Weltrend - AGM Information 2023 | FinancialReports.eu

Stock Code: 2436

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Weltrend Semiconductor Incorporated

2023 Annual Meeting of Shareholders Handbook

June 2, 2023

Meeting Agenda ............................................................................ 1 Management Presentation ........................................................... 2 Ratifications ................................................................................ 13 Discussions .................................................................................. 36 Appendix 1: Rules of Procedure for Shareholders Meetings ........ 42 Appendix 2: Articles of Incorporation .......................................... 47 Appendix 3: Shareholding of Directors ........................................ 54

Weltrend Semiconductor Incorporated 2023 Annual Meeting of Shareholders Agenda

Method for convening the shareholders' meeting: In-person shareholders' meeting Meeting time: 09:00 a.m., June 2, 2023 (Friday)

Location: 3F, No. 22, Industry E. 9th Road, Hsinchu Science Park, Hsinchu City (Conference Room 310 of Weltrend Semiconductor, Inc.)

Attendance: All shareholders and proxies

Chair: Sam Lin, Chairman

Agenda:

I. Call the Meeting to Order
II. Chair's Remarks
III. Management Presentation (Please refer to P.2 to P.12)
(I) 2022 Business Report.
(II) Audit Committee's Audit Report.
(III) Report on the 2022 Distribution of Employees' Remuneration and Directors' Remuneration.
(IV) Report on the Amendment of the "Sustainable Development Best Practice Principles".
(V) Report on the Amendment of the "Regulations Governing Share Repurchase for Transfer to Employees".
IV. Ratifications (Please refer to P.13 to P.35)
(I) 2022 Business Report and Financial Statements.
(II) 2022 Earnings Distribution Proposal.
V. Discussions (Please refer to P.36 to P.41)
(I) Amendment of the Articles of Incorporation.
(II) Amendment of the "Procedures for Acquisition and Disposal of Assets".
(III) Proposal to lift the prohibition on Directors from participation in competitive business.

Voting for Ratifications and Agenda Items in Discussions.

VI. Questions and Motions
VII. Adjournment

Management Presentation

Management Presentation 1 Proposed by the Board of Directors

Agenda: The 2022 Business Report is submitted for review. Explanation: Please refer to P.5 to P.8 for the Business Report.

Management Presentation 2 Proposed by the Board of Directors

Agenda: The Audit Committee's Audit Report is submitted for review. Explanation: Please refer to P.9 for the Audit Committee's Audit Report.

Management Presentation 3 Proposed by the Board of Directors

Agenda: The Report on the 2022 Distribution of Employees' Remuneration and Directors' Remuneration is submitted for review.

Explanation:

According to Article 20 of the Articles of Incorporation, the Company shall allocate 11% to 13% of the Company's pre-tax profit of the current period before deducting the employees' remuneration and Directors' remuneration of the year as employees' remuneration and no more than 3% as Directors' remuneration. However, if the Company has accumulated losses (including adjustment on non-distributed earnings), the Company shall set aside a part of the profit first to make up for the losses.
The Company plans to set aside 12% of the profit as employees' remuneration totaling NT$27,731,919 and 3% as Directors' remuneration totaling NT$6,932,980. The employees' remuneration and Directors' remuneration this year shall be distributed entirely in cash.
There are no discrepancies between the employees' remuneration and Directors' remuneration and the amount estimated in 2022.

Management Presentation 4 Proposed by the Board of Directors

Agenda: The report on the amendment of the "Sustainable Development Best Practice Principles" is submitted for review.

Explanation:

Processed in accordance with Tai-Zheng-Zhi-Li No. 1110024366 of Taiwan Stock Exchange Corporation dated December 23, 2022.
Please refer to P.10 for the Comparison Table of the Amended Provisions of the "Sustainable Development Best Practice Principles".

Management Presentation 5 Proposed by the Board of Directors

Agenda: The report on the amendment of the "Regulations Governing Share Repurchase for Transfer to Employees" is submitted for review.

Explanation:

Article 5 of the Company's "Regulations Governing Share Repurchase for Transfer to Employees" is amended in accordance with Article 10 of the "Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies" amended in Jin-Guan-Zheng-Fa No. 1110383426 of the Financial Supervisory Commission dated August 15, 2022.
Please refer to P.11 to P.12 for the Comparison Table of the Amended Provisions of the "Regulations Governing Share Repurchase for Transfer to Employees".

Business Report

I. 2022 Business Performance Analysis

The IC design industry has experienced a period of volatility in 2022 with a rapid decline in demand starting from the second quarter, which was a significant change from the challenges of wafer shortages, congestion at packaging and testing plants, and unrelenting customer demand for delivery in 2021. However, as we vividly recount the nightmares of shortages in 2021, we did not reduce wafer services in the second quarter and only started to reduce production at the end of the second quarter. The scheduling and production process of wafer plants require a long period of planning and it takes a quarter to reduce wafer inventory. As a result, the inventory in 2022 Q4 reached record highs and created difficulties for working capital. However, according to World Semiconductor Trade Statistics (WSTS), the total revenue of the global semiconductor market in 2022 was US$573.5 billion, which was a 3.2% growth compared to 2021. According to statistics compiled by the Industry, Science and Technology International Strategy Center, Industrial Technology Research Institute, the output of Taiwan's IC industry reached NT$4,837 billion in 2022, an 18.5% increase from 2021. It was the third consecutive year of double-digit growth and its performance remained exceptional. The revenue of TSMC alone reached NT$2,263.8 billion, which accounted for 46.8% of the industry. The output of the IC design industry was NT$1,232 billion, which was a 1.4% annual growth. The revenue of the superstar company MediaTek was NT$548.8 billion, which accounted for 44.5% of the IC design industry with a breathtaking annual growth rate of 11.22%. The performance of the two giants, TSMC and MediaTek, in 2022 contributed to the growth of Taiwan's semiconductor industry.

The Company's aforementioned difficulties in 2022 are described above. Due to the drastic decline in demand, the Company's revenue from its own products fell by 26.60% and the revenue from products sold by the Company as a distributor also fell by 15.61%. As a result, the total revenue fell by 22.81%.

1. The comparison of the 2021 and 2022 business performance is as follows:

Unit: NT$ thousands

	2022	2021	Growth rate
Operatingrevenue	2,771,368	3,590,255	-22.81%
Operatingmargin	867,225	1,091,240	-20.53%
Operating profit	349,838	456,921	-23.44%
Net non-operating revenues and expenses	(153,404)	366,889	-141.81%
Income tax expenses	(49,663)	(72,870)	-31.85%
Netprofit after tax	146,771	750,940	-80.46%
EPS	0.83	4.25	-80.47%

(These statistics are from the parent company only financial statements, which are prepared in accordance with the regulations of the competent authority.)

Due to the decline in revenue, the operating income in 2022 fell by approximately NT$107 million. As a result of the collapse of the global capital market, the Company incurred a non-operating loss of NT$153 million, which was a significant decline from the non-operating profit of NT$367 million in 2021, and the first non-operating loss incurred by the Company since the financial crisis of 2008. The Company's EPS was reduced to NT$0.83, which was the lowest level in the past six years.

The Company's R&D expenses in 2022 totaled NT$292 million, which was a decrease of NT$80 million from NT$373 million in 2021. The main reason was the decrease in employees' remuneration as a result of lower profitability. There has been no reduction in the Company's R&D activities.
Budget implementation status: The Company did not prepare a financial forecast for 2022. Actual business performance compared to internal targets: The operating profits met expectations, but the net non-operating income fell short by approximately NT$175 million. As a result, the net income after tax was lower than expected.

II. 2023 Business Plan Summary

In the wake of the drastic decline in customer demand, rapid increase in inventory in 2022, the Company will focus on the following matters for operations in 2023:

Demand is expected to pick up starting from the second quarter. With the Company's tight controls over purchases, inventories are expected to return to normal levels by the end of the first half of the year. Supply and demand are expected to normalize in the second half of the year, and we aim to restore the growth in 2021.
Motor controller ICs for cooling fans form an important new product line of the Company. In 2022, the Company acquired more than 51% of the shares of Sentelic Corporation through public acquisition and successfully gained control of the Board of Directors of a successful company in this field. The acquisition broadens our product range, customer base, and talent pool. Strengthened by the Company's close relations with the supply chain from wafer fabs to the packaging and testing facilities, the two companies will generate synergy in the partnership. This is also one of the Company's key tasks this year.
III. Evaluation of the Company's Future Development Strategy and External Competition

Although Taiwan's semiconductor industry in 2022 was dominated by the two giants, TSMC and MediaTek, there were many opportunities for smaller companies. For instance, ASPEED Technology Inc. dominated server management solutions and its stock price soared to first place even though it only had a capital of NT$378 million. There are opportunities for everyone as long as one has a good business strategy and the ability to carry it out. In the 34 years since the Company was founded, we have been committed to customer and supplier relations and we have gained the trust of our shareholders and employees with honesty and pragmatism. They are all valuable assets of the Company.

Improvements in business performance require a continuous inflow of talents as well as strategic mergers and acquisitions. The acquisition of Sentelic Corporation was an important milestone in bringing the two companies together to create synergy for real benefits for our shareholders and employees. It is a goal that we have actively pursued since the acquisition last year, and we hope to gain the support of all stakeholders.

In terms of the macroeconomic environment, the struggle for power between China and the United States forces companies to pick a side. IC design is in an important part of the supply chain, which offers challenges and opportunities. Businesses must employ more intelligent strategies and must be more cautious. In terms of the domestic environment, the Corporate Governance 3.0 policy implemented by the competent authorities of the government involves the promulgation of more laws and regulations, which create new restrictions and increase costs for companies listed on the TWSE and TPEx. However, the Company must continue to support the policies to ensure compliance and attain a higher corporate governance score.

I wish to thank you, our shareholders, for your support. Best wishes for your investment.

Sam Lin, Chairman

Tony Lin, President

Cindy Guo, CFO

Audit Committee's Audit Report

The Board of Directors has prepared and submitted the 2022 Business Report, financial statements, and earnings distribution proposal. The financial statements have been audited by Deloitte, Taiwan, which submitted the Independent Auditors' Report. The Audit Committee has reviewed the aforementioned Business Report, financial statements, and the earnings distribution proposal and did not find any instance of noncompliance. The Audit Committee hereby submits the Audit Report for your review and perusal in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

To:

2023 Annual Meeting of Shareholders

Weltrend Semiconductor Incorporated

Audit Committee Convener: Gerald Kuo

February 24, 2023

Weltrend Semiconductor Incorporated

Comparison Table of the Amended Provisions of the Sustainable Development Best Practice Principles

Article Number	Before Amendment	After Amendment
Article 27-1	New article	The Company is advised to use donations, sponsorships, investments, procurement, strategic partnerships, voluntary technical services, and other forms of support to continue to invest resources in cultural and art activities or cultural and creative industries to promote cultural development.
Article 31	(Omitted)	Added Fifth amendment: February 24, 2023

Weltrend Semiconductor Incorporated

Comparison Table of the Amended Provisions of the Regulations Governing Share Repurchase for Transfer to Employees

Article Number	Before Amendment	After Amendment	Explanation
Article 5	The Company sets the number of shares that may be transferred to each employee based on their position, years of service, and special contributions to the Company, and takes into account factors such as the total number of repurchased shares held by the Company and the maximum number of shares that a single employee may subscribe as of the baseline date of the share subscription. The results are reported to the Chairman for authorization.	The Company sets the number of shares that may be transferred to each employee based on their position, years of service, and personal performance~~and special~~ ~~contributions to the Company, and~~ ~~other items and standards~~and takes into account factors such as the total number of repurchased shares held by the Company and the maximum number of shares that a single employee may subscribe as of the baseline date of the share subscription.~~The results are reported~~ ~~to the Chairman for authorization.~~ The Board of Directors shall set the actual subscription qualifications and quantity and the Company may not authorize the Chairman to make the decision. The subscription shall be processed in accordance with the following review procedures: I. Where the transferee is a manager of the Company, the approval of the Compensation Committee must be sought and it must be followed by submission to and approval by the Board of Directors. The aforementioned procedures shall apply to full-time employees of domestic and foreign subsidiaries in which the Company directly or indirectly holds more than 50% of the voting shares if such employees serve concurrently as the Company's managers or the Company's Directors. II. Where the transferee is a full- time employee of the Company or subsidiaries other than those specified above, the approval of the Company's Compensation Committee must be sought and	Processed in accordance with Article 10 of the Regulations Governing Share Repurchase by Exchange- Listed and OTC-Listed Companies.
		I. II.

it must be followed by submission to and approval by the Board of Directors.

Ratifications

Ratification 1 Proposed by the Board of Directors

Agenda: 2022 Business Report and Financial Statements.

Explanation: 1. The Company's 2022 Parent Company Only Financial Statements and Consolidated Financial Statements were passed by the Board of Directors on February 24, 2023, and delivered to and audited by CPAs Pan-Fa Wang and ChengChih Lin of Deloitte, Taiwan, who submitted the Independent Auditors' Report.
Please refer to P.5 to P.8 and P.14 to P.33 for the 2022 Business Report, Independent Auditors' Report, and Financial Statements.
Please ratify.

Resolution:

Independent Auditor’s Report

The Board of Directors and Shareholders

Weltrend Semiconductor, Inc.

Opinion

We have audited the accompanying financial statements of Weltrend Semiconductor, Inc. (the “Company”), which comprise the balance sheets as of December 31, 2022 and 2021, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis of opinion

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

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters of the Company’s financial statements for the year ended December 31, 2022, are stated as follows

Sales revenue recognition

The operating revenue of the Company for the year 2022 amounted to NT$2,771,368 thousand. Please Notes 4 and 23 to the financial statements for accounting policies and information on revenue recognition. The Company’s operating revenue mainly includes research, development, production, and sales of integrated circuits, as well as agency sales of foreign branded integrated circuits. Due to the large number of sales and dispersed nature of the Company’s customers, we listed the sales revenue which grew compared with the last year and that from counterparties who are not publicly listed companies as one of the key audit matters.

The main audit procedures were performed for the the above-mentioned areas:

Understanding and testing the effectiveness of the main internal control design and implementation for sales revenue.
Sampling and verifying sales revenue-related vouchers and payment receipts, and inquiring about the existence of the transaction party to confirm the authenticity of the sales revenue and whether there are any abnormal situations between the sales revenue and payment parties.

Business combination

Weltrend Semiconductor, Inc. acquired Sentelic Corporation and its subsidiaries in August 2022 and gained control over them. As this transaction mainly involved complex calculations of the consideration to be transferred determined by the management in the cash transaction, the fair values of the acquired assets, and the reasonability of the purchase price allocation, it is a major transaction during the year, it is considered a significant transaction for the year and is listed as a key audit matter.

The main audit procedures were performed for the above key audit matter are as follows

Reviewing relevant meeting minutes to confirm if the business combination proposal has been properly evaluated and approved.
Verifying the Company’s remittance certificate for the payment to confirm if it was consistent with what was stated in the contract.
Reviewing and evaluating the reasonableness of the purchase price allocation report commissioned by experts appointed by the Company and the related accounting treatment for business combination on the acquisition date.

Responsibilities of the management and the governing bodies for the Financial statements

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

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

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

Auditor's responsibilities for the audit of the Financial Statements

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

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audits resulting in this independent auditors’ report are Pan-fa, Wang and Cheng-Chih, Lin.

Deloitte & Touche Taipei, Taiwan Republic of China

February 24, 2023

Weltrend Semiconductor Incorporated

Parent Company Only Balance Sheet

December 31, 2022 and 2021

Unit: NT$ thousand

Code 1100 1110 1120 1150 1170 1180 1190 1200 130X 1410 11XX 1517 1535 1550 1600 1755 1780 1915 1920 15XX 1XXX	Assets Current assets Cash and cash equivalents (Notes 4, 6 and 28) Financial assets at fair value through profit or loss - current (Notes 4, 7, 28, and 30) Financial assets at fair value through other comprehensive income - current (Notes 4, 8 and 28) Notes receivable (Notes 4, 10 and 28) Accounts receivable (Notes 4, 10, 23 and 28) Accounts receivable - related party (Notes 4, 28, 29, and 31) Other accounts receivable - related party (Notes 4, 28, 29, and 31) Other receivables (Notes 4, 19 and 28) Inventory (Notes 4 and 11) Prepayments (Note 16) Total current assets Noncurrent assets Financial assets at fair value through profit or loss - non-current (Notes 4, 7 and 28) Financial assets at fair value through other comprehensive income - non-current (Notes 4, 8 and 28) Financial assets at amortized cost - non-current (Notes 4, 9, 28, and 30) Investments using the equity method (Notes 4 and 12) Property, plant and equipment (Notes 4, 13 and 30) Right-of-use assets (Notes 4 and 14) Intangible assets (Notes 4 and 15) Prepayments for equipment Guarantee deposits paid (Note 28) Total noncurrent assets Total assets		December 31,2022 Amount % $ 169,047 3 268,698 5 306,807 6 23,778 1 683,865 14 10,514 - 1,226 - 13,732 - 1,390,584 27 29,172 1 2,897,423 57 71,098 1 - - 100 - 1,826,335 36 284,813 6 19,433 - 18,198 - - - 5,565 - 2,225,542 43 $ 5,122,965 100	December 31,2022 Amount % $ 169,047 3 268,698 5 306,807 6 23,778 1 683,865 14 10,514 - 1,226 - 13,732 - 1,390,584 27 29,172 1 2,897,423 57 71,098 1 - - 100 - 1,826,335 36 284,813 6 19,433 - 18,198 - - - 5,565 - 2,225,542 43 $ 5,122,965 100		December 31,2021 Amount % $ 866,149 17 753,076 14 355,764 7 25,278 1 1,121,290 22 16,912 - - - 50,590 1 752,326 14 23,493 - 3,964,878 76 - - 1,201 - 100 - 901,308 18 287,416 6 9,791 - 15,034 - 14,535 - 5,382 - 1,234,767 24 $ 5,199,645 100	December 31,2021 Amount % $ 866,149 17 753,076 14 355,764 7 25,278 1 1,121,290 22 16,912 - - - 50,590 1 752,326 14 23,493 - 3,964,878 76 - - 1,201 - 100 - 901,308 18 287,416 6 9,791 - 15,034 - 14,535 - 5,382 - 1,234,767 24 $ 5,199,645 100	Code 2100 2150 2170 2206 2209 2230 2250 2280 2300 21XX 2570 2580 2640 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 3XXX	Liabilities and equity Current liabilities Short-term borrowings (Notes 4, 17, 28 and 30) Notes payable (Notes 4, 18 and 28) Accounts payable (Notes 4, 18 and 28) Remuneration payable to employees and directors and supervisors (Note 24) Other payables (Notes 4, 19 and 28) Current tax liabilities (Notes 4 and 25) Liabilities - current (Notes 4 and 20) Lease liabilities - current (Notes 4, 14 and 28) Other current liabilities (Notes 4, 19 and 23) Total current liabilities Noncurrent liabilities Deferred tax liabilities (Note 4 and 25) Lease liabilities - non-current (Notes 4, 14 and 28) Net defined benefit liability - noncurrent (Note 4 and 21) Total noncurrent liabilities Total liabilities Equity (Notes 4, 22, and 28) Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury stock Total equity Total liabilities and equity		December 31,2022 Amount % $ 1,537,680 30 1,279 - 220,622 4 34,665 1 48,829 1 42,576 1 6,283 - 6,574 - 4,226 - 1,902,734 37 - - 12,995 - 53,873 1 66,868 1 1,969,602 38 1,780,100 35 69,026 1 633,441 12 32,053 1 909,856 18 1,575,350 31 167,949) ( 3) 103,164) ( 2) 3,153,363 62 $ 5,122,965 100	December 31,2022 Amount % $ 1,537,680 30 1,279 - 220,622 4 34,665 1 48,829 1 42,576 1 6,283 - 6,574 - 4,226 - 1,902,734 37 - - 12,995 - 53,873 1 66,868 1 1,969,602 38 1,780,100 35 69,026 1 633,441 12 32,053 1 909,856 18 1,575,350 31 167,949) ( 3) 103,164) ( 2) 3,153,363 62 $ 5,122,965 100		December 31,2021	December 31,2021	December 31,2021
			Amount $ 169,047 268,698 306,807 23,778 683,865 10,514 1,226 13,732 1,390,584 29,172 2,897,423 71,098 - 100 1,826,335 284,813 19,433 18,198 - 5,565 2,225,542 $ 5,122,965			Amount $ 866,149 753,076 355,764 25,278 1,121,290 16,912 - 50,590 752,326 23,493 3,964,878 - 1,201 100 901,308 287,416 9,791 15,034 14,535 5,382 1,234,767 $ 5,199,645					Amount $ 1,537,680 1,279 220,622 34,665 48,829 42,576 6,283 6,574 4,226 1,902,734 - 12,995 53,873 66,868 1,969,602 1,780,100 69,026 633,441 32,053 909,856 1,575,350 167,949) 103,164) 3,153,363 $ 5,122,965			Amount $ 535,000 720 562,372 154,587 98,093 70,343 6,583 9,693 4,120 1,441,511 24,363 401 73,677 98,441 1,539,952 1,780,100 39,555 547,112 10,883 1,475,374 2,033,369 32,053) 161,278) 3,659,693 $ 5,199,645		%
										( (		( (	( (		( (	10 - 11 3 2 2 - - - 28 1 - 1 2 30 34 1 11 - 28 39 1) 3) 70 100

The accompanying notes are an integral part of the parent company only financial statements.

Manager:

Chairman:

Chief Accounting Officer:

Weltrend Semiconductor Incorporated

Parent Company Only Statement of Comprehensive Income

For the Years Ended December 31, 2022 and 2021

Unit: Thousands of NTD; except for earnings per share in NTD

Code 4000 Operating revenue, net (Notes 4, 23 and 29) 5000 Operating costs (Notes 4, 11 and 24) 5900 Operating gross margins Operating expenses (Note 24) 6100 Selling expenses 6200 Administrative expenses 6300 Research and Development expenses 6450 Expected credit impairment losses (gain on reversal) (Note 10) 6000 Total operating expenses 6900 Net operating profits Non-operating income and expenses 7100 Interest income (Notes 4 and 24) 7010 Other income (Notes 4, 24 and 29) 7020 Other profits and losses (Note 24) 7050 Financial costs (Note 24) 7070 Share of profit on subsidiaries using the equity method (Notes 4 and 12) 7000 Non-operating income and expenses, net		2022

(Continued on next page)

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Code 7900 Net profit before taxation 7950 Income tax expense (Notes 4 and 25) 8200 Net income for the year Other comprehensive income 8310 Items not reclassified to profit or loss: 8311 Remeasurement of defined benefit plans 8316 Unrealized gains or losses on investment in equity instruments at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries using the equity method 8360 Items that may subsequently be reclassified to profit or loss: 8361 Exchange differences on the translation of financial statements of foreign operations 8300 Other comprehensive income for the year 8500 Total comprehensive income for the year Earnings per share (Note 26) 9750 Basic 9850 Diluted		2022
		Amount $ 196,434 49,663 146,771 10,832 158,254 ) 64,106 ) 372 211,156) $ 64,385) $ 0.83 $ 0.83
	( ( ( (

The accompanying notes are an integral part of the parent company only financial statements.

Chairman:

Chief Accounting Officer:

Manager:

Weltrend Semiconductor Incorporated

Parent Company Only Statement of Changes in Equity

For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousand

Common stock Number of shares (in thousands) Amount 178,010 $ 1,780,100 - - - - - - - - - - - - - - - - - - 178,010 1,780,100 - - - - - - - - - - - - - - - - 178,010 $ 1,780,100		Retained earnings	Retained earnings		Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized gain or loss on measured at fair value through other comprehensive income ( $ 1,873 ) ( $ 9,010 ) - - - - - - - - ( 70) 96,589 ( 70) 96,589 - - - - - ( 117,689) ( 1,943 ) ( 30,110 ) - - - - - - - - 372 ( 222,711) 372 ( 222,711) - - - 86,443 ($ 1,571) ($ 166,378)	Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized gain or loss on measured at fair value through other comprehensive income ( $ 1,873 ) ( $ 9,010 ) - - - - - - - - ( 70) 96,589 ( 70) 96,589 - - - - - ( 117,689) ( 1,943 ) ( 30,110 ) - - - - - - - - 372 ( 222,711) 372 ( 222,711) - - - 86,443 ($ 1,571) ($ 166,378)			Total equity
					Exchange differences on translation of the financial statements of foreign operations ( $ 1,873 ) - - - - ( 70) ( 70) - - - ( 1,943 ) - - - - 372 372 - - ($ 1,571)
Number of shares (in thousands) 178,010 - - - - - - - - - 178,010 - - - - - - - - 178,010	Legal reserve $ 503,583 43,529 - - - - - - - - 547,112 86,329 - - - - - - - $ 633,441		Special reserve $ 32,482 - 21,599 ) - - - - - - - 10,883 - 21,170 - - - - - - $ 32,053
		(		( ( ( ( ( ( (	( ( ( ( (	( ( ( ( ( (	( ( ( (	( ( ( ( (	$ 3,180,635 - - 283,453 ) 750,940 91,179 842,119 138,235 ) 58,627 - 3,659,693 - - 529,530 ) 146,771 211,156) 64,385) 87,585 - $ 3,153,363

The accompanying notes are an integral part of the parent company only financial statements.

Chairman:

Manager:

Chief Accounting Officer:

Weltrend Semiconductor Incorporated

Parent Company Only Statement of Cash Flows

For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousand

Code Cash flows from operating activities A10000 Net income before tax for 2022 A20010 Income and expense items that do not affect cash flow: A20100 Depreciation expenses A20200 Amortization expenses A20300 Expected (reversal of losses) credit impairment losses A20400 Net loss (gain) on financial assets at fair value through profit or loss A20900 Financial costs A21200 Interest income A21300 Dividend income A21900 Cost of remuneration for employee stock options A22400 Share of loss (profit) on subsidiaries using the equity method A22500 Gain on disposal of property, plant and equipment A23700 Losses on inventory valuation loss and obsolescence (gains on inventory value recovery) A24100 Foreign exchange gains (losses), net A29900 Lease modification gain A30000 Net changes in operating assets and liabilities A31130 Notes receivable A31150 Accounts receivable A31160 Accounts receivable - related party A31170 Other receivables A31180 Other receivable - related party A31190 Finance lease receivables A31200 Inventory A31230 Prepayments A32130 Notes payable A32150 Accounts payable A32990 Remuneration payable to employees and directors and supervisors A32180 Other payables A32200 Provisions A32230 Other current liabilities A32240 Net defined benefit liability A33000 Cash inflow (outflow) from operations A33100 Interest received A33300 Interests paid A33500 Income tax paid AAAA Net cash inflow (outflow) from operating activities		2022 $ 196,434 64,286 18,034 301 ) 210,928 11,169 1,219 ) 108,181 ) 28,722 112,899 95 ) 27,456 93,316 ) - 1,500 539,036 8,005 6,415 1,226 ) - 665,714 ) 5,679 ) 559 381,337 ) 119,922 ) 11,894 300 ) 106 8,973) 148,820 ) 1,219 11,169 ) 101,793) 260,563)		2021
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 823,810 58,196 33,247 443 226,174 ) 2,127 288 ) 46,439 ) 22,488 117,843 ) 323 ) 4,612 ) 26,943 23 ) 2,150 316,572 ) 1,444 7,584 ) - 188 349,957 ) 3,036 ) 373 ) 246,859 91,296 9,836 ) 3,271 ) 807 6 223,673 288 2,127 ) 20,493) 201,341

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Code Cash flows from investing activities B00010 Acquisition of financial assets measured at fair value through other comprehensive income B00020 Disposal of financial assets at fair value through other comprehensive income B00100 Acquisition of financial assets at fair value through profit or loss B00200 Sale of financial assets at fair value through profit or loss B02200 Acquisition of subsidiaries B02700 Purchase of property, plant, and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Increase in refundable deposits B03800 Decrease in refundable deposits B04500 Acquisition of intangible assets B07600 Other dividends received B09900 Dividends from subsidiaries received BBBB Net cash inflow (outflow) from investing activities Cash flows from financing activities C00100 Increase in short-term borrowings C04200 Principal repayment of lease liabilities C04500 Cash dividends paid C04900 Purchase of treasury shares C05000 Price of disposal of treasury shares CCCC Net cash inflow (outflow) from financing activities DDDD Impact of changes in exchange rate on cash and cash equivalents EEEE Net (decrease) increase in cash and cash equivalents for 2022 E00100 Opening balance of cash and cash equivalents E00200 Ending balance of cash and cash equivalents		2022 $ 711,230 ) 612,465 366,974 ) 566,097 1,117,120 ) 33,322 ) 95 183 ) - 21,198 ) 108,195 16,208 946,967) 1,002,680 13,993 ) 529,530 ) 36,735 ) 58,114 480,536 29,892 697,102 ) 866,149 $ 169,047		2021
	( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( (	$ 721,428 ) 884,540 341,775 ) 455,754 - 72,188 ) 1,171 - 20 22,233 ) 46,420 32,417 262,698 250,000 13,810 ) 283,453 ) 101,500 ) 36,139 112,624) 10,303) 341,112 525,037 $ 866,149

The accompanying notes are an integral part of the parent company only financial statements.

Chairman:

Manager:

Chief Accounting Officer:

Independent Auditor’s Report

The Board of Directors and Shareholders

Weltrend Semiconductor, Inc.

Opinion

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

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

Basis of opinion

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

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters of the Group’s consolidated financial statements for the year ended December 31, 2022, are stated as follows

Sales revenue recognition

The consolidated operating revenue of the Group for the year 2022 amounted to NT$2,888,153 thousand. Please Notes 4 and 24 to the consolidated financial statements for accounting policies and information on revenue recognition. The Group’s operating revenue mainly includes research, development, production, and sales of integrated circuits, as well as agency sales of foreign branded integrated circuits. Due to the large number of sales and dispersed nature of the Croup's customers, we listed the sales revenue which grew compared with the last year and that from counterparties who are not publicly listed companies as one of the key audit matters.

The main audit procedures were performed for the the above-mentioned areas:

Understanding and testing the effectiveness of the main internal control design and implementation for sales revenue.
Sampling and verifying sales revenue-related vouchers and payment receipts, and inquiring about the existence of the transaction party to confirm the authenticity of the sales revenue and whether there are any abnormal situations between the sales revenue and payment parties.

Business combination

As stated in Note 29 of the consolidated financial statements, Weltrend Semiconductor, Inc. acquired Sentelic Corporation and its subsidiaries in August 2022 and gained control over them. As this transaction mainly involved complex calculations of the consideration to be transferred determined by the management in the cash transaction, the fair values of the acquired assets, and the reasonability of the purchase price allocation, it is a major transaction during the year, it is considered a significant transaction for the year and is listed as a key audit matter.

The main audit procedures were performed for the above key audit matter are as follows

Reviewing relevant meeting minutes to confirm if the business combination proposal has been properly evaluated and approved.
Verifying the Company’s remittance certificate for the payment to confirm if it was consistent with what was stated in the contract.
Reviewing and evaluating the reasonableness of the purchase price allocation report commissioned by experts appointed by the Company and the related accounting treatment for business combination on the acquisition date.

Other matter

We have also audited the parent company only financial statements of Weltrend Semiconductor, Inc. as of and for the years ended December 31, 2022 and 2021, and on both we have issued an unmodified opinion with emphasis of matter paragraph.

Responsibilities of the management and the governing bodies for the Consolidated Financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC)

endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditor's responsibilities for the audit of the Consolidated Financial statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

The engagement partners on the audits resulting in this independent auditors’ report are Pan-fa, Wang and Cheng-Chih, Lin.

Deloitte & Touche Taipei, Taiwan Republic of China

February 24, 2023

Weltrend Semiconductor, Inc. and Its Subsidiaries

Consolidated Balance Sheet

December 31, 2022 and 2021

Unit: Unit: NT$ thousand, except for earnings per share that is in NT$

Code 1100 1110 1120 1136 1150 1170 1200 130X 1410 11XX 1510 1517 1535 1600 1755 1780 1805 1840 1915 1920 1990 15XX 1XXX	Assets Current assets Cash and cash equivalents (Notes 4, 6 and 31) Financial assets at fair value through profit or loss - current (Notes 4, 7, 31, and 33) Financial assets at fair value through other comprehensive income - current (Notes 4, 8 and 31) Financial assets at amortized cost - current (Notes 9 and 31) Notes receivable (Notes 4, 10 and 31) Accounts receivable, net (Notes 4, 10, 24 and 31) Other receivables (Notes 4, 10 and 31) Inventory (Notes 4 and 11) Prepayments (Note 17) Total current assets Noncurrent assets Financial assets at fair value through profit or loss - non-current (Notes 4, 7 and 31) Financial assets at fair value through other comprehensive income - non-current (Notes 4, 8 and 31) Financial assets at amortized cost - non-current (Notes 4, 9, 31, and 33) Property, plant and equipment (Notes 4, 13 and 33) Right-of-use assets (Notes 4 and 14) Intangible assets (Notes 4, 16 and 29) Goodwill (Notes 4, 5, 15 and 29) Deferred tax assets (Notes 4 and 26) Prepayments for equipment Refundable deposits Other non-current assets Total noncurrent assets Total assets		December 31,2022 Amount % $ 708,313 12 581,616 10 442,809 7 167,472 3 25,510 - 758,045 13 17,936 - 1,590,085 26 36,302 1 4,328,088 72 71,098 1 62,528 1 15,397 - 295,660 5 29,442 1 718,743 12 447,603 8 7,449 - - - 6,542 - 9,065 - 1,663,527 28 $ 5,991,615 100	December 31,2022 Amount % $ 708,313 12 581,616 10 442,809 7 167,472 3 25,510 - 758,045 13 17,936 - 1,590,085 26 36,302 1 4,328,088 72 71,098 1 62,528 1 15,397 - 295,660 5 29,442 1 718,743 12 447,603 8 7,449 - - - 6,542 - 9,065 - 1,663,527 28 $ 5,991,615 100		December 31,2021 Amount % $ 1,077,602 21 1,189,020 23 544,590 10 - - 25,278 - 1,147,185 22 83,745 2 761,145 14 23,764 - 4,852,329 92 - - 70,717 2 100 - 291,266 6 9,963 - 15,106 - - - - - 14,535 - 5,496 - - - 407,183 8 $ 5,259,512 100	December 31,2021 Amount % $ 1,077,602 21 1,189,020 23 544,590 10 - - 25,278 - 1,147,185 22 83,745 2 761,145 14 23,764 - 4,852,329 92 - - 70,717 2 100 - 291,266 6 9,963 - 15,106 - - - - - 14,535 - 5,496 - - - 407,183 8 $ 5,259,512 100	Code 2100 2150 2170 2206 2209 2230 2250 2280 2300 21XX 2570 2580 2640 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX 36XX 3XXX	Liabilities and equity Current liabilities Short-term borrowings (Notes 4, 18 and 31) Notes payable (Notes 4, 19 and 31) Accounts payable (Notes 4, 19 and 31) Remuneration payable to employees and directors and supervisors (Note 25) Other payables (Notes 4, 20 and 31) Current tax liabilities (Notes 4 and 26) Liabilities - current (Notes 4 and 21) Lease liabilities - current (Notes 4, 14 and 31) Other current liabilities (Notes 4, 20 and 24) Total current liabilities Noncurrent liabilities Deferred tax liabilities (Note 4 and 26) Lease liabilities - non-current (Notes 4, 14 and 31) Net defined benefit liability - noncurrent (Notes 4 and 22) Total noncurrent liabilities Total liabilities Equity attributable to owners of the Company (Notes 4, 23, 27 and 28) Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury stock Total equity attributable to owners of the Parent Non-controlling interests (Notes 4 and 23) Total equity Total liabilities and equity		December 31,2022 Amount % $ 1,537,680 26 1,279 - 240,640 4 49,264 1 96,113 1 58,513 1 8,756 - 12,100 - 6,843 - 2,011,188 33 143,352 3 17,525 - 54,895 1 215,772 4 2,226,960 37 1,780,100 30 69,026 1 633,441 11 32,053 1 909,856 15 1,575,350 27 167,949) ( 3) 103,164) ( 2) 3,153,363 53 611,292 10 3,764,655 63 $ 5,991,615 100	December 31,2022 Amount % $ 1,537,680 26 1,279 - 240,640 4 49,264 1 96,113 1 58,513 1 8,756 - 12,100 - 6,843 - 2,011,188 33 143,352 3 17,525 - 54,895 1 215,772 4 2,226,960 37 1,780,100 30 69,026 1 633,441 11 32,053 1 909,856 15 1,575,350 27 167,949) ( 3) 103,164) ( 2) 3,153,363 53 611,292 10 3,764,655 63 $ 5,991,615 100		December 31,2021	December 31,2021	December 31,2021
			Amount $ 708,313 581,616 442,809 167,472 25,510 758,045 17,936 1,590,085 36,302 4,328,088 71,098 62,528 15,397 295,660 29,442 718,743 447,603 7,449 - 6,542 9,065 1,663,527 $ 5,991,615			Amount $ 1,077,602 1,189,020 544,590 - 25,278 1,147,185 83,745 761,145 23,764 4,852,329 - 70,717 100 291,266 9,963 15,106 - - 14,535 5,496 - 407,183 $ 5,259,512					Amount $ 1,537,680 1,279 240,640 49,264 96,113 58,513 8,756 12,100 6,843 2,011,188 143,352 17,525 54,895 215,772 2,226,960 1,780,100 69,026 633,441 32,053 909,856 1,575,350 167,949) 103,164) 3,153,363 611,292 3,764,655 $ 5,991,615			Amount $ 567,819 720 562,372 155,701 114,523 73,230 6,583 9,868 4,148 1,494,964 24,363 401 73,677 98,441 1,593,405 1,780,100 39,555 547,112 10,883 1,475,374 2,033,369 32,053) 161,278) 3,659,693 6,414 3,666,107 $ 5,259,512		%
										( (		( (	( (		( (	11 - 11 3 2 1 - - - 28 1 - 1 2 30 34 1 11 - 28 39 1) 3) 70 - 70 100

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

Chairman:

Manager:

Chief Accounting Officer:

Weltrend Semiconductor, Inc. and Its Subsidiaries

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2022 and 2021

Unit: Thousands of NTD; except for earnings per share in NTD

Code 4000 Operating revenue, net (Notes 4 and 24) 5000 Operating costs (Notes 4, 11, 22, and 25) 5900 Operating gross margins Operating expenses (Notes 22 and 25) 6100 Selling expenses 6200 Administrative expenses 6300 Research and Development expenses 6450 Expected credit impairment losses (gain on reversal) (Note 10) 6000 Total operating expenses 6900 Net operating profits Non-operating income and expenses 7100 Interest income (Notes 4 and 25) 7010 Other income (Notes 4 and 25) 7020 Other profits and losses (Notes 4 and 25) 7050 Financial costs (Note 25) 7000 Total non-operating income and expenses 7900 Net profit before taxation 7950 Income tax expense (Notes 4 and 26) 8200 Net income for the year		2022

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Code Other comprehensive income 8310 Items not reclassified to profit or loss: 8311 Remeasurement of defined benefit plans 8316 Unrealized gains or losses on investment in equity instruments at fair value through other comprehensive income 8349 Income tax related to items not reclassified 8360 Items that may subsequently be reclassified to profit or loss: 8361 Exchange differences on the translation of financial statements of foreign operations 8300 Other comprehensive income for the year 8500 Total comprehensive income for the year Net profits (losses) attributable to: 8610 Owners of the parent 8620 Non-controlling interests 8600 Comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interests 8700 Earnings per share (Note 27) 9750 Basic 9850 Diluted	2022	% - ( 8 ) - - ( 8) ( 4) 5 ( 1) 4 ( 2 ) ( 2) ( 4)	2021
	Amount $ 11,692 ( 223,648 ) ( 172 ) 372 ( 211,756) ($ 103,886) $ 146,771 ( 38,901) $ 107,870 ( $ 64,385 ) ( 39,501) ($ 103,886) $ 0.83 $ 0.83		Amount ( $ 5,340 ) 96,546 - ( 70) 91,136 $ 842,480 $ 750,940 404 $ 751,344 $ 842,119 361 $ 842,480 $ 4.25 $ 4.21		%
					- 2 - - 2 23 21 - 21 23 - 23

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

Chief Accounting Officer:

Chairman:

Manager:

Weltrend Semiconductor, Inc. and Its Subsidiaries

Consolidated Statements of Changes in Equity

For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousand

			Equityattributable to	Equityattributable to	owners of the Parent						Non-controlling interests $ 6,620 - - - 404 ( 43) 361 - - ( 567 ) - 6,414 - - - ( 38,901 ) ( 600) ( 39,501) 13 ( 283 ) 642,824 1,825 - $ 611,292		Total equity
Common stock Number of shares (in thousands) Amount 178,010 $ 1,780,100 - - - - - - - - - - - - - - - - - - - - 178,010 1,780,100 - - - - - - - - - - - - - - - - - - - - - - 178,010 $ 1,780,100	Capital surplus $ 17,067 - - - - - - - 22,488 - - 39,555 - - - - - - 29,471 - - - - $ 69,026		Retained earnings		Unappropriated earnings $ 917,468 ( 43,529 ) 21,599 ( 283,453 ) 750,940 ( 5,340) 745,600 - - - 117,689 1,475,374 ( 86,329 ) ( 21,170 ) ( 529,530 ) 146,771 11,183 157,954 - - - - ( 86,443) $ 909,856	Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized gain or loss on financial assets measured at fair value through other comprehensive income ( $ 1,873 ) ( $ 9,010 ) - - - - - - - - ( 70) 96,589 ( 70) 96,589 - - - - - - - ( 117,689) ( 1,943 ) ( 30,110 ) - - - - - - - - 372 ( 222,711) 372 ( 222,711) - - - - - - - - - 86,443 ($ 1,571) ($ 166,378)			Treasury stock $ 59,182 ) - - - - - - 138,235 ) 36,139 - - 161,278 ) - - - - - - 58,114 - - - - $ 103,164)
						Exchange differences on translation of the financial statements of foreign operations ( $ 1,873 ) - - - - ( 70) ( 70) - - - - ( 1,943 ) - - - - 372 372 - - - - - ($ 1,571)
Number of shares (in thousands) 178,010 - - - - - - - - - - 178,010 - - - - - - - - - - - 178,010		Legal reserve $ 503,583 43,529 - - - - - - - - - 547,112 86,329 - - - - - - - - - - $ 633,441		Special reserve $ 32,482 - 21,599 ) - - - - - - - - 10,883 - 21,170 - - - - - - - - - $ 32,053
			(		( ( ( ( ( ( (	( ( ( ( (	( ( ( ( ( (	( ( ( (		( ( ( ( (	( ( ( ( ( (	( ( ( ( ( ( (	$ 3,187,255 - - 283,453 ) 751,344 91,136 842,480 138,235 ) 58,627 567 ) - 3,666,107 - - 529,530 ) 107,870 211,756) 103,886) 87,598 283 ) 642,824 1,825 - $ 3,764,655

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

Chairman:

Manager:

Chief Accounting Officer:

Weltrend Semiconductor, Inc. and Its Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousand

Code Cash flows from operating activities A10000 Net income before tax for 2022 A20010 Income and expense items that do not affect cash flow: A20100 Depreciation expenses A20200 Amortization expenses A20300 Expected (reversal of losses) credit impairment losses A20400 Net loss (gain) on financial assets at fair value through profit or loss A20900 Financial costs A21200 Interest income A21300 Dividend income A21900 Cost of remuneration for employee stock options A22500 Gain on disposal of property, plant and equipment A23700 Losses on inventory valuation loss and obsolescence (gains on inventory value recovery) A29900 Lease modification gain A24100 Foreign exchange gains (losses) – net A30000 Net changes in operating assets and liabilities A31130 Notes receivable A31150 Accounts receivable A31180 Other receivables A31190 Finance lease receivables A31200 Inventory A31230 Prepayments A32130 Notes payable A32150 Accounts payable A32990 Remuneration payable to employees and directors and supervisors A32180 Other payables A32200 Provision A32230 Other current liabilities A32240 Net defined benefit liability A33000 Cash inflow (outflow) from operations A33100 Interest received A33300 Interests paid A33500 Income tax paid AAAA Net cash inflow (outflow) from operating activities	2022 $ 139,556 68,046 46,575 ( 646 ) 290,568 12,864 ( 5,992 ) ( 136,950 ) 31,309 ( 85 ) 49,367 - ( 99,197 ) 1,059 619,848 9,553 - ( 652,019 ) ( 1,996 ) ( 1,141 ) ( 415,719 ) ( 123,825 ) 14,406 ( 448 ) 2,182 ( 9,195) ( 161,880 ) 6,374 ( 12,867 ) ( 116,991) ( 285,364)	2021
		$ 827,546 59,443 33,262 443 ( 322,484 ) 4,555 ( 322 ) ( 64,584 ) 22,488 ( 323 ) ( 4,612 ) ( 23 ) 30,011 2,150 ( 321,426 ) ( 9,177 ) 188 ( 353,438 ) ( 3,132 ) ( 373 ) 246,841 90,673 ( 10,119 ) ( 3,271 ) 621 6 224,943 322 ( 4,552 ) ( 24,368) 196,345

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Code Cash flows from investing activities B00010 Acquisition of financial assets measured at fair value through other comprehensive income B00020 Sale of financial assets at fair value through other comprehensive income B00040 Acquisition of financial assets at amortized cost B00050 Disposal of financial assets at amortized cost B00100 Acquisition of financial assets at fair value through profit or loss B00200 Sale of financial assets at fair value through profit or loss B02200 Acquisition of subsidiary (net of cash acquired) B02700 Purchase of property, plant, and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Increase in refundable deposits B03800 Decrease in refundable deposits B04500 Acquisition of intangible assets B07600 Dividend received BBBB Net cash inflow (outflow) from investing activities Cash flows from financing activities C00100 Increase in short-term borrowings C04200 Principal repayment of lease liabilities C04500 Cash dividends paid C04900 Purchase of treasury shares C05000 Price of disposal of treasury shares C05800 Cash dividends paid to non-controlling interests CCCC Net cash inflow (outflow) from financing activities DDDD Impact of changes in exchange rate on cash and cash equivalents EEEE Net (decrease) increase in cash and cash equivalents for 2022 E00100 Opening balance of cash and cash equivalents E00200 Ending balance of cash and cash equivalents	2022 ( $ 988,781 ) 913,993 ( 126,161 ) 191,385 ( 899,886 ) 1,165,690 ( 900,390 ) ( 34,137 ) 95 ( 191 ) - ( 21,354 ) 136,387 ( 563,350) 972,375 ( 16,055 ) ( 529,530 ) ( 36,735 ) 58,114 ( 283) 447,886 31,539 ( 369,289 ) 1,077,602 $ 708,313	2021
		( $ 1,256,037 ) 1,355,083 - - ( 1,043,679 ) 1,343,488 - ( 76,641 ) 1,171 - 3 ( 22,233 ) 64,537 365,692 97,451 ( 14,192 ) ( 283,453 ) ( 101,500 ) 36,139 ( 567) ( 266,122) ( 10,410) 285,505 792,097 $ 1,077,602

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

Chairman:

Chief Accounting Officer:

Manager:

Ratification 2 Proposed by the Board of Directors

Agenda: 2022 Earnings Distribution Proposal.

Explanation:

The 2022 Earnings Distribution Proposal was passed in the Company's board meeting on February 24, 2023. The Board of Directors resolved to distribute cash dividends of NT$1.2 per share in accordance with the Articles of Incorporation. Please refer to P.35 for the Earnings Distribution Table.
Cash dividends shall be calculated to the nearest NTD, with amounts of less than one NTD rounded down. Fractions of less than one NTD shall be recognized as the Company's other income.
Where the number of the Company's outstanding shares increases or decreases due to the repurchase, de-registration, transfer of the Company's shares, or other factors that affect the number of shares, and causes a change in the cash dividend distribution ratio, the Company requests the shareholders' meeting to authorize the Board of Directors to adjust the shareholder dividend distribution rate based on the total cash dividends set in the resolution for the earnings appropriation proposal and the number of actual shares outstanding on the ex-dividend date.
After the proposal is approved by the shareholders' meeting, the Board of Directors shall be authorized to set the exdividend date and other relevant matters.
Please ratify.

Resolution:

Weltrend Semiconductor Incorporated

Earnings Distribution Table

2022

Unit: NTD

Item	Amount	Notes
Undistributed earnings at the beginning of the period	838,345,102
Plus: After-tax net profit of 2022	146,771,221
Plus: Remeasurement of defined benefit plan converted into retained earnings	11,182,787

Minus: Disposal of investments in equity instruments measured at fair value through other comprehensive gain and loss with accumulated profit or loss transferred directly to retained earnings	(86,442,367)

The net profit after tax of this period plus items other than the net profit of this period are included in the undistributed earnings of the current year	71,511,641

Minus: Appropriation for legal reserve	(7,151,164)
Minus: Appropriation for statutory special earnings reserve	(135,896,262)
Distributable earnings	766,809,317
Minus: Distribution items for the year
Allocated shareholder dividends - cash	212,398,754	Cash dividends of NT$1.2 per share. Note 1 to 2.
Undistributed earnings at the end of the period	554,410,563
Note 1. The Company's earnings distribution principle is to distribute the 2022 earnings available for distribution first. If there is any shortfall, the earnings accumulated in the previous years shall be distributed on a first-in-first-out basis based on the year the earnings were generated. Note 2. The number of shares for the distribution of cash dividends for shareholders is the 178,009,961 outstanding shares as of February 24,2023 - treasurystock of 1,011,000 shares = 176,998,961 shares.

Discussions

Proposal 1 Proposed by the Board of Directors

Agenda: The amendment of the Articles of Incorporation is submitted for approval.

Explanation: 1. To attract and retain talents for the Company and preplan reasonable compensation for additional Directors in the future, the Company intends to amend Article 20 of the Articles of Incorporation to increase the allocation ratio of employees' remuneration and Directors' remuneration.
Please refer to the Comparison Table of the Amended Provisions of the Articles of Incorporation below.

Resolution:

Comparison Table of the Amended Provisions of the Articles of Incorporation

Article Number	Before Amendment	After Amendment	Reason for Amendment
Article 20	The Company shall allocate 11% to 13% of the Company's pre-tax profit of the current period before deducting the employees' remuneration and Directors' remuneration of the year as employees' remuneration and no more than 3% as Directors' remuneration. However, if the Company has accumulated losses (including adjustment on non- distributed earnings), the Company shall set aside a part of the profit first to make up for the losses. The employees' remuneration specified in the preceding paragraph may be paid in stocks or cash, and may be paid to employees of parents or subsidiaries of the Company who meet the requirements stipulated by the Board of Directors. The Directors' remuneration specified in the preceding paragraph shall only be distributed in cash. The procedures in the two preceding paragraphs must be approved by the Board of Directors and reported to the shareholders' meeting.	The Company shall allocate 11% to 1~~35~~%of the Company's pre-tax profit of the current period before deducting the employees' remuneration and Directors' remuneration of the year as employees' remuneration and no more than~~34~~%as Directors' remuneration. However, if the Company has accumulated losses (including adjustment on non- distributed earnings), the Company shall set aside a part of the profit first to make up for the losses. The employees' remuneration specified in the preceding paragraph may be paid in stocks or cash, and may be paid to employees of parents or subsidiaries of the Company who meet the requirements stipulated by the Board of Directors. The Directors' remuneration specified in the preceding paragraph shall only be distributed in cash. The procedures in the two preceding paragraphs must be approved by the Board of Directors and reported to the shareholders' meeting.	Amended based on the Company's actual requirements.

	Article 24	(Omitted)	Added Twenty-third amendment: June 2, 2023	Added in accordance with the amendment of the Articles of Incorporation .

Proposal 2 Proposed by the Board of Directors

Agenda: The amendment of the "Procedures for Acquisition and Disposal of Assets" is submitted for approval.

Explanation:

The Company plans to amend certain provisions in the Procedures to meet requirements for the Company's business operations.
Please refer to P.38 to P.40 for the Comparison Table of the Amended Provisions of the "Procedures for Acquisition and Disposal of Assets".

Resolution:

Comparison Table of the Amended Provisions of the Procedures for Acquisition and Disposal of Assets

Article Number	Before Amendment	After Amendment
Article 4	Operating Procedures 1. Degree and levels of authority delegated (1) Securities: The President is authorized to conduct transactions within the limits set forth in Article 7 of the Procedures. If the transactions meet requirements for announcement and reporting in accordance with Article 5, the President shall report the transactions to the Chairman on the following day and submit them to the next meeting of the Board of Directors for ratification. However, the acquisition or disposal of securities not traded on TWSE or TPEx, corporate bonds, or private placement of marketable securities for which the transaction amount exceeds the requirements for announcements and reporting shall require a resolution of the meeting of the Board of Directors before implementation. In addition, investmentsin Mainland China	Operating Procedures 1. Degree and levels of authority delegated (1) Securities: TheChairman~~President~~ is authorized to conduct transactions within the limits set forth in Article 7 of the Procedures. If the transactions meet requirements for announcement and reporting in accordance with Article 5,they shall be submittedto the next meeting of the Board of Directors for ratification. However, the acquisition or disposal of securities not traded on TWSE or TPEx, corporate bonds, or private placement of marketable securities for which the transaction amount exceeds the requirements for announcements and reporting shall require a resolution of the meeting of the Board of Directors before implementation. In addition, investments in Mainland China shall require the approval of the shareholders' meeting or the authorization of shareholders' meetingfor implementationbythe

Article Number	Before Amendment	After Amendment
	shall require the approval of the shareholders' meeting or the authorization of shareholders' meeting for implementation by the Board of Directors. The application must be filed to the Investment Commission, Ministry of Economic Affairs for authorization before implementation. Contentbelow omitted	Board of Directors. The application must be filed to the Investment Commission, Ministry of Economic Affairs for authorization before implementation. Content below omitted
Article 7	Scope and Amount of Investment In addition to the acquisition of assets for business use, the Company and its subsidiaries may also acquire real property, right-of-use assets thereof, or securities not for business use. The maximum amounts are specified below. 1. The total amount of real property and right-of-use assets thereof acquired by the Company not for business use shall be limited to 50% of the Company's net value in its most recent financial statements; the total amount for subsidiaries shall be limited to 30% of its net value in its most recent financial statements. 2. The total amount of securities shall be limited to the Company's net value in its most recent financial statements; the total amount for subsidiaries shall be limited to its net value in its most recent financial statements. 3. The total amount of investments in individual securities may not exceed 60% of the Company's net value in its most recent financial statements; the total amount for subsidiaries shall be limited to 60% of its net value in its most recent financial statements.	Scope and Amount of Investment In addition to the acquisition of assets for business use, the Company and its subsidiaries may also acquire real property, right-of-use assets thereof, or securities not for business use. The maximum amounts are specified below. 1. The total amount of real property and right-of-use assets thereof acquired by the Company not for business use shall be limited to 50% of the Company's net value in its most recent financial statements; the total amount for subsidiaries shall be limited to 30%~~of~~ of its net value in its most recent financial statements. 2. The total amount of securities shall be limited to200% of the Company's net value in its most recent financial statements; the total amount for subsidiaries shall be limited to its net value in~~its~~its parent company'smost recent financial statements. 3. The total amount of investments in individual securities may not exceed 200~~%60%~~of the Company's net value in its most recent financial statements; the total amount for subsidiaries shall be limited to 60% of~~itsp~~arent company'snet value in its most recent financialstatements.
Article 7-1	For the calculation of 10% of total assets under the Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by SecuritiesIssuers shallbe used.	For the calculation of 10% of total assets under the Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by SecuritiesIssuers shallbe used.

Article Number	Before Amendment	After Amendment
	(Omitted)	Added Twelfth amendment: June 2, 2023

Proposal 3 Proposed by the Board of Directors

Agenda: The proposal to lift the prohibition on Directors from participation in competitive business is submitted for approval.

Explanation: 1. Pursuant to Article 209 of the Company Act, a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
The Company proposes to lift the prohibition on Directors from participation in competitive business starting from the date of appointment, provided that such activities do not damage the Company's interests. The Company therefore files a request to the shareholders' meeting to lift the prohibition on Directors from participation in competitive business in accordance with the law.

Resolution:

Name	Title	Company Name and Concurrent Position
Sam Lin	Chairman	Sentelic Corporation Representative of Corporate Director and Chairman
Tony Lin	Director	Sentelic Corporation Representative of Corporate Director
Cindy Guo	Director	Sentelic Corporation Representative of Corporate Director

Voting for Ratifications and Agenda Items in Discussions:

Appendix 1 Weltrend Semiconductor Incorporated

Rules of Procedure for Shareholders Meetings

Article 1 Unless otherwise specified by law or the Articles of Incorporation, the shareholders' meetings of the Company shall be implemented in accordance with these Rules.
Changes to how the Company convenes its shareholders' meeting shall be resolved by the Board of Directors, and shall be made no later than mailing of the shareholders' meeting notice.
Article 2 The Company shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a signin card in lieu of signing in.
Article 3 Attendance and voting at shareholders' meetings shall be calculated based on the number of shares.
The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in, and the shares checked in on the virtual meeting platform, plus the number of shares whose voting rights are exercised by correspondence or electronically.
Article 4 The venue for a shareholders' meeting shall be the premises of the Company, or a place easily accessible to shareholders and suitable for a shareholders' meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m.
Article 4-1 The restrictions on the place of the meeting in Article 4 shall not apply when the Company convenes a virtual-only shareholders' meeting. For virtual shareholders' meetings, shareholders may begin to register on the virtual meeting platform 30 minutes before the meeting starts. Shareholders completing registration will be deemed as having attended the shareholders' meeting in person.

In the event of a virtual shareholders' meeting, shareholders wishing to attend the meeting online shall register with the Company two days before the meeting date.

The Company shall upload the meeting agenda book, annual report, and other meeting materials to the virtual meeting platform at least 30 minutes before the meeting starts, and keep this information disclosed until the end of the meeting.

If the virtual meeting platform or participation in the virtual meeting is obstructed due to natural disasters, accidents or other force majeure

events before the chair has announced the meeting adjourned, and the obstruction continues for more than 30 minutes,

the meeting shall be postponed to or resumed on another date within five days, in which case Article 182 of the Company Act shall not apply.

For a meeting to be postponed or resumed as described in the preceding paragraph, shareholders who have not registered to participate in the affected shareholders' meeting online shall not attend the postponed or resumed session.

Article 5 If a shareholders' meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman of the Board of Directors. When the Chairman is on leave or for any reason unable to exercise the powers of the Chairman, the Chairman shall designate a Director to act as the chair. If the Chairman fails to designate a Director, the Directors shall select from among themselves one person to serve as chair.
If the shareholders' meeting is convened by a person entitled to do so other than the Chairman, that person shall act as the Chairman.
Article 6 The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders' meeting in a non-voting capacity.
Staff handling administrative affairs of a shareholders' meeting shall wear identification cards or armbands.
Article 7 The shareholders' meeting shall be documented by audio and shall be retained for at least one year.
Article 8 The chair shall announce the commencement of the meeting as soon as the appointed time arrives. However, if those in attendance represent less than half of the company's outstanding shares, the chair may announce to postpone the meeting up to two times, for a period totaling no more than one hour. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned. In the event of a virtual shareholders' meeting, the Company shall also declare the meeting adjourned on the virtual meeting platform.
If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, Paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders' meeting shall be convened within

one month. In the event of a virtual shareholders' meeting, shareholders intending to attend the meeting online shall re-register to the Company in accordance with Article 4-1.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders' meeting pursuant to Article 174 of the Company Act.

Article 9 If the shareholders' meeting is convened by the Board of Directors, the Board of Directors shall determine the meeting proceedings. The proceedings shall not be changed unless resolved during the shareholders' meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders' meeting convened by a party with the power to convene that is not the Board of Directors.

The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders' meeting.

After the adjournment of the meeting, the shareholders may not elect a chair to resume the meeting at the original location or at another venue. However, if the chair declares the meeting adjourned in violation of the rules of procedure, one person may be elected chair with the consent of one half of the votes represented by shareholders present to resume the meeting.
Article 10 Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair.
A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.
When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.
Article 11 Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes.

If the shareholder's speech violates the rules or exceeds the scope of

the agenda item, the chair may terminate the speech.

Where a virtual shareholders' meeting is convened, shareholders attending the virtual meeting online may raise questions in writing at the virtual meeting platform from the chair declaring the meeting open until the chair declaring the meeting adjourned. No more than two questions for the same proposal may be raised. Each question shall contain no more than 200 words. The regulations in Article 10 and Article 11 do not apply.

Article 12 When a juristic person is appointed to attend as a proxy, it may designate only one person to represent it in the meeting. When a juristic person shareholder appoints two or more representatives to attend a shareholders' meeting, only one of the representatives so appointed may speak on the same proposal.
Article 13 After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.
Article 14 When the chair at a board meeting is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call a vote.
Article 15 Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company. The results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote. In the event of a virtual shareholders' meeting, the Company shall disclose real-time results of votes and election immediately after the end of the voting session on the virtual meeting platform according to the regulations, and this disclosure shall continue at least 15 minutes after the chair has announced the meeting adjourned.
Article 16 When a meeting is in progress, the chair may announce a break based on time considerations.
Article 17 Except as otherwise provided in the Company Act and in the Company's Articles of Incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders.
At the time of a vote, the chair may choose to ask the attending shareholders if there are any objections. If no objection is raised, the motion is considered to have been adopted with the same validity as a vote by ballots.
Article 18 When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a

vote.

When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required. Article 19 The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear arm badges bearing the word "Proctor.” Article 20 These Rules shall take effect after having been submitted to and approved by a shareholders' meeting. Subsequent amendments thereto shall be effected in the same manner.

Appendix 2 Weltrend Semiconductor Incorporated Articles of Incorporation

Chapter 1 General Principles

Article 1 The Company shall be incorporated, as a company limited by shares, under the Company Act of the Republic of China, and its name shall be Weltrend Semiconductor Incorporated.

Article 2 The business scope of the company:

Research, development, production, tests, and sales of the following products:
- (1) Mixed analog/digital ASICs for computers and communication products
- (2) Digital ICs
- (3) Analog ICs
Import and export business related to the Company's business.

Article 2-1 The Company may provide guarantees for external parties based on business requirements.

Article 2-2 The Company shall be exempt from the restrictions on total investment amount for not exceeding 40% of the paid-in capital.

Article 3 The Company's head office is established in Hsinchu Science Park. Where necessary, the Company may establish branch companies or offices domestically or overseas subject to the resolution by its Board of Directors and the approval of the competent authority.

Article 4 Public announcements of the Company shall be made in accordance with Article 28 of the Company Act.

Chapter 2 Shares

Article 5 The total capital stock of the Company shall be in the amount of NT$3.3 billion, divided into 330 million shares at NT$10 per value and issued in separate installments. The Board of Directors is authorized to issue the unissued shares based on actual requirements.

The Company may issue employee stock warrants and retains 33 million shares in the total amount specified in the preceding paragraph for the issuance of employee stock warrants.

Article 5-1 The Company may issue employee stock warrants with a subscription price lower than the closing price of the Company's regular shares on the date of issuance. This shall require a resolution by at least two-thirds of all voting rights in attendance in a shareholders' meeting attended by at least half of all voting rights of the outstanding shares. Sales of shares to employees at prices below the Company's average repurchase price are to be approved by a resolution of the most recent shareholders' meeting. This shall require a resolution by at least two-thirds of all voting rights in attendance in a shareholders' meeting attended by at least half of all voting rights of the outstanding shares.
Article 5-2 When the Company carries out the following tasks, the recipients may include employees of parents or subsidiaries of the Company who meet certain requirements: 1. Transfer of treasury stock to employees. 2. Employee stock warrant. 3. Employee cash capital increase subscription. 4. New restricted employee shares. The Board of Directors is authorized to set the requirements.
Article 6 When the Company issues shares and prints share certificates, the shares shall be registered and signed or sealed by the Director representing the Company. Such share certificates shall be numbered and issued by the competent authority or its authorized registration institution. Stocks issued by the Company are not required to be printed. The Company, however, shall contact the centralized securities depository institution for registration of the share certificates.
Article 7 Where a share certificate is transferred, lost, or destroyed, it shall be processed in accordance with the Company Act and related regulations.
Chapter 3 Shareholders' Meeting
Article 8 The Company holds general and special shareholders' meetings. A general meeting is called once a year by the Board of Directors in accordance with the law within six months after the end of the fiscal year. Special meetings may be convened according to the law when necessary.
Article 8-1 The shareholders' meeting of the Company may be held with a virtual shareholders' meeting or other methods announced by the competent authority.

Article 9 A shareholder may designate another person to represent it by submitting a proxy printed by the Company, specifying the scope of authorization. The use of proxies shall be processed in accordance with the Company Act and the "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies" promulgated by the competent authority. Article 10 Each shareholder of the Company shall have one vote per share, unless otherwise provided by Article 157, Subparagraph 3 of the Company Act. No voting power shall be granted, however, to company shares specified in Article 179 of the Company Act.

Article 11 Resolutions at a shareholders' meeting shall, unless otherwise provided for in the Company Act, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares.

Chapter 4 Directors and the Audit Committee

Article 12 The Company shall have seven to twelve directors, who shall be elected by the shareholders' meeting from persons of adequate capacity to serve a term of three years. Their terms of service may be renewed if they are re-elected in the following election. The Company's Directors shall be elected through a candidate nomination system, and the shareholders shall elect the Directors from among the nominees listed in the roster of director candidates. The related implementation items shall be processed in accordance with the Company Act, Securities and Exchange Act, and related regulations. The number of Independent Directors shall not be less than three persons in the number of Directors specified in Paragraph 1, and shall not be less than one fifth of the Directors. The professional qualifications, shareholdings, limits on concurrent service, independence, nomination and election of Independent Directors and other compliance matters shall be processed in accordance with the relevant regulations of the competent authority of securities. The Independent Directors and non-independent Directors shall be elected at the same time and the number of Directors elected shall be calculated separately.

Article 12-1 The Company may purchase liability insurance that covers the term of service of Directors and managers against liabilities they incur over the course of service. The Board of Directors is authorized to process the actual contents of the insurance at its

sole discretion.

Article 13 The Board of Directors is organized by the Directors. The Directors shall elect from among themselves a Chairman of the Board of Directors, by a majority in a meeting attended by over two-thirds of the Directors. The Chairman of the Board of Directors represents the Company externally. Where necessary, the Board of Directors may elect a Vice Chairman.

Article 13-1 Directors shall be notified of the Company's board meetings seven days prior to the meeting. However, in the event of an emergency, the meeting may be convened at any time. Notifications of meetings in the preceding paragraph may be made in writing or via e-mail or fax. If a Director is unable to attend a meeting, he/she may appoint another Director as proxy to attend the meeting by completing a proxy form. A Director may only serve as a proxy for one other Director.

Article 14 If a shareholders' meeting is convened by the Board of Directors, the chair shall be appointed in accordance with Article 208, Paragraph 3 of the Company Act. Where a shareholders' meeting is convened by a party with power to convene other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall select a chair from among themselves.

Article 15 The Board of Directors is authorized to determine the remuneration of all Directors based on prevailing rates in the industry.

Article 16 The duties of the Board of Directors are as follows:
Review and discuss business strategies and long and shortterm development plans.
Review and monitor the implementation of the annual business plan.
Review and approval of the budget and final accounts.
Formulation of proposals for capital increase or decrease.
Formulation of plans for earnings distribution or make up for losses.
Formulation of proposals for the dissolution of the Company or a merger or demerger with another company.
Review and approval of the acquisition and disposal of material properties of the Company.
Formulation of the Articles of Incorporation.
Approval of investments in other businesses.

Review and approval of material capital expenditures.
Appointment and dismissal of managers.
Organization of shareholders' meetings and business reports.
Other powers vested by laws and the shareholders' meeting.
Article 17 The Company established the Audit Committee, which is composed of all Independent Directors. The number of members of the Audit Committee, term of office, powers, and rules of procedure for meetings shall be processed in accordance with the Regulations Governing the Exercise of Powers by Audit Committees of Public Companies and specified in the Audit Committee Charter.

Chapter 5 Managers

Article 18 The Company may have managers. Their appointment, dismissal, and remuneration shall be processed in accordance with Article 29 of the Company Act.

Chapter 6 Accounting

Article 19 The Board of Directors of the Company shall formulate the following account books at the end of each accounting year:
Business Report.
Financial statements.
Proposals for the distribution of surplus earnings or make up of losses.

The documents shall be submitted to the annual shareholders' meeting for ratification.

Article 20 The Company shall allocate 11% to 13% of the Company's pre-tax profit of the current period before deducting the employees' remuneration and Directors' remuneration of the year as employees' remuneration and no more than 3% as Directors' remuneration. However, if the Company has accumulated losses (including adjustment on non-distributed earnings), the Company shall set aside a part of the profit first to make up for the losses. The employees' remuneration specified in the preceding paragraph may be paid in stocks or cash, and may be paid to employees of parents or subsidiaries of the Company who meet the requirements stipulated by the Board of Directors. The Directors' remuneration specified in the preceding paragraph shall only be distributed in cash.

The procedures in the two preceding paragraphs must be approved by the Board of Directors and reported to the shareholders' meeting.

Article 20-1 In case there are profits after tax at the closing account of the current year, the Company shall first make up the accumulated deficit (including adjustments of undistributed earnings) and retain 10% as statutory surplus reserve in accordance with the law; However, when the statutory surplus reserve exceeds the registered capital of the Company, such restrictions shall not apply. In addition, a special reserve shall be set aside or reversed pursuant to the laws or regulations of the competent authority. The Board of Directors shall draft an earnings distribution proposal regarding the remainder of the earnings as well as accumulated undistributed earnings at the beginning of the period (including adjustments of undistributed earnings) for approval at the shareholders' meeting to distribute dividends and bonuses to shareholders.

The Company’s dividend policy is as follows: The Company must consider the soundness and stability of its financial structure for the distribution of dividends. It shall also determine the ratio of the cash dividends and stock dividends distributed in the current year based on requirements for the Company's growth. The ratio of cash dividends shall not be lower than ten percent (10%) of the total dividends.

Chapter 7 Supplementary Provisions Article 21 When the Company organizes a cash capital increase, it shall set aside 10% of the shares for prioritized subscription by employees of the Company. Article 22 The Directors and managers of the Company and personnel they hire may not disclose or leak to third parties the Company's confidential documents or confidential technical, market, or product information they obtained due to their participation in the Company's operations.

Article 23 Any matter not covered herein shall be processed in accordance with the Company Act.

Article 24 The Articles of Incorporation were established on June 15, 1989. The Articles of Incorporation shall take effect after having been submitted to and approved by a shareholders' meeting. Subsequent amendments thereto shall be effected in the same manner. First amendment: December 10, 1990. Second amendment: June 13, 1992. Third amendment: May 6, 1994. Fourth amendment: March 6, 1995. Fifth amendment: April 9, 1996.

Sixth amendment: April 29, 1998. Seventh amendment: May 23, 2000. Eighth amendment: May 25, 2001. Ninth amendment: June 25, 2002. Tenth amendment: June 6, 2003. Eleventh amendment: June 15, 2004. Twelfth amendment: June 10, 2005. Thirteenth amendment: June 15, 2006. Fourteenth amendment: June 13, 2008. Fifteenth amendment: June 15, 2010. Sixteenth amendment: June 10, 2011. Seventeenth amendment: June 11, 2013. Eighteenth amendment: June 3, 2015. Nineteenth amendment: June 8, 2016. Twentieth amendment: June 5, 2019. Twenty-first amendment: June 3, 2021. Twenty-second Amendment: June 23, 2022.

Appendix 3 Shareholding of Directors:

						April 4, 2023	April 4, 2023
Title	Name	Date Elected	Term	Number of Shares Held When Elected		Number of Shares Held as Recorded in the Shareholder Register on the Book Closure Date
				Number of Shares	Share- holding Ratio	Number of Shares	Share- holding Ratio
Chairman	Sam Lin	2022.6.23	3 years	4,514,000	2.54%	4,446,000	2.50%
Director	James Chou	2022.6.23	3 years	2,433,829	1.37%	2,433,829	1.37%
Director	Paul Liao	2022.6.23	3 years	1,056,998	0.59%	1,078,468	0.61%
Director	JC Liu	2022.6.23	3 years	1,808,013	1.02%	1,808,013	1.02%
Director	Cindy Guo	2022.6.23	3 years	1,260,200	0.71%	1,270,200	0.71%
Director	Tony Lin	2022.6.23	3 years	1,021,000	0.57%	1,031,000	0.58%
Director	Jeff Tsai	2022.6.23	3 years	1,018,362	0.57%	1,018,362	0.57%
Independent Director	Gerald Kuo	2022.6.23	3 years	0	0%	0	0%
Independent Director	Wei-Kun Yeh	2022.6.23	3 years	0	0%	0	0%
Independent Director	Wen-Tsung Hsu	2022.6.23	3 years	0	0%	0	0%

The Company has issued a total of 178,009,961 shares and the paid-in capital is NT$1,780,099,610.
According to Article 26 of the Securities and Exchange Act and Article 2 of the "Rules and Review Procedures for Director and Supervisor Share Ownership

Ratios at Public Companies", the total shares held by the entire body of Directors shall not be less than 8,544,478 shares.

The Company has established an Audit Committee; therefore, the restriction on the number of shares that must be held by supervisors does not apply.
The Shareholder Register showed that all Directors held 13,085,872 shares as of the book closure date for the 2023 annual shareholders' meeting.

AI assistant

Weltrend — AGM Information 2023

52083_rns_2023-06-12_a6a67f96-03aa-4d7e-823f-67342ec5dc8e.pdf

Weltrend Semiconductor Incorporated

2023 Annual Meeting of Shareholders Handbook

Table of Contents

Weltrend Semiconductor Incorporated 2023 Annual Meeting of Shareholders Agenda

Agenda:

Management Presentation

Management Presentation 1 Proposed by the Board of Directors

Management Presentation 2 Proposed by the Board of Directors

Management Presentation 3 Proposed by the Board of Directors

Management Presentation 4 Proposed by the Board of Directors

Management Presentation 5 Proposed by the Board of Directors

Business Report

1. The comparison of the 2021 and 2022 business performance is as follows:

Audit Committee's Audit Report

Weltrend Semiconductor Incorporated

Comparison Table of the Amended Provisions of the Sustainable Development Best Practice Principles

Weltrend Semiconductor Incorporated

Comparison Table of the Amended Provisions of the Regulations Governing Share Repurchase for Transfer to Employees

Ratifications

Ratification 1 Proposed by the Board of Directors

Independent Auditor’s Report

The Board of Directors and Shareholders

Opinion

Basis of opinion

Key audit matters

Sales revenue recognition

Business combination

Responsibilities of the management and the governing bodies for the Financial statements

Auditor's responsibilities for the audit of the Financial Statements

Weltrend Semiconductor Incorporated

Unit: NT$ thousand

Weltrend Semiconductor Incorporated

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Weltrend Semiconductor Incorporated

Weltrend Semiconductor Incorporated

Parent Company Only Statement of Cash Flows

(Continued from previous page)

Independent Auditor’s Report

The Board of Directors and Shareholders

Opinion

Basis of opinion

Key audit matters

Sales revenue recognition

Business combination

Other matter

Responsibilities of the management and the governing bodies for the Consolidated Financial statements

Auditor's responsibilities for the audit of the Consolidated Financial statements

Weltrend Semiconductor, Inc. and Its Subsidiaries

Consolidated Balance Sheet

Weltrend Semiconductor, Inc. and Its Subsidiaries

Weltrend Semiconductor, Inc. and Its Subsidiaries

Weltrend Semiconductor, Inc. and Its Subsidiaries

Consolidated Statements of Cash Flows

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Ratification 2 Proposed by the Board of Directors

Weltrend Semiconductor Incorporated

Earnings Distribution Table

2022

Discussions

Proposal 1 Proposed by the Board of Directors

Comparison Table of the Amended Provisions of the Articles of Incorporation

Proposal 2 Proposed by the Board of Directors

Comparison Table of the Amended Provisions of the Procedures for Acquisition and Disposal of Assets

Proposal 3 Proposed by the Board of Directors

Appendix 1

Weltrend Semiconductor Incorporated

Rules of Procedure for Shareholders Meetings

Appendix 2

Weltrend Semiconductor Incorporated Articles of Incorporation

Chapter 5 Managers

Chapter 6 Accounting

Appendix 3

Shareholding of Directors:

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