unit is required to propose relevant improvement plans and specific actions, and improvement results are regularly tracked to reduce internal information security risks.

• Information security policy: In order to implement information security management, the Company has an internal control system—computer information security management measures for various information security risks inside and outside the organization. Prevention and control mechanisms have been established including: system and network management, system development processes, device management, hardware protection, application system security monitoring, Internet and mobile device security control, internal employee information security awareness, and so on. In addition, personnel from the Information Department establish a backup mechanism every year for network security and various application systems. They conduct disaster preparedness drills and also strengthen the environmental control of the computer room and upgrade the firewall equipment to ensure the safety of employees and the continued operation of critical businesses, reducing losses caused by accidents. We perform information security audits on a regular basis, ensuring the implementation of information security.

• Specific management plan:

  • (1) Application usage: Employees must install and use software authorized by manufacturers in accordance with company regulations, and obtain legal authorization for intellectual property rights in accordance with the relevant regulations to avoid litigation or disputes.

  • (2) Internet information security management and control: We have set up a firewall and regularly scan computer systems and data storage media for viruses. The use of various network services should be implemented in accordance with information security policies, regular review of the system logs of various network service items, and tracking of abnormal situations.

  • (3) Data access control: Computer equipment should be kept by a designated person, and accounts and passwords should be set, assigning different access rights in accordance with functions. Transferring personnel should have their original authorizations canceled and the confidentiality, removal, or overwriting of sensitive data and copyrighted software should be subject to proper approval.

  • (4) Resilience mechanisms: We have established a system backup

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mechanism and implement off-site backup, and regularly review computer network security measures.

• (5) Advocacy and verification: We strengthen the concept of employee information security, use conferences and the internal corporate website to promote information security awareness to colleagues, to not open any suspicious information or e-mails and avoid social engineering attacks. Information security information is disseminated at any time, raising employee information security awareness, carrying out regular information security checks every year, and reporting to the head of the General Administration Office.

• (6) Personnel training: the Company intermittently implements personnel information security education and training courses and information security advocacy in order to enhance colleagues’ information security knowledge and professional skills.

• Resources invested in information security management:

• (1) Network hardware devices such as firewalls, email anti-virus, spam filtering, network management collection lines, etc.

• (2) Software systems such as endpoint protection systems, backup management software, VPN authentication and encryption software, etc.

• (3) Dedicated manpower: We regularly perform daily system status checks, regular daily backups and storage of backup media in different places, and information security advocacy and education courses at least twice a year, annual system disaster recovery execution drills, and information system security updates. In addition, we scan the weaknesses of the Company’s major information systems every year with bug patching, annual internal audits of the information cycle, and so on.

• (4) Information security manpower: There is one information security supervisor and one information security officer who are responsible for information security architecture design, information security maintenance and monitoring, information security incident response and investigation, and information security policy review and revision.

• (5) We regularly conduct information security education, training and advocacy every year, reviewing whether the information security management measures are in line with the changes in the operating environment and making timely adjustments when required.

• (6) In response to the ever-changing information and communication technology, cyber threats, and information risks brought by emerging technologies, Welltend Technology obtained the ISO 27001 information security management system international certification in May 2018 (valid from July 21, 2021 to July 20, 2024). Furthermore, we regularly hold annual re-inspections to implementing a range of control measures for internal audits and internal control of the Company, legal compliance, confidentiality, completeness, and usability of information. We continue to invest in the improvement of the operation processes and the improvement of system application, and with an institutionalized, documented, and systematic management mechanism to enhance the Company’s overall risk control capabilities, we can also truly meet the needs of customers for information security. Up to now, 7 colleagues of the Company have obtained the ISO 27001 internal auditor training certification.

• Emergency reporting procedures:

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When an information security incident occurs, the person who discovers it should immediately notify the responsible unit, determine the type of incident and identify problem points, immediately deal with it, and keep a record.

• (II) State losses suffered due to major information security incidents in the most recent year and as of the publication date of publication of the annual report, possible impact, and response measures; if it cannot be reasonably estimated, the fact that it cannot be reasonably estimated shall be stated: No such situation.

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VII. Important contracts:

May20,2023	May20,2023	May20,2023	May20,2023	May20,2023
Contract nature	Contractual party	Main content	Restrictive clauses	Contract start and end date
Distribution contract	HP Taiwan	Full series of products	None	No contract period
Distribution contract	Symantec Limited	Full series of products	None	2023/02/20-2024/02/ 19 (automatic renewal upon expiration)
Distribution contract	IBM Taiwan Corporation	Authorization to maintain IBM products	None	2021/07/01-2023/06/ 30 (automatic renewal for two years upon expiration)
Distribution contract	Lenovo Technology B.V. Taiwan Branch (Netherlands)	Think and Idea series hardware, software and services	None	2022/10/01-2024/09/ 30
Distribution contract	Xander International Corp.	Computer peripherals and video products	None	2022/07/28-2023/07/ 27 (Automatic renewal upon expiration)
Distribution contract	IBM Taiwan Corporation	Power system and storage products	None	2022/12/20-2024/12/ 19 (automatic renewal for two years upon expiration)
Distribution contract	Dell B.V. Taiwan Branch	laptop computers, desktop computers, peripheral products, components, equipment, software and related accessory products	None	2023/04/19-2024/04/ 18 (Automatic renewal upon expiration)
Distribution contract	IBM Singapore Pte Ltd	Software products	None	2023/1/15-2025/1/14
Distribution contract	Apple Asia LLC, Taiwan Branch	Apple TV Apple Watch iPad iPhone Mac	None	2023/5/1-2026/4/30

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Six.

Financial Overview

• I. Condensed balance sheets and comprehensive income statements for the last five years, indicating the names review opinions of CPAs:

• (I) Condensed balance sheet and consolidated income statement information

Consolidated Condensed Balance Sheet - Adopting International Financial Reporting Standards

Unit: $NT thousand

		Unit:	Unit:	Unit:	Unit:	Unit:	$NT thousand
Year Item		Financial data for the most recent five years (Note 1)					Financial information for the current year up to March 31, 2023(Note 4)
		2018	2019	2020	2021	2022
Current assets		1,826,165	1,946,519	2,108,163	2,215,483	2,476,124	2,311,193
Property, plant and equipment (Note2)		305,152	295,710	435,556	414,455	426,974	424,977
Intangible assets		47,353	47,566	46,262	45,461	44,414	43,915
Otherassets (Note2)		82,264	142,133	126,012	115,032	132,562	132,560
Totalassets		2,260,934	2,431,928	2,715,993	2,790,431	3,080,074	2,912,645
Current liabilities	Before distribution	1,053,234	1,166,579	1,421,149	1,462,525	1,501,790	1,369,766
	After distribution	1,124,344	1,204,504	1,486,249	1,490,425	(Note 3)	Not yet allocated
Non-currentliabilities		5,257	45,214	39,823	58,717	92,462	86,544
Total liabilities	Before distribution	1,058,491	1,211,793	1,460,972	1,521,242	1,594,252	1,456,310
	After distribution	1,129,601	1,249,718	1,526,072	1,549,142	(Note 3)	Not yet allocated
Equity attributable to owners of the parent company		1,202,335	1,220,025	1,254,908	1,269,077	1,485,708	1,456,214
Capitalstock		958,135	958,135	940,000	940,000	958,900	958,900
Additional paid-in capital		7,991	7,991	7,991	7,991	7,525	7,525
Retained earnings	Before distribution	327,740	393,048	447,815	513,444	639,311	601,563
	After distribution	256,630	355,123	412,715	485,544	(Note 3)	Not yet allocated
Otherequity		(79,412)	(124,887)	(126,636)	(178,096)	(120,028)	(111,774)
Treasury shares		(12,119)	(14,262)	(14,262)	(14,262)	0	0
Non-controlling interests		108	110	113	112	114	121
Total equity	Before distribution	1,202,443	1,220,135	1,255,021	1,269,189	1,485,822	1,456,335
	After distribution	1,131,333	1,182,210	1,189,921	1,241,289	(Note 3)	Not yet allocated

Note 1: The financial information of each year has been checked and certified by CPAs. Note 2: No asset revaluation was conducted in the above-mentioned years.

Note 3: The 2022 surplus distribution plan was approved by the Board of Directors; a resolution of the shareholders’ meeting is still pending.

Note 4: The financial information for the first quarter of 2023 has been reviewed by CPAs.

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Consolidated Condensed Comprehensive Statements of Income - Adopting International Financial Reporting Standards

Unit: $NT thousand

	Unit:	Unit:	Unit:	Unit:	Unit:	$NT thousand
Year Item	Financial data for the most recent five years (Note 1)					Financial information for the current year up to March 31, 2023 (Note2)
	2018	2019	2020	2021	2022
Operatingrevenue	2,373,890	2,510,517	2,717,038	3,373,438	3,908,184	745,986
Operatingmargin	556,838	575,910	572,431	682,548	722,893	131,643
Operating profit and loss	161,532	181,541	170,569	236,096	293,882	34,735
Non-operating income and expenses	15,654	7,701	(21,929)	(24,423)	17,971	(6,598)
Net profit before tax	177,186	189,242	148,640	211,673	311,853	28,137
Profit from continuing operations for the period	124,640	136,420	95,988	130,728	184,190	29,382
Profit or loss from discontinued operations	-	-	-	-	-	-
Profit (loss) for the period	124,640	136,420	95,988	130,728	184,190	29,382
Other comprehensive income for the period (net aftertax)	(19,720)	(45,475)	(1,749)	(51,460)	58,068	8,254
Total comprehensive incomeforthe period	104,920	90,945	94,239	79,268	242,258	37,636
Net profit attributable to owners of the parent company	124,640	136,418	95,985	130,729	184,188	29,375
Net profit attributable to non-controlling interest	0	2	3	(1)	2	7
Total comprehensive income attributable to owners of the parent company	104,920	90,943	94,236	79,269	242,256	37,629
Total comprehensive profit and loss attributable to non-controlling interests	0	2	3	(1)	2	7
Earnings per share (profit and loss)	1.30	1.44	1.03	1.36	1.92	0.31

Note 1: The financial information of each year has been checked and certified by CPAs. Note 2: The financial information for the first quarter of 2023 has been reviewed by CPAs.

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• (II) Condensed Balance Sheet and Income Statement Information - Taiwan Enterprise Accounting Standards

Parent Company Only Condensed Balance Sheet - Adopting International Financial Reporting Standards

Unit: $NT thousand

		Unit:$NT thousand	Unit:$NT thousand	Unit:$NT thousand	Unit:$NT thousand	Unit:$NT thousand
Year Item		Financial data for the most recent five years (Note 1)
		2018	2019	2020	2021	2022
Current assets		444,037	463,298	411,010	432,705	387,985
Property, plant and equipment (Note2)		169,916	170,483	191,100	186,995	182,506
Intangible assets		15,470	15,682	14,325	13,546	12,523
Otherassets (Note2)		1,299,393	1,382,987	1,622,394	1,687,503	1,900,997
Total	assets	1,928,816	2,032,450	2,238,829	2,320,749	2,484,011
Current liabilities	Before distribution	711,494	805,382	976,999	1,023,472	957,109
	After distribution	711,494	805,382	976,999	1,023,472	(Note 3)
Non-currentliabilities		14,987	7,043	6,922	28,200	41,194
Other liabilities		-	-	-	-	-
Total liabilities	Before distribution	726,481	812,425	983,921	1,051,672	998,303
	After distribution	726,481	812,425	983,921	1,051,672	(Note 3)
Capitalstock		958,135	958,135	940,000	940,000	958,900
Additional paid-in capital		7,991	7,991	7,991	7,991	7,525
Retained earnings	Before distribution	327,740	393,048	447,815	513,444	639,311
	After distribution	327,740	393,048	447,815	513,444	(Note 3)
Otherequity		(79,412)	(124,887)	(126,636)	(178,096)	(120,028)
Treasury shares		(12,119)	(14,262)	(14,262)	(14,262)	0
Non-controlling interests		-	-	-	-	-
Total equity	Before distribution	1,202,335	1,220,025	1,254,908	1,269,077	1,485,708
	After distribution	1,202,335	1,220,025	1,254,908	1,269,077	(Note 3)

Note 1: The financial information of each year has been checked and certified by CPAs. Note 2: No asset revaluation was conducted in the above-mentioned years. Note 3: The 2022 surplus distribution plan was approved by the Board of Directors; a resolution of the shareholders’ meeting is still pending.

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Parent Company Only Condensed Comprehensive Income Statement - Adopting International Financial Reporting Standards

Unit: $NT thousand

	Unit:$NT thousand	Unit:$NT thousand	Unit:$NT thousand	Unit:$NT thousand	Unit:$NT thousand
Year Item	Financial data for the most recent five years (Note 1)
	2018	2019	2020	2021	2022
Operatingrevenue	678,386	559,403	808,804	1,040,823	1,250,377
Operatingmargin	184,743	143,898	165,353	206,367	223,808
Operating profit and loss	35,891	2,783	20,661	40,640	45,932
Non-operating income and expenses	101,635	142,840	88,229	115,443	156,045
Net profit (net loss) before tax	137,526	145,623	108,890	156,083	201,977
Profit or loss from continuing operations	124,640	136,418	95,985	130,729	184,188
Profit or loss from discontinued operations	-	-	-	-	-
Net profit (net loss) forthe period	124,640	136,418	95,985	130,729	184,188
Other comprehensive incomeforthe period	(19,720)	(45,475)	(1,749)	(51,460)	58,068
Total comprehensive income for theperiod	104,920	90,943	94,236	79,269	242,256

Note 1: The financial information of each year has been checked and certified by CPAs.

(III) CPA names and their audit opinions for the most recent five years:

Year	Name of the accounting firm	Name of CPAs	Audit opinion
2018	KPMG Taiwan	Yi-Wen Wang, Jui-Lan Luo	Unqualified opinion
2019	KPMG Taiwan	Yi-Wen Wang, Jui-Lan Luo	Unqualified opinion
2020	KPMG Taiwan	Yi-Wen Wang, Jui-Lan Luo	Unqualified opinion
2021	KPMG Taiwan	Yi-Wen Wang, Jui-Lan Luo	Unqualified opinion
2022	KPMG Taiwan	Yi-Wen Wang, Yiu-Kwan Au	Unqualified opinion

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II. Financial analysis for the last five years: (1) Consolidated Financial Analysis

Year Analysis item(Note 2)	Year Analysis item(Note 2)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	For the current year up to March 31, 2023 (Note 1)
		2018	2019	2020	2021	2022
Financial structure (%)	Debt to asset ratio	47.00	50.00	54.00	55.00	52.00	50.00
	Ratio of long-term funds to property, plant, and equipment	396	428	297	320	370	363
Solvency %	Current ratio	173	167	148	151	165	169
	Quick ratio	121	118	95	90	112	115
	Interest coverage ratio	25.13	22.04	17.90	23.05	28.76	9.40
Operating ability	Receivables turnover rate(times)	3.90	4.04	4.11	4.51	4.37	3.23
	Average cash collection days	94	90.35	88.81	80.93	83.52	113.00
	Inventory turnover rate(times)	3.91	3.58	3.37	3.36	3.85	3.27
	Payables turnover rate(times)	6.62	6.55	6.60	7.73	8.00	6.29
	Average sales days	93	102	108	109	95	112
	Property, plant, and equipment turnover rate(times)	7.82	8.36	7.00	7.94	9.29	7.00
	Total asset turnover rate(times)	1.10	1.07	1.06	1.23	1.33	1.00
Profitability	Return on assets (%)	6.06	6.12	4.00	6.39	6.58	4.28
	Return on equity (%)	10.46	11.26	7.76	13.33	13.37	7.99
	Net profit before tax to paid-in capital ratio(%) (Note 7)	18.49	19.75	15.81	22.52	32.52	2.93
	Netprofit rate(%)	5.00	5.00	4.00	5.00	5.00	4.00
	Earnings per share (NT$)	1.30	1.44	1.03	1.36	1.92	0.31
Cash flow	Cash flow ratio(%)	12.00	22.00	5.00	1.00	11.00	3.00
	Cash flow adequacy ratio(%)	本期不適用	85.99	74.16	40.01	55.38	Not applicable for thisperiod
	Cash reinvestment ratio(%)	4.00	13.00	2.00	-3.00	7.00	-1.00
Leverage	Operational leverage	1.51	1.52	1.51	1.34	1.27	1.60
	Financial leverage	1.05	1.05	1.05	1.04	1.04	1.11

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• The quick ratio increased year-on-year, primarily due to an increase in end of period current assets.

• Interest coverage ratio, EBIT to paid-in capital ratio, and earnings per share increased compared with the same period last year primarily due to increased net profit for the current period.

• Cash flow adequacy ratio and cash flow ratio increased compared with the same period last year primarily due to increased net cash inflow from operating activities for the period.

• Cash reinvestment ratio increased compared with the same period last year primarily due to an increase in net cash inflow from operating activities for the period while the amount of issued cash dividends for the period was smaller than cash inflows from operating activities.

Note 1: Except for the financial information for the first quarter of 2023 which was reviewed by CPAs, the financial information for all other years has been audited by accountants.

Note 2: As of the date of publication of the annual report, if a company that is listed or whose shares are traded in a securities dealer’s business premises has the most recent financial information that has been audited, certified, or reviewed by CPAs, analysis should be made together.

(2) Parent company only financial analysis

Year Analysis item (Note 2)	Year Analysis item (Note 2)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)
		2018	2019	2020	2021	2022
Financial structure (%)	Debt to asset ratio	38.00	40.00	44	45	40
	Ratio of long-term funds to property, plant, and equipment	716	720	660	694	837
Solvency %	Current ratio	62	58	42	42	41
	Quick ratio	50	41	19	21	28
	Interest coverage ratio	20.30	20.19	15.05	19.21	21.22
Operating ability	Receivables turnover rate (times)	5.82	5.41	11.31	11.64	8.23
	Average cash collection days	63	67	32	31	44
	Inventory turnover rate (times)	7.09	3.75	3.62	3.75	5.99
	Payables turnover rate (times)	5.60	4.42	5.19	6.68	8.02
	Average sales days	51	97	101	97	61
	Property, plant, and equipment turnover rate (times)	3.99	3.29	4.47	5.51	6.77
	Total asset turnover rate (times)	0.36	0.28	0.38	0.46	0.52
Profitability	Return on assets(%)	7.00	7.19	4.78	6.03	8.00
	Return on equity (%)	10.46	11.26	7.76	10.36	13.37
	Net profit before tax to paid-in capital ratio (%) (Note 7)	14.35	15.20	11.58	16.60	21.06
	Netprofit rate(%)	18	24	12	13	15
	Earningsper share(NT$)	1.30	1.44	1.03	1.36	1.92
Cash flow	Cash flow ratio (%)	0	15.00	2.00	2.00	-1.00
	Cash flow adequacy ratio (%)	Not applicable for thisperiod	36.37	41.89	24.50	29.46

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	Cash reinvestment ratio (%)	-5.00	3.00	-1.70	-3.58	-2.09
Leverage	Operational leverage	1.21	4.18	1.42	1.25	1.22
	Financial leverage	1.25	(0.58)	1.60	1.27	1.28
* The ratio of long-term capital to property, plants, and equipment increased compared to the same period last year primarily due to an increase in the total amount of equity compared with the same period last year. The quick ratio increased year-on-year, primarily due to an increase in end of period current assets. Accounts receivable turnover fell year-on-year and there was an increase in average cash collection days primarily resulting from a greater increase in accounts receivable than in sales revenue on average. Inventory turnover rate increased compared with the same period last year and average sales days decreased, primarily due to a decrease in average inventory and an increase in cost of goods sold. Accounts payable turnover rate increased compared with the same period last year, primarily due to an increase in average accounts payable that was smaller than the increase in cost of goods sold. Property, plants, and equipment turnover rate increased compared with the same period last year, primarily due to increased sales revenues. Return on assets, return on equity, EBIT to paid-in capital ratio, and earnings per share increased compared with the same period last year primarily due to increased net profit for the current period. The cash flow adequacy ratio decreased compared with the same period last year, primarily due to a decrease in net cash inflow from operating activities for the period. The cash flow ratio increased compared with the same period last year, primarily due to a decrease in cash dividend issuance for the period. * The cash reinvestment ratio increased compared with the same period last year, primarily due to a decrease in cash dividend issuance for the period and increased long-term investments.

• The cash flow ratio increased compared with the same period last year, primarily due to a decrease in cash dividend issuance for the period.

• • The cash reinvestment ratio increased compared with the same period last year, primarily due to a decrease in cash dividend issuance for the period and increased long-term investments.

• Note 1: The financial information of each year has been audited by CPAs.

• Note 2: As of the date of publication of the annual report, if a company that is listed or whose shares are traded in a securities dealer’s business premises has the most recent financial information that has been audited, certified, or reviewed by CPAs, analysis should be made together.

• Note 3: At the end of this form of the annual report, the following calculation formulas should be listed:

• Financial structure

  • (1) Liabilities to assets ratio = total liabilities/total assets.

  • (2) Ratio of long-term funds to property, plant, and equipment = (total equity + non-current liabilities)/net property, plant, and equipment.

• Solvency

  • (1) Current ratio = current assets/current liabilities.

  • (2) Quick ratio = (current assets - inventory - prepaid expenses)/current liabilities.

  • (3) Interest coverage ratio = net profit before income tax and interest expense/interest expense in the current period.

• Operating ability

  • (1) Receivables (including accounts receivable and notes receivable due to business) turnover rate = net sales/average receivables in each period (including accounts receivable and notes receivable due to business) balance.

  • (2) Average cash collection days = 365/receivables turnover rate.

  • (3) Inventory turnover rate = cost of goods sold/average inventory value.

  • (4) Payables (including accounts payable and bills payable due to business) turnover rate = cost of goods sold/average payables in each period (including accounts payable and bills payable due to business) balance.

  • (5) Average sales days = 365 /inventory turnover rate.

  • (6) Turnover rate of property, plant, and equipment = net sales/average net property, plant, and equipment.

  • (7) Total asset turnover ratio = net sales/average total assets.

• Profitability

  • (1) Return on assets = [after-tax profit and loss + interest expense × (1 - tax rate)]/average total assets.

  • (2) Return on equity = after-tax profit and loss/average total equity.

  • (3) Net profit rate = after-tax profit and loss/net sales.

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  - (4) Earnings per share = (profit and loss attributable to owners of the parent company - preferred share dividends)/weighted average number of issued shares. (Note 4)

1. Cash flow

   • (1) Cash flow ratio = net cash flow from operating activities/current liabilities.

   • (2) Net cash flow ratio = net cash flow from operating activities in the last five years/(capital expenditure + inventory increase + cash dividend) in the last five years.

   • (3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends)/(gross property, plant, and equipment + long-term investment + other non-current assets + working capital). (Note 5)

2. Leverage:

   • (1) Operating leverage = (net operating income - variable operating costs and expenses) /business interests (Note 6).

   • (2) Financial leverage = operating profit/(business profit - interest expense).

3. Note 4: In the above calculation formula for earnings per share, particular attention should be paid to the following when measuring:

4. Based on the weighted average number of common shares, not based on the number of shares outstanding at the end of the year.

5. Instances of cash capital increase or treasury stock transactions should calculate the weighted average number of shares taking into account their circulation period.

6. For any capitalization of retained earnings or capitalization of capital reserves, when calculating earnings per share for previous years and half-years, it should be retroactively adjusted in accordance with the capital increase ratio, and the issue period of the capital increase need not be taken into account.

7. If preferred shares constitute non-convertible cumulative preferred shares, their annual dividend (whether issued or not) shall be deducted from after-tax net profit, or the after-tax net loss shall be increased. If preferred shares are non-cumulative in nature, in case of net profit after tax, preferred share dividends shall be deducted from net profit after tax. In case of loss, no adjustment is necessary.

8. Note 5: In the cash flow analysis, particular attention should be paid to the following when measuring:

9. Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.

10. Capital expenditure refers to the annual cash outflow of capital investment.

11. Increases in inventory will only be included when the balance at the end of the period is greater than the balance at the beginning of the period. If inventory decreases at the end of the year, it is calculated as zero.

12. Cash dividends include cash dividends of common shares and preferred shares.

13. Property, plant and equipment means the total amount of property, plant and equipment before deduction of accumulated depreciation.

14. Note 6: The issuer shall classify various operating costs and operating expenses into fixed and variable in accordance with their nature. If estimates or subjective judgments are involved, attention should be paid to their rationality and consistency.

15. Note 7: If the Company’s stock has no par value or the par value of each share is not NT$10, the previous calculation of the ratio to paid-in capital is to be changed to the equity ratio attributable to the owners of the parent company on the balance sheet.

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III. The Audit Committee review report of the most recent financial report:

Welltend Technology Corporation Review Report of the Audit Committee

The Board of Directors has submitted the Company’s 2022 parent company only financial statements and consolidated financial statements after the audit by Yi-Wen Wang and Yiu-Kwan Au of KPMG and issued a report, together with the business report and the profit distribution proposal. After review by the Audit Committee, it is found that there is no discrepancy, and reporting for verification is requested in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

Sincerely

2023 General Meeting of Shareholders of the Company

Welltend Technology Corporation

Convener of Audit Committee: Ching-Ju Wu

March 23 2023

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• IV. Parent company only financial statements for the most recent fiscal year audited by CPAs

Independent Auditors’ Report

To the Board of Directors of Welltend Technology Corporation:

Opinion

We have completed our review of the balance sheet of Welltend Technology Corporation for the years ended December 31, 2022 and 2021, and the statements of comprehensive income, statements of changes in equity, and the statements of cash flows for the years ended December 31, 2022 and 2021, as well as the notes to the parent company only financial statements (including a summary of significant accounting policies).

In our opinion, the aforementioned parent company only financial statements in all major respects are in compliance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. They are sufficient to adequately express the financial status of Welltend Technology Corporation as of December 31, 2022 and 2021, and its financial performance and cash flows for the years ended December 31, 2022 and 2021.

Basis for Opinion

We perform audit work in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants as well as the auditing standards. Our responsibilities under these Standards are further explained in the section on Responsibilities of the accountants for auditing the parent company only financial statements. Personnel subject to rules of independence under our offices adhere to the Norm of Professional Ethics for Certified Public Accountants and remain detached and independent from Welltend Technology Corporation, and they fulfill other responsibilities of the Norm. We believe that sufficient and appropriate audit evidence has been obtained to serve as a basis for expressing an audit opinion.

Key Audit Matters

Key audit matters refer to the most important matters for the audit of Welltend Technology Corporation’s 2022 parent company only financial statements based on our professional judgment. These matters have been addressed in the process of reviewing the parent company only financial statements as a whole and in forming an audit opinion, and we do not express a separate opinion on these matters. Key audit matters that we judge should be communicated in the audit report are as follows:

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I. Revenue recognition

For accounting policies on revenue recognition, please refer to Revenue Recognition in Note 4 (XIII) of the Notes to the Parent Company Only Financial Statements. For descriptions of revenue, please refer to Revenue from Customer Contracts in Note 6 (XIII) of the Notes to the Parent Company Only Financial Statements.

Explanation of key audit matters:

The main businesses of Welltend Technology Corporation are information systems and consulting services and the sale of wires and connectors and so on. Therefore, revenue is one of the important items in the financial statements. The amount and changes of operating revenue may affect the understanding of financial statement users regarding the financial statements as a whole. Therefore, the test of revenue recognition is one of our important evaluation items in performing audits of the financial statements of Welltend Technology Corporation. Corresponding audit procedures:

Our main audit procedures for the above-mentioned key audit matters include testing the control of the revenue and collection operation cycle, implementing revenue audit procedures and detailed tests, performing correspondence audit procedures for accounts receivable, and performing spot checks of contract liabilities. Furthermore, we evaluate whether the time of opening revenue recognition is handled in accordance with the relevant standards.

• II. Revenue recognition – Equity method investments – Subsidiaries

For equity method investment accounting policies, please refer to Invested Subsidiaries under Note 4 (VIII) of the parent company-only financial statements. For explanation of equity method investments, please refer to Note 6 (IV) of the parent-company only financial statements. Explanation of key audit matters:

Some subsidiaries of Welltend Technology Corporation held under the equity method are mainly engaged in sales of wires and connectors. The amount invested in subsidiaries as of December 31, 2022 was NT$1,093,730 thousand constituting a material proportion of total assets amounting to 44%. From the perspective of consolidation, revenue from wires and connectors constitutes an important source of revenue. The amounts and changes in its sales revenues may affect the financial statement users’ understanding of the overall financial statements. Therefore, we list this as one of the important evaluation items in performing audits of the parent-company only financial statements of Welltend Technology Corporation. Corresponding audit procedures:

Our main audit procedures for the above-mentioned key audit matters include testing the control of the revenue and collection operation cycles of a portion of subsidiariesinvested in using the equity method, implementing revenue audit analytical procedures and detailed tests, performing correspondence audit procedures for accounts receivable. Furthermore, we evaluate whether the timing of revenue recognition is handled in accordance with the relevant standards.

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Responsibilities of Management and Those Charged with Governance for Parent Company Only

Financial Statements

The responsibility of management is to prepare properly expressed parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and to maintain the necessary internal controls in connection with the preparation of the parent company only financial statements to ensure that the parent company only financial statements are free from material misrepresentation that could result from fraud or error.

When preparing the parent company only financial statements, the responsibilities of management also include evaluating the ability of Welltend Technology Corporation to continue operating, the disclosure of related matters, and the adoption of a going-concern accounting basis unless management intends to liquidate Welltend Technology Corporation or cease operations, or there is no other practical alternative to liquidation or business closure.

The governance units of Welltend Technology Corporation (including the Audit Committee) are responsible for supervising the financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

The purpose of our audit of the parent company only financial statements is to obtain reasonable assurance as to whether there is a material misrepresentation of the parent company only financial statements as a whole that could result from fraud or error, and to issue an audit report. Reasonable assurance means a high degree of assurance. However, there is no guarantee that an audit carried out in accordance with the auditing standards will detect material misrepresentations in the parent company only financial statements. Misrepresentation may result from fraud or error. Misrepresentations of individual amounts or aggregates are considered material if they would reasonably be expected to affect economic decisions made by users of the parent company only financial statements.

We apply professional judgment and professional skepticism when conducting audits in accordance with the auditing standards. We also perform the following tasks:

1. Identify and evaluate the risk of material misrepresentation in the parent company only financial statements resulting from fraud or error; design and implement appropriate countermeasures for the evaluated risks; and obtain sufficient and appropriate evidence to serve as the basis for the audit opinion. Because fraud may involve complicity, forgery, deliberate omission, misrepresentation, or circumvention of internal controls, the risk of not detecting a material misrepresentation caused by fraud is higher than that arising from error.

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

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

147

estimates and related disclosures made by management.

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

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

• Obtain sufficient and appropriate audit evidence for the financial information of investee companies using the equity method so as to express an opinion on the parent company only financial statements. We are responsible for the guidance, supervision and execution of audit cases. and we are also responsible for forming audit opinions on Welltend Technology Corporation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 2022 parent company only financial statements of Welltend Technology Corporation and are therefore the key audit matters. We describe these matters in our audit report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse impact of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

148

The engagement partners on the audit resulting in this independent auditors’ report are Yi-Wen Wang and Yiu-Kwan Au.

KPMG

Taipei, Taiwan (Republic of China) March 23, 2023

Notes to Readers

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

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

149

Welltend Technology Corporation

Balance Sheet

December 31, 2022 and 2021

Unit: NT$ thousand

December 31,2022 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note VI (I)) $ 33,870 1 1170 Net notes and accounts receivable (Notes VI (II) and VI (XIII)) 179,348 7 1180 Net accounts receivable - related parties (Notes VI (II) and VII) 15,784 1 1210 Other receivables - related parties (Note VII) 219 - 1300 Net inventories (Note VI (III)) 121,915 5 1470 Other current assets 2,049 - 1476 Other financial assets - current (Note VIII) 34,800 1 Total current assets 387,985 15 Non-current assets: 1550 Investments accounted for using the equity method (Note VI (IV)) 1,869,000 75 1600 Property, plant, and equipment (Notes VI (V) and VIII) 182,506 8 1755 Right-of-use assets (Note VI (VI)) 4,834 - 1780 Intangible assets 12,523 1 1840 Deferred tax assets (Note VI (X)) 2,411 - 1900 Other non-current assets (Note VIII) 24,752 1 Total non-current assets 2,096,026 85 Total assets $ 2,484,011 100	December 31,2022	December 31,2022	December 31,2021	December 31,2021	December 31,2021
		% 1 7 1 - 5 - 1		Amount 59,254 95,220 13,541 207 220,829 1,854 41,800	% 3 4 1 - 9 - 2
	387,985	15		432,705	19
	1,869,000 182,506 4,834 12,523 2,411 24,752	75 8 - 1 - 1		1,653,416 186,995 3,201 13,546 2,604 28,282	71 8 - 1 - 1
	2,096,026	85		1,888,044	81
	$ 2,484,011	100		2,320,749	100

Liabilities and equity Current liabilities: 2100 Short-term borrowings (Notes VI (VII), VII and VIII) 2130 Current contract liabilities (Note VI (XIII)) 2170 Notes and accounts payable (including related parties) (Note VII) 2219 Other payables 2230 Current tax liabilities (Note VI (X)) 2280 Current lease liabilities (Note VI (VIII)) 2300 Other current liabilities Total current liabilities Non-current liabilities: 2570 Deferred tax liabilities (Note VI (X)) 2580 Non-current lease liabilities (Note VI (VIII)) 2600 Other non-current liabilities Total non-current liabilities Total liabilities Equity(Note VI (XI)): 3100 Capital stock 3200 Additional paid-in capital 3300 Retained earnings 3400 Other equity 3500 Treasury shares Total equity Total liabilities and equity	December 31,2022 Amount % $ 691,000 28 47,286 2 139,433 6 60,745 2 4,929 - 2,264 - 11,452 -	December 31,2022 Amount % $ 691,000 28 47,286 2 139,433 6 60,745 2 4,929 - 2,264 - 11,452 -	December 31,2021 Amount % 689,956 30 159,007 7 116,434 5 47,655 2 812 - 1,055 - 8,553 -	December 31,2021 Amount % 689,956 30 159,007 7 116,434 5 47,655 2 812 - 1,055 - 8,553 -
	Amount $ 691,000 47,286 139,433 60,745 4,929 2,264 11,452		Amount 689,956 159,007 116,434 47,655 812 1,055 8,553
	957,109	38	1,023,472	44
	38,252 2,594 348	2 - -	25,706 2,146 348	1 - -
	41,194	2	28,200	1
	998,303	40	1,051,672	45
	958,900 7,525 639,311 (120,028) -	39 - 26 (5) -	940,000 7,991 513,444 (178,096) (14,262)	41 - 22 (8) -
	1,485,708	60	1,269,077	55
	$ 2,484,011	100	2,320,749	100

Chairman: Yun-Teng Chang

(Please refer to the attached notes to the parent company only financial statements) Manager: Hsiang-Yu Wang

Accounting Supervisor: Wen-Pin Chen

150

Welltend Technology Corporation Statement of Comprehensive Income

For the years ended December 31, 2022 and 2021

Unit: NT$ thousand

4000 Operating revenue(Notes VI (XIII)and VII): 4110 Net sales revenue 4800 Other operating revenue Net operating revenue 5000 Operating costs(Notes VI (III), VII, and XII): 5110 Cost of goods sold 5800 Other operating costs Total operating costs 5910 Operating margin Operating expenses(Notes VI (VIII), VI (IX), VI (XIV), VII, and XII): 6100 Marketing expenses 6200 Management expenses 6201 Expected credit loss (Note VI (II)) 6900 Operating profit Non-operating income and expenses: 7100 Interest income (Note VII) 7010 Other income (Note VII) 7230 Net foreign currency exchange gains (losses) (Note VI (XV)) 7375 Share of interest in subsidiaries recognized using the equity method 7510 Interest expense (Note VI (VIII)) 7590 Sundry expenses 7900 Net profit before tax 7950 Less: Income tax expense(Note VI (X)) Net profit for the period 8300 Other comprehensive income: 8360 Components of other comprehensive income subsequently reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8300 Other comprehensive income for the period (net after tax) 8500 Total comprehensive income for the period Earnings per share (NT$)(Note VI (XII)) 9750 Basic earnings per share (NT$) 9850 Diluted earnings per share (NT$)	2022		% 88 12		2021
	Amount $ 1,105,295 145,082				Amount 896,838 143,985		% 86 14 100 77 3 80 20 10 6 - 16 4 - - - 12 (1) - 11 15 2 13 (5) (5) 8 1.36 1.36
	1,250,377		100		1,040,823
	992,023 34,546		79 3		802,985 31,471
	1,026,569		82		834,456
	223,808		18		206,367
	97,667 77,792 2,417		8 6 -		101,719 64,000 8
	177,876		14		165,727
	45,932		4		40,640
	168 2,853 5,752 157,516 (9,987) (257)		- - - 13 (1) -		347 2,019 (1,812) 123,629 (8,569) (171)
	156,045		12		115,443
	201,977 17,789		16 1		156,083 25,354
	184,188		15		130,729
	58,068		5		(51,460)
	58,068		5		(51,460)
	$ 242,256		20		79,269
	$		1.92 1.91
	$

(Please refer to the attached notes to the parent company only financial statements) Chairman: Yun-Teng Chang Manager: Hsiang-Yu Wang

Accounting Supervisor: Wen-Pin Chen

151

Welltend Technology Corporation Statement of Changes in Equity For the years ended December 31, 2022 and 2021

Unit: NT$ thousand

Balance on January 1, 2021 Earnings allocation and distribution: Provision for legal reserve Provision for special reserve Common stock cash dividend Net profit for the period Other comprehensive income for the period Total comprehensive income for the period Balance on December 31, 2021 Earnings allocation and distribution: Provision for legal reserve Provision for special reserve Common stock cash dividend Common stock stock dividend Transfer of employee remuneration to capital Net profit for the period Other comprehensive income for the period Total comprehensive income for the period Cancellation of treasury shares Balance on December 31, 2022	Share capital from common **stock **	Additional paid-in capital 7,991 - - - - - - - 7,991 - - - - 1,275 1,275 - - - (1,741) 7,525		Retained earnings	Retained earnings	Total 447,815 - - (65,100) (65,100) 130,729 - 130,729 513,444 - - (27,900) (27,900) - (55,800) 184,188 - 184,188 (2,521) 639,311	Other equity	Treasury shares (14,262) - - - - - - - (14,262) - - - - - - - - - 14,262 -	Total equity 1,254,908 - - (65,100) (65,100) 130,729 (51,460) 79,269 1,269,077 - - (27,900) - 2,275 (25,625) 184,188 58,068 242,256 - 1,485,708
							Exchange differences on translation of foreign financial statements (126,636) - - - - - (51,460) (51,460) (178,096) - - - - - - - 58,068 58,068 - (120,028)
			Legal reserve 70,918 9,598 - - 9,598 - - - 80,516 13,074 - - - - 13,074 - - - - 93,590	Special reserve 124,887 - 1,749 - 1,749 - - - 126,636 - 51,460 - - - 51,460 - - - - 178,096	Undistribu ted surplus earnings 252,010 (9,598) (1,749) (65,100) (76,447) 130,729 - 130,729 306,292 (13,074) (51,460) (27,900) (27,900) - (120,334) 184,188 - 184,188 (2,521) 367,625
	$ 940,000 - - - - - - - 940,000 - - - 27,900 1,000 28,900 - - - (10,000) $ 958,900

Please refer to the attached notes to the parent company only financial statements) Manager: Hsiang-Yu Wang

Chairman: Yun-Teng Chang

Accounting Supervisor: Wen-Pin Chen

152

Welltend Technology Corporation

Statement of Cash Flows

For the years ended December 31, 2022 and 2021

Unit: NT$ thousand

Cash flows from operating activities: Net profit before tax for the period Adjustments: Adjustments to reconcile profit Depreciation expense Amortization expense Expected credit loss Interest expense Interest income Share of interest in subsidiaries recognized using the equity method Gain on disposal of property, plant, and equipment Total adjustments to reconcile profit (loss) Changes in assets and liabilities related to operating activities: Net changes in assets related to operating activities, net: Increase in notes and accounts receivable Increase in accounts receivable - related parties Decrease in inventories (Increase) decrease in other current assets Total net changes in assets related to operating activities Changes in liabilities related to operating activities, net: (Decrease) increase in contract liabilities Increase (decrease) in notes and accounts payable (including related parties) Increase in other payables Increase in other current liabilities Total net changes in liabilities related to operating activities Net changes in assets and liabilities related to operating activities Total adjustments Cash inflow generated from operations Interest received Interest paid Income tax paid Net cash (outflows) inflow from operating activities Cash flows from investing activities: Acquisition of property, plant, and equipment Disposal of property, plant, and equipment Decrease in refundable deposits (Increase) decrease in other receivables-related parties Acquisition of intangible assets Decrease in other financial assets Net cash inflows from investing activities Cash flows from financing activities: Increase in short-term borrowings Repayment of lease liability principal Increase in other non-current liabilities Issuance of cash dividend Net cash outflows from financing activities Net (decrease) increase in cash and cash equivalents for the period Cash and cash equivalents at the start of period Cash and cash equivalents at the end of period	2022 $ 201,977	2021 156,083
	7,985 1,898 2,417 9,987 (168) (157,516) (37)	8,146 1,831 8 8,569 (347) (123,629) -
	(135,434)	(105,422)
	(86,545) (2,243) 98,776 (195)	(35,996) (2,720) 2,939 1,184
	9,793	(34,593)
	(111,721) 22,999 15,100 2,899	24,074 (16,875) 2,125 1,717
	(70,723)	11,041
	(60,930)	(23,552)
	(196,364)	(128,974)
	5,613 168 (9,722) (933)	27,109 347 (8,699) (1,643)
	(4,874)	17,114
	(1,391) 37 3,530 (12) (875) 7,000	(2,978) - 3,016 57,611 (1,052) 1,500
	8,289	58,097
	1,044 (1,943) - (27,900)	37,088 (1,078) 100 (65,100)
	(28,799)	(28,990)
	(25,384) 59,254	46,221 13,033
	$ 33,870	59,254

(Please refer to the attached notes to the parent company only financial statements) Chairman: Yun-Teng Chang Manager: Hsiang-Yu Wang Accounting Supervisor: Wen-Pin Chen

153

Welltend Technology Corporation Notes to the Parent Company Only Financial Statements 2022 and 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

I. Company history

Welltend Technology Corporation (“the Company”) was established in June 1993, and the general meeting of shareholders on June 13, 2008 resolved to change the Company’s name from Weidao Technology Co., Ltd., to Weizhan Information Co., Ltd. On June 13, 2013, the general meeting of shareholders resolved to change the Company’s from Weizhan Information Co., Ltd., to Welltend Technology Corporation. Its main businesses are the sale of wires and connectors and the integrated planning and implementation of information systems and consulting services.

II. Approval date and procedures for adoption of financial statements

The parent company only financial statements were authorized for issuance by the Board of Directors on March 23, 2023.

III. New standards, amendments and interpretations adopted

• (I) Impact of adopting the newly issued and revised standards and interpretations approved by the Financial Supervisory Commission

The Company has been applying the following newly amended IFRSs since January 1,

2022, and this has not materially affected the parent company only financial statements.

• Amendments to IAS 16 “Property, Plant and Equipment — Proceeds before Intended Use”

• Amendments to IAS 37 “Onerous Contracts — Cost of Fulfilling a Contract”

• Annual reform of IFRS 2018-2020 cycle

• Amendments to IFRS 3 “References to the Conceptual Framework”

• (II) Impact of the adoption of the IFRSs approved by the Financial Supervisory Commission

The Company has evaluated that the application of the following newly amended IFRSs effective from January 1, 2023, will not materially affect the parent company only financial statements.

• Amendments to IAS 1 “Disclosure of Accounting Policies”

• Amendments to IAS 8 “Definition of Accounting Estimates”

• Amendments to IAS 12 “Deferred Tax Related to Assets and Liabilities Arising from a

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Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Single Transaction”

(III) Impact of newly issued and revised standards and interpretations not yet approved by the FSC

The following standards and interpretations have been issued and amended by the International Accounting Standards Board (IASB) but have not yet been endorsed by the FSC and may be relevant to the Company:

Newly published or revised standards Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Non-Current Liabilities with Covenants”	Mainamended content IAS 1 currently stipulates that a liability that does not have an unconditional right to defer settlement for at least twelve months after the reporting period should be classified as current. The amendment deletes the requirement that the right should be unconditional and instead requires that the right must exist and be substantive at the end of the reporting period. The amendment clarifies how an enterprise should classify liabilities that are paid off by issuing its own equity instruments (such as convertible bonds). After reconsidering certain aspects of the 2020 IAS 1 amendments, the new amendment clarifies that only contractual terms in compliance on or before the reporting date affect the classification of a liability as a current or non-current liability. The contractual terms to which a business is bound after the reporting date (i.e., future terms) do not affect the classification of liabilities at that date. However, when non-current liabilities are subject to future contractual terms, a company must disclose information to help users of financial statements understand the risk that such liabilities may be repaid within twelve months of the reporting date.	Effective date of announcement by the **IASB **
		January 1, 2024 January 1, 2024

The Company is evaluating the impact of its initial adoption of the above mentioned standards and interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and revised standards that have not yet been approved to have a material impact on the parent company only financial statements.

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Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

• Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• IFRS 17 “Insurance Contracts” and amendments to IFRS 17

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

IV. Summary of significant accounting policies

Significant accounting policies adopted in these parent company only financial statements are summarized below. Unless otherwise stated, the following accounting policies have been consistently applied to all periods of expression in these parent company only financial statements.

(I) Statement of compliance

The parent company only financial statements reports are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of compilation

1. Measurement basis

These parent company only financial statements are prepared on a historical cost basis.

2. Functional currency and presentation currency

The Company uses the currency of the main economic environment in which it operates as its functional currency. This parent company only financial statements are presented in the Company’s functional currency, the New Taiwan dollar. All financial information presented in New Taiwan dollars is in thousands of New Taiwan dollars.

(III) Foreign currencies

1. Foreign currency transactions

Foreign currency transactions are translated into the functional currency based on the exchange rate on the transaction date. At the end of each subsequent reporting period (hereinafter referred to as the reporting date), the foreign currency monetary items are converted into the functional currency according to the exchange rate on that date. Foreign currency non-monetary items measured at fair value are converted into the functional currency at the exchange rate on the day when the fair value was measured. Foreign currency non-monetary items measured at historical cost are translated at the exchange rate on the date of the transaction.

Foreign currency translation differences arising from translation are normally recognized in income. However, the following situations are recognized in other comprehensive income:

• (1) Designated as equity investments at fair value through other comprehensive

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income;

• (2) Designated as financial liabilities of foreign operations’ net investment in hedging that are within the effective scope of hedging; or

• (3) Qualified cash flow hedging that is within the effective scope of hedging.

• Foreign operations

Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from acquisitions, are converted into New Taiwan dollars according to the exchange rate on the reporting date. Income and expense items are converted into New Taiwan dollars according to the average exchange rate of the current period. Exchange differences that arise are recognized in other comprehensive income.

When disposal of foreign operations results in a loss of control, joint control, or significant influence, the accumulated exchange difference with respect to the foreign operations is fully reclassified as income. In the event of partial disposal of a subsidiary that includes foreign operations, the relevant accumulated exchange difference shall be re-attributed to non-controlling interest on a pro rata basis. In the event of partial disposal of an investment involving an affiliate or joint venture that includes foreign operations, the relevant accumulated exchange difference shall be reclassified to income on a pro rata basis.

For monetary receivables or payables of foreign operations, if there is no repayment plan and it is impossible to repay in the foreseeable future, the foreign currency exchange gains and losses arising therefrom are regarded as part of the net investment in the foreign operations and are recognized as other comprehensive income.

(IV) Classification criteria for distinguishing current and non-current assets and liabilities

Assets that meet one of the following conditions are classified as current assets, and all other assets that are not current assets are classified as non-current assets:

1. The asset is expected to be realized during the normal operating cycle, or it is intended to be sold or consumed;

2. The asset is held primarily for trading purposes;

3. The asset is expected to be realized within twelve months of the reporting period; or

4. The asset constitutes cash or cash equivalents, unless there are other restrictions on exchanging the asset or using it to settle a liability at least twelve months after the reporting period.

Liabilities that meet one of the following conditions are classified as current liabilities, and all other liabilities that are not current liabilities are classified as non-current liabilities:

1. The liability is expected to be settled during the normal operating cycle;

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1. The liability is held primarily for trading purposes;

2. The liability is expected to be settled when it comes due within twelve months of the reporting period; or

3. The liability does not have an unconditional right to defer settlement for at least twelve months after the reporting period. The terms of the liability may be subject to the option of the counterparty to issue equity instruments resulting in its repayment and this does not affect its classification.

4. (V) Cash and cash equivalents

Cash includes cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible into fixed amounts of cash with little risk of changes in value. Fixed deposits that meet the above definition and are held for short-term cash commitments rather than investment or other purposes are presented in cash equivalents.

• (VI) Financial instruments

Accounts receivable and debt securities issued are originally recognized as they are incurred. All other financial assets and financial liabilities are originally recognized when the Company becomes a party to the contractual terms of the financial instrument. Financial assets not measured at fair value through profit or loss (except for accounts receivable that do not contain significant financial components) or financial liabilities that are originally measured at fair value plus transaction costs directly attributable to the acquisition or issue. Accounts receivable that do not contain significant financial components are originally measured at their transaction prices.

1. Financial assets

For the purchase or sale of financial assets in accordance with customary trading practices, all purchases and sales of financial assets of the Company classified in the same manner shall be accounted for on the trading day.

Financial assets are classified as financial assets measured at amortized cost at the time of original recognition.

The Company will reclassify all affected financial assets from the first day of the next reporting period only when changing the business model of the financial assets under management.

(1) Financial assets measured at amortized cost

Financial assets that meet both of the following conditions and are not specified as measured at fair value through profit or loss are measured at amortized cost:

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• The financial asset is held under an operating model for the purpose of collecting contractual cash flows.

• The contractual terms of the financial asset give rise to cash flows on specific dates entirely for the payment of principal and interest on the outstanding principal amount.

The assets are subsequently calculated by adding or subtracting the original recognized amount to the accumulated amortization amount calculated using the effective interest method, and adjusting any measure of post amortized cost of allowance losses. Interest income, foreign currency exchange gains and losses and impairment losses are recognized in income. Upon derecognition, profits or losses shall be included in income.

• (2) Impairment of financial assets

The Company recognizes loss allowance for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, notes receivable and accounts receivable, other receivables, deposits and other financial assets, etc.).

The following financial assets are measured against loss allowance based on the twelve-month expected credit loss amount, with the remainder measured by the amount of expected lifetime credit losses:

• Judgment that debt securities have low credit risk at the date of reporting; and

• The credit risk of other debt securities and bank deposits has not increased significantly since the original recognition (i.e., the risk of default during the expected lifetime of the financial instrument).

Loss allowance for accounts receivable and contractual assets is measured based on the amount of expected lifetime credit losses.

Expected lifetime credit losses refers to the expected credit losses arising from all possible default events during the expected life of a financial instrument.

Twelve-month expected credit loss indicates expected credit losses arising from possible defaults of financial instruments within twelve months after the reporting date (or a shorter period, if the expected term of the financial instrument is less than twelve months).

The maximum period for measuring expected credit losses is the longest contract period during which the Company is exposed to credit risk.

In determining whether credit risk has increased significantly since the original

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recognition, the Company considers reasonable and corroborating information (available without excessive cost or investment), including qualitative and quantitative information, and analysis based on the Company’s historical experience, credit evaluation, and forward-looking information.

If the credit risk rating of a financial instrument is equivalent to the globally defined “investment grade” (which is an investment grade of BBB- from Standard & Poor’s, an investment grade of Baa3 from Moody’s, or an investment grade of twA from Taiwan Ratings Corp., or above that level), the Company considers the debt securities to have a low credit risk. Time deposits held by the Company are considered to have low credit risk because the transaction counterparties and the performing parties are financial institutions at investment grade or above.

If a contract payment is overdue for more than 30 days, the Company assumes that the credit risk of the financial assets has increased significantly.

If a contract payment is more than 120 days overdue, or the borrower is unlikely to meet its credit obligations to pay the full amount to the Company, the Company considers the financial asset to be in default.

Expected credit loss is a weighted estimate of the probability of credit loss over the expected life of a financial instrument. Credit loss is measured at the present value of all cash shortfalls; that is, the difference between the cash flows that the Company can receive under the contract and the cash flows that the Company expects to receive. Expected credit loss is discounted at the effective interest rate of the financial asset.

On each reporting date, the Company evaluates whether financial assets measured at amortized cost are credit-impaired. A financial asset is credit-impaired when one or more events adversely affecting the estimated future cash flows of a financial asset have occurred. Evidence of credit impairment of financial assets includes the following observable information:

• Material financial difficulties of the borrower or issuer;

• Breach of contract, such as being delayed or overdue for more than 120 days;

• For economic or contractual reasons related to the debtor’s financial hardship, the Company grants concessions that the debtor would not otherwise consider;

• The debtor is likely to file for bankruptcy or other financial restructuring; or

• The active market for the financial asset disappears due to financial difficulties. The loss allowance for financial assets measured at amortized cost is deducted

• from the carrying amount of the assets.

When the Company is unable to reasonably anticipate the recovery of financial

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Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

assets, in whole or in part, it directly reduces the total carrying amount of its financial assets. For corporate accounts, the Company analyzes the time and amount of the write-off on an individual basis based on whether it is reasonably expected to be recoverable. The Company does not expect a material reversal of the written-off amount. However, financial assets that have been written off remain enforceable, in order to comply with the Company’s procedures for recovering overdue amounts.

• (3) Derecognition of financial assets

The Company derecognizes financial assets only when the contractual right to cash flows from the asset is terminated, or when the financial asset has been transferred and substantially all of the risks and rewards of ownership of the asset have been transferred to another enterprise, or where almost all of the risks and rewards of neither transfer nor retention of title have been retained and control of the financial asset has not been retained.

When the Company enters into a transaction to transfer financial assets, if all or substantially all risks and rewards of title to the transferred assets are retained, these shall continue to be recognized on the balance sheet.

1. Financial liabilities and equity instruments

2. (1) Classification of liabilities or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity according to the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

• (2) Equity instruments

An equity instrument is any contract that recognizes the Company’s remaining interest in assets less all of its liabilities. Equity instruments issued by the Company are recognized at the price obtained after deducting direct issue costs.

• (3) Treasury shares

When repurchasing equity instruments recognized by the Company, the consideration paid is recognized as a decrease in equity (including directly attributable costs). The repurchased shares are classified as treasury shares. Subsequent sales or re-issuance of treasury shares shall be recognized as an increase in equity and the surplus or loss arising from the transaction shall be recognized as additional paid-in capital or retained earnings (if the additional paid-in capital is insufficient to offset it).

• (4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or at fair value through profit or loss. Financial liabilities that are held for trading, derivative instruments

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or specified at the time of original recognition are classified as measured at fair value through profit or loss. Financial liabilities measured at fair value through profit and loss are measured at fair value, and the underlying net profit and loss, including any interest expense, are recognized in income.

Other financial liabilities are measured at fair value plus directly attributable transaction costs at the time of original recognition; they are subsequently measured at amortized cost using the effective interest method. Interest expense and exchange gains and losses are recognized in income. Upon derecognition, any profit or loss shall also be recognized in income.

• (5) Derecognition of financial liabilities

Financial liabilities are derecognized when the Company’s contractual obligations have been fulfilled or cancelled or have expired. When the terms of financial liabilities are modified and there is a material difference in the cash flows of the modified liabilities, the original financial liabilities are derecognized and the new financial liabilities are recognized at fair value on the basis of the revised terms.

When derecognizing financial liabilities, the difference between its carrying amount and the total consideration paid or payable is recognized as income (including any non-cash assets transferred or liabilities assumed).

• (6) Mutual offsetting of financial assets and liabilities

Financial assets and financial liabilities are only offset and expressed in the balance sheet in net amounts when the Company currently has a legally enforceable right to offset and intends to close the assets and liquidate the liabilities on a net basis or realize them simultaneously.

• (VII) Inventories

Inventories are measured at the lowest of cost and net realizable value. Costs include acquisition, production or processing costs, and other costs incurred in bringing them to the location and condition available for use, calculated using a weighted average. Net realizable value refers to the estimated selling price under normal business less the estimated cost of estimated completion and the estimated cost of completing the sale.

(VIII) Invested subsidiaries

When preparing the parent company only financial statements, the Company adopts the equity method to evaluate invested companies with control. Under the equity method, current profit and loss and other comprehensive income in the parent company only financial statements and the current profit and loss and other comprehensive income in the financial statements prepared on a consolidated basis are the same as those attributable to

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the owners of the parent company. Moreover, owner’s equity in the parent company only financial statements is the same as the equity attributable to the owners of the parent company in the financial statements prepared on a consolidated basis.

When changes in the Company’s ownership interests in a subsidiary that do not result in a loss of control, they are treated as an equity transaction with the owner.

(IX) Property, plant, and equipment

1. Identification and measurement

Items of property, plant and equipment are measured at cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment.

When the service lives of major components of property, plant and equipment are different, they shall be treated as separate items (major components) of property, plant, and equipment.

Disposal gain or loss of property, plant and equipment is recognized in income.

2. Subsequent costs

Subsequent expenses are capitalized only when there is a high probability that their future economic benefits will flow to the Company.

3. Depreciation

Depreciation is calculated on the basis of the cost of assets less the residual value and is recognized as profit or loss within the estimated life of each component using the straight-line method.

Land is not depreciated.

The estimated useful lives for the current and comparative periods are as follows:

• (1) Buildings and factories: 20 to 50 years.

• (2) Machinery and equipment: 3 to 5 years.

• (3) Office equipment and other equipment: 2 to 8 years.

The Company reviews the depreciation method, useful life, and salvage value on each reporting date and makes appropriate adjustments when necessary.

(X) Leases

The Company evaluates whether the contract constitutes or includes a lease on the date of formation of the contract; if the contract assigns control over the use of an identified asset for a period of time in exchange for consideration, the contract constitutes or includes a lease.

1. Lessee

When the Company is the lessee, it recognizes right-of-use assets and lease liabilities on the lease commencement date. Right-of-use assets are initially measured at

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cost; this cost includes the original measure of the lease liability to adjust any lease payments paid on or before the lease commencement date, plus the original direct costs incurred and the estimated costs for dismantling, removing and restoring the location or the underlying asset and is also net of any rental incentives received.

The right-of-use asset is subsequently depreciated on a straight-line basis from the lease inception date to the expiry of the useful life of the right-of-use asset or the expiry of the lease term, whichever is earlier. Furthermore, the Company regularly evaluates whether the right-of-use asset is impaired and handles any impairment losses that have occurred. The right-of-use asset is adjusted in conjunction with the remeasurement of the lease liability.

The lease liability is initially measured at the present value of the unpaid lease payments at the inception date of the lease. If the interest rate implied by the lease is easily determined, then the discount rate is that rate; if it is not easily determined, the incremental borrowing rate of the Group shall be used. Generally speaking, the Company adopts its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of lease liabilities include:

• (1) Fixed payments, including substantial fixed payments;

• (2) Lease payments based on changes in an index or rate, as measured by the index or rate on the date of lease commencement as the original measure.

• (3) The residual value guarantee amount expected to be paid; and

• (4) The exercise price or penalty payable when it is reasonably determined that the option to purchase or terminate the lease will be exercised.

Interest on lease liabilities is subsequently accrued using the effective interest method and remeasurement of the amount occurs in the event of the following:

• (1) Changes in the index or rate used to determine lease payments result in changes in future lease payments;

• (2) There is a change in the residual value guarantee amount expected to be paid;

• (3) There is a change in the evaluation of the option to purchase the underlying asset;

• (4) There is a change in the estimate of whether to exercise the option to extend or terminate, and the evaluation of the lease period is changed; and

• (5) Modification of the subject matter, scope or other terms of the lease.

When the lease liability is remeasured as a result of the aforementioned changes in the index or rate used to determine lease payments and the assessment of options to extend or terminate the lease, this constitutes a corresponding adjustment to the carrying amount of the right-of-use asset; and when the carrying amount of the right-of-use asset

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is reduced to zero, the remaining remeasured amount is recognized in income.

For lease modifications that reduce the scope of the lease, these constitute a reduction in the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease. The difference between this and the remeasured amount of the lease liability is recognized in income.

The Company presents right-of-use assets and lease liabilities that do not meet the definition of investment real property as separate line items in the balance sheet.

For short-term leasing of parking spaces and office equipment and leasing of low-value underlying assets, the Company chooses not to recognize right-of-use assets and lease liabilities. Instead, the related lease payments are recognized as expenses on a straight-line basis over the lease term.

2. Lessor

In transactions where the Company is the lessor, classification of lease contracts is made by whether they transfer substantially all risks and rewards of ownership of the underlying asset on the lease inception date. If this is the case, it is classified as a finance lease; otherwise, it is classified as an operating lease. At the time of evaluation, the Company considers relevant specific indicators including whether the lease period covers the main portion of the economic life of the underlying asset. If the Company is a sublease lessor, the main lease and sublease transactions are handled separately. The classification of sublease transactions is also evaluated with the right-of-use asset arising from the main lease. If the main lease is a short-term lease and the recognition exemption applies, the sublease transaction should be classified as an operating lease.

If the agreement contains lease and non-lease components, the Company shall allocate the consideration in the contract using the requirements of IFRS 15.

For assets held under a finance lease, the amount of the net investment in the lease is presented as finance lease receivable. The original direct costs incurred as a result of the negotiation and arrangement of the operating lease are included in the net amount of the lease investment. The net lease investment is in a form that reflects a fixed rate of return in each period and apportionment over the lease term is recognized as interest income. For operating leases, the Company recognizes lease payments received as rental income over the lease term on a straight-line basis.

(XI) Intangible assets

1. Identification and measurement

Goodwill arising from the acquisition of a subsidiary is measured in terms of cost

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less accumulated impairment.

Expenses related to research activities are recognized under income at the time incurred.

Development expenditures are capitalized only made when they can be reliably measured, the technical or commercial feasibility of the product or process has been achieved, and it is probable that future economic benefits will flow to the Company, and the Company intends and has sufficient resources to complete the development and to use or sell the asset. Other development expenditures are recognized under income when incurred. After the original recognition, the capitalized development expense is measured by the amount of its costs less accumulated amortization and accumulated impairment.

Other intangible assets acquired by the Company with a limited period of durability, including customer relationships and patent rights and trademark rights, are measured by the amount of cost less accumulated amortization and cumulative impairment.

2. Subsequent expenditures

Subsequent expenditures are capitalized only to the extent that they increase the future economic benefits of the underlying asset. All other expenses are recognized under income as incurred, including internally developed goodwill and branding.

3. Amortization

Except for goodwill, amortization is calculated based on the cost of the asset less the estimated residual value. When an intangible asset is ready for use, it is recognized under income using the straight-line method over its estimated useful life.

(XII) Impairment on non-financial assets

The Company assesses on each reporting date whether there is an indication that the carrying amount of a non-financial asset may be impaired (except inventories and deferred tax assets). If any indication is present, the recoverable amount of the asset is estimated. Goodwill is regularly tested for impairment annually.

For the purpose of the impairment test, a group of assets whose cash inflows are largely independent of the cash inflows of other individual assets or groups of assets constitute the smallest identifiable group of assets. Goodwill acquired in a business combination is allocated to each cash-generating unit or group of cash-generating units that is expected to benefit from the synergies of the combination.

The recoverable amount is the higher of the individual asset or cash-generating unit’s fair value less costs of disposal and its value in use. When evaluating value in use, estimated future cash flows are discounted to present value using a pre-tax discount rate.

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Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

The discount rate should reflect current market evaluation of the time value of money and the risks specific to the asset or cash-generating unit.

If the recoverable amount of an individual asset or cash-generating unit is less than the carrying amount, impairment losses are recognized.

Impairment losses are recognized immediately under income, and first reduce the carrying amount of the amortized goodwill of the cash-generating unit. The carrying amount of each asset is reduced in proportion to the carrying amount of each other asset in the unit.

Goodwill impairment losses are not reversed. Non-financial assets other than goodwill are to be reversed only to the extent of not exceeding the carrying amount of the asset (net of depreciation or amortization) that would have been determined if an impairment loss had not been recognized in prior years.

(XIII) Income recognition

1. Revenue from customer contracts

Revenue is measured at the consideration to which the goods or services are expected to be acquired by the transfer of goods or services. The Company recognizes revenue when the control of the goods or services is transferred to the customer and the performance obligation is satisfied. The Company’s main revenue items are described as follows:

(1) Sale of goods

The Company sells wire and connectors. The Company recognizes revenue at the time of the transfer of control over the products. The transfer of control over the product means that the product has been delivered to the customer, the customer can completely decide the sales channel and price of the product, and there are no outstanding obligations that will affect the customer’s acceptance of the product. Delivery occurs when the product is shipped to a specific location, its obsolescence and risk of loss has passed to the customer, and the customer has accepted the product in accordance with the sales contract, the acceptance clause has expired, or when the Company has objective evidence that all acceptance conditions have been met.

The Company recognizes accounts receivable when the goods are delivered, because the Company has the right to unconditionally receive consideration at that time. (2) Information systems and consulting services

The Company provides corporate information system and advisory services and recognizes associated revenue during the financial reporting period for the provision of

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Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

services. A fixed-price contract is based on the proportion of services actually provided to total services as of the reporting date, and the revenue is gradually recognized over time.

Some contracts contain multiple deliverables, such as hardware procurement and installation and system maintenance services. Most of them are services that do not include integration services and can be performed by other parties, so they are regarded as a separate performance obligation and the transaction price is apportioned on the basis of the separate selling price. If the price cannot be directly observed, it is estimated at the expected cost plus profit and the individual selling price. If the contract includes the purchase and installation of hardware, it is recognized as revenue from the hardware at the time of delivery of the hardware, the transfer of legal ownership and the acceptance of the customer.

If circumstances change, estimates of revenue, costs and degree of completion will be revised and the changes will be reflected in profit or loss during the period when management becomes aware of the changes.

Under a fixed-price contract, the customer pays a fixed amount according to the agreed timeline. If the services already provided exceed the payment, a contractual asset is recognized; if the payment exceeds the services already provided, a contractual liability is recognized.

A maintenance contract is based on the number of hours for which the service is provided and the revenue is recognized in the amount of the invoice that the Company is entitled to issue. The Company requests payment from the customer on a monthly or quarterly basis, and the consideration can be charged after the invoice is issued.

(3) Financial components

The Company expects that the time between the transfer of goods or services to the customer by all client contracts and the time between the customer’s payment for such goods or services does not exceed one year, and therefore the Company does not adjust the time value of money for the transaction price.

(XIV) Employee benefits

1. Defined contribution plans

The contribution obligation of the defined contribution pension plan is the employee benefit expense recognized under income during the period of service provided by the employee.

2. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis

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and are recognized as expenses at the time of provision of the relevant services.

In connection with the amount expected to be paid under the short-term cash bonus or dividend plan, if it is a result of the employee’s past provision of services, the Company has a current statutory or presumptive payment obligation, and the obligation can be reliably estimated, the amount shall be recognized as a liability.

(XV) Income taxes

Income tax includes current and deferred income tax. Except for those items related to business combinations or items directly recognized in equity or other comprehensive income, current income tax and deferred income tax are recognized under income.

The Company has determined that the interest or penalty related to income tax does not meet the definition of income tax (including uncertain tax treatment), so the accounting treatment of IAS 37 is applied.

Current income tax includes the estimated income tax payable or tax refund payable based on the taxable income (loss) of the current year, and any adjustment to the income tax or tax refund payable in the previous year. After its amount reflects the income tax-related uncertainties, if any, it is the best estimate of the amount expected to be paid or received measured at the statutory tax rate or substantive legislative tax rate at the reporting date.

Deferred tax is the measurement and recognition of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their tax base. Deferred tax is not recognized for temporary differences arising from:

1. Assets or liabilities that are not originally recognized in the transaction of a business combination, and do not affect accounting profits and taxable income (losses) at the time of the transaction;

2. Temporary differences arising from investments in subsidiaries, affiliates and joint venture interests where the Group can control the timing of the reversal of the temporary difference and it is probable that it will be not reversed in the foreseeable future; and

3. Taxable temporary differences arising from the original recognition of goodwill.

Unused tax losses and unused income tax credits are recognized as deferred tax assets at a later stage of the rollover with the deductible temporary differences, to the extent that there is a high probability that future tax income will be available. Furthermore, they are re-evaluated each reporting date to reduce the relevant income tax benefits to the extent that they are not likely to be realized; or to the extent that there is a high probability that sufficient taxable income will be reversed to the amount already reduced.

Deferred income tax is measured at the rate at which temporary differences are

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expected to be reversed, based on the statutory or substantial legislative rates at the date of reporting, and reflects the uncertainty (if any) associated with income tax.

The Company only offsets deferred tax assets and deferred tax liabilities if the following conditions are simultaneously met:

1. There is a statutory enforcement right to offset the current income tax assets and the current income tax liabilities against each other; and

2. Deferred tax assets and deferred tax liabilities are related to one of the following taxpayers subject to income tax by the same tax authority;

3. (1) The same taxpayer; or

4. (2) Different taxpayers, but each entity intends to pay off the current income tax liabilities and assets on a net basis, or realize the assets and liquidation liabilities at the same time, during each future period in which the deferred tax assets are expected to be recovered and the deferred tax liabilities are expected to be repaid.

The undistributed surplus earnings of the Company are subject to income tax on profit-making enterprises. This is recognized as current income tax expense after a profit distribution proposal is approved by the shareholders’ meeting in the following year.

• (XVI) Earnings per share

The Company presents basic and diluted earnings per share attributable to holders of ordinary shares of the Company. The basic earnings per share of the Company are the profit or loss attributable to the holders of ordinary shares of the Company, calculated by dividing by the weighted average number of ordinary shares outstanding for the period. Diluted earnings per share refers to the profit and loss attributable to the holders of the Company’s ordinary shares and the weighted average number of ordinary shares outstanding, calculated after separately adjusting for the effect of all potential dilutive ordinary shares. The Company’s potential dilutive ordinary shares include estimates of employee compensation.

(XVII) Segment information

The Company has disclosed segment information in the consolidated financial statements, so the parent company only financial statements do not disclose segment information.

V. Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the parent company only financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers requires management to make judgments, estimates and assumptions that affect the application of the

170

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Management continues to review estimates and underlying assumptions, and changes in accounting estimates are recognized during the period of change and for future periods affected.

The Company’s accounting policies do not involve material uncertainties in judgments, estimates, and assumptions, and there are no matters that have a significant impact on the amounts recognized in the parent company only financial statements.

VI. Explanation of significant accounts

• (I) Cash and cash equivalents

Cash on hand Demand and foreign currency deposits Cash on hand	December 31, 2022 $ 145 9,157 $ 145 $ 33,870	December 31, 2021 $ 145 59,109 $ $ 59,254

Please refer to Note VI (XV) for the fair value sensitivity analysis and interest rate risk of the Company’s financial assets and liabilities.

• (2) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance Net notes and accounts receivable Net accounts receivable - related parties	December 31, 2022 $ 2,279 195,301 197,580 (2,448 ) $ 195,132 $ 179,348 $ 15,784	December 31, 2021
		$ 3,742 105,050 108,792 (31 ) $ 108,761 $ 95,220 $ 13,541

The Company uses a simplified approach to estimate expected credit losses for all notes and accounts receivable; i.e., they are measured by lifetime expected credit losses. For measurement purpose, these notes and accounts receivable are grouped by common credit risk characteristics that represent the customer’s ability to pay all amounts due in accordance with the contractual terms. Forward-looking information such as historical credit loss experience and reasonable forecast of future economic conditions has been incorporated. Analysis of the expected credit losses of notes and accounts receivable for December 31, 2022 and 2021, is as follows:

171

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Credit rating	December 31, 2022 Carrying amount of notes and accounts receivable Weighted average expected credit loss ratio Allowance for lifetime expected credit losses $ 178,535 - - 19,045 12.85% 2,448 $ 197,580 2,448	December 31, 2022 Carrying amount of notes and accounts receivable Weighted average expected credit loss ratio Allowance for lifetime expected credit losses $ 178,535 - - 19,045 12.85% 2,448 $ 197,580 2,448	December 31, 2022 Carrying amount of notes and accounts receivable Weighted average expected credit loss ratio Allowance for lifetime expected credit losses $ 178,535 - - 19,045 12.85% 2,448 $ 197,580 2,448
	Carrying amount of notes and accounts receivable	Weighted average expected credit loss ratio
Level A Level B	$ 178,535 19,045	- 12.85%
	$ 197,580		2,448

Credit rating	December 31, 2021 Carrying amount of notes and accounts receivable Weighted average expected credit loss ratio Allowance for lifetime expected credit losses $ 106,952 - - 1,840 1.68% 31 $ 108,792 31	December 31, 2021 Carrying amount of notes and accounts receivable Weighted average expected credit loss ratio Allowance for lifetime expected credit losses $ 106,952 - - 1,840 1.68% 31 $ 108,792 31	December 31, 2021 Carrying amount of notes and accounts receivable Weighted average expected credit loss ratio Allowance for lifetime expected credit losses $ 106,952 - - 1,840 1.68% 31 $ 108,792 31
	Carrying amount of notes and accounts receivable	Weighted average expected credit loss ratio
Level A Level B	$ 106,952 1,840	- 1.68%
	$ 108,792		31

Aging analysis of the Company’s notes and accounts receivable is as follows:

Not yet past due 0 to 90 days past due 90 to 180 days past due More than 180 days past due	December 31, 2022 $ 138,471 36,803 6,340 15,966 $ 197,580	December 31, 2021
		$ 85,991 20,128 1,027 1,646
		$ 108,792

Changes in the Company’s loss allowance for notes receivable and accounts receivable were as follows:

Opening balance at start of period Impairment losses recognized Balance at end of period	2022 $ 31 2,417 $ 2,448	2021
		$ 23 8 $ 31

Allowance for doubtful accounts is mainly based on historical payment behavior and extensive analysis of the credit ratings of the target customers. The Company believes that the overdue portion of accounts receivable for which allowance for doubtful accounts has

172

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

not yet been provided is still recoverable.

As of December 31, 2022 and 2021, none of the Company’s notes and accounts receivable were pledged as collateral.

Please see note VI (XV) for the sensitivity analysis of exchange rates for the Company’s notes and accounts receivable for 2022 and 2021.

(III) Inventories

tories
Goods held for sale	December 31, 2022 $ 121,915	December 31, 2021
		$ 220,829

1. The cost of inventories recognized as cost of goods sold and as expenses by the Company in 2022 and 2021 were NT$990,985 thousand and NT$802,823 thousand, respectively.

2. Details of expenses and losses related to inventory recognition of the Company in 2022 and 2021 are as follows:

nd 2021 are as follows:
Write-down and losses from inactive inventory	2022 $ 1,038	2021
		$ 162

1. As of December 31, 2022 and 2021, none of the Company’s inventories were pledged as collateral.

2. (IV) Investments accounted for using the equity method

The Company’s financial information for investments accounted for using the equity method at the reporting date was as follows:

hod at the reporting date was as follows:
Subsidiary	December 31, 2022 $ 1,869,000	December 31, 2021
		$ 1,653,416

1. Please refer to the 2022 consolidated financial statements.

2. As of December 31, 2022 and 2021, none of the Company’s investments under the equity method were pledged as collateral.

3. (V) Property, plant, and equipment

Details of changes in cost and depreciation of property, plant, and equipment of the Company in 2022 and 2021 are as follows:

173

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Cost: Balance on January 1, 2022 Add Transfers Disposal Balance on December 31, 2022 Balance on January 1, 2021 Add Transfers Balance on December 31, 2021 Depreciation: Balance on January 1, 2022 Depreciation in the current year Disposal Balance on December 31, 2022 Balance on January 1, 2021 Depreciation in the current year Disposal Balance on December 31, 2021 Carrying amounts: December 31, 2022 January 1, 2021 December 31, 2021	Land $ 140,142 - - - $ 140,142 $ 140,142 - - $ 140,142 $ - - - $ - $ - - - $ - $ 140,142 $ 140,142 $ 140,142	Buildings 75,094 78 - - 75,172 74,618 476 - 75,094 34,973 2,084 - 37,057 32,789 2,184 - 34,973 38,115 41,829 40,121	Office equipment and others 34,913 1,313 138 (7,647) 28,717 34,318 2,502 (1,907) 34,913 28,181 3,934 (7,647) 24,468 25,189 4,899 (1,907) 28,181 4,249 9,129 6,732	Total 250,149 1,391 138 (7,647) 244,031 249,078 2,978 (1,907) 250,149 63,154 6,018 (7,647) 61,525 57,978 7,083 (1,907) 63,154 182,506 191,100 186,995

Please see Note VIII for details of long-term borrowings and financing lines

guaranteed by a portion of property, plant, and equipment as of December 31, 2022 and 2021.

• (VI) Right-of-use assets

Details of changes in the cost and depreciation of the Company’s leased buildings and others are as follows:

174

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Right-of-use asset costs: Balance on January 1, 2022 Add Balance on December 31, 2022 Balance on January 1, 2021 Add Less Balance on December 31, 2021 Right-of-use asset depreciation: Balance on January 1, 2022 Depreciation in the current year Balance on December 31, 2022 Balance on January 1, 2021 Depreciation in the current year Less Balance on December 31, 2021 Carrying amounts: December 31, 2022 January 1, 2021 December 31, 2021	Building $ 2,123 3,600	Others 1,078 -	Total 3,201 3,600
	$ 5,723	1,078	6,801
	$ 2,115 2,123 (2,115)	1,074 1,078 (1,074)	3,189 3,201 (3,189)
	$ 2,123	1,078	3,201
	$ - 1,608	- 359	- 1,967
	$ 1,608	359	1,967
	$ 1,410 705 (2,115)	716 358 (1,074)	2,126 1,063 (3,189)
	$ -	-	-
	$ 4,115	719	4,834
	$ 705	358	1,063
	$ 2,123	1,078	3,201

(VII) Short-term loans

Secured bank loans Unsecured bank loans Short-term notes and bills payable Total Unused credit line Interest rate	December 31, 2022 $ 531,000 160,000 - $ 691,000 $ 450,775 1.25%~1.85%	December 31, 2021
		1470,000 140,000 79,956
		689,956
		279,200
		1%~1.33%

1. For information about the Company’s interest rate and liquidity risks, please refer to Note VI (XV) for details.

2. The Company’s short-term loan amounts are jointly and severally guaranteed by key management personnel; please refer to Note VII for details.

3. Please refer to Note VIII for the details of the related assets of the Company pledged as collateral.

175

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

(VIII) Lease liabilities

Book value of the Company’s lease liabilities is as follows:

Current Non-current	December 31, 2022 $ 2,264 $ 2,594	December 31, 2021
		1,055
		2,146

For the maturity analysis of financial instruments, please refer to Note VI (XV). Amounts recognized as profit or loss are as follows:

2022 Interest expense on lease liabilities $ 59 Variable lease payments not included in the measurement of lease liabilities $ 33 Gains from sublease of right-of-use assets $ 1,825 Expenses related to short term leases $ 305 Expenses related to leases of low value assets (excluding short term leases of low value assets) $ 50 Amounts recognized in the statements of cash flows are as follows: 2022 Total cash flows from leases $ 2,390	2021
	8
	128
	1,825
	916
	49
	2021
	2,179

1. Leasing of buildings

The Company leased buildings as office premises in December 31, 2022 and 2021.

The lease term of the office premises was three years, and the lease included the option to extend the lease term for the same period as the original contract.

2. Other leases

The lease period of parking space leased by the Company is three years.

Lease payments for some contracts are calculated based on the actual usage of the lease.

The Company also leases other equipment with contract terms of three years. These leases are short-term or leases of low value items. The Company has elected not to recognize right of use assets and lease liabilities for these leases.

(IX) Employee benefits

The defined contribution plan of the Company is in accordance with the provisions of the Labor Pension Act. In accordance with the contribution rate of 6% of workers’ monthly

176

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

wages, a contribution is transferred to the individual accounts of the labor pension fund of the Bureau of Labor Insurance. After the Company has allocated a fixed amount to the Bureau of Labor Insurance under this plan, it has no statutory or presumptive obligation to pay additional amounts.

The pension expenses under the Company’s 2022 and 2021 defined pension contributions were NT$6,135 thousand and NT$5,980 thousand, respectively, and were transferred to the Bureau of Labor Insurance.

• (X) Income taxes

• Income tax expense

• (1) The Company’s expenses for 2022 and 2021 were as follows:

Income tax expense for the current period: Generated in the current period Undistributed surplus earnings Undervaluation (overvaluation) for the prior period Deferred tax expense Income tax expense	2022 $ 4,418 520 112 5,050 12,739 $ 17,789	2021 (351) 812 (321 ) 140 25,214 25,354

• (2) The Company’s 2022 and 2021 income tax expenses and pre-tax net profits were adjusted as follows:

Net profit before tax Income tax calculated at the domestic tax rate of the Company’s location Net amount of domestic investment gains and losses Changes in unrecognized temporary differences Current-year losses for which no deferred tax asset was recognized Undistributed surplus earnings Undervaluation (overvaluation) for the prior period Others Income tax expense	2022 $ 201,977 $ 40,395 (8,045) (13,418) (2,763) 520 1,100 - $ 17,789	2021 156,083 31,217 (1,568) (4,794) - 812 (321) 8 25,354

177

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

2. Deferred tax assets and liabilities

• (1) Unrecognized deferred tax liabilities

Temporary differences related to investment subsidiaries on December 31, 2022

and 2021, are due to the Company’s control over the timing of the reversal of these temporary differences. Therefore, no deferred tax liabilities were recognized. Relevant amounts were as follows:

Aggregated amount of temporary differences related to investment subsidiaries Amounts not recognized as deferred tax liabilities	December 31, 2022 $ 850,357 $ 186,213	December 31, 2021 807,729
		174,558

• (2) Items not recognized as deferred tax assets by the Company are as follows:

Deductible temporary differences Tax loss	December 31, 2022 $ - - $ -	December 31, 2021
		1,763 2,763 4,526

(3) Recognized deferred tax assets and liabilities

Changes in deferred tax assets and liabilities for 2022 and 2021 are as follows: Investment income recognized under the equity method (foreign) Other Total Deferred tax liabilities: Balance on January 1, 2022 $ 25,706 - 25,706 Debit/(credit) income 12,096 450 12,546 Balance on December 31, 2022 $ 37,802 450 38,252 Balance on January 1, 2021 $ 6,674 - 6,674 Debit/(credit) income 19,032 - 19,032 Balance on December 31, 2021 $ 25,706 - 25,706	Changes in deferred tax assets and liabilities for 2022 and 2021 are as follows: Investment income recognized under the equity method (foreign) Other Total Deferred tax liabilities: Balance on January 1, 2022 $ 25,706 - 25,706 Debit/(credit) income 12,096 450 12,546 Balance on December 31, 2022 $ 37,802 450 38,252 Balance on January 1, 2021 $ 6,674 - 6,674 Debit/(credit) income 19,032 - 19,032 Balance on December 31, 2021 $ 25,706 - 25,706	Changes in deferred tax assets and liabilities for 2022 and 2021 are as follows: Investment income recognized under the equity method (foreign) Other Total Deferred tax liabilities: Balance on January 1, 2022 $ 25,706 - 25,706 Debit/(credit) income 12,096 450 12,546 Balance on December 31, 2022 $ 37,802 450 38,252 Balance on January 1, 2021 $ 6,674 - 6,674 Debit/(credit) income 19,032 - 19,032 Balance on December 31, 2021 $ 25,706 - 25,706	Changes in deferred tax assets and liabilities for 2022 and 2021 are as follows: Investment income recognized under the equity method (foreign) Other Total Deferred tax liabilities: Balance on January 1, 2022 $ 25,706 - 25,706 Debit/(credit) income 12,096 450 12,546 Balance on December 31, 2022 $ 37,802 450 38,252 Balance on January 1, 2021 $ 6,674 - 6,674 Debit/(credit) income 19,032 - 19,032 Balance on December 31, 2021 $ 25,706 - 25,706
	$ 25,706 12,096
	$ 37,802	450	38,252
	$ 6,674 19,032	- -	6,674 19,032
	$ 25,706	-	25,706

178

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Deferred tax assets: Balance on January 1, 2022 (Debit)/credit income Balance on December 31, 2022 Balance on January 1, 2021 (Debit)/credit income Balance on December 31, 2021	Tax loss	Other - 2,411 2,411 - - -	**Total **
	$ 2,604 (2,604)		2,604 (193)
	$ -		2,411
	$ 8,786 (6,182)		8,786 (6,182)
	$ 2,604		2,604

1. The Company’s tax returns for the years up to 2020 were examined and approved by the tax authority.

(XI) Capital and other equity

For both December 31, 2022 and December 2021, the total authorized capital stock of the Company was NT$2,700,000 thousand and the par value was NT$10 per share, for 270,000 thousand shares. The total number of shares specified above constitutes ordinary shares, with the number of issued shares amounting to NT$95,890 thousand and NT$94,000 thousand, respectively. All payments for issued shares have been received.

The reconciliation table of the number of outstanding shares of the Company in 2022 and 2021 is as follows:

Starting balance on January 1 Issuance of stock dividend Issuance of employee stock remuneration Cancellation of treasury shares Ending balance on December 31	Unit: Thousand shares Common stock 2022 2021 94,000 94,000 2,790 - 100 - (1,000) - 95,890 94,000	Unit: Thousand shares Common stock 2022 2021 94,000 94,000 2,790 - 100 - (1,000) - 95,890 94,000
	95,890

1. Additional paid-in capital

According to the provisions of the Company Act, additional paid-in capital must first make up for losses and only then can realized additional paid-in capital be converted into capital or into cash dividends for issuance. Realized additional paid-in capital referred to in the preceding paragraph includes the excess from the issuance of shares in excess of the par value and from the receipt of gifts. In accordance with the provisions of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the total amount of additional paid-in capital allocated to be replenished each year may not

179

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

exceed 10% of the paid-in capital.

2. Retained earnings

If there is a surplus in the annual final accounts, then in accordance with the Articles of Incorporation of the Company and after paying income tax on profit-making enterprises and making up for losses in prior years, 10% should first be set aside as legal reserve. However, when the legal reserve has reached the level of the Company’s paid-in capital, this limitation shall not apply. Furthermore, appropriate special reserve or reversals shall be set aside in accordance with the decrees or regulations of the competent authority. If there is any remaining balance, a proposal for the distribution of this balance plus accumulated undistributed surplus earnings from the previous period shall be formulated by the Board of Directors. When issuing new shares, such distribution shall be made after a resolution of the shareholders’ meeting.

In accordance with the provisions of Paragraph 5, Article 240 of the Company Act, the Company authorizes the Board of Directors to pay dividends and bonuses for all or part of the legal reserve and additional paid-in capital as provided for in Paragraph 1, Article 241 of the Company Act per resolution passed by the majority of directors present at a Board meeting attended by more than two thirds of the directors. The dividends and bonuses shall be paid by way of issuing cash, and it shall be reported to the shareholders’ meeting.

In response to the growth of operations and investment needs, the Company has adopted the following dividend distribution principles at this stage:

The Company is in a stage of business growth, and the dividend distribution policy depends on the Company’s current and future investment environment, capital needs, domestic and international competition, capital budget, etc. Taking into account the interests of shareholders, balancing dividends and the Company’s long-term financial planning, etc., every year the Board of Directors shall draw up a distribution plan in accordance with the law and submit it for resolution by the shareholders’ meeting. Shareholders’ dividends may be distributed in cash or stock. The proportion of cash dividend distribution shall be no less than 10% of the total dividends. However, the cash dividend distribution ratio can still be adjusted according to the operating conditions of the current year.

(1) Legal reserve

When the Company has no losses, then subject to a resolution of the shareholders’ meeting, issuance shall be made of new shares or cash with the legal reserve. However, this is limited to the portion of the reserve exceeding 25% of the paid-in capital.

180

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

(2) Special reserve

Pursuant to Order issued by the Financial Supervisory Commission, when the Company distributes its distributable surplus, then for the net deduction of other shareholders’ equity incurred in the current year, special reserve of the same amount is withdrawn from the current income and the undistributed surplus of the previous period. If the amount of the deduction of other shareholders’ equity accumulated in the previous period is not distributed, special reserve of the same amount from the undistributed surplus of the previous period shall not be distributed. In the event of a subsequent reversal of the amount of the deduction of shareholders’ equity, earnings are distributed on the reversal portion.

(3) Earnings distribution

The Company respectively passed resolutions of the Board of Directors on the amount of cash dividends under appropriation of earnings for 2021 on March 22, 2022 and the amount of stock dividends under appropriation of earnings for 2021 on June 14, 2022. On August 4, 2021, the shareholders’ meeting passed a resolution on appropriation of earnings for 2020. The dividend amounts to be distributed to owners were as follows:

Dividends distributed to owners of ordinary shares: Cash dividend Stock dividend	2021	2021	2021		2020 Dividend rate (NT$) Amount 0.70 65,100 - - $ 65,100
	Dividend rate (NT$) $ 0.30 0.30		Amount		Dividend rate (NT$) 0.70 -
			27,900 27,900
			$ 55,800

On March 23, 2023, the Board of Directors of the Company proposed the earnings distribution for 2022 with the amount of dividends distributed to owners as follows:

Dividends distributed to owners of ordinary shares: Cash dividend	2022 Dividend rate (NT$) Amount $ 0.70$ 67,123
	Dividend rate (NT$) $ 0.70

Cash dividends and stock dividends are calculated based on the 95,890 thousand shares of the Company that have been issued as of March 23, 2023, and that are entitled to participate in the distribution.

181

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

3. Treasury shares

In accordance with Article 28-2 of the Securities and Exchange Act, the Company

buys back treasury shares for the purpose of transferring shares to employees. Details of changes in treasury shares in 2022 and 2021 are as follows:

Treasury shares at start of period Cancellations this period Treasury shares at end of period	2022 Number of shares (thousand shares) Amount 1,000 $ 14,262 (1,000) (14,262) - $ -	2022 Number of shares (thousand shares) Amount 1,000 $ 14,262 (1,000) (14,262) - $ -	2021 Number of shares (thousand shares) Amount 1,000 14,262 - -	2021 Number of shares (thousand shares) Amount 1,000 14,262 - -
	Number of shares (thousand shares) 1,000 (1,000)		Number of shares (thousand shares)
			1,000 -	14,262 -
	-	$ -	1,000	14,262

In accordance with provisions of the Securities and Exchange Act, the proportion of shares bought back by the Company may not exceed 10% of the total issued shares of the Company; the total amount of the shares purchased may not exceed the amount of retained earnings plus issued share premium and realized additional paid-in capital; shares repurchased as a result of the transfer of shares to employees shall be transferred within three years from the date of purchase, and if the transfer is not made within the time limit, then Company’s unissued shares shall be deemed to have been cancelled. In addition, treasury shares may not be pledged and no shareholder rights may be enjoyed before transfer.

(XII) Earnings per share

The Company’s basic earnings per share and diluted earnings per share are calculated as follows:

Basic earnings per share: Net profit attributable to holders of ordinary shares of the Company Weighted average number of ordinary shares outstanding (thousand shares) Basic earnings per share (NT$)	2022 $ 184,188	2021 130,729 95,790 1.36
	95,868
	$ 1.92

182

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Diluted earnings per share: Net profit attributable to holders of ordinary shares of the Company (diluted) Weighted average number of ordinary shares outstanding (basic) (thousand shares) Impact of employee stock remuneration Weighted average number of ordinary shares outstanding (diluted) (thousand shares) Diluted earnings per share (NT$) (XIII) Revenue from customer contracts 1. Details of revenue Information Services Department Primary regional markets: Taiwan $ 1,209,114 Mainland China 16,613 $ 1,225,727 Information Services Department Primary regional markets: Taiwan $ 1,001,971 Mainland China 16,194 $ 1,018,165 2. Contract balances December 31, 2022 Notes receivable $ 2,279 Accounts receivable 195,301 Less: Loss allowance (2,448 ) $ 195,132 Contract liabilities $ 47,286	Diluted earnings per share: Net profit attributable to holders of ordinary shares of the Company (diluted) Weighted average number of ordinary shares outstanding (basic) (thousand shares) Impact of employee stock remuneration Weighted average number of ordinary shares outstanding (diluted) (thousand shares) Diluted earnings per share (NT$) (XIII) Revenue from customer contracts 1. Details of revenue Information Services Department Primary regional markets: Taiwan $ 1,209,114 Mainland China 16,613 $ 1,225,727 Information Services Department Primary regional markets: Taiwan $ 1,001,971 Mainland China 16,194 $ 1,018,165 2. Contract balances December 31, 2022 Notes receivable $ 2,279 Accounts receivable 195,301 Less: Loss allowance (2,448 ) $ 195,132 Contract liabilities $ 47,286		2022 $ 184,188	2022 $ 184,188
			95,868 432
			96,300
			$ 1.91
			2022
	Information Services Department $ 1,209,114 16,613	Wire & Connectors Department - 24,650
	$ 1,225,727	24,650
		2021
	Information Services Department	Information Services Department
	$ 1,001,971 16,194	- 22,658 22,658 December 31, 2021 3,742 105,050 (31 ) 108,761 159,007
	$ 1,018,165
	December 31, 2022 $ 2,279 195,301 (2,448 ) $ 195,132 $ 47,286

183

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Please refer to Note VI (II) for the details of notes and accounts receivable and their impairment.

The opening balances of contract liabilities for January 1, 2022 and 2021, and the amounts recognized as revenue in 2022 and 2021 were NT$152,964 thousand and NT$133,709 thousand, respectively.

Changes in contract assets and contract liabilities are mainly due to the difference between the time when the Company transfers goods or services to customers to satisfy performance obligations and when customers pay.

(XIV) Remuneration of employees and of directors and supervisors

In accordance with the Company’s Articles of Incorporation, if there is profit for the year then no less than 1% and no more than 10% shall be allocated for employee remuneration by a resolution of the Board of Directors and in the form of stock or cash distributions. Distribution recipients are to include employees of affiliated companies who meet certain conditions. Out of the aforementioned profit amount of the Company, no more than 3% should be appropriated by a resolution of the Board of Directors as remuneration for directors and supervisors (constitutes director remuneration after the establishment of the Audit Committee).

Distribution proposals for employee remuneration and remuneration of directors and supervisors (constitutes director remuneration after the establishment of the Audit Committee) shall be reported to the shareholders’ meeting. However, when the Company still has accumulated losses, the compensation amounts should be reserved in advance before the remuneration of employees and the remuneration of directors is allocated according to the aforementioned proportions.

The estimated amounts of employee remuneration of the Company in 2022 and 2021 were NT$7,700 thousand and NT$4,840 thousand. Estimated amounts of the remuneration for directors and supervisors were NT$6,400 thousand and NT$4,500 thousand. These refer to the amounts before deducting the remuneration of employees and the remuneration of directors and supervisors from the net profit before tax of the Company for each period. After deducting the accumulated losses, the balance is multiplied by the remuneration of employees and directors and supervisors stipulated in the Company’s Articles of Incorporation The remuneration distribution percentage is an estimate basis and is presented as an operating expense for each period. (In all of the above instances, after the establishment of the Audit Committee, supervisor remuneration constitutes director remuneration.) If the Board of Directors decides to pay employee compensation in stock, the numbers of shares to be distributed are calculated based on the closing price of the Company one day before the date of the meeting of the Board of Directors.

184

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

In respect to the remuneration of employees, directors, and supervisors allocated by the above-mentioned resolutions of the Board of Directors, there were no differences between these amounts and the estimated amounts in the Company’s 2022 and 2021 consolidated financial statements. (After the establishment of the Audit Committee, supervisor remuneration constitutes director remuneration.) Relevant information can be inquired through the Market Observation Post System.

• (XV) Financial instruments

1. Credit risk

• (1) Amount of maximum credit risk exposure

The carrying amounts of financial assets and contract assets represent the maximum credit exposure amount.

(2) Concentration of credit risk

Since the Company has a large customer base, there is no significant concentration of transactions with a single customer and the sales area is dispersed. Therefore, there is no risk of significant concentration of credit risk in accounts receivable. In order to reduce credit risk, the Company also regularly and continuously evaluates the financial status of customers. However, customers are usually not required to provide collateral.

• (3) Credit risk of receivables

For details of credit risk exposure information and credit impairment of notes

receivable and accounts receivable, please refer to Note VI (II).

2. Liquidity risk

The table below shows the contractual maturity dates of financial liabilities, including estimated interest and impact of netting agreements.

December 31, 2022 Non-derivative financial liabilities Short-term bank loans Lease liabilities Notes and accounts payable Other payables Deposits received (accounted for as other non-current liabilities)	Carrying **amount **	Contractual **cash flows **	**Within 1year **	**1 to 2years **	Over 2years - (305) - - (348)
	$ 691,000 4,858 139,433 60,745 348	(692,430) (4,919) (139,433) (60,745) (348)	(692,430) (2,307) (139,433) (60,745) -	- (2,307) - - -
	$ 896,384	(897,875)	(894,915)	(2,307)	(653)

185

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

December 31, 2021 Non-derivative financial liabilities Short-term bank loans Short-term notes and bills payable Lease liabilities Notes and accounts payable Other payables Deposits received (accounted for as other non-current liabilities)	Carrying **amount **	Contractual **cash flows **	**Within 1year **	**1 to 2years **	Over 2years - - (1,086) - - (348)
	$ 610,000 79,956 3,201 116,434 47,655 348	(611,271) (80,000) (3,258) (116,434) (47,655) (348)	(611,271) (80,000) (1,086) (116,434) (47,655) -	- - (1,086) - - -
	$ 857,594	(858,966)	(856,446)	(1,086)	(1,434)

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier or in significantly different amounts.

1. Exchange rate risk

2. (1) Exposure to exchange rate risk

The financial assets and liabilities of the Company exposed to significant foreign currency exchange rate risk are as follows:

Financial assets Monetary items USD HKD Financial liabilities Monetary items USD	December 31, 2022	December 31, 2022	December 31, 2022	Foreign currency unit: $ thousand December 31, 2021 Foreign currency Exchange Rate TWD 1,518 USD/TWD =27.68 42,018 2,004 HKD/TWD =3.549 7,112 146 USD/TWD =27.68 4,041	Foreign currency unit: $ thousand December 31, 2021 Foreign currency Exchange Rate TWD 1,518 USD/TWD =27.68 42,018 2,004 HKD/TWD =3.549 7,112 146 USD/TWD =27.68 4,041
	Foreign currency $ 1,312 4,008 219	Exchange Rate	TWD	Foreign currency	Exchange Rate USD/TWD =27.68 HKD/TWD =3.549 USD/TWD =27.68
		USD/TWD =30.71 HKD/TWD =3.938 USD/TWD =30.71	40,285 15,784 6,728	1,518 2,004 146

(2) Sensitivity analysis

The exchange rate risk of the Company’s monetary items mainly comes from cash and cash equivalents, accounts receivable, other receivables and accounts payable denominated in foreign currencies which generate foreign currency exchange gains and losses at the time of translation. If the TWD had depreciated or appreciated by 5% against the USD or RMB as of December 31, 2022 and 2021, then with all other factors remaining constant the impact on net profit before tax in 2022 and 2021 would be as follows:

186

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

USD (versus TWD) Appreciate 5% Depreciate 5% HKD (versus TWD) Appreciate 5% Depreciate 5%	December 31, 2022 $ 1,678 (1,678) 789 (789)	December 31, 2021 1,899 (1,899) 356 (356)

(3) Exchange gains and losses on monetary items

For information on exchange gains and losses on monetary items of the Company, foreign currency exchange gains (losses) in 2022 and 2021 (both realized and unrealized) amounted to NT$5,752 thousand and (NT$1,812) thousand.

4. Interest rate analysis

The Company’s financial asset and financial liability interest rate risk exposure is listed in the following table:

Variable rate instruments (book amounts): Financial assets Financial liabilities	December 31, 2022 $ 9,157 531,000	December 31, 2021 59,109 610,000

The following sensitivity analysis is based on the exposure to interest rate risk of the derivative and non-derivative financial instruments on the reporting date. For variable rate instruments, the sensitivity analysis assumes the variable rate liabilities on the reporting date have been outstanding for the whole year. The Company’s internal key management reported the increases and decreases in interest rates, and changes in interest rates of 25 basis points are considered by management to be reasonably possible.

If interest rates had increased or decreased by 25 basis points, and with all other variables held constant, the Company’s net profit before tax in 2022 and 2021 would have decreased or increased by NT$1,305 thousand and NT$1,377 thousand, respectively. This would mainly be due to variable interest rate demand deposits and borrowings of the Company.

187

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

5. Fair value information

(1) Fair value hierarchy

The carrying amounts and fair values of the Company’s financial assets and financial liabilities are listed below (including fair value rating information; however, provided that the carrying amount of financial instruments other than fair value is a reasonable approximation of fair value, and in the case of lease liabilities, there is no requirement to disclose fair value information):

Financial assets measured at amortized cost Cash and cash equivalents Net notes receivable and accounts receivable (including related parties) Other receivables - related parties Other financial assets - current Deposits made (accounted for as other non-current assets) Financial liabilities measured at amortized cost Bank loans Notes payable and accounts payable Other payables Lease liabilities - current Lease liabilities - non-current Deposits received (accounted for as other non-current liabilities)		December 31, 2022	December 31, 2022	December 31, 2022
	Carrying amount $ 33,870 195,132 219 34,800 24,752		Fair value
		Level 1 - - - - - - - - - - -	Level 2 - - - - - - - - - - -	Level 3 - - - - - - - - - - -	**Total **
					- - - - - - - - - - -
	$ 288,773
	$ 691,000 139,433 60,745 2,264 2,594 348
	$ 896,384

188

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Financial assets measured at amortized cost Cash and cash equivalents Net notes receivable and accounts receivable (including related parties) Other receivables - related parties Other financial assets - current Deposits made (accounted for as other non-current assets) Financial liabilities measured at amortized cost Bank loans Notes payable and accounts payable Other payables Lease liabilities - current Lease liabilities - non-current Deposits received (accounted for as other non-current liabilities)		December 31, 2021	December 31, 2021	December 31, 2021
	Carrying amount $ 59,254 108,761 207 41,800 28,282		Fair value
		Level 1 - - - - - - - - - - -	Level 2 - - - - - - - - - - -	Level 3 - - - - - - - - - - -	**Total **
					- - - - - - - - - - -
	$ 238,304
	$ 689,956 116,434 47,655 1,055 2,146 348
	$ 857,594

(2) Valuation techniques for financial instruments not measured at fair value

The management of the Company believes that the carrying amounts of the Company’s financial assets and financial liabilities measured at amortized cost in the parent company only financial statements are close to their fair values.

(XVI) Financial risk management

1. Overview

The Company is exposed to the following risks as a result of the use of financial instruments:

(1) Credit risk

189

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

(2) Liquidity risk

(3) Market risk

This note presents the Company’s exposure information for each of the above risks, the Company’s objectives, policies and procedures for measuring and managing the risks. For further quantitative disclosures, please refer to the notes to the parent company only financial statements.

2. Risk management structure

The Company’s financial department provides services for various businesses, coordinates access to domestic and international financial market operations, and supervises and manages the financial risks associated with the Company’s operations through internal risk reports that analyze risk exposure according to the level and breadth of risk. The use of financial instruments is governed by the policies adopted by the Board of Directors of the Company. These constitute written principles for exchange rate risk, interest rate risk, credit risk, the use of non-derivative financial instruments, and the investment of surplus liquidity. Internal auditors continuously review policy compliance and exposure limits. The Company does not trade in financial instruments for speculative purposes (including derivative financial instruments).

3. Credit risk

Credit risk is the risk of financial loss of the Company due to the failure of the customer or counterparty of the financial instrument to perform its contractual obligations. This arises mainly from the Company’s accounts receivable from customers and securities investments.

(1) Accounts receivable and other receivables

The Company has established a credit policy under which the Company is required to analyze the credit rating of each new customer individually before giving standard payment and shipping conditions and terms. The Company’s review includes external ratings where available, and bank letters in certain circumstances. Purchasing limits are established on a case-by-case basis. Such limits are subject to periodic review. Customers who do not meet the Company’s benchmark credit rating may only trade with the Company on an advance receipt basis.

Accounts receivable cover a wide range of customers and are spread across different industries and geographic regions. The Company continuously evaluates the financial situation of its accounts receivable clients and, if necessary, purchases credit guarantee insurance contracts.

190

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Since the Company has a large customer base, there is no significant concentration of transactions with a single customer and the sales area is dispersed. Therefore, there is no risk of significant concentration of credit risk in accounts receivable. In order to reduce credit risk, the Company also regularly and continuously evaluates the financial status of customers. However, customers are usually not required to provide collateral.

(2) Investments

The credit risk of bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’s financial department. Since the Company’s transaction counterparties and other parties are all creditworthy banks and financial institutions as well as corporate organizations and government agencies at investment grade and above, there are no material performance concerns and therefore no significant credit risk.

(3) Guarantees

It is the Company’s policy to provide financial guarantees only to wholly-owned subsidiaries. Please refer to Note XIII (I) for information on endorsements/guarantees by the Company for subsidiaries as of December 31, 2022.

4. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents to support the Company’s operations and mitigate the impact of fluctuations in cash flows. The Company’s management monitors the use of bank financing lines and ensures compliance with the terms of loan contracts.

Bank borrowings are an important source of liquidity for the Company. Please refer to Note VI (VII) for unused bank facilities of the Company as of December 31, 2022 and 2021.

5. Market risk

Market risk refers to changes in market prices such as changes in exchange rates, interest rates, and equity instrument prices, and the risk that affects the Company’s earnings or the value of financial instruments it holds. The objective of market risk management is to control the exposure to market risk to within an acceptable range and to optimize returns on investment.

(1) Exchange rate risk

The Company is exposed to exchange rate risk arising from sales, purchases and borrowing transactions that are not denominated in the functional currency. The main transaction currencies are New Taiwan dollar and US dollar.

191

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Loan interest is priced in the currency of the principal of the loan. Generally speaking, the currency of the loan is the same as the currency of the cash flows generated by the Company’s operations, mainly New Taiwan dollar. In this case, it provides economic hedging without the need to use derivatives. Therefore, hedging accounting is not used.

For monetary assets and liabilities denominated in other foreign currencies, when short-term imbalances occur, the Company buys or sells foreign currencies at real-time exchange rates to ensure that the net risk exposure remains at an acceptable level.

(2) Interest rate risk

As the Company borrows funds at both fixed and floating interest rates, cash flow risk arises from the borrowing of funds at floating interest rates. The Company manages interest rate risk by maintaining an appropriate combination of fixed and floating interest rates.

(XVII) Capital management

Based on the characteristics of the current operating industry and the future development of the Company, and considering factors such as changes in the external environment, the Company plans its capital management to ensure that it has the necessary financial resources and operating plans to meet the needs of future working capital, capital expenditure, debt repayment, and dividend payments. Management uses appropriate total debt/equity ratios, ratios of interest-bearing debt to equity, or other financial ratios to determine the optimal capitalization of the Company. It enhances shareholder returns by optimizing debt and equity balances while maintaining a sound capital base. Debt-to-equity ratios as of the reporting dates were as follows:

Total liabilities Total equity Interest-bearing debt Debt-to-equity ratio Ratio of interest-bearing debt to equity	December 31, 2022 $ 998,303 1,485,708 691,000 67% 47%	December 31, 2021 1,051,672 1,269,077 689,956 83% 54%

(XVIII) Investing and financing activities not affecting current cash flows

The Company’s non-cash transaction investment and financing activities in 2022 and 2021 were undertaken to obtain right-of-use assets via leasing; please refer to Note VI (VI) for details.

Reconciliation of liabilities from financing activities is as follows:

192

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Short-term loans Deposits received Lease liabilities Total liabilities from financing activities Short-term loans Deposits received Lease liabilities Total liabilities from financing activities	January 1, 2022 $ 689,956 348 3,201 $ 693,505 January 1, 2021 $ 652,868 248 1,078 $ 654,194	Cash flows 1,044 - (1,943)		Non-cash changes Others - - 3,600 3,600 Others - - 3,201 3,201	December 31, 2022 691,000 348 4,858
		(899)			696,206
		Cash flows 37,088 100 (1,078)			December 31, 2021 689,956 348 3,201
		36,110			693,505

VII. Related party transactions

(I) Names and relationship with related parties

The Company’s subsidiaries and other related parties involved in transactions with the Company during the periods covered by these parent company only financial statements were as follows:

Relationship with the Name of related party Company CHLERAISE ELECTRONIC CORPORATION (CELERAISE) Subsidiary of the Company CELERAISE (THAILAND) CO., LTD (THAILAND) Subsidiary of the Company Celeraise Investments Limited (Celeraise Hong Kong) Subsidiary of the Company Leadpak Industrial Co., Ltd. (Leadpak Industrial, formerly Bor Subsidiary of the Company Sheng Industrial Co., Ltd.) Celeraise Technology Corporation (Celeraise Technology) Subsidiary of the Company Shanghai Zhansheng Electronics Co., Ltd. (Shanghai Subsidiary of the Company Zhansheng) Yield Profit International Enterprise Limited (Yield Profit Subsidiary of the Company International) Jet Success Technology Development Limited (Jet Success) Subsidiary of the Company Kunshan Yiguan Electronic Technology Co., Ltd. (Kunshan Subsidiary of the Company Yiguan) Mr. Yun-Teng Chang Chairman of the Company

193

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

(II) Significant transactions with related parties

1. Operating revenue

The amounts of significant sales of the Company to related parties were as follows:

Subsidiary	2022 $ 20,818	2021 24,745

The Company has no sales prices for Celeraise Hong Kong and Kunshan Yiguan to compare with those for general customers. The sales prices for Celeraise Technology are not significantly different from that of ordinary customers. The Company’s credit conditions for Celeraise Technology are determined according to the credit conditions of the final purchaser of each project. The credit conditions for Celeraise Hong Kong and Kunshan Yiguan are 60 days. Payments are made according to financial needs. There is no significant difference from general customers, and the credit period for general customers is 30 to 60 days.

2. Purchases

The amounts of purchases of the Company from related parties were as follows:

Subsidiary Celeraise Hong Kong Others	2022 $ 21,819 1,275	2021 19,857 23
	$ 23,094	19,880

Purchase prices of the Company for related parties constitute the final selling prices of the finished products minus a certain percentage, and payment terms are based on their funding needs.

3. Receivables from related parties

Details of the Company’s receivables from related parties are as follows:

Accounts	Related party category Subsidiary: Celeraise Hong Kong Celeraise Technology	December 31, 2022 $ 15,784 -	December 31, 2021 7,136 6,405
Accounts receivable
		$ 15,784	13,541

194

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

4. Payables to related parties

Details of the Company’s receivables from related parties are as follows:

Accounts	Related party category Subsidiary:	December 31, 2022 $ 6,532	December 31, 2021
Accounts payable			3,924

5. Loans to related parties

The amounts of funds loaned by the Company as of December 31, 2022 and 2021 each came to NT$0 thousand. Moreover, loans of funds to related parties were unsecured and interest-bearing at an interest rate of 1.5%. Interest income in 2022 and 2021 amounted to NT$0 thousand and NT$297 thousand, respectively; and interest receivable for the years ended December 31, 2022 and 2021, amounted to NT$219 thousand and NT$207 thousand, respectively, accounted for as other receivables - related parties.

6. Endorsements/Guarantees

Details of performance guarantees provided by related parties to the Company are as follows:

Subsidiary	December 31, 2022 $ 40,446	December 31, 2021 38,440

7. Leases

The Company leases some office floors to its subsidiaries and rent is charged

monthly. Rental income for both 2022 and 2021 was NT$1,080 thousand. As of December 31, 2022 and 2021, all relevant funds had been recovered.

(III) Key management personnel transactions

1. Compensation of key management personnel includes:

Short-term employee benefits

2022	2021 26,657
$ 31,676

2. Guarantees provided

The total amounts of the Company’s short-term loan contracts for December 31, 2022 and 2021, were NT$1,141,775 thousand and NT$969,200 thousand, respectively, with Mr. Yun-Teng Chang serving as joint guarantor.

VIII. Pledged assets

Details of book values of assets provided by the Company as collateral against pledges are as follows:

195

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Asset name	Purpose of pledge	December 31, 2022 $ 140,142 38,115 34,800 - 24,752	December 31, 2021 123,514 33,505 26,800 15,000 28,282
Property, plant, and equipment - land Property, plant, and equipment - buildings Restricted bank deposits (accounted for as other financial assets - current) Time deposits (accounted for as other financial assets - current) Deposits made (accounted for as other non-current assets)	Short-term loans Short-term loans Bank loans and performance guarantees, etc. Bank loans and performance guarantees, etc. Performance guarantees and bid deposits
		$ 237,809	227,101

IX. Significant commitments and contingencies: None .

X. Losses due to major disasters: None.

XI. Significant subsequent events: None.

XII. Other

The summary of current period employee benefits, depreciation, and amortization, by

function, is as follows:

function,is as follows:
Function Nature	2022			2021
	Under operating costs	Under operating expenses	Total	Under operating costs	Under operating expenses	Total
Employee benefit expense Salary expense Health and labor insurance expense Pension expense Director’s remuneration Other employee benefit expense Depreciation expense Amortization expense	8,318 916 431 - 462 1,458 -	108,357 11,470 5,704 6,735 6,330 6,527 1,898	116,675 12,386 6,135 6,735 6,792 7,985 1,898	- - - - - 2,126 -	105,019 12,051 5,980 3,530 6,401 5,930 1,831	105,019 12,051 5,980 3,530 6,401 8,146 1,831

196

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Additional information on the number of employees and employee benefit expenses of the Company in 2022 and 2021 is as follows:

2022 and 2021 is as follows:
Number of employees Number of directors who do not concurrently serve as employees Average employee benefit expense Average employee salary expense Adjustments in average employee salary expense Supervisor’s remuneration	2022	2021 177
	177
	7	7
	$ 835	761
	$ 686	618
	11%	-
	$ -

he Company’s salary and remuneration policy information is as follows (including directors, supervisors, managers, and employees):

1. Employees:

The Company formulates employee salary policies according to the market salary level, the requirements of the responsibilities of each functional grade and the operation needs of the organization, and takes the employee’s academic experience, rank, responsibilities, and personal work performance as an important basis for salary verification.

The Company’s annual salary adjustment range is determined according to evaluations of operating conditions, budget, price levels, and market salary levels. The extent of individual salary adjustments of employees will be determined according to their performance and their salary competitiveness compared with employees of the same level. In addition, employees who are promoted according to the Employee Promotion Management Procedures shall see adjustments according to the adjustment of their responsibilities and their original salaries.

The Company’s salaries include recurring salaries (basic salary and fixed allowances paid on a monthly basis) as well as non-recurring salaries (non-monthly allowances, overtime pay, bonuses, employee compensation, etc.).

2. Managers:

The appointment of the general manager and deputy general managers (level) are handled in accordance with the provisions of the Company’s rules. The remuneration policy is determined according to the scope of powers and responsibilities of the position, the achievement rate of the Company’s overall operating goals, individual performance, and academic experience, and with reference to the salary levels of the same nature in the industry market.

197

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

3. Directors and supervisors:

Compensation of directors and supervisors includes travel expenses, remuneration, and the remuneration of directors and supervisors via earnings distributions. In accordance with the Company’s Articles of Incorporation, the remuneration of directors and supervisors shall account for no more than 3% of distributed earnings after a resolution by the Board of Directors, and it shall be reported to the shareholders’ meeting. Please see Note VI (XIV) for the relevant provisions of the Articles of Incorporation of the Company.

XIII. Other disclosures

(I) Information on significant transactions

The following is the information on significant transactions required by the Regulations Governing the Preparation of Financial Reports by Securities Issuers for the Company in 2022:

1. Loans to other parties:

Number	The company lending funds	Name of borrower	Current account	Whether a related party	Highest amount during the period	Balance at end of period	Actual usage amount	Interest rate	Purposes of fund financing for the borrower	Transaction amount for business between twoparties	Reasons for short term financing	Allowan ce for bad debt	Collateral	Collateral	Loan limit for individual counterpartie s	Total loan limit
													Name	Value
1 1 2 2 2 3 4	Jiun Tai Jiun Tai Jet Success Jet Success Jet Success Shanghai Zhansheng Celeraise Hong Kong	THAILAND Celeraise Hong Kong Yield Profit International Celeraise Hong Kong CELERAISE Huizhou Zhanmao THAILAND	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y Y Y	33,781 16,108 23,195 141,746 16,108 50,242 45,101	33,781 15,355 22,111 - 15,355 49,149 42,994	33,781 15,355 22,111 - 15,355 49,149 42,994	2% 1.5% 1.5% 1.5% 2% 1.5% 2%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - - -	Operating turnover Operating turnover Operating turnover Operating turnover Operating turnover Operating turnover Operating turnover	- - - - - - -	None None None None None None None	- - - - - - -	104,611 (Note 1) 104,611 (Note 1) 366,320 (Note 2) 366,320 (Note 2) 146,528 (Note 2) 123,567 (Note 3) 426,975 (Note 4)	104,266 (Note 1) 104,611 (Note 1) 366,320 (Note 2) 366,320 (Note 2) 146,528 (Note 2) 123,567 (Note 3) 426,975 (Note 4)

Note 1: In accordance with Jiun Tai’s Operational “Procedures for Loaning Funds to Others”, the total amount of funds loaned may not exceed 100% of Jiun Tai’s net value. If there is a need for short-term financing with Jiun Tai, the loan amount may not exceed 100% of Jiun Tai’s net value. Further, the total amount of foreign intercompany loans where Jiun Tai does not directly or indirectly hold 100% of the voting shares may not exceed 40% of the net value.

Note 2: In accordance with Jet Success’s “Operational Procedures for Loaning Funds to Others”, the total amount of funds loaned may not exceed 100% of Jet Success’s net value. If there is a need for short-term financing with Jet Success, the loan amount may not exceed 100% of Jet Success’s net value. Separately, the total amount of intercompany loans to foreign companies where Jet Success does not directly or indirectly hold 100% of the voting shares may not exceed 40% of the net value.

Note 3: In accordance with Shanghai Zhansheng’s “Operational Procedures for Loaning Funds to Others”, the total amount of funds loaned may not exceed 100% of Shanghai Zhansheng’s net value. If there is a need for short-term financing with Shanghai Zhansheng, the loan amount may not exceed 100% of Shanghai Zhansheng’s net value. Separately, the total amount of intercompany loans where Shanghai Zhansheng does not directly or indirectly hold 100% of the voting shares may not exceed 40% of the net value.

Note 4: In accordance with Celeraise Hong Kong’s “Operational Procedures for Loaning Funds to Others”, the total amount of funds loaned may not exceed 100% of Celeraise Hong Kong’s net value. If there is a need for short-term financing with Celeraise Hong Kong, the loan amount may not exceed 100% of Celeraise Hong Kong’s net value. Separately, the total amount of intercompany loans where Celeraise Hong Kong does not directly or indirectly hold 100% of the voting shares may not exceed 40% of the net value.

Note 5: The above transactions have been eliminated in the preparation of the consolidated financial statements.

198

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

2. Guarantees and endorsements for other parties:

Number	Name of endorsement/guara ntee company	Counterparty of guarantee and endorsement	Counterparty of guarantee and endorsement	Endorsement/ guarantee limit for single enterprise	Maximum endorseme nt/guarante e balance for the current period	Balance of endorseme nt/guarante e at end of period	Actual usage amount	Guarantee amount by endorsement of property guarantees	Ratio of cumulative endorsement/guara ntee amount to net value of the most recent financial statements	Endorseme nt/guarante e maximum	Endorseme nt/guarante e of parent company for subsidiarie s	Endorseme nt/guarante e of subsidiarie s for parent company	Endorsemen ts/guarantee s to the mainland China region
		Company name	Relationship
0 0 1	The Company “ Celeraise Technology	Celeraise Hong Kong/Jiun Tai Celeraise Hong Kong/Yield Profit International/Cele raise Technology The Company	Subsidiary of the Company Subsidiary of the Company Parent company	1,485,708 1,485,708 346,561	80,538 146,645 48,208	76,775 (Note 2) 142,130 (Note 3) 40,446	- - 40,446	- - -	5.17% 9.57% 58.35%	1,485,708 1,485,708 346,561	Y Y N	N N Y	N N N

• Note 1: The total amount of the Company’s external endorsements/guarantees may not exceed 100% of the Company’s net value. The amount of endorsements/guarantees for a single enterprise may not exceed 100% of the Company’s net value.

• Note 2: A shared quota guarantee is provided for Celeraise Hong Kong and Jiun Tai of NT$76,775 thousand (US$2,500 thousand). Note 3: A joint guarantee is provided for Celeraise Hong Kong, Yield Profit International, and Celeraise Technology of NT$142,130 thousand (US$3,000 thousand and NT$50,000).

• Note 4: Endorsements/guarantees made by Celeraise Technology are made in accordance with that company’s Management Measures for Loans and Endorsements/Guarantees. The total amount of external endorsements/guarantees may not exceed 500% of the company’s net value, and the amount of endorsements/guarantees for a single enterprise may not exceed 500% of the company’s net value.

• Securities held at the end of the period (excluding investment in subsidiaries, associates, and joint ventures): None.

• Individual securities acquired or disposed of with accumulated amount exceeding NT$300 million or 20% of the paid-in capital: None.

• Acquisition of individual real property with amount exceeding NT$300 million or 20% of the paid-in capital: None.

• Disposal of individual real property with amount exceeding NT$300 million or 20% of the paid-in capital: None.

• Related party transactions for purchases and sales with amounts exceeding NT$100 million or 20% of the paid-in capital:

							Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
Company buying (selling) goods	Transaction counterparty	Relationship		Transaction status			Circumstances and reasons why trading conditions are different from ordinary transactions		Notes and accounts receivable (payable)		Notes
			Buying (selling) goods	Amount (Note 1)	Ratio of total purchas es (sales)	Credit period	Unit price	Credit period	Balance (Note 3)	Ratio of total notes and accounts receivable (payable)
Celeraise Hong Kong CELERAISE	CELERAISE Celeraise Hong Kong	Ultimate parent company is the same Ultimate parent company is the same	(Sales) Purchase	(398,095) 398,095	(40) % 62 %	Monthly settlement is 270 days, and the payments are made based on funding needs Monthly settlement is 270 days, and the payments are made based on funding needs	No significant difference with general customers No significant difference with general customers	No significant difference with general customers No significant difference with general customers	130,840 (130,840)	42% (66)%	Note 1 Note 1

199

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

Company buying (selling) goods	Transaction counterparty	Relationship	Transaction status	Transaction status	Transaction status	Transaction status	Circumstances and reasons why trading conditions are different from ordinary transactions	Circumstances and reasons why trading conditions are different from ordinary transactions	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Notes
			Buying (selling) goods	Amount (Note 1)	Ratio of total purchas es (sales)	Credit period	Unit price	Credit period	Balance (Note 3)	Ratio of total notes and accounts receivable (payable)
Huizhou Zhanmao Celeraise Hong Kong Celeraise Hong Kong Huizhou Zhanmao	Celeraise Hong Kong Huizhou Zhanmao Huizhou Zhanmao Celeraise Hong Kong	Ultimate parent company is the same Ultimate parent company is the same Ultimate parent company is the same Ultimate parent company is the same	(Sales) Purchase (Sales) Purchase	(370,493) 370,493 (151,292) 151,292	(52) % 37 % (15) % 40 %	Monthly settlement is 270 days, and the payments are made based on funding needs Monthly settlement is 270 days, and the payments are made based on funding needs Monthly settlement is 270 days, and the payments are made based on funding needs Monthly settlement is 270 days, and the payments are made based on funding needs	No significant difference with general customers No significant difference with general customers No significant difference with general customers No significant difference with general customers	No significant difference with general customers No significant difference with general customers No significant difference with general customers No significant difference with general customers	118,650 (118,650) 176,511 (176,511)	52% (40)% 57% (66)%	Note 1 Note 1 Note 1 Note 1

Note 1: The above transactions have been eliminated in the preparation of the consolidated financial statements.

1. Receivables from related parties with amounts exceeding NT$100 million or 20% of the

paid-in capital:

paid-in capital:	paid-in capital:	paid-in capital:	paid-in capital:	paid-in capital:
					Unit: NT$ thousand
Company with accounts receivable	Transaction counterparty	Relationship	Balance of receivables from related parties	Turnover rate	Receivables overdue from relatedparties		Receivables amount from related parties recovered after theperiod	Amount of allowance for doubtful accounts
					Amount	Action taken
Celeraise Hong Kong Celeraise Hong Kong Huizhou Zhanmao	Huizhou Zhanmao CELERAISE Celeraise Hong Kong	Ultimate parent company is the same Ultimate parent company is the same Ultimate parent company is the same	176,511 130,840 118,650	93% 406% 426%	- - -		17,321 60,479 39,001	- - -

Note 1: Information up to February 28, 2023.

Note 2: The transactions listed on the left have been eliminated in the preparation of the consolidated financial statements.

1. Trading in derivative instruments: None.

2. (II) Information on investees

3. The Company’s reinvestment business information is as follows (excluding investment in mainland China companies):

200

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

				Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares
Investing company name	Investee company name	**Region **	Main business items	Original investment amount		Held at end of period			Profit or loss of the investee company for the current period (Note 2)	Investment gains and losses recognized in the current period(Note 2)	Notes
				End of current period	End of prior period	Number of shares	Ratio	Carrying amount
The Company The Company The Company The Company The Company The Company The Company Jiun Tai Celeraise Hong Kong 〃	A Team Jiun Tai Celeraise Technology Leadpak Industrial Celeraise Hong Kong CELERAISE THAILAND Celeraise Hong Kong Yield Profit International Jet Success	British Virgin Islands Hong Kong Taiwan Taiwan Hong Kong Philippine s Thailand Hong Kong Hong Kong Hong Kong	Investment, trading, and holding company Holding company Information service industry International trade and other wholesale and retail trade Manufacture and sale of wire and cable connectors and connectors Manufacture and sale of wire and cable connectors and connectors Manufacture and sale of wire and cable connectors and connectors Manufacture and sale of wire and cable connectors and connectors Investment, trading, and holding company Investment, trading, and holding company	16,538 280,890 30,000 29,810 382,646 25,532 182,136 1 (HKD0.16) (Note 1) 61,433 (HKD15,600) (Note 1) 30,716 (HKD7,800) (Note 1)	16,538 280,890 30,000 29,810 382,646 25,532 182,136 1 (HKD0.16) (Note 1) 61,433 (HKD15,600) (Note 1) 30,716 (HKD7,800) (Note 1)	500 59,920 3,000 2,981 50,300 400 18,275 - 15,600 7,800	100% 100% 100% 99.36% 99.99% 100% 100% 0.01% 100% 100%	974 267,120 69,315 17,778 1,093,730 255,661 164,422 1 (HKD0.16) (Note 1) 313,566 (HKD79,626) (Note 1) 366,320 (HKD93,022) (Note 1)	- (2,987) 39,928 300 56,930 44,708 18,640 - 60,290 (HKD15,820) (Note 2) (3,226) (HKD(846)) (Note 2)	- (2,987) 39,927 298 56,930 44,708 18,640 Recognized by Jiun Tai Recognized by Celeraise Hong Kong 〃	Subsidiary 〃 〃 〃 〃 〃 〃 〃 Sub-subsi diary 〃

Note 1: Converted to New Taiwan dollar at the period-end exchange rate on the financial reporting end date. Note 2: Converted to New Taiwan dollar at the average exchange rate during the financial reporting period.

(III) Information on investment in mainland China

1. Relevant information such as the name and main business items of the investee company in mainland China:

in mainland China:	in mainland China:	in mainland China:	in mainland China:	in mainland China:
					Unit: Foreign currency thousands / thousand shares
Mainland China investee company name	Main business items	Paid-in capital amount (Note 3)	Investment method	Accumulated investment amount remitted from Taiwan at the beginning of the current period (Note 3)	Investment amount remitted or recovered in the currentperiod		Accumulated investment amount remitted from Taiwan at the end of the current period (Note 3)	Profit or loss of the investee company for the current period (Note 4)	Shareholding ratio of the Company’s direct or indirect investment	Investment gains and losses recognized in the current period (Notes 4 and 5)	Book value of investments at the end of the period (Note 3)	Investment income repatriated up to the current period
					Outflow	Inflow
Shanghai Minshi Shanghai Zhansheng Shenzhen Zhansheng Celeraise Chenzhou Kunshan Yiguan Huizhou Zhanmao	R&D and production of industrial automation control, product quality control, communication, and electronic network computing software Production of electronics, cable connectors, telephone spare parts and small household appliances; sales of the company’s own products Manufacture and sale of wire and cable connectors and connectors Production and sale of wire connectors, electronic wire products, etc. Manufacture and sale of wire and cable connectors and connectors, etc. Production and sale of wire connectors, electronic wire products and packaging materials, etc.	15,355 (US$500) 51,439 (US$1,675) 46,363 (US$515 RMB$6,930) (Note 6) - 30,710 (US$1,000) 51,593 (US$1,680) (Note 7)	Note 1 Note 2 Note 2 Note 2 Note 2 Note 2	15,355 (US$500) 224,183 (US$7,300) - 30,710 (US$1,000) 30,710 (US$1,000) -	- - - - - -	- - - - - -	15,355 (US$500) 224,183 (US$7,300) - 30,710 (US$1,000) 30,710 (US$1,000) -	- 5,899 (RMB1,334) (8,831) (RMB(1,997)) (Note 8) 2,901 (RMB656) 60,741 (RMB13,736)	100% 100% 100% -% 100% 100%	- 5,395 (RMB1,220) (5,728) (HKD(1,503)) - 2,900 (HKD761) 60,724 (HKD15,934)	- 130,490 (RMB29,603) 32,933 (HKD8,363) (Note 8) 360,307 (HKD91,495) 336,872 (HKD85,544)	- - - - - -

2. Limitations on investment in mainland China:

Company name	Accumulated investment amount remitted from Taiwan to mainland China at the end of the current period (Note 3)	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (Note 3)	Investment limit for the mainland China area in accordance with the regulations of the Investment Commission of the Ministry of Economic Affairs 891,425
The Company	300,958(USD9,800)	371,284(USD12,090)

Note 1: Reinvestment in mainland China through investment and establishment of companies in a third region.

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Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

• Note 2: Reinvestment in mainland China companies by reinvesting in existing companies in a third region.

• Note 3: Converted to New Taiwan dollar at the period-end exchange rate on the financial reporting end date.

• Note 4: Converted to New Taiwan dollar at the average exchange rate during the financial reporting period.

• Note 5: Investment gains and losses for the current period are recognized based on the financial statements of the invested company that have been verified and certified by the CPAs of the Taiwan parent company.

• Note 6: Constitutes reinvestment undertaken by Celeraise Hong Kong through investment of US$515 thousand of its own funds and use of fixed assets.

• Note 7: The difference between the remitted investment amount and the Company’s remittance is the reinvestment of US$1,680 thousand made by Celeraise Hong Kong, Yield Profit International, and Jet Success using their own funds.

• Note 8: Celeraise Chenzhou Industry completed the liquidation process in June 2018 and the investment amount was reimbursed in July 2018.

• Note 9: The above transactions have been eliminated in the preparation of the consolidated financial statements.

• Material transactions with mainland China investee companies:

• For direct or indirect material transactions between the Company and mainland

• China investee companies in 2022 (eliminated in the preparation of the consolidated statements), please see the description detailed under the “Information on Material Transactions” as well as “Business relationships and significant intercompany transactions”.

(IV) Information on principal shareholders:

rmation on principal shareholders:
	Unit: Shares
Shares Principal shareholder name	Number of shares held	Shareholding percentage
Year Jan Industrial Co., Ltd.	11,152,634	11.63%
Jiayu Investment Co., Ltd.	9,485,167	9.89%
Jusheng Investment Co., Ltd.	8,842,241	9.22%
Wei Yi Investment Co., Ltd.	7,792,774	8.12%
Shih Chieh Wei Co., Ltd.	7,715,421	8.04%

• Note: (1) The information of major shareholders in this table is published by the depository and clearing company on the last business day at the end of each quarter, calculating shareholder ownership of the company with information on the delivery of more than 5% of ordinary shares that have been completed without physical registration (including treasury shares). As for the share capital

202

Notes to the Parent Company Only Financial Statements of Welltend Technology Corporation (continued)

recorded in the company’s financial statements and the actual number of shares that the company has completed without physical registration, there may be discrepancies or differences due to the different basis for preparation and calculation.

• (2) If the above-mentioned information is of shares delivered to a trust by a shareholder, it is disclosed by the individual account of the trustor whose trust account is opened by the trustee. As for insider equity declarations of shareholders holding more than 10% of shares made in accordance with the Securities and Exchange Act, such shareholdings include own-held shares plus shares that are delivered to a trust and that have the right to exercise decision-making power over the trust property. Please refer to the Market Observation Post System for insider equity declaration information.

XIV. Segment information

Please refer to the 2022 consolidated financial statements for details.

203

Welltend Technology Corporation

Schedule of cash and cash equivalents December 31, 2022

	December 31, 2022	Unit: NT$ thousand
**Item **	Summary		Amount
Cash on hand		$	145
Demand deposits			5,349
Foreign currency	USD 124 thousand @30.71
deposits			3,808
Time deposits	USD 800 thousand @30.71		24,568
		$	33,870
	Schedule of notes and accounts receivable -
	non-related parties

Customer name Notes receivable: Others (Note) Accounts receivable: Company V Company AA Company Z Others (Note) Less: Loss allowance Total	Summary Operating revenue from non-related parties Operating revenue from non-related parties 〃 〃	Amount $ 2,279
		41,030 21,893 14,279 102,315
		179,517 (2,448)
		$ 179,348

Note: The balance of each item does not exceed 5% of the amount of this account and is not listed separately.

204

Welltend Technology Corporation

Schedule of inventories

December 31, 2022

Unit: NT$ thousand

Item Goods held for sale Less: Allowance for depreciation and inactive inventory Total	Amount Cost Net realizable value $ 123,665 125,538 (1,750) $ 121,915	Amount Cost Net realizable value $ 123,665 125,538 (1,750) $ 121,915
	Cost
	$ 123,665 (1,750)	125,538
	$ 121,915

205

Welltend Technology Corporation

Schedule of changes in investments using the

equity method January 1 to December 31, 2022

Units: NT$ thousand / Original currency thousand

Number of shares: Thousand shares

Name	Opening balance at start of period	Opening balance at start of period	Additions this period	Additions this period	Reductions this period	Reductions this period		Investment gains (losses) recognized under the equity method	Exchange differences on translation of foreign financial statements	Balance at end of period	Balance at end of period	Balance at end of period	Total market price or net value	Provision of guarantee or pledge Notes
	Number of shares	Amount	Number of shares	Amount - - - - - - -	Number of shares	Amount - - - - - - -				Number of shares	Shareholdin g percentage	Amount 974 267,120 17,778 69,315 1,093,730 255,661 164,422
A-Team Tech Jiun Tai Leadpak Industrial Celeraise Technology Celeraise Hong Kong CELERAISE THAILAND	500$ 960 59,920 266,257 2,981 17,480 3,000 29,388 50,300 996,827 400 207,137 3,275 135,367 $ 1,653,416		- - - - - - -		- - - - - - -			- (2,987) 298 39,927 56,930 44,708 18,640	14 3,850 - - 39,973 3,816 10,415 58,068	500 59,920 2,981 3,000 50,300 400 3,275	100% 100% 99.36% 100% 99.99% 99.99% 99.99%		974 261,528 17,794 69,312 1,067,438 255,661 164,422	None 〃 〃 〃 〃 〃 〃
		$ 1,653,416		-		-		157,516				1,869,000

206

Welltend Technology Corporation

Schedule of changes in property, plant, and

equipment

December 31, 2022

Please see Note VI (V)

Schedule of short-term loans

Creditor bank First Commercial Bank Shin Kong Bank CTBC Mega Bank Citibank Taiwan Cooperative Bank DBS Bank SCSB Bank	Summary Contract period Operating turnover amount 111.06~112.05 〃 111.04~112.04 〃 111.04~112.04 〃 111.11~112.11 〃 111.03~112.03 〃 111.10~112.10 〃 111.04~112.04 〃 111.04~112.04	Interest rate 1.48%~1.52% - 1.44%~1.60% 1.40%~1.68% 1.30%~1.57% 1.65%~1.85% 1.25%~1.65% 1.65%	Financing amount Collateral or guarantee $ 420,000 Land and buildings 75,000 Certificates of deposit 250,000 None 100,000 Land and buildings 76,775 Reimbursement account 40,000 Reimbursement account 100,000 Reimbursement account 80,000 Land and buildings	Amount
				340,000 - 160,000 - 60,000 1,000 80,000 50,000
				$ 691,000

207

Welltend Technology Corporation Schedule of notes and accounts payable December 31, 2022

Unit: NT$ thousand

Customer name Notes payable Accounts payable: Company J Company H Company I Company X Company Y Others (Note) Accounts payable - related parties Total Note: The balance of each item does listed separately.	Summary Amount Operating expenses from non-related parties $ - Operating expenses from non-related parties $ 24,594 〃 33,589 〃 11,889 〃 9,222 〃 8,446 〃 45,161 132,901 Operating expenses of related persons 6,532 $ 139,433 not exceed 5% of the amount of this account and is not	Amount
		$ -
		$ 24,594 33,589 11,889 9,222 8,446 45,161
		132,901 6,532
		$ 139,433

Schedule of other payables

Item Salaries and bonuses payable Employee compensation payable Others (Note) Remuneration payable to directors Health insurance premiums payable	Summary Salary in December 2022 and estimated year-end bonus in 2022 Labor fees and withholdings, etc., payable Labor fees, business tax and withholdings, etc., payable		Amount
			$ 36,337 7,700 6,812 6,400 3,496
			$ 60,745

Note: The balance of each account does not exceed 5% of the amount of this account and is not listed separately.

208

Welltend Technology Corporation Schedule of operating revenue January 1 to December 31, 2022

Unit: NT$ thousand

Item Sales revenue: Information products Wire and connectors Less: Returns and discounts Others Net operating revenue	Quantity	Amount $ 1,089,424 24,650
		1,114,074 (8,779)
		1,105,295 145,082
		$ 1,250,377

209

Welltend Technology Corporation

Schedule of operating costs

January 1 to December 31, 2022

Unit: NT$ thousand

Item Starting inventory Add: Incoming material for this period Less: Ending inventory Cost of goods sold Other operating costs Losses from inventory depreciation and inactive inventory Total	Amount $ 221,540 893,110 (123,665) 990,985 34,546 1,038 $ 1,026,569

Schedule of operating expenses

Item Salary expenses Depreciation Insurance expenses Employees’ compensation Remuneration of directors Others (Note) Total	Marketing Expenses $ 72,235 1,338 8,616 - - 15,478 $ 97,667	Management Expenses
		36,122 5,189 3,625 7,700 6,400 18,755
		77,791

Note: The balance of each item does not exceed 5% of the amount of this account and is not listed separately

210

V. Consolidated financial statements for parent and subsidiary companies for the most recent fiscal year audited by CPAs:

Representation Letter

The entities that are required to be included in the combined financial statements of Welltend Technology Corporation as of and for the year ended December 31, 2022 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10, “Consolidated Financial Statements” endorsed by the Financial Supervisory Commission of the Republic of China. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Welltend Technology Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Welltend Technology Corporation Chairman: Yun-Teng Chang Date: March 23, 2023

211

Independent Auditors’ Report

To the Board of Directors of Welltend Technology Corporation:

Opinion

We have completed our review of the balance sheet of Welltend Technology Corporation and its Subsidiaries (Welltend Group) Consolidated for the years ended December 31, 2022 and 2021, and the consolidated statement of comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash flows for the years ended December 31, 2022 and 2021, as well as the notes to the consolidated financial statements (including a summary of significant accounting policies).

In our opinion, the aforementioned consolidated financial statements in all major respects are in compliance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the Financial Supervisory Commission. They are sufficient to adequately express the consolidated financial status of Welltend Group as of December 31, 2022 and 2021, and its consolidated financial performance and consolidated cash flows for the years ended December 31, 2022 and 2021.

Basis for Opinion

We perform audit work in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants as well as the auditing standards. Our responsibilities under these Standards are further explained in the section on Responsibilities of the accountants for auditing the consolidated financial statements. Personnel subject to rules of independence under our offices adhere to the Norm of Professional Ethics for Certified Public Accountants and remain detached and independent from Welltend Group, and they fulfill other responsibilities of the Norm. We believe that sufficient and appropriate audit evidence has been obtained to serve as a basis for expressing an audit opinion.

Key Audit Matters

Key audit matters refer to the most important matters for the audit of Welltend Technology Group’s 2022 consolidated financial statements based on our professional judgment. These matters have been addressed in the process of reviewing the consolidated financial statements as a whole and in forming an audit opinion, and we do not express a separate opinion on these matters. Key audit matters that we judge should be communicated in the audit report are as follows:

212

Revenue recognition

For accounting policies on revenue recognition, please refer to Revenue Recognition in Note 4 (XIII) of the Notes to the Consolidated Financial Statements. For descriptions of revenue, please refer to Revenue from Customer Contracts in Note 6 (XII) of the Notes to the Consolidated Financial Statements.

Explanation of key audit matters:

The main businesses of Welltend Group are information systems and consulting services and the sale of wires and connectors. Therefore, revenue is one of the important items in its financial statements. The amount and changes of operating revenue may affect the understanding of financial statement users regarding the financial statements as a whole. Therefore, the test of revenue recognition is one of our important evaluation items in performing audits of the financial statements of Welltend Technology Group. Corresponding audit procedures:

Our main audit procedures for the above-mentioned key audit matters include testing the control of the revenue and collection operation cycle, implementing revenue audit procedures and detailed tests, performing correspondence audit procedures for accounts receivable, and performing spot checks of the Information Services Department’s contract liabilities. Furthermore, we evaluate whether the timing of operating revenue recognition is handled in accordance with the relevant bulletins.

Other Matters

Welltend Technology Corporation has prepared parent company only financial statements for 2022 and 2021, and the audit report with unqualified opinion that we have issued is on file for reference.

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

The responsibility of management is to prepare properly expressed consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the Financial Supervisory Commission, and to maintain the necessary internal controls in connection with the preparation of the consolidated financial statements to ensure that the consolidated financial statements are free from material misrepresentation that could result from fraud or error.

When preparing the consolidated financial statements, the responsibilities of management also include evaluating the ability of Welltend Group to continue operating, the disclosure of related matters, and the adoption of a going-concern accounting basis unless management intends to liquidate Welltend Group or cease operations, or there is no other practical alternative to liquidation or business closure.

213

The governance units of Welltend Group (including the Audit Committee) are responsible for supervising the financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

The purpose of our audit of the consolidated financial statements is to obtain reasonable assurance as to whether there is a material misrepresentation of the consolidated financial statements as a whole that could result from fraud or error, and to issue an audit report. Reasonable assurance means a high degree of assurance. However, there is no guarantee that an audit carried out in accordance with the auditing standards will detect material misrepresentations in the consolidated financial statements. Misrepresentation may result from fraud or error. Misrepresentations of individual amounts or aggregates are considered material if they would reasonably be expected to affect economic decisions made by users of the consolidated financial statements.

We apply professional judgment and professional skepticism when conducting audits in accordance with the auditing standards. We also perform the following tasks:

1. Identify and evaluate the risk of material misrepresentation in the consolidated financial statements resulting from fraud or error; design and implement appropriate countermeasures for the evaluated risks; and obtain sufficient and appropriate evidence to serve as the basis for the audit opinion. Because fraud may involve complicity, forgery, deliberate omission, misrepresentation, or circumvention of internal controls, the risk of not detecting a material misrepresentation caused by fraud is higher than that arising from error.

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

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

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

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

214

presentation.

1. Obtain sufficient and appropriate audit evidence for the financial information of entities within the Group so as to express an opinion on the consolidated financial statements. We are responsible for the guidance, supervision and execution of Group audit cases and we are also responsible for forming audit opinions on the Group’s financial statements.

2. We communicate with those charged with governance regarding, among other matters,

3. the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Yi-Wen Wang and Yiu-Kwan Au.

KPMG

Taipei, Taiwan (Republic of China) March 23, 2023

Notes to Readers

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

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

215

Welltend Technology Corporation and Subsidiaries

Consolidated Balance Sheet

December 31, 2022 and 2021

Unit: NT$ thousand

Assets Current assets: 1100 Cash and cash equivalents (Note VI (I)) 1170 Net notes and accounts receivable (Notes VI (II) and VI (XIII)) 1300 Net inventories (Note VI (III)) 1470 Other current assets 1476 Other financial assets - current (Note VIII) Non-current assets: 1600 Property, plant, and equipment (Notes VI (IV) and VIII) 1755 Right-of-use assets (Notes VI (V) and VII) 1780 Intangible assets 1840 Deferred tax assets (Note VI (X)) 1900 Other non-current assets (Note VIII) 1915 Long-term prepayments Total assets	December 31, 2022	December 31, 2022	**December 31, **	**December 31, **	2021 % 15 28 31 3 2 79 15 2 2 - 2 - 21 100 Liabilities and equity Current liabilities: 2100 Short-term borrowings (Notes VI (VI),VII and VIII) 2130 Current contract liabilities (Note VI (XIII)) 2170 Notes and accounts payable 2200 Other payables (Note VII) 2280 Current lease liabilities (Notes VI (VIII) and VII) 2300 Other current liabilities Non-current liabilities: 2570 Deferred tax liabilities (Note VI (X)) 2580 Non-current lease liabilities (Notes VI (VIII) and VII) 2600 Other non-current liabilities Total liabilities Equity attributable to owners of parent(Note VI (XI)): 3100 Capital stock 3200 Additional paid-in capital 3300 Retained earnings 3400 Other equity 3500 Treasury shares 36XX Non-controlling interests Total equity Total liabilities and equity	December 31, 2022	December 31, 2022	**December 31, **	**December 31, **	2021 % 25 7 13 6 - 1
	Amount $ 530,360 997,775 779,205 132,237 36,547	%		Amount 412,811 789,775 876,593 93,047 43,257		Amount $ 691,000 55,892 443,594 249,241 31,592 30,471	%		Amount 689,956 203,606 352,959 176,101 10,915 28,988
		17 33 25 4 1 80 14 2 2 - 2 - 20 100					23 2 14 8 1 1
	2,476,124			2,215,483
	426,974 72,958 44,414 3,440 56,164 -			414,455 42,827 45,461 3,546 68,630 29		1,501,790	49		1,462,525	52
						49,319 42,709 434	2 1 -		25,706 32,579 432	1 1 -
						92,462	3		58,717	2
						1,594,252	52		1,521,242	54
	603,950			574,948		958,900 7,525 639,311 (120,028) -	31 - 21 (4) -		940,000 7,991 513,444 (178,096) (14,262)	34 - 18 (6) -
	$ 3,080,074			2,790,431
						1,485,708	48		1,269,077	46
						114	-		112	-
						1,485,822	48		1,269,189	46
						$ 3,080,074	100		2,790,431	100

Chairman: Yun-Teng Chang

(Please refer to the attached notes to the parent company only financial statements) Manager: Hsiang-Yu Wang

Accounting Supervisor: Wen-Pin Chen

216

Welltend Technology Corporation and Subsidiaries

Consolidated Statement of Comprehensive Income January 1 to December 31, 2022 and 2021

Unit: NT$ thousand

Operating revenue(Note VI (XIII)): 4110 Net sales revenue 4800 Other operating revenue Operating costs(Notes VI (III), VI (VIII), VI (IX), VII, and XII): 5110 Cost of goods sold 5800 Other operating costs 5910 Operating margin Operating expenses(Notes VI (VIII), VI (IX), VI (XIV), VII, and XII): 6100 Marketing expenses 6200 Management expenses 6450 Expected credit loss (Note VI (II)) 6900 Operating profit Non-operating income and expenses: 7010 Other revenue 7100 Interest income 7230 Net foreign currency exchange gain (losses) (Note VI (XV)) 7510 Interest expense (Notes VI (VIII) and VII) 7590 Sundry expenses 7900 Net profit before tax 7950 Less: Income tax expense(Note VI (X)) Net profit for the period 8300 Other comprehensive income: 8360 Components of other comprehensive income subsequently reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8300 Other comprehensive income for the period Total comprehensive income for the period Net profit for the period attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income attributable to: 8710 Owners of parent 8720 Non-controlling interests Earnings per share(Note VI (XII)) 9750 Basic earnings per share (Unit: NT$) 9850 Diluted earnings per share (Unit: NT$)	2022					**2021 **
	Amount $ 3,606,201 301,983		%			Amount 3,128,277 245,161		% 93 7 100 78 2 80 20 8 6 - 14 6 1 - (1) - - - 6 2 4 (2) (2) 2 4 - 4 2 - 2 1.36 1.36
			92 8
	3,908,184		100			3,373,438
	3,074,581 110,710		79 3			2,623,418 67,472
	3,185,291		82			2,690,890
	722,893		18			682,548
	211,837 214,174 3,000		5 6 -			253,768 190,099 2,585
	429,011		11			446,452
	293,882		7			236,096
	10,834 2,610 23,714 (11,233) (7,954)		- - 1 - -			18,978 4,141 (26,718) (9,599) (11,225)
	17,971		1			(24,423)
	311,853 127,663		8 3			211,673 80,945
	184,190		5			130,728
	58,068		1			(51,460)
	58,068		1			(51,460)
	$ 242,258		6			79,268
	$ 184,188 2		5 -			130,729 (1)
	$ 184,190		5			130,728
	$ 242,256 2		6 -			79,269 (1)
	$ 242,258		6			79,268
	$		1.92 1.91
	$

(Please refer to the attached notes to the parent company only financial statements) Chairman: Yun-Teng Chang Manager: Hsiang-Yu Wang Accounting Supervisor: Wen-Pin Chen

217

Welltend Technology Corporation and Subsidiaries Consolidated Statement of Changes in Equity

January 1 to December 31, 2022 and 2021

Unit: NT$ thousand

Equity attributable to owners of parent

Balance on January 1, 2021 Earnings allocation and distribution: Provision for legal reserve Provision for special reserve Common stock cash dividend Net profit for the period Other comprehensive income for the period Total comprehensive income for the period Balance on December 31, 2021 Earnings allocation and distribution: Provision for legal reserve Provision for special reserve Common stock cash dividend Common stock stock dividend Transfer of employee remuneration to capital Net profit for the period Other comprehensive income for the period Total comprehensive income for the period Cancellation of treasury shares Balance on December 31, 2022	Share capital from common **stock **	Additional paid-in **capital **		**Retained earnings **	**Retained earnings **		**Other equity **	**Other equity **	Treasury shares (14,262)	Total equity attributable to owners of the parent company 1,254,908	Non-contro lling interests 113 - - - - (1) - (1) 112 - - - - - - 2 - 2 - 114	Total equity 1,255,021
								Exchange differences on translation of foreign financial **statements **
			Legal reserve 70,918 9,598 - - 9,598 - - - 80,516 13,074 - - - - 13,074 - - - - 93,590	Special reserve Undistribute d surplus earnings 124,887 252,010 - (9,598) 1,749 (1,749) - (65,100) 1,749 (76,447) - 130,729 - - - 130,729 126,636 306,292 - (13,074) 51,460 (51,460) - (27,900) - (27,900) - - 51,460 (120,334) - 184,188 - - - 184,188 - (2,521) 178,096 367,625		**Total **
	$ 940,000	7,991		124,887		447,815		(126,636)
	- - -	- - -		- 1,749 -	(9,598) (1,749) (65,100)	- - (65,100)		- - -	- - -	- - (65,100)		- - (65,100)
	-	-		1,749	(76,447)	(65,100)		-	-	(65,100)		(65,100)
	- -	- -		- -	130,729 -	130,729 -		- (51,460)	- -	130,729 (51,460)		130,728 (51,460)
	-	-		-	130,729	130,729		(51,460)	-	79,269		79,268
	940,000	7,991		126,636	306,292	513,444		(178,096)	(14,262)	1,269,077		1,269,189
	- - - 27,900 1,000	- - - - 1,275		- 51,460 - - -	(13,074) (51,460) (27,900) (27,900) -	- - (27,900) (27,900) -		- - - - -	- - - - -	- - (27,900) - 2,275		- - (27,900) - 2,275
	28,900	1,275		51,460	(120,334)	(55,800)		-	-	(25,625)		(25,625)
	- -	- -		- -	184,188 -	184,188 -		- 58,068	- -	184,188 58,068		184,190 58,068
	-	-		-	184,188	184,188		58,068	-	242,256		242,258
	(10,000)	(1,741)		-	(2,521)	(2,521)		-	14,262	-		-
	$ 958,900	7,525		178,096	367,625	639,311		(120,028)	-	1,485,708		1,485,822

(Please refer to the attached notes to the parent company only financial statements) Manager: Hsiang-Yu Wang

Chairman: Yun-Teng Chang

Accounting Supervisor: Wen-Pin Chen

218

Welltend Technology Corporation and Subsidiaries Consolidated Statement of Cash Flows

January 1 to December 31, 2022 and 2021

Unit: NT$ thousand

Cash flows from operating activities: Net profit before tax for the period Adjustments: Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit loss Interest expense Interest income Loss on disposal of property, plant, and equipment Lease modification benefits Total adjustments to reconcile profit (loss) Changes in assets and liabilities related to operating activities: Net changes in assets related to operating activities, net: Notes and accounts receivable Inventories Other current assets Other financial assets Total net changes in assets related to operating activities Changes in liabilities related to operating activities, net: Contract liabilities Notes and accounts payable Other payables Other current liabilities Other liabilities related to operating activities Net changes in assets and liabilities related to operating activities Total adjustments Cash inflow generated from operations Interest received Interest paid Income tax paid Net cash inflow from operating activities Cash flows from investing activities: Acquisition of property, plant, and equipment Disposal of property, plant, and equipment Decrease in refundable deposits Decrease (Increase) in other non-current assets Acquisition of intangible assets Other financial assets Net cash outflows from investing activities Cash flows from financing activities: Short-term borrowings Repayment of lease liability principal Increase (decrease) in other non-current liabilities Issuance of cash dividend Net cash inflows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents for the period Cash and cash equivalents at start of period Cash and cash equivalents at end of period	2022 $ 311,853	2021 211,673
	78,345 1,922 3,000 11,233 (2,610) 841 (3)	78,189 1,853 2,585 9,599 (4,141) 48 (634)
	92,728	87,499
	(211,000) 97,388 (51,321) (290)	(86,139) (153,465) (22,170) (829)
	(165,223)	(262,603)
	(147,714) 90,635 43,750 1,483	16,292 9,426 (2,118) (656)
	(11,846)	22,944
	(177,069)	(239,659)
	(84,341)	(152,160)
	227,512 4,039 (10,968) (62,484)	59,513 2,382 (9,729) (36,963)
	158,099	15,203
	(46,088) 97 5,010 4,436 (875) 7,000	(43,893) - - (15,541) (1,052) 1,500
	(30,420)	(58,986)
	1,044 (30,883) - (27,900)	18,845 (34,986) 100 (65,100)
	(57,739)	(81,141)
	47,609	(29,790)
	117,549 412,811	(154,714) 567,525
	$ 530,360	412,811

(Please refer to the attached notes to the parent company only financial statements) Chairman: Yun-Teng Chang Manager: Hsiang-Yu Wang Accounting Supervisor: Wen-Pin Chen

219

Welltend Technology Corporation and Subsidiaries Notes to the Consolidated Financial Statements 2022 and 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

I. Company history

Welltend Technology Corporation NGJZ (“the Company”) was established in June 1993. Its main businesses are the sale of wires and connectors and the integrated planning and implementation of information systems and consulting services. The composition of the Company’s consolidated financial statements as of December 31, 2022 includes the Company and subsidiaries of the Company (hereinafter collectively referred to as “the Group”). Please refer to Note 4 (II) for an explanation of the main businesses of the Group.

II. Approval date and procedures of the consolidated financial statements

The consolidated financial statements were authorized for issuance by the Board of Directors on March 23, 2023.

III. New standards, amendments and interpretations adopted

• (I) Impact of adopting the newly issued and revised standards and interpretations approved by the Financial Supervisory Commission

The Group has been applying the following newly amended IFRSs since January 1, 2022, and this has not materially affected the consolidated financial statements.

• Amendments to IAS 16 “Property, Plant and Equipment — Proceeds before Intended Use”

• Amendments to IAS 37 “Onerous Contracts — Cost of Fulfilling a Contract”

• Annual reform of IFRS 2018-2020 cycle

• Amendments to IFRS 3 “References to the Conceptual Framework”

• (II) Impact of the adoption of the IFRSs approved by the Financial Supervisory Commission

The Group has evaluated that the application of the following newly amended IFRSs effective from January 1, 2023, will not materially affect the consolidated financial statements.

• Amendments to IAS 1 “Disclosure of Accounting Policies”

• Amendments to IAS 8 “Definition of Accounting Estimates”

• Amendments to IAS 12 “Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction”

220

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

• (III) Impact of newly issued and revised standards and interpretations not yet approved by the FSC

The following standards and interpretations have been issued and amended by the International Accounting Standards Board (IASB) but have not yet been approved by the FSC and may be relevant to the Group:

Standards or Interpretations Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants”	Content of amendment IAS 1 currently stipulates that a liability that does not have an unconditional right to defer settlement for at least twelve months after the reporting period should be classified as current. The amendment deletes the requirement that the right should be unconditional and instead requires that the right must exist and be substantive at the end of the reporting period. The amendment clarifies how an enterprise should classify liabilities that are paid off by issuing its own equity instruments (such as convertible bonds). After reconsidering certain aspects of the 2020 IAS 1 amendments, the new amendment clarifies that only contractual terms in compliance on or before the reporting date affect the classification of a liability as a current or non-current liability. The contractual terms to which a business is bound after the reporting date (i.e., future terms) do not affect the classification of liabilities at that date. However, when non-current liabilities are subject to future contractual terms, a company must disclose information to help users of financial statements understand the risk that such liabilities may be repaid within twelve months of the reporting date.	Effective date per IASB
		January 1, 2024 January 1, 2024

221

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

The Group is evaluating the impact of its initial adoption of the abovementioned standards and interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the following other new and revised standards that have not yet been approved to have a material impact on the consolidated financial statements.

• Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• IFRS 17 “Insurance Contracts” and amendments to IFRS 17

• Amendment to IFRS 16 “Requirements for Sale and Leaseback Transactions”

IV. Summary of significant accounting policies

Significant accounting policies adopted in these consolidated financial statements are summarized below. Unless otherwise stated, the following accounting policies have been consistently applied to all periods of expression in these consolidated financial statements.

• (I) Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter the “Regulations”) and with the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the Financial Supervisory Commission (hereinafter the “FSC-approved IFRSs”).

• (II) Basis of compilation

1. Measurement basis

These consolidated financial statements are prepared on a historical cost basis.

2. Functional currency and presentation currency

Each entity in the Group uses the currency of the main economic environment in which it operates as its functional currency. These consolidated financial statements are presented in the Company’s functional currency, the New Taiwan dollar. All financial information presented in New Taiwan dollars is in thousands of New Taiwan dollars.

222

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(III) Basis of consolidation

1. Principles for the preparation of the consolidated financial statements

The preparation of the consolidated financial statements includes the Company and entities controlled by the Company (i.e., subsidiaries). When the Company is exposed to, or has rights to, variable returns from its participation in the investee entity, and has the ability to affect those returns through power over the investee entity, the Company controls that entity.

Starting from the date of acquisition of control of the subsidiary, its financial statements are included in the consolidated financial statements, until the date of loss of control. Transactions, balances, and any unrealized gains and losses within the Group have been completely eliminated in the preparation of the consolidated financial statements. The total comprehensive income of subsidiaries is attributed to the owners of the Company and non-controlling interests, respectively. This is true even if the non-controlling interest thus becomes a loss balance.

The financial statements of subsidiaries have been adjusted appropriately so that their accounting policies are consistent with those used by the Group.

When changes in the Group’s ownership interests in a subsidiary do not result in a loss of control of the subsidiary, they are treated as an equity transaction with the owner. The difference between the adjustment for non-controlling interests and the fair value of the consideration paid or received is directly recognized in equity and attributed to the owners of the Company.

2. List of subsidiaries in the consolidated financial statements

Subsidiaries included in these consolidated financial statements include:

Investing company **name **	**Subsidiary name **	**Nature of business **	**Shareholding ratio **	**Shareholding ratio **
			December 31, 2022	December 31, 2021
The Company The Company The Company	A-Team Tech Inc. (A-Team) JIUN TAI CORPORATION LIMITED (JIUN TAI) CELERAISE ELECTRONIC CORPORATION (CELERAISE)	Investment, trading, and holding company Holding company Manufacture and sale of wire and cable connectors and connectors	100.00% 100.00% 100.00%	100.00% 100.00% 100.00%

223

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Investing company name	Subsidiary name	Nature of business	Shareholding ratio
			December 31, 2022 company name
The Company The Company and Jiun Tai The Company The Company A-Team JIUN TAI Celeraise Hong Kong Celeraise Hong Kong Celeraise Hong Kong Yield Profit International Jet Success	CELERAISE (THAILAND) CO., LTD (THAILAND) Celeraise Investments Limited (Celeraise Hong Kong) Leadpak Industrial Co., Ltd. (Leadpak Industrial, formerly Bor Sheng Industrial Co., Ltd.) Celeraise Technology Corporation (Celeraise Technology) Minshi Computer Technology (Shanghai) Co., Ltd. (Shanghai Minshi) Shanghai Zhansheng Electronics Co., Ltd. (Shanghai Zhansheng) Yield Profit International Enterprise Limited (Yield Profit International) Jet Success Technology Development Limited (Jet Success) Shenzhen Zhansheng Electric Power Co., Ltd. (Shenzhen Zhansheng) Zhan Mao Electronics Enterprise (Huizhou) Co., Ltd. (Huizhou Zhan Mao) Kunshan Yiguan Electronic Technology Co., Ltd. (Kunshan Yiguan)	Manufacture and sale of wire and cable connectors and connectors Manufacture and sale of wire and cable connectors and connectors International trade and other wholesale and retail trade Automatic control equipment engineering industry, computer equipment installation industry, etc. R&D and production of industrial automation control, product quality control, communication, and electronic network computer software Production of electronics, wire connectors, telephone spare parts and small household appliances; sale of the company’s own products Investment, trading, and holding company Investment, trading, and holding company Manufacture and sale of wire and cable connectors and connectors Manufacture and sale of wire and cable connectors and connectors Manufacture and sale of wire and cable connectors and connectors	100.00% 100.00% 100.00% 100.00% 99.36% 99.36% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

224

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(IV) Foreign currency

1. Foreign currency transactions

Foreign currency transactions are translated into the functional currency based on the exchange rate on the transaction date. At the end of each subsequent reporting period (hereinafter referred to as the reporting date), the foreign currency monetary items are converted into the functional currency according to the exchange rate on that date. Foreign currency non-monetary items measured at fair value are converted into the functional currency at the exchange rate on the day when the fair value was measured. Foreign currency non-monetary items measured at historical cost are translated at the exchange rate on the date of the transaction.

Foreign currency translation differences arising from translation are normally recognized in income. However, the following situations are recognized in other comprehensive income:

• (1) Designated as equity investments at fair value through other comprehensive income;

• (2) Designated as financial liabilities of foreign operations’ net investment in hedging that are within the effective scope of hedging; or

• (3) Qualified cash flow hedging that is within the effective scope of hedging.

• Foreign operations

Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from acquisitions, are converted into New Taiwan dollars according to the exchange rate on the reporting date. Income and expense items are converted into New Taiwan dollars according to the average exchange rate of the current period. Exchange differences that arise are recognized in other comprehensive income.

When disposal of foreign operations results in a loss of control, joint control, or significant influence, the accumulated exchange difference with respect to the foreign operations is fully reclassified as income. In the event of partial disposal of a subsidiary that includes foreign operations, the relevant accumulated exchange difference shall be re-attributed to non-controlling interest on a pro rata basis. In the event of partial disposal of an investment involving an affiliate or joint venture that includes foreign operations, the relevant accumulated exchange difference shall be reclassified to income on a pro rata basis.

225

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

For monetary receivables or payables of foreign operations, if there is no repayment plan and it is impossible to repay in the foreseeable future, the foreign currency exchange gains and losses arising therefrom are regarded as part of the net investment in the foreign operations and are recognized as other comprehensive income.

(V) Classification criteria for distinguishing current and non-current assets and liabilities Assets that meet one of the following conditions are classified as current assets, and all other assets that are not current assets are classified as non-current assets:

1. The asset is expected to be realized during the normal operating cycle, or it is intended to be sold or consumed;

2. The asset is held primarily for trading purposes;

3. The asset is expected to be realized within twelve months of the reporting period; or

4. The asset constitutes cash or cash equivalents, unless there are other restrictions on exchanging the asset or using it to settle a liability at least twelve months after the reporting period.

Liabilities that meet one of the following conditions are classified as current liabilities, and all other liabilities that are not current liabilities are classified as non-current liabilities:

1. The liability is expected to be settled during the normal operating cycle;

2. The liability is held primarily for trading purposes;

3. The liability is expected to be settled when it comes due within twelve months of the reporting period; or

4. The liability does not have an unconditional right to defer settlement for at least twelve months after the reporting period. The terms of the liability may be subject to the option of the counterparty to issue equity instruments resulting in its repayment and this does not affect its classification.

5. (VI) Cash and cash equivalents

Cash includes cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible into fixed amounts of cash with little risk of changes in value. Fixed deposits that meet the above definition and are held for short-term cash commitments rather than investment or other purposes are presented in cash equivalents.

226

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(VII) Financial instruments

Accounts receivable and debt securities issued are originally recognized as they are incurred. All other financial assets and financial liabilities are originally recognized when the Group becomes a party to the contractual terms of the financial instrument. Financial assets not measured at fair value through profit or loss (except for accounts receivable that do not contain significant financial components) or financial liabilities that are originally measured at fair value plus transaction costs directly attributable to the acquisition or issue. Accounts receivable that do not contain significant financial components are originally measured at their transaction prices.

1. Financial assets

For the purchase or sale of financial assets in accordance with customary trading practices, all purchases and sales of financial assets of the Group classified in the same manner shall be accounted for on the trading day.

Financial assets are classified as financial assets measured at amortized cost at the time of original recognition.

The Group will reclassify all affected financial assets from the first day of the next reporting period only when changing the business model of the financial assets under management.

(1) Financial assets measured at amortized cost

Financial assets that meet both of the following conditions and are not specified as measured at fair value through profit or loss are measured at amortized cost:

• The financial asset is held under an operating model for the purpose of collecting contractual cash flows.

• The contractual terms of the financial asset give rise to cash flows on specific dates entirely for the payment of principal and interest on the outstanding principal amount.

The assets are subsequently calculated by adding or subtracting the original recognized amount to the accumulated amortization amount calculated using the effective interest method, and adjusting any measure of post amortized cost of allowance losses. Interest income, foreign currency exchange gains and losses and impairment losses are recognized in income. Upon derecognition, profits or losses shall be included in income.

227

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(2) Impairment of financial assets

The Group recognizes loss allowance for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, notes receivable and accounts receivable, other receivables, deposits and other financial assets, etc.).

The following financial assets are measured against loss allowance based on the 12-month expected credit loss amount, with the remainder measured by the amount of expected lifetime credit losses:

• Judgment that debt securities have low credit risk at the date of reporting; and

• The credit risk of other debt securities and bank deposits has not increased significantly since the original recognition (i.e., the risk of default during the expected lifetime of the financial instrument).

Loss allowance for accounts receivable and contractual assets is measured based on the amount of expected lifetime credit losses.

Expected lifetime credit losses refers to the expected credit losses arising from all possible default events during the expected life of a financial instrument.

Twelve-month expected credit loss indicates expected credit losses arising from possible defaults of financial instruments within twelve months after the reporting date (or a shorter period, if the expected term of the financial instrument is less than twelve months).

The maximum period for measuring expected credit losses is the longest contract period during which the Group is exposed to credit risk.

In determining whether credit risk has increased significantly since the original recognition, the Group considers reasonable and corroborating information (available without excessive cost or investment), including qualitative and quantitative information, and analysis based on the Group’s historical experience, credit evaluation, and forward-looking information.

If the credit risk rating of a financial instrument is equivalent to the globally defined “investment grade” (which is an investment grade of BBB- from Standard & Poor’s, an investment grade of Baa3 from Moody’s, or an investment grade of twA from Taiwan Ratings Corp., or above that level), the Group considers the debt securities to have a low credit risk.

228

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Time deposits held by the Group are considered to have low credit risk because the transaction counterparties and the performing parties are financial institutions at investment grade or above.

If a contract payment is overdue for more than 30 days, the Group assumes that the credit risk of the financial assets has increased significantly.

If a contract payment is more than 120 days overdue, or the borrower is unlikely to meet its credit obligations to pay the full amount to the Group, the Group considers the financial asset to be in default.

Expected credit loss is a weighted estimate of the probability of credit loss over the expected life of a financial instrument. Credit loss is measured at the present value of all cash shortfalls; that is, the difference between the cash flows that the Group can receive under the contract and the cash flows that the Group expects to receive. Expected credit loss is discounted at the effective interest rate of the financial asset.

On each reporting date, the Group evaluates whether financial assets measured at amortized cost are credit-impaired. A financial asset is credit-impaired when one or more events adversely affecting the estimated future cash flows of a financial asset have occurred. Evidence of credit impairment of financial assets includes the following observable information:

• Material financial difficulties of the borrower or issuer;

• Breach of contract, such as being delayed or overdue for more than 120 days;

• For economic or contractual reasons related to the debtor’s financial hardship, the Group grants concessions that the debtor would not otherwise consider;

• The debtor is likely to file for bankruptcy or other financial restructuring; or

• The active market for the financial asset disappears due to financial difficulties.

The loss allowance for financial assets measured at amortized cost is deducted from the carrying amount of the assets.

When the Group is unable to reasonably anticipate the recovery of financial assets, in whole or in part, it directly reduces the total carrying amount of its financial assets. For corporate accounts, the Group analyzes the time and amount of the write-off on an individual basis based on whether it is reasonably expected to be recoverable. The Group does not expect a material reversal of

229

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

the written-off amount. However, financial assets that have been written off remain enforceable, in order to comply with the Group’s procedures for recovering overdue amounts

• (3) Derecognition of financial assets

The Group derecognizes financial assets only when the contractual right to cash flows from the asset is terminated, or when the financial asset has been transferred and substantially all of the risks and rewards of ownership of the asset have been transferred to another enterprise, or where almost all of the risks and rewards of neither transfer nor retention of title have been retained and control of the financial asset has not been retained.

When the Group enters into a transaction to transfer financial assets, if all or substantially all risks and rewards of title to the transferred assets are retained, these shall continue to be recognized on the balance sheet.

1. Financial liabilities and equity instruments

2. (1) Classification of liabilities or equity

Debt and equity instruments issued by the Group are classified as financial liabilities or equity according to the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

• (2) Equity transactions

An equity instrument is any contract that recognizes the Group’s remaining interest in assets less all of its liabilities. Equity instruments issued by the Group are recognized at the price obtained after deducting direct issue costs.

• (3) Treasury shares

When repurchasing equity instruments recognized by the Company, the consideration paid is recognized as a decrease in equity (including directly attributable costs). The repurchased shares are classified as treasury shares. Subsequent sales or re-issuance of treasury shares shall be recognized as an increase in equity and the surplus or loss arising from the transaction shall be recognized as additional paid-in capital or retained earnings (if the additional paid-in capital is insufficient to offset it).

(4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or at fair value through profit or loss. Financial liabilities that are held for trading, derivative instruments or specified at the time of original recognition are classified as measured at fair value through profit or loss. Financial liabilities

230

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

measured at fair value through profit and loss are measured at fair value, and the underlying net profit and loss, including any interest expense, are recognized in income.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and exchange gains and losses are recognized in income. Upon derecognition, any profit or loss shall also be recognized in income.

• (5) Derecognition of financial liabilities

Financial liabilities are derecognized when the Group’s contractual obligations have been fulfilled or cancelled or have expired. When the terms of financial liabilities are modified and there is a material difference in the cash flows of the modified liabilities, the original financial liabilities are derecognized and the new financial liabilities are recognized at fair value on the basis of the revised terms.

When derecognizing financial liabilities, the difference between its carrying amount and the total consideration paid or payable is recognized as income (including any non-cash assets transferred or liabilities assumed).

(6) Mutual offsetting of financial assets and liabilities

Financial assets and financial liabilities are only offset and expressed in the balance sheet in net amounts when the Group currently has a legally enforceable right to offset and intends to close the assets and liquidate the liabilities on a net basis or realize them simultaneously.

(VIII) Inventories

Inventories are measured at the lowest of cost and net realizable value. Costs include acquisition, production or processing costs, and other costs incurred in bringing them to the location and condition available for use, calculated using a weighted average. The cost of finished goods and work-in-progress inventories includes an appropriate proportion of manufacturing overhead allocated to normal production capacity. Net realizable value refers to the estimated selling price under normal business less the estimated cost of estimated completion and the estimated cost of completing the sale.

231

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(IX) Property, plant and equipment

1. Identification and measurement

Items of property, plant and equipment are measured at cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment.

When the service lives of major components of property, plant and equipment are different, they shall be treated as separate items (major components) of property, plant, and equipment.

Disposal gain or loss of property, plant and equipment is recognized in income.

2. Subsequent costs

Subsequent expenses are capitalized only when there is a high probability that their future economic benefits will flow to the Group.

3. Depreciation

Depreciation is calculated on the basis of the cost of assets less the residual value and is recognized as profit or loss within the estimated life of each component using the straight-line method.

Land is not depreciated.

The estimated useful lives for the current and comparative periods are as follows:

• (1) Buildings and factories: 2 to 50 years.

• (2) Machinery and equipment: 2 to 10 years.

• (3) Office equipment and other equipment: 2 to 10 years.

The Group reviews the depreciation method, useful life, and salvage value on each annual reporting date and makes appropriate adjustments when necessary.

(X) Leases

The Group evaluates whether the contract constitutes or includes a lease on the date of formation of the contract; if the contract assigns control over the use of an identified asset for a period of time in exchange for consideration, the contract constitutes or includes a lease.

1. Lessee

The Group recognizes right-of-use assets and lease liabilities on the lease commencement date. Right-of-use assets are initially measured at cost; this cost includes the original measure of the lease liability to adjust any lease payments paid on or before the lease commencement date, plus the original direct costs

232

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

incurred and the estimated costs for dismantling, removing and restoring the location or the underlying asset and is also net of any rental incentives received.

The right-of-use asset is subsequently depreciated on a straight-line basis from the lease inception date to the expiry of the useful life of the right-of-use asset or the expiry of the lease term, whichever is earlier. Furthermore, the Group regularly evaluates whether the right-of-use asset is impaired and handles any impairment losses that have occurred. The right-of-use asset is adjusted in conjunction with the remeasurement of the lease liability.

The lease liability is initially measured at the present value of the unpaid lease payments at the inception date of the lease. If the interest rate implied by the lease is easily determined, then the discount rate is that rate; if it is not easily determined, the incremental borrowing rate of the Group shall be used. Generally speaking, the Group adopts its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of lease liabilities include:

• (1) Fixed payments, including substantial fixed payments;

• (2) Lease payments based on changes in an index or rate, as measured by the index or rate on the date of lease commencement as the original measure.

• (3) The residual value guarantee amount expected to be paid; and

• (4) The exercise price or penalty payable when it is reasonably determined that the option to purchase or terminate the lease will be exercised.

  • Interest on lease liabilities is subsequently accrued using the effective interest

• method and remeasurement of the amount occurs in the event of the following:

• (1) Changes in the index or rate used to determine lease payments result in changes in future lease payments;

• (2) There is a change in the residual value guarantee amount expected to be paid;

• (3) There is a change in the evaluation of the option to purchase the underlying asset;

• (4) There is a change in the estimate of whether to exercise the option to extend or

• terminate, and the evaluation of the lease period is changed; and

• (5) Modification of the subject matter, scope, or other terms of the lease.

233

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

When the lease liability is remeasured as a result of the aforementioned changes in the index or rate used to determine lease payments and the assessment of options to extend or terminate the lease, this constitutes a corresponding adjustment to the carrying amount of the right-of-use asset; and when the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasured amount is recognized in income.

For lease modifications that reduce the scope of the lease, these constitute a reduction in the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease. The difference between this and the remeasured amount of the lease liability is recognized in income.

The Group presents right-of-use assets and lease liabilities that do not meet the definition of investment real property as separate line items in the balance sheet.

For short-term leasing of parking spaces and office equipment and leasing of low-value underlying assets, the Group chooses not to recognize right-of-use assets and lease liabilities. Instead, the related lease payments are recognized as expenses on a straight-line basis over the lease term.

2. Lessor

In transactions where the Group is the lessor, classification of lease contracts is made by whether they transfer substantially all risks and rewards of ownership of the underlying asset on the lease inception date. If this is the case, it is classified as a finance lease; otherwise, it is classified as an operating lease. At the time of evaluation, the Group considers relevant specific indicators including whether the lease period covers the main portion of the economic life of the underlying asset.

If the Group is a sublease lessor, the main lease and sublease transactions are handled separately. The classification of sublease transactions is also evaluated with the right-of-use asset arising from the main lease. If the main lease is a short-term lease and the recognition exemption applies, the sublease transaction should be classified as an operating lease.

234

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

If the agreement contains lease and non-lease components, the Group shall allocate the consideration in the contract using the requirements of IFRS 15.

For assets held under a finance lease, the amount of the net investment in the lease is presented as finance lease receivable. The original direct costs incurred as a result of the negotiation and arrangement of the operating lease are included in the net amount of the lease investment. The net lease investment is in a form that reflects a fixed rate of return in each period and apportionment over the lease term is recognized as interest income. For operating leases, the Group recognizes lease payments received as rental income over the lease term on a straight-line basis.

(XI) Intangible assets

1. Identification and measurement

Goodwill arising from the acquisition of a subsidiary is measured in terms of cost less accumulated impairment.

Expenses related to research activities are recognized under income at the time incurred.

Development expenditures are capitalized only made when they can be reliably measured, the technical or commercial feasibility of the product or process has been achieved, and it is probable that future economic benefits will flow to the Group, and the Group intends and has sufficient resources to complete the development and to use or sell the asset. Other development expenditures are recognized under income when incurred. After the original recognition, the capitalized development expense is measured by the amount of its costs less accumulated amortization and accumulated impairment.

Other intangible assets acquired by the Group with a limited period of durability, including customer relationships and patent rights and trademark rights, are measured by the amount of cost less accumulated amortization and cumulative impairment.

2. Subsequent expenditures

Subsequent expenditures are capitalized only to the extent that they increase the future economic benefits of the underlying asset. All other expenses are recognized under income as incurred, including internally developed goodwill and branding.

235

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

3. Amortization

Except for goodwill, amortization is calculated based on the cost of the asset less the estimated residual value. When an intangible asset is ready for use, the cost of computer software is recognized under income using the straight-line method based on its estimated useful life of 3 to 10 years.

The Group reviews the amortization method, useful life, and salvage value of the intangible asset on each annual reporting date and makes appropriate adjustments when necessary.

(XII) Impairment on non-financial assets

The Group assesses on each reporting date whether there is an indication that the carrying amount of a non-financial asset may be impaired (except inventories and deferred tax assets). If any indication is present, the recoverable amount of the asset is estimated. Goodwill is regularly tested for impairment annually.

For the purpose of the impairment test, a group of assets whose cash inflows are largely independent of the cash inflows of other individual assets or groups of assets constitute the smallest identifiable group of assets. Goodwill acquired in a business combination is allocated to each cash-generating unit or group of cash-generating units that is expected to benefit from the synergies of the combination.

The recoverable amount is the higher of the individual asset or cash-generating unit’s fair value less costs of disposal and its value in use. When evaluating value in use, estimated future cash flows are discounted to present value using a pre-tax discount rate. The discount rate should reflect current market evaluation of the time value of money and the risks specific to the asset or cash-generating unit.

If the recoverable amount of an individual asset or cash-generating unit is less than the carrying amount, impairment losses are recognized.

Impairment losses are recognized immediately under income, and first reduce the carrying amount of the amortized goodwill of the cash-generating unit. The carrying amount of each asset is reduced in proportion to the carrying amount of each other asset in the unit.

236

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Goodwill impairment losses are not reversed. Non-financial assets other than goodwill are to be reversed only to the extent of not exceeding the carrying amount of the asset (net of depreciation or amortization) that would have been determined if an impairment loss had not been recognized in prior years.

• (XIII) Income recognition

• Revenue from customer contracts

Revenue is measured at the consideration to which the goods or services are expected to be acquired by the transfer of goods or services. The Group recognizes revenue when the control of the goods or services is transferred to the customer and the performance obligation is satisfied. The Group’s main revenue items are described as follows:

• (1) Sale of goods

The Group manufactures and sells wire and connectors. The Group recognizes revenue at the time of the transfer of control over the products. The transfer of control over the product means that the product has been delivered to the customer, the customer can completely decide the sales channel and price of the product, and there are no outstanding obligations that will affect the customer’s acceptance of the product. Delivery occurs when the product is shipped to a specific location, its obsolescence and risk of loss has passed to the customer, and the customer has accepted the product in accordance with the sales contract, the acceptance clause has expired, or when the Group has objective evidence that all acceptance conditions have been met.

The Group recognizes accounts receivable when the goods are delivered, because the Group has the right to unconditionally receive consideration at that time.

(2) Information systems and consulting services

The Group provides corporate information system and advisory services and recognizes associated revenue during the financial reporting period for the provision of services. A fixed-price contract is based on the proportion of services actually provided to total services as of the reporting date, and the revenue is gradually recognized over time.

237

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Some contracts contain multiple deliverables, such as hardware procurement and installation and system maintenance services. Most of them are services that do not include integration services and can be performed by other parties, so they are regarded as a separate performance obligation and the transaction price is apportioned on the basis of the separate selling price. If the price cannot be directly observed, it is estimated at the expected cost plus profit and the individual selling price. If the contract includes the purchase and installation of hardware, it is recognized as revenue from the hardware at the time of delivery of the hardware, the transfer of legal ownership and the acceptance of the customer.

If circumstances change, estimates of revenue, costs and degree of completion will be revised and the changes will be reflected in profit or loss during the period when management becomes aware of the changes.

Under a fixed-price contract, the customer pays a fixed amount according to the agreed timeline. If the services already provided exceed the payment, a contractual asset is recognized; if the payment exceeds the services already provided, a contractual liability is recognized.

A maintenance contract is based on the number of hours for which the service is provided and the revenue is recognized in the amount of the invoice that the Group is entitled to issue. The Group requests payment from the customer on a monthly or quarterly basis, and the consideration can be charged after the invoice is issued.

(3) Financial components

The Group expects that the time between the transfer of goods or services to the customer by all client contracts and the time between the customer’s payment for such goods or services does not exceed one year, and therefore the Group does not adjust the time value of money for the transaction price.

(XIV) Employee benefits

1. Defined contribution plans

The contribution obligation of the defined contribution pension plan is the employee benefit expense recognized under income during the period of service provided by the employee.

238

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

2. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are recognized as expenses at the time of provision of the relevant services.

In connection with the amount expected to be paid under the short-term cash bonus or dividend plan, if it is a result of the employee’s past provision of services, the Group has a current statutory or presumptive payment obligation, and the obligation can be reliably estimated, the amount shall be recognized as a liability.

(XV) Share-based payment transactions

The share-based payment agreement for equity delivery is based on the fair value on the date of payment, and expenses are recognized and the relative equity is increased during the vested period of the reward. The recognized fees are adjusted according to the number of rewards expected to meet the service conditions and non-market acquired conditions. The final recognized amount is measured on the basis of the number of rewards that meet the service conditions and non-market acquired conditions on the vesting date.

The non-vested conditions for the share basis benefit are reflected in the measurement of the fair value of the share basis benefit on the date of the share base benefit and the difference between the expected and the actual result does not need to be verified or adjusted.

The amount of fair value payable to an employee of the share appreciation right for cash delivery is the recognition of expenses and increase in relative liabilities in the period during which the employee can receive remuneration unconditionally. The liability is re-evaluated at the fair value of the share appreciation right at each reporting date and at the closing date, and any change thereof is recognized as income.

The date on which the basic payment of shares of the Group is granted shall be the date on which the record date of the capital increase is approved by the Board of Directors.

239

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(XVI) Income taxes

Income tax includes current and deferred income tax. Except for those items related to business combinations or items directly recognized in equity or other comprehensive income, current income tax and deferred income tax are recognized under income.

The Group has determined that the interest or penalty related to income tax does not meet the definition of income tax (including uncertain tax treatment), so the accounting treatment of IAS 37 is applied.

Current income tax includes the estimated income tax payable or tax refund payable based on the taxable income (loss) of the current year, and any adjustment to the income tax or tax refund payable in the previous year. After its amount reflects the income tax-related uncertainties, if any, and it is the best estimate of the amount expected to be paid or received measured at the statutory tax rate or substantive legislative tax rate at the reporting date.

Deferred tax is the measurement and recognition of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their tax base. Deferred tax is not recognized for temporary differences arising from:

1. Assets or liabilities that are not originally recognized in the transaction of a business combination, and do not affect accounting profits and taxable income (losses) at the time of the transaction;

2. Temporary differences arising from investments in subsidiaries, affiliates and joint venture interests where the Group can control the timing of the reversal of the temporary difference and it is probable that it will be not reversed in the foreseeable future; and

3. Taxable temporary differences arising from the original recognition of goodwill.

Unused tax losses and unused income tax credits are recognized as deferred tax assets at a later stage of the rollover with the deductible temporary differences, to the extent that there is a high probability that future tax income will be available. Furthermore, they are re-evaluated each reporting date to reduce the relevant income tax benefits to the extent that they are not likely to be realized; or to the extent that there is a high probability that sufficient taxable income will be reversed to the amount already reduced.

240

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

The Group only offsets deferred tax assets and deferred tax liabilities if the following conditions are simultaneously met:

1. There is a statutory enforcement right to offset the current income tax assets and the current income tax liabilities against each other; and

2. Deferred tax assets and deferred tax liabilities are related to one of the following taxpayers subject to income tax by the same tax authority;

(1) The same taxpayer; or

• (2) Different taxpayers, but each entity intends to pay off the current income tax liabilities and assets on a net basis, or realize the assets and liquidation liabilities at the same time, during each future period in which the deferred tax assets are expected to be recovered and the deferred tax liabilities are expected to be repaid.

Undistributed surplus earnings are subject to income tax on profit-making enterprises. This is recognized as current income tax expense after a profit distribution proposal is approved by the shareholders’ meeting in the following year.

(XVII) Earnings per share

The Group presents basic and diluted earnings per share attributable to holders of ordinary shares of the Company. The basic earnings per share of the Group are the profit or loss attributable to the holders of ordinary shares of the Company, calculated by dividing by the weighted average number of ordinary shares outstanding for the period. Diluted earnings per share refers to the profit and loss attributable to the holders of the Company’s ordinary shares and the weighted average number of ordinary shares outstanding, calculated after separately adjusting for the effect of all potential dilutive ordinary shares. The Group’s potential dilutive ordinary shares include estimates of employee compensation.

(XVIII) Segment information

Operating segments from an integral part of the Group and are engaged in business activities that may earn revenue and incur expenses (including income and expenses related to transactions between other components of the Group). The operating results of all operating segments are regularly reviewed by the principal operational decision makers of the Group to make decisions about allocating resources to the segments and measure their performance. Each operating segment has separate financial information.

241

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

V. Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the consolidated financial statements in conformity with the Regulations and the FSC-approved IFRSs requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Management continues to review estimates and underlying assumptions, and changes in accounting estimates are recognized during the period of change and for future periods affected.

The Group’s accounting policies do not involve material uncertainties in judgments, and there are no matters that have a significant impact on the amounts recognized in the consolidated financial statements.

VI. Explanation of significant accounts

(I) Cash and cash equivalents

Cash on hand Demand and foreign currency deposits Time deposits	December 31, 2022 $ 1,469 483,359 45,532 $ 530,360	December 31, 2021
		$ 1,735 351,563 59,513 $ 412,811

Please refer to Note VI (XV) for the fair value sensitivity analysis and interest and exchange rate risk of the Group’s financial assets and liabilities.

(2) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance	December 31, 2022 $ 2,459 1,019,188 1,021,647 (23,872 ) $ 997,775	December 31, 2021
		$ 3,865 806,766 810,631 (20,856 ) $ 789,775

242

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

The Group uses a simplified approach to estimate expected credit losses for all notes and accounts receivable; i.e., they are measured by lifetime expected credit losses. For measurement purpose, these notes and accounts receivable are grouped by common credit risk characteristics that represent the customer’s ability to pay all amounts due in accordance with the contractual terms. Forward-looking information such as historical credit loss experience and reasonable forecast of future economic conditions has been incorporated. Analysis of the expected credit loss of the notes receivable and accounts receivable of the Group is as follows:

Credit rating	December 31, 2022	December 31, 2022	December 31, 2022
	Carrying amount of notes and accounts receivable	Weighted average expected credit loss ratio	Allowance for lifetime expected credit losses 1,471 22,401
Level A Level B	$ 940,080 81,567	0.16% 27.46%
	$ 1,021,647		23,872

Credit rating	December 31, 2021	December 31, 2021	December 31, 2021
	Carrying amount of notes and accounts receivable	Weighted average expected credit loss ratio	Allowance for lifetime expected credit losses 1,450 19,406
Level A Level B	$ 786,529 24,102	0.18% 80.52%
	$ 810,631		20,856

Aging analysis of the Group’s notes and accounts receivable is as follows:

Not yet past due 0 to 90 days past due 90 to 180 days past due More than 180 days past due	December 31, 2022 $ 781,527 140,863 44,844 54,413 $ 1,021,647	December 31, 2021
		$ 703,052 79,293 8,919 19,367
		810,631

243

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Changes in the Group’s loss allowance for notes receivable and accounts receivable were as follows:

Opening balance at start of period Impairment losses recognized Amount written off due to non-recoverability during the current year Foreign exchange gains Balance at end of period	2022 $ 20,856 3,000 (636) 652 $ 23,872	2021
		$ 18,540 2,585 - (269 ) $ 20,856

Loss allowance is mainly based on historical payment behavior and extensive analysis of the credit ratings of the target customers. The Group believes that the overdue portion of accounts receivable for which loss allowance has not yet been provided is still recoverable.

As of December 31, 2022 and 2021, none of the Group’s notes and accounts receivable were pledged as collateral.

Please see note VI (XV) for the risk and sensitivity analysis of exchange rates for the Group’s notes and accounts receivable for 2022 and 2021.

(III) Inventories

Raw materials Works in process Finished goods Goods held for sale	December 31, 2022 $ 473,707 88,772 86,440 130,286 $ 779,205	December 31, 2021
		410,176 102,263 78,495 285,659
		876,593

1. The cost of inventories recognized as cost of goods sold and as expenses by the Group in 2022 and 2021 were NT$3,142,665 thousand and NT$2,677,872 thousand respectively.

2. In 2022 and 2021, the Group recognized inventory depreciation and inactive inventory of NT$42,626 thousand and NT$13,018 thousand, respectively, due to the write-down of inventories to the net realizable value, and this has been reported as cost of goods sold.

3. As of December 31, 2022 and 2021, none of the Group’s inventories were pledged as collateral.

244

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(IV) Property, plant, and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Group were as follows:

Land Cost or deemed cost: Balance on January 1, 2022 $ 199,490 Add - Disposal - Transfers - Effect of movements in exchange rates 4,193 Balance on December 31, 2022 $ 203,683 Balance on January 1, 2021 $ 206,206 Add 1,735 Disposal - Effect of movements in exchange rates (8,451) Balance on December 31, 2021 $ 199,490 Depreciation and impairment loss: Balance on January 1, 2022 $ - Depreciation in the current year - Disposal - Effect of movements in exchange rates - Balance on December 31, 2022 $ - Balance on January 1, 2021 $ - Depreciation in the current year - Disposal - Effect of movements in exchange rates - Balance on December 31, 2021 $ - Carrying amounts: December 31, 2022 $ 203,683 January 1, 2021 $ 206,206 December 31, 2021 $ 199,490	Land Cost or deemed cost: Balance on January 1, 2022 $ 199,490 Add - Disposal - Transfers - Effect of movements in exchange rates 4,193 Balance on December 31, 2022 $ 203,683 Balance on January 1, 2021 $ 206,206 Add 1,735 Disposal - Effect of movements in exchange rates (8,451) Balance on December 31, 2021 $ 199,490 Depreciation and impairment loss: Balance on January 1, 2022 $ - Depreciation in the current year - Disposal - Effect of movements in exchange rates - Balance on December 31, 2022 $ - Balance on January 1, 2021 $ - Depreciation in the current year - Disposal - Effect of movements in exchange rates - Balance on December 31, 2021 $ - Carrying amounts: December 31, 2022 $ 203,683 January 1, 2021 $ 206,206 December 31, 2021 $ 199,490	Buildings 148,453 78 - - 4,462	Machinery and equipment 295,715 15,509 (5,756) - 12,230	Office equipment and others 132,149 30,501 (27,791) 3,020 3,322	Total 775,807 46,088 (33,547) 3,020 24,207
	$ 203,683	152,993	317,698	141,201	815,575
		154,916 2,244 - (8,707)	287,043 25,021 (11,472) (4,877)	124,042 14,893 (3,712) (3,074)	772,207 43,893 (15,184) (25,109)
	$ 199,490	148,453	295,715	132,149	775,807
		44,064 5,685 - 442	212,193 21,091 (4,818) 10,234	105,095 20,046 (27,791) 2,360	361,352 46,822 (32,609) 13,036
	$ -	50,191	238,700	99,710	388,601
		38,401 5,868 - (205)	204,780 20,022 (11,429) (1,180)	93,470 17,280 (3,707) (1,948)	336,651 43,170 (15,136) (3,333)
	$ -	44,064	212,193	105,095	361,352
	$ 203,683	102,802	78,998	41,491	426,974
	$ 206,206	116,515	82,263	30,572	435,556
	$ 199,490	104,389	83,522	27,054	414,455

1. Please see Note VIII for details of circumstances in which property, plant and equipment of the Group were used to provide loans and financing and guarantees for customs duties as of December 31, 2022 and 2021.

245

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(V) Right-of-use assets

Details of changes in right-of-use assets recognized as leased premises and buildings, transportation equipment and other assets of the Group, and their cost and depreciation, are as follows:

Right-of-use asset costs: Balance on January 1, 2022 Add Less Effect of movements in exchange rates Balance on December 31, 2022 Balance on January 1, 2021 Add Less Effect of movements in exchange rates Balance on December 31, 2021 Right-of-use asset depreciation: Balance on January 1, 2022 Depreciation in the current year Less Effect of movements in exchange rates Balance on December 31, 2022 Balance on January 1, 2021 Depreciation in the current year Less Effect of movements in exchange rates Balance on December 31, 2021 Carrying amounts: December 31, 2022 January 1, 2021 December 31, 2021	Buildings $ 107,620 59,742 (57,704) 2,091 $ 111,749 $ 135,807 26,263 (49,044) (5,406 ) $ 107,620 $ 67,194 30,499 (57,552) 1,348 $ 41,489 $ 73,522 34,307 (38,693) (1,942 ) $ 67,194 $ 70,260 $ 62,285 $ 40,426		Transportati on equipment and others 3,312 1,203 (949) 169 3,735 2,135 2,456 (1,074) (205 ) 3,312 911 1,024 (949) 51 1,037 1,376 712 (1,074) (103 ) 911 2,698 759 2,401		Total 110,932 60,945 (58,653) 2,260 115,484 137,942 28,719 (50,118) (5,611 ) 110,932 68,105 31,523 (58,501) 1,399 42,526 74,898 35,019 (39,767) (2,045 ) 68,105 72,958 63,044 42,827

The Group leased factories and offices from other related parties from January 1 to December 31, 2022, please refer to Note VII for details.

246

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(VI) Short-term loans

Details of short-term loans of the Group are as follows:

Non-Secured bank loans Secured bank loans Short-term notes and bills payable Total Unused credit line Interest rate	December 31, 2022	December 31, 2022		December 31, 2021
	$ 160,000 531,000 - $ 691,000 $ 500,775 1.25%~1.85%			140,000 470,000 79,956
		691,000		689,956
		500,775		329,200
		1.25%~1.85%		1%~1.33%

1. For information about the Group’s exchange and interest rate and liquidity risks, and sensitivity analysis, please refer to Note VI (XV) for details.

2. The Group’s short-term borrowings and loan amounts are jointly and severally guaranteed by key management personnel; please refer to Note VII for details.

3. Please refer to Note VIII for the details of the related assets of the Group pledged as collateral.

(VII) Other payables

Details of Other payables of the Group are as follows:

Current income tax liabilities Annual bonuses payable Salaries payable Remuneration payable to directors and supervisors and remuneration payable to employees Other expenses payable	December 31, 2022	December 31, 2021
	$ 64,069 60,474 40,727 16,800 67,171	32,640 42,268 42,534 9,340 49,319
	$ 249,241	176,101

Other expenses payable mainly constitute payables in the form of labor fees, service fees, health and labor insurance, transport fees, and related miscellaneous expenses payable.

247

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(VIII) Lease liabilities

Book value of the Group’s lease liabilities is as follows ：

December 31, 2022 Current $ 31,592 Non-current $ 42,709 For the maturity analysis, please refer to Note VI (XIV). Amounts recognized as profit or loss are as follows: 2022 Interest expense on lease liabilities $ 1,080 Variable lease payments not included in the measurement of lease liabilities $ 33 Gains from sublease of right-of-use assets $ 745 Expenses related to short term leases $ 3,909 Expenses related to leases of low value assets (excluding short term leases of low value assets) $ 131 Amounts recognized in the consolidated statements of cash flows 2022 Total cash flows from leases $ 36,036	December 31, 2022		December 31, 2021
	$ 31,592	10,915 32,579 2021 812 128 745 5,580 535 are as follows: 2021 42,041	10,915
	$ 42,709		32,579
			2021
			812
			128
			745
			5,580
			535
	$ 36,036		42,041

1. Leasing of buildings

The Group leases buildings as offices and factories. The lease period for is three years for offices and three to twenty years for factories. Some leases include the option to extend the lease term for the same period as the original contract.

2. Other leases

The lease period of parking space and transport equipment leased by the Group is three years.

Lease payments for some contracts are calculated based on the actual usage of the lease.

248

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(IX) Employee benefits

The defined contribution plan of the Company and its subsidiaries within the jurisdiction of the Republic of China is in accordance with the provisions of the Labor Pension Act. In accordance with the contribution rate of 6% of workers’ monthly wages, a contribution is transferred to the individual accounts of the labor pension fund of the Bureau of Labor Insurance. After the Group has allocated a fixed amount to the Bureau of Labor Insurance under this plan, it has no statutory or presumptive obligation to pay additional amounts.

The pension expenses of the Company and its subsidiaries within the jurisdiction of the Republic of China under the 2022 and 2021 defined pension contributions were NT$11,111 thousand and NT$9,908 thousand respectively, and were transferred to the Bureau of Labor Insurance.

Other subsidiaries included in the preparation of the consolidated financial statements recognized defined pension contributions and endowment insurance premiums of NT$12,224 thousand and NT$10,152 thousand in 2022 and 2021, respectively.

(X) Income taxes

1. Income tax expense

• (1) Details of income tax expenses of the Group in 2022 and 2021 are as follows:

Income tax expense for the current period: Generated in the current period Undistributed surplus earnings Undervaluation (overvaluation) for the prior period Deferred tax expense Income tax expense	2022 $ 95,352 520 8,037 103,909 23,754 $ 127,663	2021
		55,344 812 (321 ) 55,835 25,110 80,945

249

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(2) The Group’s 2022 and 2021 income tax expenses and pre-tax net profits were adjusted as follows:

Net profit before tax Income tax calculated at the domestic tax rate of the Company’s location Foreign dividend income Current-year losses for which no deferred tax asset was recognized Changes in unrecognized temporary differences Undervaluation (overvaluation) for the prior period Undistributed surplus earnings Others Income tax expense	2022 $ 311,853 $ 125,133 14,353 (2,733) (13,509) 5,656 520 (1,757 ) $ 127,663	2021
		211,673 92,275 - (3,030) (14,889) (321) 812 6,098 80,945

1. Deferred tax assets and liabilities

2. (1) Unrecognized deferred tax liabilities

Temporary differences related to investment subsidiaries on December 31, 2022 and 2021, are due to the Group’s control over the timing of the reversal of these temporary differences. Therefore, no deferred tax liabilities were recognized. Relevant amounts were as follows:

gnized. Relevant amounts were as follows:
Aggregated amount of temporary differences related to investment subsidiaries Amounts not recognized as deferred tax liabilities	December 31, 2022		December 31, 2021
	$ 850,357 $ 186,213		807,729 174,558

250

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(2) Unrecognized deferred tax assets

Deductible temporary differences Tax loss	December 31, 2022		December 31, 2021
	$ 288 1,663		2,142 4,396
	$ 1,951		6,538

Tax losses are subject to the provisions of the Income Tax Act and as approved by the tax collection authority. Losses for the previous ten years may be deducted from the net profit of the current year before reassessing the income tax. These items are not recognized as deferred tax assets because it is not likely that the Group will have sufficient taxable income for the temporary difference in the future.

As of December 31, 2022, the tax loss deduction period of the Company, Leadpak Industrial, and Celeraise Technology was as follows:

Year of occurrence	Amount of loss	Amount that can still be deducted Deadline for deductions Notes
Leadpak Industrial: 2013 2017 2019 2020 2021 2022	$ 17 32 4,584 3,384 144 154	17 2023 Approved number 32 2027 Approved number 4,584 2029 Approved number 3,384 2030 Approved number 144 2031 Declared number 154 2032 Estimated number 8,315
	$ 8,315

251

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(3) Recognized deferred tax liabilities and assets

Changes in deferred tax liabilities and assets for 2022 and 2021 are as

follows:

Deferred tax liabilities: Balance on January 1, 2022 Debit/(credit) income Effect of movements in exchange rates Balance on December 31, 2022 Balance on January 1, 2021 Debit/(credit) income Balance on December 31, 2021 Deferred tax assets: Balance on January 1, 2022 (Debit)/credit income Balance on December 31, 2022 Balance on January 1, 2021 (Debit)/credit income Balance on December 31, 2021	Investment income recognized under the equity method (foreign) $ 25,706 12,096 -	Others - 11,552 (35)	Total 25,706 23,648 (35)
	$ 37,802	11,517	49,319
	$ 6,674 19,032	- -	6,674 19,032
	$ 25,706	-	25,706
	Tax loss $ 2,604 (2,604) $ - $ 8,786 (6,182) $ 2,604	Others 942 2,498 3,440 838 104 942	Total 3,546 (106) 3,440 9,624 (6,078) 3,546

3. Income tax approval status

Tax returns by the Company, by Celeraise Technology and by Leadpak Industrial for the years up to 2020 were examined and approved by the tax authority.

252

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(XI) Capital and other equity

For both December 31, 2022 and December 2021, the total authorized capital stock of the Company was NT$2,700,000 thousand and the par value was NT$10 per share, for 270,000 thousand shares. The total number of shares specified above constitutes ordinary shares, with the number of issued shares amounting to NT$95,890 thousand and NT$94,000 thousand, respectively. All payments for issued shares have been received.

Unit: Thousand shares

es have been received.	Unit: Thousand shares	Unit: Thousand shares	Unit: Thousand shares
Starting balance on January 1 Issuance of stock dividend Issuance of employee stock remuneration Cancellation of treasury shares Ending balance on December 31	Common stock 2022 2021 94,000 94,000 2,790 - 100 - (1,000) - 95,890 94,000
	95,890		94,000

1. Additional paid-in capital

According to the provisions of the Company Act, additional paid-in capital must first make up for losses and only then can realized additional paid-in capital be converted into capital or into cash dividends for issuance. Realized additional paid-in capital referred to in the preceding paragraph includes the excess from the issuance of shares in excess of the par value and from the receipt of gifts. In accordance with the provisions of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the total amount of additional paid-in capital allocated to be replenished each year may not exceed 10% of the paid-in capital.

2. Retained earnings

If there is a surplus in the annual final accounts, then in accordance with the Articles of Incorporation of the Company and after paying income tax on profit-making enterprises and making up for losses in prior years, 10% should first be set aside as legal reserve. However, when the legal reserve has reached the level of the Company’s paid-in capital, this limitation shall not apply. Furthermore, appropriate special reserve or reversals shall be set aside in accordance with the decrees or regulations of the competent authority. If there is any remaining balance, a proposal for the distribution of this balance plus accumulated undistributed surplus earnings from the previous period shall be formulated by the

253

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Board of Directors. When issuing new shares, such distribution shall be made after a resolution of the shareholders’ meeting.

In response to the growth of operations and investment needs, the Company has adopted the following dividend distribution principles at this stage:

The Company is in a stage of business growth, and the dividend distribution policy depends on the Company’s current and future investment environment, capital needs, domestic and international competition, capital budget, etc. Taking into account the interests of shareholders, balancing dividends, and the Company’s long-term financial planning, etc., every year the Board of Directors shall draw up a distribution plan in accordance with the law and submit it for resolution by the shareholders’ meeting. Shareholders’ dividends may be distributed in cash or stock. The proportion of cash dividend distribution shall be no less than 10% of the total dividends. However, the cash dividend distribution ratio can still be adjusted according to the operating conditions of the current year.

• (1) Legal reserve

When the Company has no losses, then subject to a resolution of the shareholders’ meeting, issuance shall be made of new shares or cash with the legal reserve. However, this is limited to the portion of the reserve exceeding 25% of the paid-in capital.

• (2) Special reserve

In accordance with FSC regulations, when the Company distributes its distributable surplus, then for the net deduction of other shareholders’ equity incurred in the current year, special reserve of the same amount is withdrawn from the current income and the undistributed surplus of the previous period. If the amount of the deduction of other shareholders’ equity accumulated in the previous period is not distributed, special reserve of the same amount from the undistributed surplus of the previous period shall not be distributed. In the event of a subsequent reversal of the amount of the deduction of shareholders’ equity, earnings are distributed on the reversal portion.

254

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(3) Earnings distribution

The Company respectively passed resolutions of the Board of Directors on the amount of cash dividends under appropriation of earnings for 2021 on March 22, 2022 and the amount of stock dividends under appropriation of earnings for 2021 on June 14, 2022. On August 4, 2021, the shareholders’ meeting passed a resolution on appropriation of earnings for 2020. The dividend amounts to be distributed to owners were as follows:

Dividends distributed to owners of ordinary shares: Cash dividend Stock dividend	2021	2021	2021		2020 Dividend rate (NT$) Amount 0.70 65,100 - - $ 65,100
	Dividend rate (NT$) $ 0.30 0.30		Amount		Dividend rate (NT$) 0.70 -
			27,900 27,900
			$ 55,800

On March 23 2023, the Board of Directors of the Company proposed the earnings distribution for 2022 with the amount of dividends distributed to owners as follows:

Dividends distributed to owners of ordinary shares: Cash dividend

		2022
		Dividend
	rate (NT$)		Amount
	$	0.70$	67,123

In accordance with provisions of the Securities and Exchange Act, the proportion of shares bought back by the Company may not exceed 10% of the total issued shares of the Company; the total amount of the shares purchased may not exceed the amount of retained earnings plus issued share premium and realized additional paid-in capital; shares repurchased as a result of the transfer of shares to employees shall be transferred within three years from the date of purchase, and if the transfer is not made within the time limit, then Company’s unissued shares shall be deemed to have been cancelled. In addition, treasury shares may not be pledged and no shareholder rights may be enjoyed before transfer.

255

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

3. Treasury shares

In accordance with Article 28-2 of the Securities and Exchange Act, the Company buys back treasury shares for the purpose of transferring shares to employees. Details of changes in treasury shares in 2022 and 2021 are as follows:

Treasury shares at start of period Cancellations this period Treasury shares at end of period	2022 Number of shares (thousand shares) Amount 1,000 $ 14,262 (1,000) (14,262) - $ -	2022 Number of shares (thousand shares) Amount 1,000 $ 14,262 (1,000) (14,262) - $ -	2021 Number of shares (thousand shares) Amount 1,000 14,262 - - 1,000 14,262
	Number of shares (thousand shares) 1,000 (1,000)		Number of shares (thousand shares)
			1,000 - 1,000
	-	$ -

In accordance with provisions of the Securities and Exchange Act, the proportion of shares bought back by the Company may not exceed 10% of the total issued shares of the Company; the total amount of the shares purchased may not exceed the amount of retained earnings plus issued share premium and realized additional paid-in capital; shares repurchased as a result of the transfer of shares to employees shall be transferred within three years from the date of purchase, and if the transfer is not made within the time limit, then Company’s unissued shares shall be deemed to have been cancelled. In addition, treasury shares may not be pledged and no shareholder rights may be enjoyed before transfer.

(XII) Earnings per share

The Group’s basic earnings per share and diluted earnings per share are calculated as follows:

Basic earnings per share: Net profit attributable to holders of ordinary shares of the Company Weighted average number of ordinary shares outstanding (thousand shares) Basic earnings per share (NT$) Basic earnings per share:	2022 $ 184,188 95,868 $ 1.92	2021 130,729
		95,790
		1.36

256

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Diluted earnings per share: Net profit attributable to holders of ordinary shares of the Company (diluted) Weighted average number of ordinary shares outstanding (basic) (thousand shares) Impact of employee stock remuneration Weighted average number of ordinary shares outstanding (diluted) (thousand shares) Diluted earnings per share (NT$)	2022 $ 184,188	2021 130,729 95,790 230 96,020 1.36
	95,868 432
	96,300
	$ 1.91

(XIII) Revenue from customer contracts

1. Details of revenue

Primary regional markets: Taiwan Mainland China Philippines Thailand Primary regional markets: Taiwan Mainland China Philippines Thailand		2022	Total 1,615,734 1,237,128 726,030 329,292 3,908,184 Total 1,256,721 1,267,143 543,498 306,076
	Information Services Department $ 1,615,734 - - - $ 1,615,734	Wire & Connectors Department - 1,237,128 726,030 329,292 2,292,450 2021
	Information Services Department $ 1,256,721 - - -	Wire & Connectors Department - 1,267,143 543,498 306,076
	$ 1,256,721	2,116,717	3,373,438

257

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

2. Contract balances

tract balances
Notes receivable Accounts receivable Less: Loss allowance Contract liabilities	December 31, 2022 $ 2,459 1,019,188 (23,872 ) $ 997,775 December 31, 2022 $ 55,892	December 31, 2021 3,865 806,766 (20,856 ) 789,775 December 31, 2021 203,606	January 1, 2021 1,068 723,693 (18,540)
			706,221
			January 1, 2021 187,314

Please refer to Note VI (II) for the details of notes and accounts receivable and their impairment.

The opening balances of contract liabilities for January 1, 2022 and 2021, and the amounts recognized as revenue in 2022 and 2021 were NT$192,307 thousand and NT$182,475 thousand, respectively.

Changes in contract assets and contract liabilities are mainly due to the difference between the time when the Group transfers goods or services to customers to satisfy performance obligations and when customers pay. (XIV) Remuneration of employees and of directors and supervisors

In accordance with the Company’s Articles of Incorporation, if there is profit for the year then no less than 1% and no more than 10% shall be allocated for employee remuneration by a resolution of the Board of Directors and in the form of stock or cash distributions. Distribution recipients are to include employees of affiliated companies who meet certain conditions. Out of the aforementioned profit amount of the Company, no more than 3% should be appropriated by a resolution of the Board of Directors as remuneration for directors and supervisors (constitutes director remuneration after the establishment of the Audit Committee).

The estimated amounts of employee remuneration of the Company in 2022 and 2021 were NT$7,700 thousand and NT$4,840 thousand. Estimated amounts of the remuneration for directors and supervisors were NT$6,400 thousand and NT$4,500 thousand. These refer to the amounts before deducting the remuneration of employees and the remuneration of directors and supervisors from the net profit before tax of the Company for each period. After deducting the accumulated losses,

258

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

the balance is multiplied by the remuneration of employees and directors and supervisors stipulated in the Company’s Articles of Incorporation The remuneration distribution percentage is an estimate basis and is presented as an operating expense for each period. (In all of the above instances, after the establishment of the Audit Committee, supervisor remuneration constitutes director remuneration.) If the Board of Directors decides to pay employee compensation in stock, the numbers of shares to be distributed are calculated based on the closing price of the Company one day before the date of the meeting of the Board of Directors.

In respect to the remuneration of employees, directors, and supervisors allocated by the above-mentioned resolutions of the Board of Directors, there were no differences between these amounts and the estimated amounts in the Company’s 2022 and 2021 consolidated financial statements. (After the establishment of the Audit Committee, supervisor remuneration constitutes director remuneration.) Relevant information can be inquired through the Market Observation Post System.

• (XV) Financial instruments

• Credit risk

• (1) Amount of maximum credit risk exposure

The carrying amounts of financial assets and contract assets represent the maximum credit exposure amount.

• (2) Concentration of credit risk

Since the Group has a large customer base, there is no significant concentration of transactions with a single customer and the sales area is dispersed. Therefore, there is no risk of significant concentration of credit risk in accounts receivable. In order to reduce credit risk, the Group also regularly and continuously evaluates the financial status of customers. However, customers are usually not required to provide collateral.

(3) Credit risk of receivables

For details of credit risk exposure information and credit impairment of notes receivable and accounts receivable, please refer to Note VI (II).

259

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

2. Liquidity risk

The table below shows the contractual maturity dates of financial liabilities, including estimated interest and impact of netting agreements.

December 31, 2022 Non-derivative financial liabilities Short-term bank loans Notes and accounts payable Other payables Lease liabilities - current and non-current Deposits received (accounted for as other non-current liabilities) December 31, 2021 Non-derivative financial liabilities Short-term bank loans Short-term notes and bills payable Notes and accounts payable Other payables Lease liabilities - current and non-current Deposits received (accounted for as other non-current liabilities)	Carrying amount	Contractual cash flows (692,430) (443,594) (249,241) (77,089) (434)	Within 1year	1 to 2years	Over 2years - - - (19,248) (434)
	$ 691,000 443,594 249,241 74,301 434		(692,430) (443,594) (249,241) (32,321) -	- - - (25,520) -
	$ 1,458,570	(1,462,788)	(1,417,586)	(25,520)	(19,682)
	$ 610,000 79,956 352,959 176,101 43,494 432	(665,634) (80,000) (352,959) (176,101) (46,231) (432)	(665,634) (80,000) (352,959) (176,101) (11,405) -	- - - - (11,067) -	- - - - (23,759) (432)
	$ 1,262,942	(1,321,357)	(1,286,099)	(11,067)	(24,191)

The Group does not expect that the cash flows included in the maturity analysis could occur significantly earlier or in significantly different amounts.

260

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

3. Exchange rate risk

(1) Exposure to exchange rate risk

The financial assets and liabilities of the Group exposed to significant foreign currency exchange rate risk are as follows:

Financial assets Monetary items USD USD USD USD USD Financial liabilities Monetary items USD USD USD USD USD	December 31, 2022	December 31, 2022	December 31, 2022	Foreign currency unit: $ thousand December 31, 2021	Foreign currency unit: $ thousand December 31, 2021	Foreign currency unit: $ thousand December 31, 2021
	Foreign currency	Exchange rate	TWD	Foreign currency	Exchange rate	TWD
	$ 1,463 21,586 23,261 8,695 809 219 6,612 13,101 8,018 4,706	USD/TWD =30.710 USD/RMB =6.967 USD/HKD =7.798 USD/PHP =56.452 USD/THB =34.351 USD/TWD =30.710 USD/RMB =6.967 USD/HKD =7.798 USD/PHP =56.452 USD/THB =34.351	44,942 662,910 714,359 267,023 24,845 6,728 203,060 402,347 246,237 144,511	1,668 27,667 28,035 6,987 184 146 15,059 20,417 5,205 6,079	USD/TWD =27.680 USD/RMB =6.372 USD/HKD =7.799 USD/PHP =51.738 USD/THB =33.150 USD/TWD =27.680 USD/RMB =6.372 USD/HKD =7.799 USD/PHP =51.738 USD/THB =33.150	46,172 765,830 776,014 193,389 5,085 4,033 416,835 565,143 144,074 168,268

261

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(2) Sensitivity analysis

The exchange rate risk of the Group’s monetary items mainly comes from cash and cash equivalents, accounts receivable, other receivables, loans, accounts payable, and other payables denominated in foreign currencies which generate foreign currency exchange gains and losses at the time of translation. If foreign currencies had depreciated or appreciated by 5% against the TWD, RMB, HKD, PHP, and THB as of December 31, 2022 and 2021, then with all other factors remaining constant the impact on income in 2022 and 2021 would be as follows:

USD (versus TWD) Appreciate 5% Depreciate 5% USD (versus RMB) Appreciate 5% Depreciate 5% USD (versus HKD) Appreciate 5% Depreciate 5% USD (versus PHP) Appreciate 5% Depreciate 5% USD (versus THB) Appreciate 5% Depreciate 5%	December 31, 2022 $ 1,911 (1,911) 22,993 (22,993) 15,601 (15,601) 1,039 (1,039) (5,983) 5,983	December 31, 2021
		2,107 (2,107) 17,450 (17,450) 10,544 (10,544) 2,466 (2,466) (8,159) 8,159

(3) Exchange gains and losses on monetary items

Due to the wide variety of functional currencies of the Group, the exchange profit and loss information of monetary items is disclosed by means of consolidation. In 2022 and 2021, the net exchange gains (losses) (including realized and unrealized) amounted to NT$23,714 thousand and (NT$26,718) thousand, respectively.

262

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

4. Interest rate analysis

The Group’s financial asset and financial liability interest rate risk exposure is listed in the following table:

d in the following table:
Variable rate instruments (book amounts): Financial assets Financial liabilities	December 31, 2022 $ 483,349 531,000	December 31, 2021
		351,563 610,000

The following sensitivity analysis is based on the exposure to interest rate risk of the derivative and non-derivative financial instruments on the reporting date. For variable rate instruments, the sensitivity analysis assumes the variable rate liabilities on the reporting date have been outstanding for the whole year. The Group’s internal key management reports increases and decreases in interest rates, and changes in interest rates of 25 basis points are considered by management to be reasonably possible.

If interest rates had increased or decreased by 25 basis points, and with all other variables held constant, the Group’s pre-tax profit and loss in 2022 and 2021 would be as follows, mainly due to the Group’s variable interest rate demand deposits and borrowings:

osits and borrowings:
Interest rates increase by 25 bps Interest rates decrease by 25 bps	2022 $ (119) 119	2021
		(846) 846

5. Fair value information

(1) Type and fair value of financial instruments

The carrying amounts and fair values of the Group’s financial assets and financial liabilities are listed below (including fair value rating information; however, provided that the carrying amount of financial instruments other than fair value is a reasonable approximation of fair value, and in the case of lease liabilities, there is no requirement to disclose fair value information):

263

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Financial assets measured at amortized cost Cash and cash equivalents Net notes and accounts receivable Other financial assets - current Deposits made (accounted for as other non-current assets) Financial liabilities measured at amortized cost Bank loans Notes and accounts payable Other payables Lease liabilities - current Lease liabilities - non-current Deposits received (accounted for as other non-current liabilities)		December 31, 2022	December 31, 2022	December 31, 2022
	Carrying amount $ 530,360 997,775 36,547 51,162		Fair value
		Level 1 - - - - - - - - - -	Level 2 - - - - - - - - - -	Level 3 - - - - - - - - - -	**Total **
					- - - - - - - - - -
	$ 1,615,844
	$ 691,000 443,594 249,241 31,592 42,709 434
	$ 1,458,570

Financial assets measured at amortized cost Cash and cash equivalents Net notes and accounts receivable Other financial assets-current Deposits made (accounted for as other non-current assets)		December 31, 2021	December 31, 2021	December 31, 2021
	Carrying amount $ 412,811 789,775 43,257 56,622		Fair value
		Level 1 - - - -	Level 2 - - - -	Level 3 - - - -	**Total **
					- - - -
	$ 1,302,465

264

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Financial liabilities measured at amortized cost Bank loans Short-term notes and bills payable Notes and accounts payable Other payables Lease liabilities - current Lease liabilities - non-current Deposits received (accounted for as other non-current liabilities)		December 31, 2021	December 31, 2021	December 31, 2021
	Carrying amount $ 610,000 79,956 352,959 176,101 10,915 32,579 432		Fair value
		Level 1 - - - - - - -	Level 2 - - - - - - -	Level 3 - - - - - - -	**Total **
					- - - - - - -
	$ 1,262,942

(2) Valuation techniques for financial instruments not measured at fair value

The management of the Group believes that the carrying amounts of the Group’s financial assets and financial liabilities measured at amortized cost in the consolidated financial statements are close to their fair values.

(XVI) Financial risk management

1. Overview

The Group is exposed to the following risks as a result of the use of financial instruments:

(1) Credit risk

(2) Liquidity risk

(3) Market risk

This note presents the Group’s exposure information for each of the above risks, the Group’s objectives, policies, and procedures for measuring and managing the risks. For further quantitative disclosures, please refer to the notes to the consolidated financial statements.

2. Risk management structure

The Group’s financial department provides services for various businesses, coordinates access to domestic and international financial market operations, and supervises and manages the financial risks associated with the Group’s

265

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

operations through internal risk reports that analyze risk exposure according to the level and breadth of risk. The use of financial instruments is governed by the policies adopted by the Board of Directors of the Company. These constitute written principles for exchange rate risk, interest rate risk, credit risk, the use of non-derivative financial instruments, and the investment of surplus liquidity. Internal auditors continuously review policy compliance and exposure limits. The Group does not trade in financial instruments for speculative purposes (including derivative financial instruments).

3. Credit risk

Credit risk is the risk of financial loss of the Group due to the failure of the customer or counterparty of the financial instrument to perform its contractual obligations. This arises mainly from the Group’s accounts receivable from customers and securities investments.

(1) Accounts receivable and other receivables

The Group has established a credit policy under which the Group is required to analyze the credit rating of each new customer individually before giving standard payment and shipping conditions and terms. The Group’s review includes external ratings where available, and bank letters in certain circumstances. Purchasing limits are established on a case-by-case basis. Such limits are subject to periodic review. Customers who do not meet the Group’s benchmark credit rating may only trade with the Group on an advance receipt basis.

Accounts receivable cover a wide range of customers and are spread across different industries and geographic regions. The Group continuously evaluates the financial situation of its accounts receivable clients and, if necessary, purchases credit guarantee insurance contracts.

Since the Group has a large customer base, there is no significant concentration of transactions with a single customer and the sales area is dispersed. Therefore, there is no risk of significant concentration of credit risk in accounts receivable. In order to reduce credit risk, the Group also regularly and continuously evaluates the financial status of customers. However, customers are usually not required to provide collateral.

266

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(2) Investments

The credit risk of bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Group’s financial department. Since the Group’s transaction counterparties and other parties are all creditworthy banks and financial institutions as well as corporate organizations and government agencies at investment grade and above, there are no material performance concerns and therefore no significant credit risk.

(3) Guarantees

It is the Group’s policy to provide financial guarantees only to wholly-owned subsidiaries. Please refer to Note XIII (I) for information on endorsements/guarantees by the Group for subsidiaries as of December 31, 2022.

4. Liquidity risk

The Group manages and maintains sufficient cash and cash equivalents to support the Group’s operations and mitigate the impact of fluctuations in cash flows. The Group’s management monitors the use of bank financing lines and ensures compliance with the terms of loan contracts.

Bank borrowings are an important source of liquidity for the Group. Please refer to Note VI (VI) for unused bank facilities of the Group as of December 31, 2022 and 2021.

5. Market risk

Market risk refers to changes in market prices such as changes in exchange rates, interest rates, and equity instrument prices, and the risk that affects the Group’s earnings or the value of financial instruments it holds. The objective of market risk management is to control the exposure to market risk to within an acceptable range and to optimize returns on investment.

(3) Exchange rate risk

The Group is exposed to exchange rate risk arising from sales, purchases and borrowing transactions that are not denominated in the functional currency. The main transaction currencies are New Taiwan dollar and US dollar.

Loan interest is priced in the currency of the principal of the loan. Generally speaking, the currency of the loan is the same as the currency of the cash flows generated by the Group’s operations, mainly New Taiwan dollar. In this case, it provides economic hedging without the need to use derivatives. Therefore, hedging accounting is not used.

267

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

For monetary assets and liabilities denominated in other foreign currencies, when short-term imbalances occur, the Group buys or sells foreign currencies at real-time exchange rates to ensure that the net risk exposure remains at an acceptable level.

(2) Interest rate risk

As the Group borrows funds at both fixed and floating interest rates, cash flow risk arises from the borrowing of funds at floating interest rates. The Group manages interest rate risk by maintaining an appropriate combination of fixed and floating interest rates.

(XVII) Capital management

Based on the characteristics of the current operating industry and the future development of the Group, and considering factors such as changes in the external environment, the Group plans its capital management to ensure that it has the necessary financial resources and operating plans to meet the needs of future working capital, capital expenditure, debt repayment, and dividend payments. Management uses appropriate total debt/equity ratios, ratios of interest-bearing debt to equity, or other financial ratios to determine the optimal capitalization of the Group. It enhances shareholder returns by optimizing debt and equity balances while maintaining a sound capital base. Debt-to-equity ratios as of the reporting dates were as follows:

ollows:
Total liabilities Total equity Interest-bearing debt Debt-to-equity ratio Ratio of interest-bearing debt to equity	December 31, 2022	December 31, 2021
	$ 1,594,252 1,485,822 691,000 107% 47%	1,521,242 1,269,189 689,956 120% 54%

(XVIII) Investing and financing activities not affecting current cash flows

The Group’s non-cash transaction investment and financing activities in 2022 and 2021 were undertaken to obtain right-of-use assets via leasing; please refer to Note VI (V) for details.

Reconciliation of liabilities from financing activities is as follows:

268

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Short-term loans Deposits received Lease liabilities Total liabilities from financing activities Short-term loans Deposits received Lease liabilities Total liabilities from financing activities	January 1, 2022 $ 689,956 432 43,494 $ 733,882 January 1, 2021 $ 671,111 333 64,421 $ 735,865	Cash flows 1,044 - (30,883) (29,839) Cash flows 18,845 100 (34,986) (16,041)	**Non-cash **	changes Exchange rate changes - 2 900	December 31, 2022
			Others - - 60,790 60,790 **Non-cash **
					691,000 434 74,301
				902	765,735
				changes Exchange rate changes - (1) (3,675)	December 31, 2021
			Others - - 17,734 17,734
					689,956 432 43,494
				(3,676)	733,882

VII. Related party transactions

• (I) Names and relationship with related parties

Parties involved in transactions with the Group during the periods covered by these consolidated financial statements were as follows:

Name of related party Relationship with the Group

Mr. Yun-Teng Chang

Chairman of the Company

Ms. Kui-Yu Chang

Kunshan Mingmao Electronics Co., Ltd. (Kunshan Mingmao)

Year Jan Industrial Co., Ltd.

ILOFA REALTY INC. (ILOFA)

Director of the Company

The responsible person is a relative within one degree of kinship of the chairman of the Company

The responsible person is a relative within one degree of kinship of the chairman of the Company

The responsible person is a director of the Company

• (II) Significant transactions with related parties

• Payables to related parties

Details of payables to related parties for the Group’s leasing of real estate to related parties are as follows:

269

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Accounts	Related party category Senior management Other related parties	December 31, 2022 $ 2,724 4,983	December 31, 2021 1,691 4,912
Other payables 〃
		$ 7,707	6,603

2. Leases

• (1) In January 2016, the Group leased offices and parking spaces from other related parties with the rent determined by market conditions. Signing a one-year lease agreement, the total contract values were NT$5,828 thousand and NT$1,097 thousand, respectively. Interest expense of NT$58 thousand and NT$8 thousand were respectively for the years ended December 31, 2022 and 2021, respectively; the balances of the lease liabilities were NT$4,858 thousand and NT$3,201 thousand, respectively.

• (2) The Group leased a plant from another related party, Kunshan Mingmao, with the rent determined by market conditions and signing a one-year lease agreement. The expected lease term is three years, and the total contract value is NT$58,236 thousand. Interest expense of NT$544 thousand and NT$134 thousand were respectively for the years ended December 31, 2022 and 2021, respectively; the balances of the lease liabilities were NT$37,520 thousand and NT$0 thousand, respectively.

• (3) The Group leased offices and factories to key management in May 2017 and January 2019, respectively, with rents determined by market conditions and signing lease contracts of three years and one year respectively. The total contract values were NT$2,544 thousand and NT$1,390 thousand, respectively. In May 2020, the lease of the office was renewed with key management, and the rent was determined according to market conditions. A three-year lease contract was signed with a total contract value of NT$2,477 thousand. Interest expense of NT$274 thousand and NT$308 thousand was recognized in 2022 and 2021, respectively.

The balance of leasing liabilities of the Group’s leased offices to key management is as follows:

Key management - ILOFA Key management - Others	December 31, 2022 $ 18,734 283	December 31, 2021 19,447 1,013
	$ 19,017	20,460

270

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

(III) Key management personnel transactions

1. Compensation of key management personnel includes:

Short-term employee benefits

es:
2022	2021
$ 44,612	35,827

2. Guarantees provided

The total amounts of the Group’s loan contracts for December 31, 2022 and 2021 were NT$1,191,775 thousand and NT$1,019,200 thousand, respectively, with Mr. Yun-Teng Chang serving as joint guarantor.

VIII. Pledged assets

Details of book values of assets provided by the Group as collateral against pledges are as follows:

Asset name	Purpose of pledge
Property, plant, and equipment - land Property, plant, and equipment - buildings Restricted bank deposits (accounted for as other financial assets - current) Time deposits (accounted for as other financial assets - current) Deposits made (accounted for as other non-current assets)

IX. Significant commitments and contingencies: None

X. Losses due to major disasters: None.

XI. Significant subsequent events: None.

271

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

XII. Other

(I) The summary of current period employee benefits, depreciation, and amortization, by

function, is as follows:

function,is as follows:
Function Nature	2022			2021
	Under operating costs	Under operating expenses	Total	Under operating costs	Under operating expenses	Total
Employee benefit expense Salary expense Health and labor insurance expense Pension expense Other employee benefit expense Depreciation expense Amortization expense	341,826 15,475 12,798 14,988 55,808 -	242,901 18,240 10,537 20,647 22,537 1,922	584,727 33,715 23,335 35,635 78,345 1,922	318,100 5,973 8,803 13,829 58,889 -	257,915 22,370 11,257 20,831 19,300 1,853	576,015 28,343 20,060 34,660 78,189 1,853

XIII. Other disclosures

(I) Information on significant transactions

The following is the information on significant transactions required by the Regulations Governing the Preparation of Financial Reports by Securities Issuers for the Group in 2022:

1. Loans to other parties:

Number	The company lending funds	Name of borrower	Current account	Whether a related party	Highest amount during the period	Balance at end of period	Actual usage amount	Interest rate	Purposes of fund financing for the borrower	Transaction amount for business between twoparties	Reasons for short term financing	Allowance for bad debt	Collateral	Collateral	Loan limit for individual counterparties	Total loan limit
													Name	Value
1 1 2 2 2 3 4	Jiun Tai Jiun Tai Jet Success Jet Success Jet Success Shanghai Zhansheng Celeraise Hong Kong	THAILAND Celeraise Hong Kong Yield Profit International Celeraise Hong Kong CELERAISE Huizhou Zhanmao THAILAND	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y Y Y	33,781 16,108 23,195 141,746 16,108 50,242 45,101	33,781 15,355 22,111 - 15,355 49,149 42,994	33,781 15,355 22,111 - 15,355 49,149 42,994	2% 1.5% 1.5% 1.5% 2% 1.5% 2%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - - -	Operating turnover Operating turnover Operating turnover Operating turnover Operating turnover Operating turnover Operating turnover	- - - - - - -	None None None None None None None	- - - - - - -	104,611 (Note 1) 104,611 (Note 1) 366,320 (Note 2) 366,320 (Note 2) 146,528 (Note 2) 123,567 (Note 3) 426,975 (Note 4)	104,611 (Note 1 104,611 (Note 1 366,320 (Note 2 366,320 (Note 2 146,528 (Note 2 123,567 (Note 3 426,975 (Note 4

Note 1: In accordance with Jiun Tai’s Operational “Procedures for Loaning Funds to Others”, the total amount of funds loaned may not exceed 100% of Jiun Tai’s net value. If there is a need for short-term financing with Jiun Tai, the loan amount may not exceed 100% of Jiun Tai’s net value. Further, the total amount of foreign intercompany loans where Jiun Tai does not directly or indirectly hold 100% of the voting shares may not exceed 40% of the net value.

Note 2: In accordance with Jet Success’s “Operational Procedures for Loaning Funds to Others”, the total amount of funds loaned may not exceed 100% of Jet Success’s net value. If there is a need for short-term financing with Jet Success, the loan amount may not exceed 100% of Jet Success’s net value. Separately, the total amount of intercompany loans to foreign companies where Jet Success does not directly or indirectly hold 100% of the voting shares may not exceed 40% of the net value.

Note 3: In accordance with Shanghai Zhansheng’s “Operational Procedures for Loaning Funds to Others”, the total amount of funds loaned may not exceed 100% of Shanghai Zhansheng’s net value. If there is a need for short-term financing with Shanghai Zhansheng, the loan amount may not exceed 100% of Shanghai Zhansheng’s net value. Separately, the total amount of intercompany loans where Shanghai Zhansheng does not directly or indirectly hold 100% of the voting shares may not exceed 40% of the net value.

272

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

• Note 4: In accordance with Celeraise Hong Kong’s “Operational Procedures for Loaning Funds to Others”, the total amount of funds loaned may not exceed 100% of Celeraise Hong Kong’s net value. If there is a need for short-term financing with Celeraise Hong Kong, the loan amount may not exceed 100% of Celeraise Hong Kong’s net value. Separately, the total amount of intercompany loans where Celeraise Hong Kong does not directly or indirectly hold 100% of the voting shares may not exceed 40% of the net value.

Note 5: The above transactions have been eliminated in the preparation of the consolidated financial statements.

1. Guarantees and endorsements for other parties:

Number	Name of endorsement/ guarantee company	Counterparty of guarantee and endorsement	Counterparty of guarantee and endorsement	Endorsement/ guarantee limit for single enterprise	Maximum endorsement/ guarantee balance for the current period	Balance of endorsement/ guarantee at end of period	Actual usage amount	Guarantee amount by endorsement of property guarantees	Ratio of cumulative endorsement/ guarantee amount to net value of the most recent financial statements	Endorsement/ guarantee maximum	Endorsement/ guarantee of parent company for subsidiaries	Endorsement/ guarantee of subsidiaries for parent company	Endorsements/ guarantees to the mainland China region
		Company name	Relationship
0 0 1	The Company 〃 Celeraise Technology	Celeraise Hong Kong/Jiun Tai Celeraise Hong Kong/Yield Profit International/Celer aise Technology The Company	Subsidiary of the Company Subsidiary of the Company Parent company	1,485,708 1,485,708 346,561	80,538 146,645 48,208	76,775 (Note 2) 142,130 (Note 3) 40,446	- - 40,446	- - -	5.17% 9.57% 58.35%	1,485,708 1,485,708 346,561	Y Y N	N N Y	N N N

• Note 1: The total amount of the Company’s external endorsements/guarantees may not exceed 100% of the Company’s net value. The amount of endorsements/guarantees for a single enterprise may not exceed 100% of the Company’s net value.

• Note 2: A shared quota guarantee is provided for Celeraise Hong Kong and Jiun Tai of NT$76,775 thousand (US$2,500 thousand). Note 3: A joint guarantee is provided for Celeraise Hong Kong, Yield Profit International, and Celeraise Technology of NT$142,130 thousand (US$3,000 thousand and NT$50,000).

Note 4: Endorsements/guarantees made by Celeraise Technology are made in accordance with that company’s Management Measures for Loans and Endorsements/Guarantees. The total amount of external endorsements/guarantees may not exceed 500% of the company’s net value, and the amount of endorsements/guarantees for a single enterprise may not exceed 500% of the company’s net value.

Note 5: The counterparty of the above endorsement/guarantee is the entity preparing the consolidated financial statements.

1. Securities held at the end of the period (excluding investment in subsidiaries, associates, and joint ventures): None.

2. Individual securities acquired or disposed of with accumulated amount exceeding NT$300 million or 20% of the paid-in capital: None.

3. Acquisition of individual real property with amount exceeding NT$300 million or 20% of the paid-in capital: None.

4. Disposal of individual real property with amount exceeding NT$300 million or 20% of the paid-in capital: None.

5. Related party transactions for purchases and sales with amounts exceeding NT$100 million or 20% of the paid-in capital:

									Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
Company buying (selling) goods	Transaction counterparty	Relationship	Transac		tion status		Circumstance why trading c different fr transa	s and reasons onditions are om ordinary ctions	Notes and accounts receivable (payable)		Notes
			Buying (selling) goods	Amount (Note 1)	Ratio of total purchase s (sales)	Credit period	Unit price	Credit period	Balance (Note 2)	Ratio of total notes and accounts receivable (payable)
Celeraise Hong Kong CELERAISE	CELERAISE Celeraise Hong Kong	Ultimate parent company is the same Ultimate parent company is the same	(Sales) Purchase	(398,095) 398,095	(40) % 62 %	Monthly settlement is 270 days, and the payments are made based on funding needs Monthly settlement is 270 days, and the payments are made based on fundingneeds	No significant difference with general customers No significant difference with general customers	No significant difference with general customers No significant difference with general customers	130,840 (130,840)	42% (66)%	Note 1 Note 1

273

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

==> picture [442 x 313] intentionally omitted <==

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

Company Transaction Relationship Transaction status Circumstances and reasons Notes
buying counterparty why trading conditions are Notes and accounts
(selling) different from ordinary receivable (payable)
goods transactions
Buying Amount Ratio of Credit Unit price Credit period Balance Ratio of total
(selling) (Note 1) total period (Note 2) notes and
goods purchases accounts
(sales) receivable
(payable)
Huizhou Celeraise Hong Ultimate parent (Sales) (370,493) (52) % Monthly No significant No significant 118,650 52% Note 1
Zhanmao Kong company is the settlement is difference with difference with
same 270 days, general general
and the customers customers
payments
are made
based on
funding
needs
Celeraise Huizhou Zhanmao Ultimate parent Purchase 370,493 37 % Monthly No significant No significant (118,650) (40)% Note 1
Hong Kong company is the settlement is difference with difference with
same 270 days, general general
and the customers customers
payments
are made
based on
funding
needs
Celeraise Huizhou Zhanmao Ultimate parent (Sales) (151,292) (15) % Monthly No significant No significant 176,511 57% Note 1
Hong Kong company is the settlement is difference with difference with
same 270 days, general general
and the customers customers
payments
are made
based on
funding
needs
Huizhou Celeraise Hong Ultimate parent Purchase 151,292 40 % Monthly No significant No significant (176,511) (66)% Note 1
Zhanmao Kong company is the settlement is difference with difference with
same 270 days, general general
and the customers customers
payments
are made
based on
funding
needs
----- End of picture text -----

Note 1: Information up to February 28, 2023. Note 2: The transactions listed on the left have been eliminated in the preparation of the consolidated financial statements.

1. Receivables from related parties with amounts exceeding NT$100 million or 20%

of the paid-in capital:

Unit: NT$ thousand

Company with accounts receivable	Transaction counterparty	Relationship	Balance of receivables from related parties	Turnover rate	Receivables overdue from relatedparties	Receivables overdue from relatedparties	Receivables amount from related parties recovered after theperiod	Amount of allowance for doubtful accounts
					Amount	Action taken
Celeraise Hong Kong Celeraise Hong Kong Huizhou Zhanmao	Huizhou Zhanmao CELERAISE Celeraise Hong Kong	Ultimate parent company is the same Ultimate parent company is the same Ultimate parent company is the same	176,511 130,840 118,650	93% 406% 426%	- - -		17,321 60,479 39,001	- - -

Note 1: Information up to February 28, 2023.

Note 2: The transactions listed on the left have been eliminated in the preparation of the consolidated financial statements.

9. Trading in derivative instruments:

None.

274

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

10. Business relationships and significant intercompany transactions:

Number (Note 1)	Name of transaction person	Name of counterparty	Relationship with transaction person (Note 2)		Intercompany transactions	Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Ratio to consolidated total revenue or total assets
1 1 1 1 1 1 2 2 2 2 3 3	Celeraise Hong Kong Celeraise Hong Kong Celeraise Hong Kong Celeraise Hong Kong Celeraise Hong Kong Celeraise Hong Kong Kunshan Yiguan Kunshan Yiguan Kunshan Yiguan Kunshan Yiguan Huizhou Zhanmao Huizhou Zhanmao	CELERAISE CELERAISE Huizhou Zhanmao Huizhou Zhanmao Welltend Technology Welltend Technology Shanghai Zhansheng Shanghai Zhansheng THAILAND THAILAND Celeraise Hong Kong Celeraise Hong Kong	3 3 3 3 3 3 3 3 3 3 3 3	Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable	398,095 130,840 151,292 176,511 20,941 6,527 63,411 33,515 15,151 11,780 370,493 118,650	Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs	10.15% 4.25% 3.86% 5.73% 0.53% 0.21% 1.62% 1.09% 0.39% 0.38% 9.45% 3.85%

275

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Number (Note 1)	Name of transaction person	Name of counterparty	Relationship with transaction person (Note 2)	Intercompany transactions	Intercompany transactions	Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Ratio to consolidated total revenue or total assets
3 3 3 3 3 3	Huizhou Zhanmao Huizhou Zhanmao Huizhou Zhanmao Huizhou Zhanmao Huizhou Zhanmao Huizhou Zhanmao	CELERAISE CELERAISE THAILAND THAILAND Kunshan Yiguan Kunshan Yiguan	3 3 3 3 3 3	Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable	50,918 72,457 45,987 39,994 40,342 8,922	Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs Prices are not significantly different from those of ordinary customers, monthly settlement is 270 days, and payments are received according to funding needs	1.30% 2.35% 1.17% 1.30% 1.03% 0.29%

Note 1: Numbers are filled in according to the following:

1. The parent company is 0.

2. Subsidiaries are numbered in sequence starting from 1.

Note 2: Relationship is classified into three types:

1. Parent company to subsidiary.

2. Subsidiary to parent company.

3. Subsidiary to subsidiary.

(II) Information on investees

1. The Group’s reinvestment business information is as follows (excluding

investment in mainland China companies):

								Unit: Foreign currency	Unit: Foreign currency	Unit: Foreign currency	thousands / thousand shares	thousands / thousand shares	thousands / thousand shares
Investing company name	Investee company name	Region	Main business items	Original investment amount		Held at end		of period	Highest level of holdings in theperiod		Profit or loss of the investee company for the current period (Note 2)	Investment gains and losses recognized in the current period(Note 2)	Notes
				End of current period	End of prior period	Number of shares	Ratio	**Carrying amount **	Number of shares	Sharehold ing ratio
The Company The Company The Company The Company The Company The Company	A Team Jiun Tai Celeraise Technology Leadpak Industrial Celeraise Hong Kong CELERAISE	British Virgin Islands Hong Kong Taiwan Taiwan Hong Kong Philippine s	Investment, trading, and holding company Holding company Information service industry International trade and other wholesale and retail trade Manufacture and sale of wire and cable connectors and connectors Manufacture and sale of wire and cable connectors and connectors	16,538 280,890 30,000 29,810 382,646 25,532	16,538 280,890 30,000 29,810 382,646 25,532	500 59,920 3,000 2,981 50,300 400	100% 100% 100% 99.36% 99.99% 100%	974 267,120 69,315 17,778 1,093,730 255,661	500 59,920 3,000 2,981 50,300 400	100% 100% 100% 99.36% 99.99% 100%	- (2,987) 39,928 300 56,930 44,708	- (2,987) 39,927 298 56,930 44,708	Subsidiar y 〃 〃 〃 〃 〃

276

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

Investing company name	Investee company name	Region	Main business items	Original investment amount	Original investment amount	Held at end	Held at end	of period	Highest level of holdings in theperiod	Highest level of holdings in theperiod	Profit or loss of the investee company for the current period (Note 2)	Investment gains and losses recognized in the current period (Note 2)	Notes
				End of current period	End of prior period	Number of shares	Ratio	**Carrying amount **	Number of shares	Sharehold ing ratio
The Company Jiun Tai Celeraise Hong Kong 〃	THAILAND Celeraise Hong Kong Yield Profit International Jet Success	Thailand Hong Kong Hong Kong Hong Kong	Manufacture and sale of wire and cable connectors and connectors Manufacture and sale of wire and cable connectors and connectors Investment, trading, and holding company Investment, trading, and holding company	182,136 1 (HKD0.16) (Note 1) 61,433 (HKD15,600) (Note 1) 30,716 (HKD7,800) (Note 1)	182,136 1 (HKD0.16) (Note 1) 61,433 (HKD15,600) (Note 1) 30,716 (HKD7,800) (Note 1)	18,275 - 15,600 7,800	100% 0.01% 100% 100%	164,422 1 (HKD0.16) (Note 1) 313,566 (HKD79,626) (Note 1) 366,320 (HKD93,022) (Note 1)	18,275 - 15,600 7,800	100% 0.01% 100% 100%	18,640 - 60,290 (HKD15,820) (Note 2) (3,226) (HKD(846)) (Note 2)	18,640 Recognized by Jiun Tai Recognized by Celeraise Hong Kong 〃	〃 〃 Sub-sub sidiary 〃
	Note 1: Convert Note 2: Convert Note 3: The abo	ed to New ed to New ve transact	Taiwan dollar at the period-end exchange rate on the financi Taiwan dollar at the average exchange rate during the financ ions have been eliminated in the preparation of the consolid				al reporting end date. ial reporting period. ated financial statements.

(III) Information on investment in mainland China

1. Relevant information such as the name and main business items of the investee

company in mainland China:

										Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares	Unit: Foreign currencythousands / thousand shares
Mainland China investee company name	Main business items	Paid-in capital amount (Note 3)	Investm ent method	Accumulated investment amount remitted from Taiwan at the beginning of the current period (Note 3)	Investment amount remitted or recovered in the current period		Accumulated investment amount remitted from Taiwan at the end of the current period (Note 3)	Profit or loss of the investee company for the current period (Note 4)	Shareholdin g ratio of the Company’s direct or indirect investment	Highest level of holdings in the period		Investment gains and losses recognized in the current period (Notes 4 and 5)	Book value of investments at the end of the period (Note 3)	Investme nt income repatriate d up to the current period
					Outflo w	Inflow				Thousand shares / thousand units	Shareholdi ng ratio
Shanghai Minshi Shanghai Zhansheng Shenzhen Zhansheng Celeraise Chenzhou Kunshan Yiguan Huizhou Zhanmao	R&D and production of industrial automation control, product quality control, communication, and electronic network computing software Production of electronics, cable connectors, telephone spare parts and small household appliances; sales of the company’s own products Manufacture and sale of wire and cable connectors and connectors Production and sale of wire connectors, electronic wire products, etc. Manufacture and sale of wire and cable connectors and connectors, etc. Production and sale of wire connectors, electronic wire products and packaging materials,etc.	15,355 (US$500) 51,439 (US$1,675) 46,363 (US$515 RMB$6,930) (Note 6) - 30,710 (US$1,000) 51,593 (US$1,680) (Note 7)	Note 1 Note 2 Note 2 Note 2 Note 2 Note 2	15,355 (US$500) 224,183 (US$7,300) - 30,710 (US$1,000) 30,710 (US$1,000) -	- - - - - -	- - - - - -	15,355 (US$500) 224,183 (US$7,300) - 30,710 (US$1,000) 30,710 (US$1,000) -	- 5,899 (RMB1,334) (8,831) (RMB(1,997)) (Note 8) 2,901 (RMB656) 60,741 (RMB13,736)	100% 100% 100% - 100% 100%	- - - - - -	100% 100% 100% - 100% 100%	- 5,395 (RMB1,220) (5,728) (HKD(1,503)) - 2,900 (HKD761) 60,724 (HKD15,934)	- 130,490 (RMB29,603) 32,933 (HKD8,363) (Note 8) 360,307 (HKD91,495) 336,872 (HKD85,544)	- - - - - -

2. Limitations on investment in mainland China:

Company name	Accumulated investment amount remitted from Taiwan to mainland China at the end of the current period (Note 3)	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (Note 3)	Investment limit for the mainland China area in accordance with the regulations of the Investment Commission of the Ministry of Economic Affairs
The Company	300,958(USD9,800)	371,284(USD12,090)	891,425

277

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

• Note 1: Reinvestment in mainland China through investment and establishment of companies in a third region.

• Note 2: Reinvestment in mainland China companies by reinvesting in existing companies in a third region.

• Note 3: Converted to New Taiwan dollar at the period-end exchange rate on the financial reporting end date.

• Note 4: Converted to New Taiwan dollar at the average exchange rate during the financial reporting period.

• Note 5: Investment gains and losses for the current period are recognized based on the financial statements of the invested company that have been verified and certified by the CPAs of the Taiwan parent company.

• Note 6: Constitutes reinvestment undertaken by Celeraise Hong Kong through investment of US$515 thousand of its own funds and use of fixed assets.

• Note 7: The difference between the remitted investment amount and the Company’s remittance is the reinvestment of US$1,680 thousand made by Celeraise Hong Kong, Yield Profit International, and Jet Success using their own funds.

• Note 8: Celeraise Chenzhou Industry completed the liquidation process in June 2018 and the investment amount was reimbursed in July 2018.

• Note 9: The above transactions have been eliminated in the preparation of the consolidated financial statements.

3. Material transactions with mainland China investee companies:

For direct or indirect material transactions between the Group and mainland China investee companies in 2022 (eliminated in the preparation of the consolidated statements), please see the description detailed under the “Information on Material Transactions” as well as “Business relationships and significant intercompany transactions”.

(IV) Information on principal shareholders:

rmation on principal shareholders:	rmation on principal shareholders:	rmation on principal shareholders:
Unit: Shares
Shares Principal shareholder name	Number of shares held	Shareholding percentage
Year Jan Industrial Co., Ltd.	11,152,634	11.63%
Jiayu Investment Co., Ltd.	9,485,167	9.89%
Jusheng Investment Co., Ltd.	8,842,241	9.22%
Wei Yi Investment Co., Ltd.	7,792,774	8.12%
Shih Chieh Wei Co., Ltd.	7,715,421	8.04%

278

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

• Note: (1) The information of major shareholders in this table is published by the depository and clearing company on the last business day at the end of each quarter, calculating shareholder ownership of the company with information on the delivery of more than 5% of ordinary shares that have been completed without physical registration (including treasury shares). As for the share capital recorded in the company’s financial statements and the actual number of shares that the company has completed without physical registration, there may be discrepancies or differences due to the different basis for preparation and calculation.

• (2) If the above-mentioned information is of shares delivered to a trust by a shareholder, it is disclosed by the individual account of the trustor whose trust account is opened by the trustee. As for insider equity declarations of shareholders holding more than 10% of shares made in accordance with the Securities and Exchange Act, such shareholdings include own-held shares plus shares that are delivered to a trust and that have the right to exercise decision-making power over the trust property. Please refer to the Market Observation Post System for insider equity declaration information.

XIV. Segment information

(I) General information

The Group is divided into operating segments by different products and labor services. Of these, the segments that should be reported are the Information Service Department and the Wire & Connectors Department. The main business of the Information Service Department is the integrated planning and implementation of information systems and consulting services. The main business of the Wire & Connectors Department is the production and sale of computer peripherals, smart home appliances, communication equipment, and game consoles.

The Group does not allocate income tax expense and net profit or loss from non-controlling interests to reportable segments. Amounts for reportable departments are consistent with reports used by operating decision makers. The roup has not allocated assets and liabilities to reportable segments for the purpose of operating decision makers to measure divisional assets and liabilities. The accounting policies of the operating segments are the same as the summary of significant accounting policies described in Note 4.

279

Notes to the Consolidated Financial Statements of Welltend Technology Corporation and Subsidiaries (continued)

• (II) Reportable information on segment profit and loss, segment assets, segment liabilities, and their measurement basis

The Group’s operating segment information and reconciliation are as follows:

Revenue: Revenue from external customers Interdepartmental revenue Total revenue Segment (loss) profit Segment total assets Revenue: Revenue from external customers Interdepartmental revenue Total revenue Segment (loss) profit Segment total assets			2022			Total 3,908,184 -
	Information services $ 1,615,734 16,613 $ 1,632,347 $ 145,372	Wire and connectors	Other segments	Adjustment s and eliminations
		2,292,450 -	- -	- (16,613) (16,613) (8,379)
		2,292,450	-			3,908,184
		157,105	(216)			293,882
			2021			$ 3,080,074
						Total 3,373,438 -
	Information services $ 1,256,721 15,599 $ 1,272,320 $ 83,467	Wire and connectors	Other segments	Adjustment s and eliminations
		2,116,717 -	- -		- (15,599) (15,599) (9,370)
		2,116,717	-			3,373,438
		162,209	(210)			236,096
						$ 2,790,431

280

(III) Information on geographic differentiation

Information on geographic differentiation within the Group is as follows. Revenue is classified based on the geographic locations of the customer, while non-current assets are classified according to the geographic locations of the assets.

ts.
Region Revenue from external customers: Taiwan Mainland China Philippines Thailand Non-current assets: Taiwan Mainland China Philippines Thailand	2022 $ 1,615,734 1,237,128 726,030 329,292 $ 3,908,184 December 31, 2022 $ 248,699 146,283 56,915 148,613	2021 1,256,721 1,267,143 543,498 306,076 3,373,438 December 31, 2021 254,600 126,126 46,432 144,244
	$ 600,510	571,402

Non-current assets include property, plant and equipment, right-of-use assets, intangible assets, and other assets. However, deferred tax assets are excluded.

(IV) Information on major customers:

The Group has no customers whose revenue from external customers accounts for more than 10% of consolidated operating revenues.

• 281 -

VI. In the most recent year and as of the date of publication of the annual report, if any financial difficulties occurred to the Company and its affiliated companies, their effect on the Company’s financial status should be listed: At present, the Company is operating normally and there are no financial crises.

282

Seven. Financial Status and Review and Analysis of Financial Performance

I. Financial status:

Financial status comparative analysis

			Unit: NT$/NT$ thousand	Unit: NT$/NT$ thousand
Year Item	2021	2022	Difference
			Amount	Percentage(%)
Current assets	2,215,483	2,476,124	260,641	11.76%
Property, plant and equipment	414,455	426,974	12,519	3.02%
Other assets	160,493	176,976	16,483	10.27%
Total assets	2,790,431	3,080,074	289,643	10.38%
Current liabilities	1,462,525	1,501,790	39,265	2.68%
Non-current liabilities:	58,717	92,462	33,745	57.47%
Total liabilities	1,521,242	1,594,252	73,010	4.80%
Capital stock	940,000	958,900	18,900	2.01%
Additionalpaid-in capital	7,991	7,525	(466)	-5.83%
Retained earnings	513,444	639,311	125,867	24.51%
Other equity	(192,246)	(120,028)	72,218	37.57%
Total equity	1,269,189	1,485,822	216,633	17.07%

Where changes between the prior and subsequent period are more than 20% and the change amount is NT$10 million, analysis is given as follows:

1. Non-current liabilities increased primarily because deferred tax liabilities were greater for 2022.

2. Retained earnings increased mainly due to an increase in after-tax net profit in 2022.

3. An increase in other equity interest primarily reflected an increase in exchange differences on conversion of foreign financial statements in 2022.

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II. Financial performance:

(I) Comparative analysis of business results

			Unit: NT$/NT$ thousand Difference Amount Percentage(%) 534,746 15.85% 494,401 18.37% 40,345 5.91% (17,441) -3.91% 57,786 24.48% 42,394 -173.58% 100,180 47.33% 46,718 57.72% 53,462 40.90% 109,528 -212.84% 162,990 205.62%	Unit: NT$/NT$ thousand Difference Amount Percentage(%) 534,746 15.85% 494,401 18.37% 40,345 5.91% (17,441) -3.91% 57,786 24.48% 42,394 -173.58% 100,180 47.33% 46,718 57.72% 53,462 40.90% 109,528 -212.84% 162,990 205.62%
Year Item	2021	2022	Difference
			Amount	Percentage(%)
Operatingrevenue	3,373,438	3,908,184	534,746	15.85%
Operatingcosts	2,690,890	3,185,291	494,401	18.37%
Operatingmargin	682,548	722,893	40,345	5.91%
Operatingexpenses	446,452	429,011	(17,441)	-3.91%
Operating profit	236,096	293,882	57,786	24.48%
Non-operating income and expenses	(24,423)	17,971	42,394	-173.58%
Netprofit before tax	211,673	311,853	100,180	47.33%
Income tax expense	80,945	127,663	46,718	57.72%
Netprofit for theperiod	130,728	184,190	53,462	40.90%
Other comprehensive income	(51,460)	58,068	109,528	-212.84%
Total comprehensive income for theperiod	79,268	242,258	162,990	205.62%

Where changes between the prior and subsequent period are more than 20% and the change amount is NT$10 million, analysis is given as follows:

1. An increase in operating profit was primarily due to an increase of operating revenue in 2022.

2. Non-operating income and expenses increased, primarily due to an increase in net foreign currency exchange gains in 2022.

3. Increases occurred in net profit before tax and net profit for the current period, primarily due to increases in operating revenue and net exchange gains from foreign currency in 2022.

4. Income tax expenses increased, primarily due to an increase in net profit before tax in 2022.

5. Increases were seen in other comprehensive income and in total comprehensive income for the period, primarily due to increases in exchange differences on translation of foreign financial statements in 2022.

6. (II) Expected sales volume and its basis, and possible impact on the Company’s future financial business, and response plan:

The Group’s operating strategy is to continue to expand stable business projects and actively plan to expand overseas manufacturing industries to increase the Company’s profitability.

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III. Cash flows:

• (I) Analysis and explanation of changes in combined cash flow in recent years:

Year Item	2021	2022	Ratio of increase (decrease)
Cash flow ratio (%)	1.00	11.00	1000.00%
Cash flow adequacy ratio (%)	40.01	55.38	38.42%
Cash reinvestment ratio (%)	-3	7	-333.33%

Operating activities: Mainly due to an increase in net profit before tax and a decrease in inventories for the period, resulting in net cash inflows from operating activities.

Investing activities: Mainly due to the acquisition of property, plants, and equipment for the period, resulting in cash outflows from investing activities.

Financing activities: Cash outflows from financing activities occurred due to repayment of principal for lease liabilities as well as the issuance of cash dividends.

• (II) Improvement plan for insufficient liquidity: Not applicable.

• (III) Estimated cash flow analysis:

The cash flow of the Group is mainly operated with its own working capital. If there is any shortage of short-term funds, short-term bank loans will be used to pay for it.

V. Impact of major capital expenditures on financial business in recent years: None

V. Reinvestment policy in the most recent year, main reasons for its profit or loss, improvement plan and investment plan for the next year:

• (I) The Group’s reinvestment policy:

  • The Group’s current reinvestment policy takes the wire and connector industry-related business as the main investment target. Furthermore, we make an investment plan after analyzing each item and measuring the benefits generated and then submit it to the Board of Directors for discussion and approval.

• (II) Main reasons for income from reinvestment in 2022 and its improvement plan: In 2023, the Group continues to strengthen its ability to receive orders for investment businesses in China and Southeast Asia. We are reducing production costs, improving product quality, and strengthening the recovery of accounts receivable. Furthermore, we are expanding market operations and developing multiple products to increase reinvestment income.

• (III) Investment plan for the coming year:

  • In response to Japanese customers’ continuous investment in ASEAN and in line with the overall operation plans of the Group, we continue to invest in Southeast Asia with our own funds in 2023.

• VI. Risk matters (risk matters should be analyzed and evaluated for the following matters in the most recent year and up to the publication date of the annual report):

• (I) The impact of interest rates, exchange rate changes, and inflation on the Company’s profit and loss and future countermeasures :

Unit: NT$ thousand

			Unit: NT$ thousand	Unit: NT$ thousand
Item	2021		2022
	Amount	Ratio (%)	Amount	Ratio (%)
Operatingrevenue	3,373,438	100.00	3,908,184	100.00

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Interest expense	9,599	0.28	11,233	0.29
Foreign currency exchange gains (losses)	(26,718)	(0.79)	23,714	0.61

Source: Financial reports audited and certified by CPAs

1. Interest rate changes:

   • (1) The Company’s interest expenses accounted for a very small proportion of operating income, with minimal impact on profit or loss.

   • (2) Future response measures: The Company maintains a fairly good credit relationship with banks and monitors market changes at all times. Furthermore, we regularly contact banks to understand the interest rate trends to strive for more favorable loan terms. Moreover, the Company’s operating conditions are good. With the continuous growth of business, short-term working capital is still used for primary financial scheduling. Therefore, changes in interest rates will not have a significant impact on the Company’s profit and loss.

2. Exchange rate changes:

   • The Group’s products are mainly exported and revenue payments and accounts payable are mostly denominated in US dollars. Moreover, the Group will add to the product quotations according to fluctuations in exchange rates. Changes in exchange rates thus have little impact on the Group’s profit or loss. Moreover, we appropriately retain the foreign currency portion of sales revenues to make foreign currency payments to serve as a natural hedge. Furthermore, the heads of relevant departments continually monitor market trends and make timely reference to the bank’s professional advice in order to minimize the impact of exchange rate changes on the Company’s profit and loss.

3. Inflation:

   • The Group continually monitors market price fluctuations and maintains good interactive relationships with suppliers and customers. Moreover, we consider overall market conditions to determine the best purchasing policy. Therefore, inflation does not affect the Group’s material profitability.

4. (II) Policies, main reasons for profit or loss, and future countermeasures for engaging in high-risk and high-leverage investments, loans of funds to others, endorsements/guarantees, and derivatives transactions:

5. Since its establishment, the Company has been committed to its own business. There are no high-risk and high-leverage investment behaviors.

6. The Company undertakes loans of funds to others and endorsement/guarantee operations, all in accordance with the provisions of the “Company’s Measures for Loans and Endorsements/Guarantees”.

7. The Company does not engage in derivatives transactions.

8. (III) Future R&D plans and estimated R&D expenses: None.

9. (IV) The impact of important domestic and foreign policies and legal changes on the Company’s financial business and corresponding measures:

10. The daily operations of the Company and its subsidiaries are handled in accordance with relevant laws and regulations at home and abroad. Furthermore, we keep abreast of domestic and foreign policy development trends and changes in laws and regulations. As of the date of publication, there were no events affecting the Company’s financial business due to major policy and legal changes domestically and abroad.

11. (V) The impact of technological changes (including information security risks) and industry changes on the Company’s financial business, and countermeasures:

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The Company continually monitors changes in technology related to the industry in which it is located. We undertake timely launches of products that meet market trends, grasp market trends, and improve the automated mass production process as we continue to create high value-added connector products. We develop in step with customers to enhance our competitiveness. Therefore, technological changes have a positive effect on the Company.

In order to improve its information security management, the Company has an information security team that is responsible for promoting information security-related policies, implementing information security incident notification and related emergency responses, regularly assessing information security risks, implementing information security advocacy, education and training, and undertaking information security audits, while strengthening management efficiency. It supervises the information security protection work of the Company’s colleagues, establishes correct awareness of information security protection, and stringently implements information security risk management.

• (VI) The impact of corporate image changes on corporate crisis management and countermeasures:

• The Company upholds a business philosophy of honesty, diligence, thrift and prudence. Since our inception, we have actively strengthened internal management, improved management quality and efficiency, and fulfilled our corporate social responsibility, to maintain a positive corporate image. There have been no major changes in corporate image that have resulted in a corporate crisis.

• (VII) Expected benefits and possible risks of mergers and acquisitions and countermeasures: None.

• (VIII) Expected benefits and possible risks of plant expansions and countermeasures: None.

• (IX) Risks and countermeasures faced by purchase or sales concentration: None.

• (X) The influence and risk of the massive transfer of shares or the replacement of the directors, supervisors, or major shareholders holding more than 10% of the shares issued by the Company, and the response: As of the date of publication, there have been no substantial transfers of equity interests.

• (XI) The impact, risks and countermeasures of changes of management rights on the Company: There is no such situation as of the publication date.

• (XII) Statement shall be made of litigation or non-litigation events impacting the Company and its directors, supervisors, general managers, substantive persons in charge, and major shareholders whose shareholding ratio exceeds 10%, and major litigation or non-litigation events or administrative disputes confirmed or still being adjudicated for affiliated companies, where the outcomes may have a significant impact on shareholders’ equity or the price of securities; disclosure shall be made of the facts in dispute, the subject matter amount, the commencement date of the litigation, the main parties involved in the litigation, and the disposition as of the date of publication of the annual report: No such situation.

• (XIII) Other important risks and countermeasures:

• In order to comprehensively strengthen information security risk control and protect the corporate responsibility of customers’ personal information, the company targets various information security risks inside and outside the organization, such as: system and network management, system development process, device management, hardware protection, application system security monitoring, Internet and mobile device security control, internal employee information security awareness, and so on, and prevention and control mechanisms have been established. In addition, personnel from the Information Department establish a backup mechanism every year for network security and for each application system, and they conduct disaster preparedness drills while also

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strengthening the environmental control of computer rooms and upgrading firewall equipment. These efforts are aimed at ensuring the safety of employees and the continued operation of critical businesses, thereby reducing losses arising from accidents.

VII. Other important matters: None.

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Eight.

Special Disclosures

• I. Related information of affiliated companies: (I) Affiliated business merger report: 1. Profile of affiliated companies (1) Organization chart of affiliated companies (2022/12/31):

Welltend Technology Corp

		Welltend Technology Corp
	100% A Team Tech Inc. (B.V.I) Shanghai Celeraise Electronic Co., Ltd. Minshi Computer Technology (Shanghai) Co., Ltd. 100% 100% 99.36% Celeraise Technology Corporation 100% Leadpak Industrial Co., Ltd. 100% JIUN TAI CORPORATION LIMITED (Hong Kong) Jet Success Technology Development Limited (Hong Kong) Celeraise Investment Limited (Hong Kong) Kunshan Celeraise Electronic Co., Shenzhen Celeraise Electronic Co., Ltd. Yield Profit International Enterprise Limited (Hong Kong) 99.9997% 100% 100% 100% 0.0003% 100% Zhan Mao (Huizhou) Electronic Co., Ltd. 100% CELERAISE ELECTRONIC CORPORATION (Philippines) 99.99% Celeraise (Thailand) Co., Ltd. 99.9997%
				CELERAISE ELECTRONIC CORPORATION (Philippines)

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(2) Basic information of each affiliated company

		Unit: NT$ thousand/foreigncurrencyinthousands	Unit: NT$ thousand/foreigncurrencyinthousands	Unit: NT$ thousand/foreigncurrencyinthousands
Enterprise name	Date of establishment	Address	Paid-in capital amount	Main business items
A Team Tech Inc.	2001.12.14	The premises of Commonwealth Trust Limited, Sealight House, Tortola, British Virgin Islands.	NTD 16,538	Investment, trading, and holding company.
Minshi Computer Technology (ShanghaI) Co., Ltd.	2000.11.22	Stand A, 26th Floor, Zhaofeng Global Building, No. 1800, Zhongshan West Road, Shanghai	NTD 15,535 USD 500	R&D and production of industrial automation control, product quality control, communication, and electronicnetworkcomputing software.
Jiun Tai Corporation Limited (Hong Kong)	2009.06.01	RM.1203, BLK.A, Goldfield Idustrial Centre,1 Sui Wo Road, Fotan, Shatin, N. T	NTD 280,890	Holding company.
Shanghai Celeraise Electronic Co., Ltd.	2009.06.01	Room 168, Area D, 5th Floor, Building 1, No. 6, Kangye Road, Zhujiajiao Town, Qingpu District, Shanghai	NTD 51,439 USD 1,675	Production of electronics, cable connectors, telephone spare parts and small household appliances;sale of the company’s ownproducts.
Celeraise Technology Corporation	2009.10.21	4F-1, No. 61, Gongyi Road, Section 2, Nantun District, Taichung City	NTD 30,000	Information service industry
Leadpak Industrial Co., Ltd.	2009.10.15	6th Floor, No. 59, Dongxing Road, Taipei City	NTD 30,000	Manufacturing of industrial plastic products, other plastic products manufacturing industry, electrical installation industry,etc.
Celeraise Investment Limited (Hong Kong)	1990.08.31	RM.1203, BLK.A, Goldfield Idustrial Centre,1 Sui Wo Road, Fotan, Shatin, N. T	NT 382,646	Manufacture and sale of wire and cable connectors and connectors.
Yield Profit International Enterprise Limited (Hong Kong)	2010.05.25	RM.1203, BLK.A, Goldfield Idustrial Centre,1 Sui Wo Road, Fotan, Shatin, N. T	NTD 61,433 HK 15,600	Investment, trading, and holding company.
Jet Success Technology Development Limited (Hong Kong)	2010.07.12	RM.1203, BLK.A, Goldfield Idustrial Centre,1 Sui Wo Road, Fotan, Shatin, N. T	NTD 30,716 HK 7,800	Investment, trading, and holding company.
Kunshan Celeraise Electronic Co., Ltd.	2011.06.29	Room 6, No. 8 Weimeng Road, Dianshanhu Town, Kunshan City, Jiangsu Province	NTD 30,710 USD 1,000	Production and sale of wires, connectors and joints, and packaging materials.
Shenzhen Celeraise Electronic Co., Ltd.	2012.09.12	Factory Building 2, No. 4-8, Mumianwan Road, Mumianwan Village, Buji Street, Longgang District, Shenzhen	NTD 46,363 USD 515 RMB 6,930	Manufacture and sale of wire and cable connectors and connectors.
Zhan Mao (Huizhou) Electronic Co., Ltd.	2013.10.25	Runchang Industrial Park, Hongtian Village, Xinxu Town, Huiyang District, Huizhou City, Guangdong Province	NTD 51,593 USD 1,680	Production and sale of wire connectors, electronic wire products, etc.
Celeraise Electronic Corporation(Philippines)	2015.03.18	Maguyam Road, Carillo Drive, Beside Hong Chang Compond, BarangayBancal, Carmona, Cavite	NTD 25,532	Manufacture and sale of wire and cable connectors and connectors.
Celeraise (Thailand) Co., Ltd.	2017.5.16	41/1 WHA INDUSTRIAL ESTATE CHONBURI, MOO 8, BOWIN, A. SRIRACHA, CHONBURI 20230	NTD 182,136	Manufacture and sale of wire and cable connectors and connectors.

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• (3) Information on the same shareholders of those who have control and affiliation: None.

• (4) Items covered by business offices of overall related enterprises: Manufacture and sale of wire and cable connectors and connectors, information services and investments.

• (5) Information on directors, supervisors and presidents of related companies:

Enterprise name	Job title and name	Number of shares held	Number of shares held
		Number of shares	Shareholding ratio
A Team Tech Inc.	Director: Welltend Technology Corporation—Representatives Tai-Ming Chang andHsuan-Bin Kuo	500,000 (shares)	100%
Minshi Computer Technology (ShanghaI) Co., Ltd.	Director: Welltend Technology Corporation—Representative Hsuan-Bin Kuo	-	100%
Celeraise Technology Corporation	Director: Welltend Technology Representatives: Kuei-Yu Chang, Yun-Teng Chang, Hsuan-Bin Kuo Supervisor: Welltend Technology Representative:C.H.Chen	3,000,000 (shares)	100%
Leadpak Industrial Co., Ltd.	Director: Welltend Technology Representatives: Kuei-Yu Chang, Yun-Teng Chang, Hsuan-Bin Kuo Supervisor: Welltend Technology Representative:C.H.Chen	2,981,000 (shares)	99.36%
JIUN TAI CORPORATION LIMITED	Director: Welltend Technology Corporation representatives: Kuei-Yu Chang, Xiang-Yu Wang	59,920,000 (shares)	100%
Celeraise Investment Limited (Hong Kong)	Director: Welltend Technology Corporation representatives: Kuei-Yu Chang, Xiang-YuWang	50,300,000 (shares)	99.99%
Yield Profit International Enterprise Limited (Hong Kong)	Director: Celeraise Investment Limited representatives: Kuei-Yu Chang, Xiang-Yu Wang	15,600,000 (shares)	100%
Jet Success Technology Development Limited (Hong Kong)	Director: Celeraise Investment Limited representatives: Kuei-Yu Chang, Xiang-Yu Wang	7,800,000 (shares)	100%
Shanghai Celeraise Electronic Co., Ltd.	Director: Yun-Teng Chang Legal representative: Yun-Teng Chang Supervisor: Wen-Bin Chen	-	100%
Kunshan Celeraise Electronic Co., Ltd.	Director: Yun-Teng Chang Legal representative: Yun-Teng Chang Supervisor: Wen-Bin Chen	-	100%
Shenzhen Celeraise Electronic Co., Ltd.	Director: Xiang-Yu Wang Legal representative: Xiang-Yu Wang Supervisor: Wen-Bin Chen	-	100%
Zhan Mao (Huizhou) Electronic Co., Ltd.	Director: Xiang-Yu Wang Legal representative: Xiang-Yu Wang Supervisor: Wen-Bin Chen	-	100%
Celeraise Electronic Corporation (Philippines)	Directors: Yun-Teng Chang, Xiang-Yu Wang, Kuei-Yu Chang, Hsuan-Bin Kuo Joy Antonio Lo	399,995 (shares)	99.995%
Celeraise (Thailand) Co., Ltd.	Directors: Yun-Teng Chang, Kuei-Yu Chang, Xiang-Yu Wang	18,274,997 (shares)	99.9997%

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(6) Overview of operations of each affiliated company:

	Unit: NT$/Foreigncurrency:thousands	Unit: NT$/Foreigncurrency:thousands	Unit: NT$/Foreigncurrency:thousands	Unit: NT$/Foreigncurrency:thousands	Unit: NT$/Foreigncurrency:thousands	Unit: NT$/Foreigncurrency:thousands	Unit: NT$/Foreigncurrency:thousands	Unit: NT$/Foreigncurrency:thousands
	Capital amount	Total assets	Total liabilities	Net worth	Operating revenue	Operating profit (loss)	Profits or losses after tax for the period	Earnings per share (NT$) (after tax)
A Team Tech Inc.	NT 16,538	NT 974 RMB 221	NT 0 RMB 0	NT 974 RMB 221	NT 0 RMB 0	NT 0 RMB 0	NT 0 RMB 0	-
Minshi Computer Technology (ShanghaI)Co., Ltd.	NT 15,355 US 500	NT 0 RMB 0	NT 0 RMB 0	NT 0 RMB 0	NT 0 RMB 0	NT 0 RMB 0	NT 0 RMB 0	-
JIUN TAI CORPORATION LIMITED	NT 280,890	NT 261,548 RMB 59,335	NT 20 RMB 5	NT 261,528 RMB 59,330	NT 0 RMB 0	NT (66) RMB (15)	NT (2,987) RMB (676)	-
Shanghai Celeraise Electronic Co.,Ltd.	NT46,364 US 1,675	NT 176,920 RMB 40,136	NT 53,353 RMB 12,104	NT 123,567 RMB 28,032	NT75,119 RMB 16,988	NT 6,755 RMB 1,527	NT 5,899 RMB 1,334	-
Celeraise Technology Corporation	NT30,000	NT 159,812	NT 90,500	NT 69,312	NT 412,096	NT 55,653	NT 39,928	NT 13.31
Leadpak Industrial Co., Ltd.	NT30,000	NT 17,944	NT 35	NT 17,908	NT 0	NT (216)	NT (300)	NT (0.1)
Celeraise Investment Limited (HongKong)	NT 382,646	NT 1,332,632 HK 338,403	NT 265,194 HK 67,342	NT 1,067,438 HK 271,061	NT 991,647 HK 260,206	NT 12,035 HK 3,158	NT 56,930 HK 14,938	-
Shenzhen Celeraise Electronic Co., Ltd.	NT 46,363 US 515、 RMB 6,930	NT 144,628 RMB 32,821	NT 111,693 RMB 25,347	NT 32,935 RMB 7,474	NT 0 RMB 0	NT (6,467) RMB (1,463)	NT (8,831) RMB (1,997)	-
Yield Profit International Enterprise Limited (Hong Kong)	NT 61,433 HK 15,600	NT 336,990 HK 85,574	NT 23,424 HK 5,948	NT 313,566 HK 79,626	NT 0 HK 0	NT 73 HK 19	NT 60,290 HK 15,820	-
Jet Success Technology Development Limited (Hong Kong)	NT 30,716 HK 7,800	NT 399,492 HK 101,445	NT 33,172 HK 8,423	NT 366,320 HK 93,022	NT 0 HK 0	NT 73 HK 19	NT 3,226 HK 846	-
Kunshan Celeraise Electronic Co., Ltd.	NT 30,710 US 1,000	NT 516,910 RMB 117,303	NT 156,602 RMB 35,538	NT 360,308 RMB 81,765	NT 587,185 RMB 132,825	NT 34,880 RMB 7,890	NT 2,901 RMB 656	-
Zhan Mao (Huizhou) Electronic Co., Ltd.	NT 51,593 US 1,680	NT 635,633 RMB 144,245	NT 298,762 RMB 67,798	NT 336,871 RMB 76,447	NT 716,874 RMB 162,161	NT 49,444 RMB 11,184	NT 60,741 RMB 13,736	-
CELERAISE ELECTRONIC CORPORATION	NT 25,532	NT 568,543 PHP 1,045,116	NT 312,882 PHP 575,152	NT 255,661 PHP 469,964	NT 726,034 PHP 1,344,508	NT 69,813 PHP 129,284	NT 44,708 PHP 82,793	-
Celeraise (Thailand) Co., Ltd.	NT 182,136	NT 372,511 THB 416,679	NT 208,089 THB 232,762	NT 164,422 THB 183,917	NT 330,083 THB 386,062	NT 7,562 THB 8,845	NT 18,640 THB 21,801	-

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• (II) Consolidated Financial Statements of Affiliated Enterprises: Please refer to Page 211 of this report.

• (III) Affiliated company report: None.

II. Handling of privately placed securities in the most recent year and as of the date of publication of the annual report: None.

• III. Status of holding or disposing of the Company’s stocks by subsidiaries in the most recent year and as of the date of publication of the annual report: None.

VI. Supplementary information: None.

Nine. The occurrence of the incidents as stated in subparagraph 2 of Paragraph 3 under Article 36 of this law that caused significant influence on shareholders equipment or stock price in the previous period to the date this report was . printed

None.

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Welltend Technology Corporation

Chairperson: Yun-Teng Chang

294