YFO — Audit Report / Information 2022

Nov 10, 2022

Stock code: 3622

Young Fast Optoelectronics Co., Ltd.

Parent Company Only Financial Statements and Independent Auditors’ Report

2022 and 2021

Company address: No. 31, Jingjian 1st Road, Guanyin Industrial Zone, Guanyin District, Taoyuan City Telephone: (03) 483-3665

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Contents

Item I. Cover II. Contents III. Auditing Report of the Certified Accountants IV. Balance sheet V. Statement of Comprehensive Income VI. Statement of Changes in Equity VII. Statement of Cash Flows VIII. Notes to the Parent Company Only Financial Statements (I) Company history (II) Approval date and procedures of the financial statements (III) New standards, amendments and interpretations adopted (IV) Summary of significant accounting policies (V) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (VI) Explanation of significant accounts (VII) Related party transactions (VIII) Pledged assets (IX) Significant commitments and contingencies (X) Losses due to major disasters (XI) Subsequent Events (XII) Other (XIII) Other disclosures 1. Information on significant transactions 2. Information on investees 3. Information on investment in Mainland China 4. Information on major shareholders (XIV) Segment information IX. List of significant accounts

Page

1 2 3 4 5 6 7 8 9 9 10 24 25 56 59 59 59 59 59 61 64 64 65 66 67

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Auditing Report of the Certified Accountants

To the Board of Directors of Young Fast Optoelectronics Co., Ltd.:

Audit Opinion

We have completed our review of Young Fast Optoelectronics Co. Balance Sheet for December 31, 2022 and 2021; and Statements of Comprehensive Income, Statements of Changes in Equity, Statements of Cash Flows, and Notes to the Parent Company Only Financial Statements (including a summary of significant accounting policies) for January 1 – December 31, 2022 and 2021.

In our opinion, the aforementioned parent company only financial statements in all material respects are in compliance with Regulations Governing the Preparation of Financial Reports by Securities Issuers. They are sufficient to adequately express the financial status of Young Fast Optoelectronics Co. as of December 31, 2022 and 2021 and its financial performance and cash flows from January 1 through December 31, 2022 and 2021.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of Young Fast Optoelectronics Co., Ltd. in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. 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 2022 parent company only financial statements of Young Fast Optoelectronics Co., Ltd. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In our judgment, revenue recognition constitutes a key audit matter to be communicated in the audit report.

For details of accounting policies regarding revenue recognition, please refer to Note 4 (16) of the parent company only financial statements on Recognition of Revenue; for details of revenue related disclosures, please refer to Note 6 (21) the parent company only financial statements.

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Explanation of Key Audit Matters:

Sales revenue of Young Fast Optoelectronics Co., Ltd. stands as the primary indicator for investors and management in evaluating its financial or business performance. Moreover, as a listed company, Young Fast Optoelectronics Co., Ltd. is highly regarded by the investing public. Therefore, we identify revenue recognition as an important item in the audit of current year financial statements.

Corresponding Audit Procedures:

Our main audit procedures regarding the above key audit matters include:

• Testing the effectiveness of internal control design and implementation related to revenue recognition.

• Conducting trend analysis for the top ten customers in terms of sales, including a comparison of the customer list and sales revenue amounts between the current period and the most recent period and the same period of last year to assess whether there are any significant abnormalities. If there are major changes, the causes are identified and analyzed.

• Sampling and checking sales transactions of the whole year to evaluate the authenticity of sales transactions, the correctness of the recognized amounts of sales revenue, and the reasonableness of the time of accounting.

• Testing a sample of sales transactions in the period before and after the end of the year to assess whether the timing of revenue recognition is appropriate.

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

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the ability to continue as a going concern of Young Fast Optoelectronics Co., Ltd., disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate Young Fast Optoelectronics Co., Ltd. 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 financial reporting process of Young Fast Optoelectronics Co., Ltd.

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Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also perform the following tasks:

1. Identify and assess the risks of material misstatement of the parent company only 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.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of Young Fast Optoelectronics Co., Ltd.

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

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

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

2. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on these parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion regarding Young Fast Optoelectronics Co., Ltd.

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 2022 parent company only financial statements of Young Fast Optoelectronics Co., Ltd. and are therefore the key audit matters. We describe these matters in our auditor’s 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

KPMG Taiwan CERTIFIED PUBLIC ACCOUNTANTS Republic of China February 23, 2023

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Young Fast Optoelectronics Co., Ltd.

Balance sheet

December 31, 2022 and 2021

Unit: NTD Thousand

Assets 11xx Current Assets: 1100 Cash and cash equivalents (Notes 6 (1) and 8) 1110 Current financial assets at fair value through profit or loss (Note 6 (2)) 1120 Current financial assets at fair value through other comprehensive income (Note 6 (3)) 1136 Current financial assets at amortised cost (Note 6 (4)) 1150 Notes receivable, net (Note 6 (5) and (21)) 1170 Accounts receivable, net (Note 6 (5) and (21)) 1180 Accounts receivable due from related parties (Notes 6 (5), (21) and 7) 1200 Other receivables (Note 6 (6)) 1210 Other receivables due from related parties, net (Note 6 (6) and 7) 130X Inventory (Notes 6 (7) and 9) 1470 Other current assets Total current assets 15xx Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note 6 (3)) 1550 Investments accounted for using equity method, net (Note 6 (9)) 1600 Property, plant and equipment (Notes 6 (10), 7, and 9) 1755 Right of use assets (Notes 6 (11), (15), and 7) 1760 Investment real estate, net (Note 6 (12)) 1780 Intangible assets (Note 6 (13)) 1840 Deferred tax assets (Note 6 (18)) 1915 Prepaid equipment(Note 6 (10)) 1990 Other non-current assets (Note 6 (6)) Total non-current assets 1xxx Total assets	2022.12.31 Amount ％ $ 474,968 8 74,970 1 3,196,620 52 30,710 - 102,952 2 95,896 2 24,026 - 2,201 - 1,790 - 168,486 3 4,338 - 4,176,957 68 154,905 3 1,257,445 20 430,060 7 57,800 1 76,186 1 5,172 - 30,774 - 1,045 - 5,211 -	2021.12.31 Amount ％ 279,313 5 57,132 1 3,159,014 54 - - 111,718 2 159,832 3 15,476 - 1,814 - 122,700 2 221,448 4 5,637 - 4,134,084 71 128,266 2 981,411 18 428,237 7 65,340 1 76,365 1 6,060 - 25,752 - 14,126 - 6,192 - 1,731,749 29 5,865,833 100 Liabilities and Equity 21xx Current liabilities: 2100 Short-term loans (Notes 6 (14), 7, and 9) 2130 Current contract liabilities (Note 6 (21)) 2150 Notes payable 2170 Accounts payable 2180 Accounts payable, related parties (Note 7) 2200 Other payables (Note 6 (22) and 7) 2230 Current tax liabilities 2250 Current provisions (Note 6 (16)) 2282 Lease liabilities－Related parties (Notes 6 (15) and 7) 2399 Other current liabilities Total current liabilities 25xx Non-current liabilities: 2551 Provision for employee benefit liabilities, non-current (Note 6 (17)) 2552 Provision for long-term liabilities for warranties (Note 6 (16)) 2556 Provision for long-term liabilities for decommissioning, rehabilitation, and restoration costs (Note 6 (16)) 2570 Deferred tax liabilities (Note 6 (18)) 2582 Lease liabilities－Related parties (Notes 6 (15) and 7) 2670 Other non-current liabilities Total non-current liabilities 2xxx Total liabilities 31xx Equity (Note 6 (8), (9), (17), (18), and (19)): 3110 Share capital from common stock 3200 Capital reserve Retained earnings: 3310 Legal reserve 3350 Undistributed surplus earnings Total retained earnings 3400 Other equity interest 3xxx Total Equity 2-3xxxTotal liabilities and equity	**2022.12.31 **	**2022.12.31 **	2021.12.31 Amount ％ 41,297 1 6,028 - 675 - 130,801 2 109,192 2 139,174 2 6,076 - 12,551 - 14,574 - 2,856 - 463,224 7 8,405 - 50,924 2 5,069 - 1,968 - 50,984 1 55,676 1 173,026 4 636,250 11 1,513,276 26 2,077,180 35 43,385 1 532,991 9 576,376 10 1,062,751 18 5,229,583 89 5,865,833 100
			Amount	％ - - - 1 2 3 - - - -
			$ - 5,579 546 83,134 139,893 150,685 6,660 26,017 14,238 1,358
			428,110 6
			5,337 - 60,187 2 4,102 - 932 - 43,842 1 61,712 1
			176,112 4
			604,222 10		636,250
			1,513,276 24
			2,001,516 33
	2,018,598 32		71,324 1 817,484 13
			888,808 14
			1,187,733 19
			5,591,333 90
	$ 6,195,555 100		$ 6,195,555 100

(For details, please refer to the attached notes to the parent company only financial statements)

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Young Fast Optoelectronics Co., Ltd. Statement of Comprehensive Income

January 1 to December 31, 2022 and 2021

Unit: NTD Thousand

4000 Operating revenue (Note 6 (21) and 7) 5000 Operating costs (Notes 6 (7),(10), (11), (13),(15), (16) , (17), 7, and 12) 5900 Operating margin 6000 Operating expenses (Notes 6 (5), (6),(10),(11),(13),(15),(17),(22) , 7,and 12): 6100 Marketing expenses 6200 Management expenses 6300 Research and development expenses 6450 Expected credit loss Total operating expenses 6900 Net operating profit 7000 Non-operating revenue and expenses (Notes 6 (2), (8), (9), (12), (15), (23), 7 and 12): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit or loss of subsidiaries and affiliates accounted for using the equity method Total non-operating revenue and expenses 7900 Net profit from continuing operations before tax 7950 Less: Income tax expense (benefit) (Note 6 (17)) 8200 Net profit for the period 8300 Other comprehensive income (Note 6 (9), (17), (18), and (19)): 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit plan 8316 Unrealized losses from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive profits and losses of subsidiaries, affiliates, and joint ventures recognized using the equity method 8349 Less: Income tax related to items that will not be reclassified Total items that will not be reclassified to profit or loss 8360 Items that may subsequently be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8380 Share of other comprehensive profits and losses of subsidiaries, affiliates, and joint ventures recognized using the equity method 8399 Less: Income tax related to items that may be reclassified Total items that may subsequently be reclassified to profit or loss 8300 Other comprehensive income, net of tax, for the period 8500 Total comprehensive income for the period 9710 Earnings per share (Unit: NTD) (Note 6 (20)) 9750 Basic earnings per share 9850 Diluted earnings per share	2022	％ 100 78	2021	％ 100 83 17 2 7 3 - 12 5 - 8 4 - 3 15 20 1 19 - 40 - - 40 (8) - - (8) 32 51 1.85
	Amount $ 1,548,855 1,212,716		Amount 1,452,295 1,211,193
	336,139	22	241,102
	28,743 109,814 41,092 (15,574)	2 7 3 (1)	26,279 102,499 45,049 4,795
	164,075	11	178,622
	172,064	11	62,480
	3,544 136,193 52,448 (1,139) 52,683	- 9 3 - 4	490 123,402 57,246 (758) 54,220
	243,729	16	234,600
	415,793 (258)	27 -	297,080 17,650
	416,051	27	279,430
	2,714 21,486 139 543	- 1 - -	(50) 574,849 (3) (10)
	23,796	1	574,806
	102,110 1,386 -	7 - -	(110,763) (567) -
	103,496	7	(111,330)
	127,292	8	463,476
	$ 543,343	35	742,906
	$	2.75
	$	2.74		1.84

(For details, please refer to the attached notes to the parent company only financial statements)

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Young Fast Optoelectronics Co., Ltd. Statement of Changes in Equity

January 1 to December 31, 2022 and 2021

Unit: NTD Thousand

Balance at January 1, 2021 Earnings allocation and distribution: Provision for legal reserve Changes in other capital reserve: Cash dividends from capital reserve Net profit for the period Other comprehensive income, net of tax, for the period Total comprehensive income for the period Balance at December 31, 2021 Earnings allocation and distribution: Provision for legal reserve Common stock cash dividend Changes in other capital reserve: Cash dividends from capital reserve Net profit for the period Other comprehensive income, net of tax, for the period Total comprehensive income for the period Balance at December 31, 2022	Share capital from common **stock **	Capital reserve	Retained earnings	Retained earnings	Retained earnings	Total other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total Total equity 599,232 4,638,005 - - - (151,328) - 279,430 463,519 463,476 463,519 742,906 1,062,751 5,229,583 - - - (105,929) - (75,664) - 416,051 124,982 127,292 124,982 543,343 1,187,733 5,591,333
			Legal reserve	Undistributed surplus earnings	Total 296,989 - - 279,430 (43)
	$ 1,513,276 - - - -	2,228,508 - (151,328) - -	24,523 18,862 - - -	272,466 (18,862) - 279,430 (43)		21,361 577,871 - - - - - - (111,330) 574,849
	-	-	-	279,387	279,387	(111,330) 574,849
	1,513,276 - - - - -	2,077,180 - - (75,664) - -	43,385 27,939 - - - -	523,991 (27,939) (105,929) - 416,051 2,310	576,376 - (105,929) - 416,051 2,310	(89,969) 1,152,720 - - - - - - - - 103,496 21,486
	-	-	-	418,361	418,361	103,496 21,486
	$ 1,513,276	2,001,516	71,324	817,484	888,808	13,527 1,174,206

(For details, please refer to the attached notes to the parent company only financial statements)

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Young Fast Optoelectronics Co., Ltd. Statement of Cash Flows

January 1 to December 31, 2022 and 2021

Cash flows from operating activities: Profit (loss) before tax for the current period Adjustments: Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit loss Loss (gain) on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Profit from subsidiaries and affiliates accounted for using the equity method Proceeds from disposal of property, plant and equipment Lease modification benefits Proceeds from disposal of non-current assets held for sale Total income and expense items Changes in operating assets and liabilities: Changes in operating assets, net: Current Financial Assets at Fair Value through Profit or Loss Notes receivable Accounts receivable (including related parties) Other receivables (including related parties) Inventory Other current assets Other non-current assets Total changes in operating assets, net Changes in operating liabilities, net: Contract liabilities Notes payable Accounts payable (including related parties) Other payables Provisions Other current liabilities Non-current net defined benefit liability Decrease in other operating liabilities Net changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Interest paid Payment of income tax Net cash inflow from operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Capital reduction of non-current financial assets at fair value through other comprehensive income Acquisition of financial assets at amortised cost Investments accounted for using equity method Acquisition of ownership interests in subsidiaries Disposal of non-current assets held for sale Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Decrease (increase) in other receivables due from related parties Increase in prepaid equipment Dividends received Net cash inflow (outflow) from investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in deposits received Payment of lease liabilities Decrease in other non-current liabilities Payment of cash dividends Net cash flows used in financing activities Net decrease in cash and cash equivalents for the period Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	Unit: NTD Thousand 2022 2021 $ 415,793 297,080 42,893 29,639 888 78 (15,574) 4,795 (7,120) 3,780 1,139 758 (3,544) (490) (128,166) (115,581) (52,683) (54,220) (15,990) (120) (292) (12) - (65,633) (178,449) (197,006) (10,718) - 25,347 (8,085) 54,379 (92,206) (1,415) 5,406 52,962 (111,332) 1,299 1,221 - 13,979 121,854 (191,017) (449) (8,955) (129) 643 (16,966) 97,518 16,853 9,971 21,762 27,310 (1,498) 994 (354) (385) 19,219 127,096 141,073 (63,921) (37,376) (260,927) 378,417 36,153 3,544 490 (1,139) (758) (5,730) (1,030) 375,092 34,855 (42,759) (129,276) - 19,418 (30,710) - (684,333) - 529,540 - - 17,375 (21,540) (37,477) 16,570 120 981 (317) - (6,138) 121,909 51,844 (1,045) (6,185) 163,243 147,562 51,856 56,926 145,215 119,600 (186,512) (83,337) (14) 20 (14,439) (12,850) 6,050 (1,243) (181,593) (151,328) (231,293) (129,138) 195,655 (37,357) 279,313 316,670 $ 474,968 279,313
	$ 415,793 42,893 888 (15,574) (7,120) 1,139 (3,544) (128,166) (52,683) (15,990) (292) -
	(178,449)
	(10,718) 25,347 54,379 (1,415) 52,962 1,299 -
	121,854
	(449) (129) (16,966) 16,853 21,762 (1,498) (354)
	19,219
	141,073
	(37,376)
	378,417 3,544 (1,139) (5,730)
	375,092
	(42,759) - (30,710) (684,333) 529,540 - (21,540) 16,570 981 - 121,909 (1,045) 163,243
	51,856
	145,215 (186,512) (14) (14,439) 6,050 (181,593)
	(231,293)
	195,655
	279,313
	$ 474,968

(For details, please refer to the attached notes to the parent company only financial statements)

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Young Fast Optoelectronics Co., Ltd. Notes to the Parent Company Only Financial Statements 2022 and 2021

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

I. Company history

Young Fast Optoelectronics Co., Ltd. (“the Company”), previously known as Dahelong Electromechanical Co., Ltd., was established and registered with the approval of the Ministry of Economic Affairs on July 30, 2002, in accordance with the Company Law and its relevant laws and regulations, and obtained registration as a for-profit enterprise with its main business being the manufacture of power cable accessories such as power generation, transmission and distribution.

(Original) Young Fast Optoelectronics Co., Ltd. (formerly Young Fast Optoelectronics Company) was established on August 1, 2007 in accordance with the Business Mergers and Acquisitions Act. Its main business items are the research and development, manufacturing, and sales of various types of touch panels.

In order to improve our operational performance and competitiveness, the Company passed a resolution of its extraordinary shareholders’ meeting of November 23, 2007 to undergo a merger with the former Young Fast Optoelectronics Company and change the Company’s name to Young Fast Optoelectronics Co., Ltd. Following the merger, the Company was to be the surviving company with a swap of 0.5 common shares of the original Young Fast Optoelectronics for 1 common share of the Company. All rights and obligations of the original Young Fast Optoelectronics was to be generally accepted by the Company. The Company issued 84,000 thousand ordinary shares for the merger and capital increase, and December 24, 2007 was the base date for the merger and capital increase and issuance of new shares.

The Company passed a resolution of the Board of Directors on April 28, 2017 such that in accordance with Article 19 of the Business Mergers and Acquisitions Act and taking May 31, 2017 as the base date, a simple merger was undertaken with the 100%owned reinvested companies Lucky Chance Enterprise Co., Ltd. (“Lucky Chance”) and with Lead Well Technology Co., Ltd. (“Lead Well”). After the mergers, Lucky Chance and Lead Well were to be the extinguished companies and the Company was to be the surviving company.

(For details, please refer to the attached notes to the parent company only financial statements)

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

II. Approval date and procedures of the financial statements

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

III. New standards, amendments and interpretations adopted

• (I) The impact of adopting the newly issued and revised standards and interpretations approved by the Financial Supervisory Commission (“the FSC”).

The Company will apply the following newly amended International Financial Reporting Standards from January 1, 2022, and there is no significant impact on the parent company only financial statements.

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

• Amendments to IAS 37 “Onerous Contracts – Costs of Fulfilling a Contract”

• Annual Improvements to IFRSs2018-2020 Cycle

• Amendments to IFRS 3 “References to Conceptual Frameworks”

• (II) Implications of adopting International Financial Reporting Standards not yet endorsed by the FSC

The following amended IFRSs will take effect on January 1, 2023, and may have the following impact:

1. Amendment to IAS 1 “Disclosure of Accounting Policies”

2. The main content of the amendment includes the following:

3. Entities are required to disclose their material, as opposed to important, accounting policies;

4. Entities are required to state that the accounting policies in relation to immaterial transactions or other matters or circumstances are immaterial and thus need not be disclosed.

5. Entities are required to state that the accounting policies in relation to immaterial transactions or other matters or circumstances are crucial to the entities’ financial statements.

The Company is assessing the reviewing the accounting policies to be disclosed in the parent company only financial statements, to align with the amendment.

1. Others

The Company does not expect the following amended standards to have a material impact on its parent company only financial statements.

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

• Amendment to IAS 8 “Definition of Accounting Estimates”

• (III) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Regarding IFRSs that have been issued by the International Accounting Standards Board (IASB) but have not yet been endorsed by the FSC, points of likely concern are as follows:

Effective date New or amended of IASB standards Main points of amendment publication Amendments to IAS 1 Under existing IAS 1 requirements, January 1, 2024 “Classification of Liabilities companies classify a liability as as Current or Non-current” current when they do not have an unconditional right to defer settlement for at least 12 months after the reporting date. The amended clause has removed the requirement for a right to be unconditional and instead now requires that a right to defer settlement must exist at the reporting date and have substance. The amendments also clarify how a company classifies a liability that can be settled in its own shares – e.g. convertible debt.

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

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

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

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

• Amendments to IAS 1 “Non-current Liabilities with Covenants”

• Amendment to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information”

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

IV. Summary of significant accounting policies

A summary of the significant accounting policies adopted in the parent company

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

only financial statements is as follows. The following accounting policies have been applied consistently to all periods presented in the parent company only financial statements.

• (I) Statement of compliance

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

• (II) Compilation basis

1. Measurement basis

Except for the following significant items of the balance sheet, the parent company only financial statements have been prepared on a historical cost basis:

• (1) Financial assets at fair value through profit or loss measured at fair value;

• (2) Financial assets at fair value through other comprehensive income measured at fair value;

• (3) Defined benefit liabilities are measured by adding unrecognized upfront service costs and unrecognized actuarial losses to pension fund assets, less unrecognized actuarial benefits and the present value of defined benefit obligations, and the impact of the upper limit stated in Note 4 (18).

• Functional currency and currency of presentation

Each entity of the Company uses the currency of the primary economic environment in of said entity’s operations as its functional currency. The parent company only financial statements are expressed in the Company's functional currency, which is the New Taiwan Dollar. All financial information presented in New Taiwan Dollars is in thousands of New Taiwan Dollars.

• (III) Foreign currencies

• Foreign currency transactions

Foreign currency transactions are translated into functional currency at the exchange rate as of the date of transaction. On the end date of each subsequent reporting period (the “reporting date”), foreign currency monetary items are converted into the functional currency according to the exchange rate of that date.

Foreign currency non-monetary items measured at fair value are converted into functional currency at the exchange rate on the day when the fair value was measured. Foreign currency non-monetary items measured at historical cost are translated at the exchange rate on the date of the transaction. Foreign currency translation differences arising from translation are normally recognized in profit or loss. However, foreign currency translation differences arising from the translation of equity investments at fair value through other comprehensive income are recognized in other comprehensive income.

1. Foreign operating entities

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Assets and liabilities of foreign operating entities, including goodwill arising from acquisitions and fair value adjustments, are translated into the currency of presentation of the entity's financial statements at the exchange rate on the reporting date; items of income and expenses are translated into the currency of presentation of the parent company only financial statements at the average exchange rate of the current period, and the resulting exchange differences are recognized as other comprehensive income.

When disposal of a foreign operating entity results in a loss of control, joint control, or significant influence, the accumulated exchange differences related to the foreign operating entity are fully reclassified to profit or loss. In the case of partial disposal of a subsidiary that includes a foreign operating entity, the relevant accumulated exchange differences are re-attributed to non-controlling interests on a pro rata basis. When partially disposing of an investment involving an affiliated enterprise or a joint venture of a foreign operating entity, the relevant accumulated exchange differences are reclassified to profit or loss on a pro rata basis.

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

(IV) Classification criteria for distinguishing current and non-current assets and liabilities Assets that meet one of the following conditions are classified as current assets; all other assets that are not current assets are classified as non-current assets:

1. The asset is expected to be recognized in its normal operating cycle, or there is intent to sell or consume it;

2. The asset is held mainly for trading purposes;

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

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

Liabilities that meet one of the following conditions are classified as current liabilities; all other liabilities that are not current liabilities are classified as noncurrent liabilities:

1. It is expected that the liability will be settled during the normal operating cycle;

2. The liability is held mainly for trading purposes;

3. The liability is expected to be settled within twelve months after the reporting

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

period; or

1. The liability does not have an unconditional right to defer settlement to at least twelve months after the reporting period. The terms of the liability, which may be liquidated by the issuance of equity instruments at the choice of the counterparty, do not affect their classification.

2. (V) Cash and cash equivalents

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

Bank overdrafts are immediately repayable and form part of the company's overall cash management, and are included in the cash flow statement as a component of cash and cash equivalents.

• (VI) Financial instruments

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

1. Financial assets

When the purchase or sale of financial assets conforms to conventional transactions, the Company shall adopt transaction-day accounting for all purchases and sales of financial assets classified in the same way.

Financial assets are classified as: financial assets at amortized cost, financial assets at fair value through other comprehensive income, or financial assets at fair value through profit or loss. The Company reclassifies all affected financial assets from the first day of the following reporting period only when changing the business model for managing financial assets.

• (1) Financial assets measured at amortized cost

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

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

• The contractual terms of the financial asset generate cash flows on a

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

specified date and entirely for the sake of payment of principal and interest on the principal amount in circulation.

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

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

At the original time of recognition, the Company may make an irrevocable election to present subsequent changes in fair value of investments in equity instruments not held for trading in other comprehensive income. The foregoing elections are made on the basis of the individual instrument.

Investments in equity instruments are to be subsequently measured at fair value. Dividend income is to be recognized under profit or loss (unless it clearly represents the recovery of a portion of the investment cost). Remaining net gains or losses are to be recognized as other comprehensive income and are not to be reclassified to profit or loss.

Dividend income from equity investments is to be recognized on the date when the Company is entitled to receive dividends (usually the ex-dividend date).

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

Financial assets other than those measured at amortized cost above or at fair value through other comprehensive income are to be measured at fair value through profit or loss. In order to eliminate or significantly reduce accounting misalignments at the original time of recognition, financial assets that meet the criteria to be measured at amortized cost or at fair value through other comprehensive income may be irrevocably designated by the Company as financial assets at fair value through profit or loss.

These assets are to be subsequently measured at fair value and their net gains or losses are to be recognized in profit or loss (including their associated dividends and interest income).

• (4) Impairment of financial assets

The Company recognizes loss allowance for expected credit losses on financial assets measured at amortized cost.

Loss allowance for bills and accounts receivables are measured based on expected credit loss during the period. Other financial assets measured at

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

amortized cost are based on reasonable and corroborative information (obtainable without undue cost or investment), including qualitative and quantitative information; and based on the Company's historical experience, credit assessment and analysis of forward-looking information, if the credit risk has not increased significantly since the original recognition, the impairment is measured by the twelve-month expected credit loss. If it is assessed that credit risk has increased significantly since original recognition, the impairment is measured according to the duration of the credit losses.

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

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

The maximum period over which expected credit losses are measured is the maximum contractual period over which the Company is exposed to credit risk.

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

Loss allowance for financial assets measured at amortized cost are deducted from the asset's carrying amount. Amounts set aside or reversed from loss allowance are recognized in profit or loss.

When the company cannot reasonably expect to recover the financial assets in whole or in part, it directly reduces the total carrying amount of its financial assets. For company accounts, the Company analyzes the timing and amount of write-offs individually on the basis of whether they are reasonably expected to be recoverable. The Company does not expect a material reversal of the written-off amounts. However, financial assets that have been written off remain enforceable in order to comply with the Company's procedures for recovering overdue amounts.

(5) Derecognition of financial assets

The Company derecognizes financial assets only upon termination of the contractual rights to cash flows from the asset, or upon transfer of the financial assets where substantially all risks and rewards of ownership of the asset have

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

been transferred to other enterprises, or when substantially all risks and rewards of title have neither been transferred nor retained and we do not retain control of the financial asset.

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

1. Financial liabilities and equity instruments

2. (1) Equity Instruments

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

• (2) Financial liabilities

Financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and exchange gains and losses are recognized in profit or loss. Any gain or loss upon derecognition is also recognized in profit or loss.

• (3) Derecognition of financial liabilities

Financial liabilities are to be derecognized when the contractual obligations have been fulfilled, canceled, or expired. When the terms of financial liabilities are modified and the cash flows of the modified liabilities are substantially different, the original financial liabilities are to be derecognized and new financial liabilities are to be recognized at fair value based on the modified terms.

When derecognizing a financial liability, the difference between its carrying amount and the total consideration paid or payable (including any non-cash assets transferred or liabilities assumed) is to be recognized in profit or loss.

• (4) Offset of financial assets and liabilities

Financial assets and financial liabilities shall only be offset when the Company currently has legally enforceable rights to offset each other and intends to settle on a net basis or to realize assets and settle liabilities at the same time. They are to be offset against each other and presented on a net basis on the balance sheet.

• (VII) Inventory

Inventories are measured at the lower of cost and net realizable value. Costs include acquisition, production or processing costs, and other costs incurred to bring them to a place and condition in which it is ready for use, and are calculated using the weighted average method. The cost of finished goods and work-in-progress inventories includes an appropriate proportion of manufacturing overhead allocated

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

to normal production capacity.

Net realizable value represents the estimated selling price under normal operations less the estimated costs to be spent on completion and the estimated costs to complete the sale.

(VIII) Invested affiliates

An affiliate is a company over which significant influence is held over its financial and operating policies but is not controlled or jointly controlled.

The Company adopts the Equity Method to deal with equity in affiliated companies. Under the Equity Method, it is recognized at cost at the time of original acquisition and investment costs include transaction costs. The carrying amount of an investment in an affiliated company includes the goodwill identified at the time of the original investment less any accumulated impairment losses.

The parent company only financial statements cover from the date of material impact to the date of loss of material impact. After making adjustments consistent with the Company's accounting policies, the Company recognizes the amount of profit and loss and other comprehensive in come of each invested affiliate in proportion to its equity. When there is a change in non-income items and other comprehensive income of an affiliated company that does not affect the Company's associated shareholding ratio, the Company recognizes changes in equity attributable to the Company's share of the affiliated companies as capital reserve in proportion to its shareholding.

Unrealized profits and losses arising from transactions between the Company and its affiliates are only recognized in the corporate financial statements within the scope of the rights and interests of non-related party investors in the affiliated companies.

When the proportion of losses that the Company should recognize in an affiliated company is equal to or exceeds our equity in the affiliated company, recognition of such losses should be halted; and additional losses and related liabilities are to be recognized only to the extent that statutory obligations, constructive obligations, or payments have been made on behalf of the investee company.

(IX) Invested subsidiaries

When preparing parent company only financial statements, the Company adopts the equity method to evaluate invested companies with control. Under the Equity Method, the current profit and loss and other comprehensive income of the parent company only financial statements and the current profit and loss and other comprehensive income of the financial statements prepared on a consolidated basis are the same as that attributable to the owner of the parent company. Furthermore, the owner's equity in the parent company only financial statements is the same as

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

the equity attributable to owners of the parent in the financial statements prepared on a consolidated basis.

Changes in the Company's ownership interests in subsidiaries that do not result in a loss of control are treated as equity transactions with the owner.

• (X) Investment real estate

Investment real estate is held for lease income or asset appreciation or both, constituting real estate that is not for sale in normal business, for production, provision of goods or services, or for administrative purposes. Investment real estate is originally measured at cost and subsequently it is measured by cost less accumulated depreciation and accumulated impairment. Its depreciation method, useful life, and residual value shall be treated in accordance with the provisions of property, plant and equipment.

Investment real estate disposal gains or losses (calculated by the difference between the net disposal price and the carrying amount of the item) are recognized in profit or loss.

Lease income from investment real estate is recognized as non-operating income on a straight-line basis over the lease term. Lease incentives are recognized as part of the lease income during the leasing period.

• (XI) Property, plant and equipment

• Identification and measurement

Items of property, plant and equipment are measured at cost less

accumulated depreciation and any accumulated impairment.

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

Disposal gains or losses from property, plant and equipment are recognized in profit or loss.

1. Subsequent costs

Subsequent expenses are capitalized only when it is probable that their future economic benefits will flow to the Company.

3. Depreciation

Depreciation is calculated as the cost of the asset less the residual value. It is recognized in profit or loss on a straight-line basis over the estimated useful life of each component.

Land is not depreciated.

Estimated useful life for the current and comparison periods are as follows:

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Housing and construction	2 to 40 years
Machinery and equipment	1 to 9 years
Leased assets	3 to 20 years
Other equipment	1 to 5 years

The

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

(XII) Leases

The Company assesses whether a contract constitutes or contains a lease on the date of establishment of the contract. If a contract transfers control over the use of an identified asset for a period of time in exchange for consideration, the contract constitutes or contains a lease.

1. As a lessee

The Company recognizes right-of-use assets and lease liabilities as of the lease commencement date. Right-of-use assets are initially measured at cost, which includes the original measured amount of the lease liability adjusted for any lease benefits paid on or before the lease commencement date, plus the original direct costs incurred and the estimated costs for dismantling, removing, and restoring the location or the underlying asset, and also net of any lease incentives received.

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

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

Lease payments included in the measurement of lease liabilities include:

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

• (2) Changes in lease benefits depending on an index or rate, using the index or rate on the lease commencement date as the original measure;

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

• (4) The exercise price or penalty payable when it is reasonably certain that a

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

purchase option or lease termination option will be exercised.

Interest on a lease liability is subsequently accrued using the effective interest method, and its amount is re-measured when the following conditions occur:

• (1) There are changes in the index or rate used to determine lease payments resulting in changes in future lease payments;

• (2) There are changes in the residual value guarantee amount expected to be paid;

• (3) There are changes in the assessment of the underlying asset purchase option;

• (4) There are changes in estimates of whether to exercise extension or termination options and changes in the assessment of the lease term;

• (5) There are modifications to the subject matter, scope, or other terms of the lease.

When the lease liability is re-measured due to the aforementioned changes in the index or rate used to determine lease payments, changes in the residual value guarantee amount, and changes in the assessment of options to purchase, extend, or terminate, the carrying amount of the right-of-use asset is adjusted accordingly. When the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasured amount is recognized in profit or loss.

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

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

For short-term leasing of some office and transportation equipment and the lease of low-value target assets, the Company chooses not to recognize right-ofuse assets and lease liabilities. Instead, the related lease payments are recognized as expenses on a straight-line basis over the lease term. 2. As a lessor

In transactions where the Company is the lessor, classification of lease contracts is undertaken by whether they transfer substantially all risks and rewards of ownership of the underlying asset on the lease inception date. If this is the case, a lease is classified as a finance lease; otherwise, it is classified as an operating lease. At the time of evaluation, the Company considers relevant specific indicators including whether the lease period covers the main part of the economic life of the underlying asset.

If the company is a lessor of a sublease, the main lease and sublease

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

transactions are handled separately. The classification of sublease transactions is also assessed with the right-of-use asset arising from the main lease. If a sublease transaction meets the definition of investment real estate, the sublease transaction shall be classified as investment real estate.

For business leases, the Company recognizes lease payments received as lease income over the lease term on a straight-line basis.

(XIII) Intangible assets

1. Identification and measurement

Intangible assets are measured at cost less accumulated amortization and accumulated impairment.

2. Subsequent expenses

Subsequent expenses are capitalized only to the extent that they increase the future economic benefits of the specific asset in question.

3. Amortization

Amortization is calculated based on the cost of the asset less the estimated residual value, and is recognized in profit or loss using the straight-line method over its estimated useful life from when the intangible asset is ready for use.

Estimated useful life for the current and comparison periods are as follows:

Computer software 3 to 8 years

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

• (XIV) Impairment of non-financial assets

The Company assesses on each reporting date whether there is an indication that the carrying amount of non-financial assets may be impaired

(except for inventories, deferred tax assets, and assets arising from employee benefits). If any such sign is present, then the recoverable amount of the asset is estimated.

For the purposes of the impairment test, the smallest identifiable group of assets is formed by a group of assets whose cash inflows are largely independent of the cash inflows of other individual assets or groups of assets.

The recoverable amount is the higher of the individual asset or cash-generating unit's fair value less costs of disposal and its value in use. If the recoverable amount of an individual asset or cash-generating unit is less than the carrying amount, an impairment loss is recognized.

(XV) Provisions

The recognition of a liability provision is a present obligation due to past events where it is probable that the Company will need to outflow economic resources to

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

settle the obligation in the future and where the amount of the obligation can be estimated reliably.

1. Liability provision for after-sales service is based on historical experience, management's judgment and other known reasons to estimate possible product returns, discounts and replacements, and it is recognized as cost of goods sold in the year when the related products are sold.

2. Decommissioning, restoration, and rehabilitation costs is to estimate the restoration cost of the leased plant that may occur in the future.

3. (XVI) Revenue recognition

Revenue is measured as the consideration to which the transfer of goods or services is expected to be entitled. The Company recognizes revenue when control of goods or services is transferred to the customer and performance obligations are satisfied. The transfer of control of a product means that the product has been delivered to the customer, the customer can decide the sales channel and price of a product in their entirety, and there are no outstanding obligations that will affect the customer's acceptance of the product. Delivery occurs when the product is shipped to a specific location, its obsolescence and risk of loss has been passed to the customer, and the customer has accepted the product in accordance with the sales contract; or when the acceptance clause has expired or when the Company has objective evidence that all acceptance conditions have been met.

• (XVII) Government subsidies

When the Company receives government subsidies related to salaries and working capital subsidies, the unconditional grant is recognized as other income. (XVIII) Employee benefits

1. Defined contribution plan

Contribution obligations to a defined contribution plan are recognized as expenses during the period during which an employee provides service.

1. Defined benefit plan

The Company's net obligation to the defined benefit plan is calculated by converting the future benefit amount earned by the employee's service in the current or previous period to the present value for each benefit plan and less the fair value of any plan assets.

Defined benefit obligations are actuated annually by a qualified actuary using the projected unit credit method. When the calculation result may be beneficial to the Company, recognized assets are limited to the present value of any economic benefits that would be available in the form of refunds of contributions from the program or reductions in future contributions to the program. Any minimum funding requirements are considered when calculating the present value of economic benefits.

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Remeasurement of net defined benefit liability is immediately recognized in other comprehensive income and reflected in accumulated in retained earnings. This includes actuarial profit and loss, plan asset remuneration (excluding interest), and any change in the upper asset limit (excluding interest). The Company determines the net defined benefit liabilities (assets) and net interest expense (income), using the net defined benefit liabilities (assets) determined at the beginning of the annual reporting and the discount rate. Net interest expense and other expenses of defined benefit plans are recognized in profit or loss.

When a plan is revised or curtailed, the resulting change in benefits related to prior service costs or curtailment benefits or losses is immediately recognized in profit or loss. When settlement occurs, the Company recognizes the settlement gain or loss of the defined benefit plan.

1. Short-term employee benefits

Short-term employee benefit obligations are recognized as expenses when services are provided. If the Company has a current statutory or constructive payment obligation due to the employee's past services and the obligation can be reliably estimated, this amount is recognized as a liability.

• (XIX) Income taxes

Income taxes include current income tax and deferred income tax. Current income tax and deferred income tax are recognized in profit or loss, except for those related to business combinations, items directly recognized in equity, or other comprehensive income.

Current income tax includes taxable income (losses) based on the current year, calculated estimated income tax payable or tax refund receivable, and any adjustments to tax payable or refunds receivable from prior years. The amount is the best estimate of the amount expected to be paid or received at the statutory tax rate or substantive legislative tax rate at the reporting date.

Deferred income tax is recognized as a measure of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Temporary differences arising from the following situations are not recognized as deferred income tax:

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

2. Temporary differences arising from invested subsidiaries, affiliates, and joint ventures where the Company can control the timing of the reversal of the temporary differences and it is probable that they will not be reversed in the foreseeable future; as well as

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

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Deferred income tax is measured at the tax rate at which the temporary difference is expected to reverse, based on statutory or substantive legislative tax rates at the reporting date.

Deferred tax assets and deferred tax liabilities are offset only when the following conditions are met simultaneously:

1. They have the legal enforcement right to offset current income tax assets and current income tax liabilities; and

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

(1) The same taxpayer; or

• (2) Distinct taxpayers, but where each entity intends to settle current tax liabilities and assets on a net basis, or to realize assets and settle liabilities simultaneously, in each future period in which significant amounts of deferred tax assets are expected to be recovered and deferred tax liabilities are expected to be settled.

Unused tax losses and unused income tax credits are recognized as deferred tax assets to the extent that it is probable that future taxable income will be available to the extent that the deductible temporary differences are carried forward. Furthermore, it is reassessed on each reporting date and reduced to the extent that the relevant income tax benefit is not probable to be realized; or reverses the previously reduced amount to the extent that it becomes probable that sufficient taxable income will be available.

• (XX) Earnings per share

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

• (XXI) Segment information

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

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

The preparation of the parent company only financial statements in conformity with

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

the Regulations Governing the Preparation of Financial Reports by Securities Issuers requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Management continues to review estimates and underlying assumptions. Changes in accounting estimates are recognized in the period in which they are changed and in the future periods that are affected.

The parent company only financial statements involve significant judgment on whether the investee company Epoch Chemtronics Corp. involves substantial control, and this in turn has a significant impact on the amount recognized in the parent company only financial statements. For related information, please refer to the consolidated financial statements for 2022.

The parent company only financial statements contain no information such that the accounting policies involve significant estimates and assumptions that have a material impact on the amounts recognized in the parent company only financial statements.

VI. Explanation of significant accounts

• (I) Cash and cash equivalents

Cash Demand deposits Checking deposits Fixed deposits	2022.12.31 $ 387 443,791 80 30,710	2021.12.31 366 278,192 755 - 279,313
	$ 474,968

Please refer to Note 6 (24) for disclosure of exchange rate risk and sensitivity analysis of the Company’s financial assets and liabilities.

• －

• (II) Financial assets at fair value through profit or loss current

Financial assets designated as at fair value through profit or loss: Gold passbook accounts	2022.12.31		2021.12.31 57,132
	$ 74,970

1. Please refer to Note 6 (23) for the remeasurement of fair value.

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

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

Equity investments at fair value through other comprehensive income Current: Domestic TWSE listed company shares: Taiwan Cooperative Financial Holding Co., Ltd. Mega Financial Holding Company Limited First Financial Holding Co.,Ltd. Taiwan Business Bank Taiwan Fertilizer Co., Ltd. Cathay Financial Holdings Co., Ltd. Non current: Domestic TWSE listed company shares: Hold-Key Electric Wire & Cable Co., Ltd. Unlisted domestic common shares: Sol Young Enterprises Co., Ltd. ICP Technology Co., Ltd. Willide Optoelectronics Co., Ltd. Total	2022.12.31 $ 1,389,557 707,724 745,533 177,832 109,087 66,887	2021.12.31 1,320,546 808,763 675,752 131,098 142,730 80,125
	3,196,620	3,159,014
	137,763	112,624 12,610 3,032 -
	12,610 3,032 1,500
	17,142	15,642
	154,905	128,266
	$ 3,351,525	3,287,280

These equity instrument investments held by the Company constitute long-term strategic investments and are not held for trading purposes. They have therefore been designated as fair value through other comprehensive income.

The Company did not dispose of strategic investments in 2022 and 2021 and the accumulated gains and losses during these periods have not been transferred in equity.

For market risk information please refer to Note 6 (24).

(IV) Financial Assets Measured at Amortized Cost are Assets

Time deposits with original maturities of over three months Interest rate range (%)	2022.12.31 $ 30,710	2022.12.31 $ 30,710	2021.12.31 -
		4.06	-

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Company’s assesses these assets as being held to maturity in order to receive their contractual cash flows, and the cash flows of these financial assets constitute in their entirety the payment of principal and interest on the outstanding principal amounts. They are therefore presented as financial assets measured at amortized cost.

(V) Notes receivable and accounts receivable

Notes receivable Accounts receivable Accounts receivable - related parties Less: Loss allowance－notes receivable Loss allowance - accounts receivable	2022.12.31 $ 113,919 96,903 24,026 (10,967) (1,007) $ 222,874	2021.12.31 139,266 159,832 15,476 (27,548) - 287,026

The Company executed an accounts receivable factoring contract with domestic financial institutions in 2022. Under the contract, the Company need not assume the risk of the transferred accounts receivable being unrecovered but only need bear the losses arising from business disputes. In addition, the Company does not participate in the transferred accounts receivable anymore in any way, and a credit risk coverage rate up to 90% has been provided by banks. As of December 31, 2022, the Company did not have any factored accounts receivable. In addition, The Company did not execute any accounts receivable factoring contract with any domestic financial institution in 2021.

As of December 31, 2022, the cap on factored accounts receivable under the contract executed by the Company and the bank was 12,284 thousand.

The Company applies the simplified approach to provide for its expected credit losses for all notes and accounts receivable, i.e., using the measurement of expected credit loss during the period. To measure the expected credit losses, such notes receivable and accounts receivable have been grouped based on shared credit risk characteristics and the days past due, as well as incorporating forward looking information, including macroeconomic and relevant industry information. According to the historical experience of the Company's credit losses, there is no significant difference in the loss patterns of different customer groups. Therefore the provision matrix does not further differentiate customer groups.

According to historical experience, the Company's accounts receivable due from related parties have experienced no credit losses, and we also consider that as of the balance sheet date, the accounts receivable due from related parties have not been overdue and there is no other indication that the credit quality of accounts receivable due from related parties has changed from the original credit dates.

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Therefore, the company's assessment of accounts receivable due from related parties is that they will not generate credit losses, and they are not included for calculation in the analysis table of expected credit losses.

Analysis of expected credit losses of the Company's notes receivable and accounts receivable (excluding related parties) is as follows:

Current 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due More than 180 days past due Current 1 to 30 days past due 31 to 60 days past due 91 to 120 days past due 121 to 150 days past due 151 to 180 days past due More than 180 days past due		2022.12.31		Allowance for expected credit loss during the period 3,300 10 17 17 8,630 11,974 Allowance for expected credit loss during the period 2,932 188 - 523 - 508 23,397 27,548
	Carrying values of notes receivable and accounts receivable $ 201,898 228 36 30 8,630	Weighted average loss rate(％)
		1.63 4.39 47.22 56.67 100.00 2021.12.31
	$ 210,822
	Carrying values of notes receivable and accounts receivable	Weighted average loss rate(％)
	$ 254,004 11,055 449 4,942 1 5,250 23,397	1.15 1.70 - 10.59 - 9.67 100.00
	$ 299,098

The table of changes in loss allowance for notes receivable and accounts receivable of the Company is as follows:

Opening balance Provision for impairment loss (reversal gain) Ending balance	2022 $ 27,548 (15,574)	2021 8,774 18,774 27,548
	$ 11,974

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

(VI) Other receivables and long-term receivables

Other receivables Other receivables - related parties Long-term receivables Less: Loss allowance	2022.12.31 $ 2,201 1,790 65,166 (65,166)	2021.12.31 1,814 122,700 65,166 (65,166) 124,514
	$ 3,991

The table of changes in loss allowance for other receivables and long-term receivables of the Company is as follows:

Opening balance Reversal of impairment losses Ending balance	2022 $ 65,166 -	2021 79,145 (13,979) 65,166
	$ 65,166

For other credit risk information please refer to Note 6 (24).

(VII) Inventory

Raw materials Work in process Finished products Goods held in inventory	2022.12.31 $ 129,332 13,307 13,042 12,805	2021.12.31 113,571 42,205 50,345 15,327 221,448
	$ 168,486

In addition to transferring inventory to operating costs due to normal sales in 2022 and 2021, other total expenses and losses directly included in operating costs are listed as follows:

Inventory valuation and obsolescence loss Inventory obsolescence loss Inclusion in operating costs	2022 $ 19,223 1,895	2021 9,131 2,743 11,874
	$ 21,118

None of the Company's inventory was pledged as collateral as of December 31, 2022 and 2021.

(VIII) Non-current assets held for sale

The Company completed the liquidation process of Youwei Photoelectricity (Huizhou) Co., Ltd. on December 15, 2021, and recognized disposal gain of NTD

～ 29 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

65,633 thousand and recorded it under other gains and losses.

1. Details of the carrying amounts of the net assets of Youwei Photoelectricity (Huizhou) Co., Ltd. on the date of disposal are as follows:

Cash and cash equivalents etails of the amounts of disposal gains are as follows: Reclassification from other equity to profit or loss from exchange differences on translation of foreign financial statements	2021.12.15 $ 17,375 2021.12.15 $ 65,633

1. Details of the amounts of disposal gains are as follows:

(IX) Investments accounted for using equity method

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

Subsidiary Affiliated companies	2022.12.31 $ 930,256 327,189	2021.12.31 684,082 297,329 981,411
	$ 1,257,445

1. Subsidiaries

Please refer to the 2022consolidated financial statements.

2. Affiliated companies

Affiliates that are material to the Company consisted of the following:

Affiliated company name Relationship with the Group Main operating location / country of incorporation Epoch Chemtronics Corp. (Epoch) Optical instrument manufacturing, etc. Taiwan	Proportion of shareholding and voting rights	Proportion of shareholding and voting rights
	2022.12.31	2021.12.31
	23.75%	23.75%

Aggregated financial information of affiliated companies that are material to the Company are set forth below.

Current assets Non-current assets Current liabilities Non-current liabilities Net assets		2022.12.31 $ 2,671,160 906,762 (2,203,917) (84,158)		2021.12.31 2,043,870 863,316 (1,691,409) (51,654) 1,164,123
		$ 1,289,847

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Operating revenue Profit from continuing operations Other comprehensive income Total comprehensive income Dividends received from affiliated companies Share of net assets of the Company's affiliates on January 1 Comprehensive income (loss) attributable to the Company Dividends received from affiliated companies Share of net assets of related companies attributable to the Company at period end Add: Goodwill Carrying amount of equity in affiliated companies attributable to the Company at period end		2022		2021 3,795,224 108,222 (2,408) 105,814 24,241 2021 275,591 25,132 (24,241) 276,482 20,847 297,329
		$ 4,301,967 221,374 6,422
		$ 227,796 $ 24,241 2022
		$ 276,482 54,101 (24,241)
		306,342 20,847
		$ 327,189

The difference between the Company's equity and the carrying amount of the investment using the equity method mainly constitutes goodwill arising from the purchase of the investment at a premium when originally acquired.

1. Collateral

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

(X) Property, plant and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Company for 2021 and 2020 were as follows:

～ 31 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Land Cost or deemed cost: Balance as at January 1, 2022 $ 263,627 Addition - Reclassification - Disposal - Balance as at December 31, 2022 $ 263,627 Balance as at January 1, 2021 $ 263,627 Addition - Disposal - Balance as at December 31, 2021 $ 263,627 Depreciation and impairment loss: Balance as at January 1, 2022 $ - Depreciation for the current period - Disposal - Balance as at December 31, 2022 $ - Balance as at January 1, 2021 $ - Depreciation for the current period - Disposal - Balance as at December 31, 2021 $ - Carrying amounts: Balance as at December 31, 2022 $ 263,627 Balance as at December 31, 2021 $ 263,627	Land			Housing and **construction **		Machinery and equipment			Leased assets 54,446 1,729 9,931 (26,269) 39,837 31,679 22,767 - 54,446 31,518 9,240 (25,974) 14,784 30,131 1,387 - 31,518 25,053 22,928	Leased assets 54,446 1,729 9,931 (26,269) 39,837 31,679 22,767 - 54,446 31,518 9,240 (25,974) 14,784 30,131 1,387 - 31,518 25,053 22,928	Other equipment 110,856 9,513 - (12,051) 108,318 106,586 4,999 (729) 110,856 100,663 5,417 (11,897) 94,183 97,149 4,243 (729) 100,663 14,135 10,193	Other equipment 110,856 9,513 - (12,051) 108,318 106,586 4,999 (729) 110,856 100,663 5,417 (11,897) 94,183 97,149 4,243 (729) 100,663 14,135 10,193	Total 1,834,394 16,198 14,126 (332,357) 1,532,361 1,827,534 40,134 (33,274) 1,834,394 1,406,157 27,921 (331,777) 1,102,301 1,422,761 16,670 (33,274) 1,406,157 430,060 428,237
				564,242 2,291 - - 566,533 562,512 1,730 - 564,242 455,634 7,856 - 463,490 448,166 7,468 - 455,634 103,043 108,608		841,223 2,665 4,195 (294,037) 554,046 863,130 10,638 (32,545) 841,223 818,342 5,408 (293,906) 529,844 847,315 3,572 (32,545) 818,342 24,202 22,881
									39,837 31,679 22,767 - 54,446 31,518 9,240 (25,974) 14,784 30,131 1,387 - 31,518 25,053 22,928

Note 1: Transferred from payments for prepaid equipment.

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

(XI) Right of use assets

Changes in the cost, depreciation, and impairment losses of the land and buildings of the Company are detailed as follows:

Right of use asset costs: Balance as at January 1, 2022 Addition Remeasurements due to change in lease term Disposal (early termination of the contract) Balance as at December 31, 2022 Balance as at January 1, 2021 Addition Disposal (early termination of the contract) Balance as at December 31, 2021 Right of use asset depreciation: Balance as at January 1, 2022 Depreciation for the current period Disposal (early termination of the contract) Balance as at December 31, 2022 Balance as at January 1, 2021 Depreciation for the current period Disposal (early termination of the contract) Balance as at December 31, 2021 Carrying amounts: Balance as at December 31, 2022 Balance as at December 31, 2021

Housing and construction $ 73,810 1,988 7,324 (3,665) $ 79,457 $ 38,839 72,134 (37,163) $ 73,810 $ 8,470 14,793 (1,606) $ 21,657 $ 19,419 12,790 (23,739) $ 8,470 $ 57,800 $ 65,340

(XII) Investment real estate

Investment real estate constitutes the Company's own assets. Changes in the cost, depreciation, and impairment losses investment real estate of the Company are detailed as follows:

～ 33 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Cost or deemed cost: Balance as at December 31, 2022 (i.e., balance as at January 1, 2022) Balance as at December 31, 2021 (i.e., balance as at January 1, 2021)	Land $ 69,908	Housing and construction 7,174	Total 77,082
	$ 69,908	7,174	77,082

Depreciation and impairment loss:

Balance as at January 1, 2022 Depreciation for the current period Balance as at December 31, 2022 Balance as at January 1, 2021 Depreciation for the current period Balance as at December 31, 2021 Carrying amount: Balance as at December 31, 2022 Balance as at December 31, 2021 Fair value: Balance as at December 31, 2022 Balance as at December 31, 2021	Land $ - -	Housing and construction Total 717 717 179 179	Housing and construction Total 717 717 179 179
	$ -	896 896
	$ - -	538 538 179 179
	$ -	717 717
	$ 69,908 6,278 76,186
	$ 69,908 6,457 76,365
			$ 159,156 $ 163,110

The fair value of the Company's investment real estate is valued by the Company with reference to market evidence of similar real estate transaction prices.

～ 34 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

(XIII) Intangible assets

Costs and amortization of the Company's intangible assets in 2022 are detailed as follows:

Cost: Balance as at December 31, 2022 (i.e., balance as at January 1, 2022) Balance as at January 1, 2021 Addition Balance as at December 31, 2021 Amortization and impairment loss: Balance as at January 1, 2022 Amortization for the period Balance as at December 31, 2022 Balance as at January 1, 2021 Amortization for the period Balance as at December 31, 2021 Carrying amounts: Balance as at December 31, 2022 Balance as at December 31, 2021

Computer software $ 6,138 $ - 6,138 $ 6,138 $ 78 888 $ 966 $ - 78 $ 78 $ 5,172 $ 6,060

Cost:

(XIV) Short-term loans

Details, conditions, and terms of short-term loans of the Company are as follows:

ws:
Credit loans Unused credit line Interest rate range (%)	2022.12.31
	$ -
		**- **

(XV) Lease liabilities

Book value of the Company’s lease liabilities is as follows:

Current Non current	2022.12.31 $ 14,238 43,842	2021.12.31 14,574 50,984 65,558
	$ 58,080

For the maturity analysis, please refer to Note 6 (24). Lease amounts recognized as profit or loss are as follows:

～ 35 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Interest on lease liabilities Expenses relating to leases of low value assets Lease amounts recognized in the statements of Total amount of net cash flows from operating activities Total amount net cash flows from financing activities Total cash flows from leases	2022 $ 847
	$ 827

The Company leased land and buildings as factories and office premises on December 31, 2022 and 2021. Land and building leases are usually for a period of five years with an option to extend for the same period as the original contract at the expiry of the lease term.

The Company leases some offices and transportation equipment for a period of one to three years. Such leases are leases of low value subject matter, and the Company has elected not to recognize right of use assets and lease liabilities for these leases.

As of December 31, 2022 and 2021, lease liabilities Increase by NTD 4,973 thousand due and decreased by NTD 13,436 thousand due to early termination and re-assessment of some lease contracts.

(XVI) Provisions

After-sales service provisions:

2022 Beginning balance as of January 1 $ 63,475 Newly added provisions for the period 37,426 Provisions used in the period - Current reversal provision (14,697) Ending balance as of December 31 $ 86,204 Carrying amount of after-sales service provisions is as follows: 2022.12.31 Current $ 26,017 Non current 60,187 $ 86,204	2022 $ 63,475 37,426 - (14,697)	2022 $ 63,475 37,426 - (14,697)		2021 36,165 33,135 (881) (4,944) 63,475 2021.12.31 12,551 50,924 63,475
	$ 86,204
	$ 26,017 60,187
	$ 86,204

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Decommissioning, restoration, and rehabilitation costs - non current:

Beginning balance as of January 1 Provisions used in the period Ending balance as of December 31	2022 $ 5,069 (967)		2021 5,069 -
	$ 4,102		5,069

1. Liability provision for after-sales service is based on historical experience, management's judgment and other known reasons to estimate possible product returns, discounts and replacements, and it is recognized as cost of goods sold in the year when the related products are sold.

2. Decommissioning, restoration, and rehabilitation costs is to estimate the restoration cost of the leased plant that may occur in the future.

(XVII) Employee benefits

1. Defined benefit plan

Reconciliation between the present value of the Company's defined benefit obligations and the fair value of plan assets is as follows:

Present value of defined benefit obligations Fair value of plan assets Non-current net defined benefit liability	2022.12.31 2021.12.31 $ 16,493 $ 18,331 (11,156) (9,926)
	$ 5,337 $ 8,405

The Company's defined benefit plan is transferred to labor retirement reserve accounts of the Bank of Taiwan. Retirement payments for each employee are subject to the Labor Standards Act; they are calculated on the basis of years of service and the average salary for the six months prior to retirement.

• (1) Composition of plan assets

In accordance with the Labor Standards Act, the pension fund provided for by the Company is under the overall management of the Bureau of Labor Funds under the Ministry of Labor. In accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, the minimum income distributed in the annual final settlement for the use of the fund shall not be lower than the income calculated according to the two-year fixed deposit interest rate of local banks.

As of the reporting date, the balance of the Company's labor retirement reserve account at the Bank of Taiwan was NTD 11,156 thousand. Information on the use of assets of the labor pension fund includes fund yield and fund asset allocation; please refer to the information published on the website of the Bureau of Labor Funds.

• (2) Changes in present value of defined benefit obligations

Changes in the present value of the Company's defined benefit obligations in 2022 and 2021 were as follows:

～ 37 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Defined benefit obligations as at January 1 Current service cost and interest Remeasurement of net defined benefit liabilities (assets) - Actuarial gains and losses due to experience adjustments - Actuarial gains and losses arising from changes in demographic assumptions - Actuarial gains and losses arising from changes in financial assumptions Defined benefit obligations as at December 31	2022 $ 18,331 114 (1,269) - (683)	2021 18,074 90 (10) 369 (192) 18,331
	$ 16,493

(3) Changes in fair value of plan assets

Changes in the fair value of the Company's 2022 and 2021 were as follows: Fair value of identifiable plan net assets as at January 1 Interest income Remeasurement of net defined benefit liabilities (assets)－plan asset return (excluding current interest) Amount allocated to the plan Fair value of identifiable plan net assets as at December 31	defined benefit plan assets in 2022 2021 $ 9,926 9,334 63 48 762 117 405 427 $ 11,156 9,926
	$ 11,156

(4) Expenses recognized in profit or loss

Details of expenses reported by the Company in 2022 and 2021 are as follows:

ws:
Current service cost Net interest on net defined benefit liabilities	2022 $ - 51	2021 - 42 42
	$ 51

• (5) Net defined benefit assets recognized in remeasurement of other comprehensive income (liabilities)

The Company's cumulative net defined benefit assets recognized in remeasurement of other comprehensive income (liabilities) are as follows:

Cumulative balance as at January 1 Recognized this period Cumulative balance as at December 31	2022 $ 226 2,714	2021 276 (50) 226
	$ 2,940

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

(6) Actuarial assumptions

Significant actuarial assumptions used by the Company for the present value of the defined benefit obligations at the reporting date are as follows:

Discount rate Future salary increases	2022.12.31 1.375% 2.250%	2021.12.31
		0.625% 2.000%

The Company expects a provision amount paid to defined benefit plan of $394 thousand within one year after the 2022 annual report date.

The weighted average duration of the defined benefit plan is 7.9 years.

(7) Sensitivity analysis

The impact of changes in key actuarial assumptions when applied at 31 December 2022 and 2021 on the present value of the defined benefit obligations is as follows:

December 31, 2022 Discount rate (change of 0.25%) Future salary adjustments (change of 0.25%) December 31, 2021 Discount rate (change of 0.25%) Future salary adjustments (change of 0.25%)	Impact on defined benefit obligations 0.25% increase 0.25% decrease (319) 331 323 (313) (381) 397 385 (372)
	0.25% increase
	(319) 323 (381) 385

The above sensitivity analysis is based on the analysis of the impact of a change in a single assumption while other assumptions remain unchanged. In practice, many changes in assumptions may be linked. The sensitivity analysis is consistent with the methodology used to calculate the net defined benefit liability on the balance sheet.

The methods and assumptions used in the preparation of the sensitivity analysis in this period are the same as those in the previous period.

2. Defined contribution plan

The Company's defined contribution plan is in accordance with the provisions of the Labor Pension Act. Transfers are made to individual labor pension accounts established by the Bureau of Labor Insurance in line with the contribution rate of 6% of monthly employee salaries. Under this setup, after the Company has provided a fixed amount to the Bureau of Labor Insurance, there is no statutory or constructive obligation to pay an additional amount.

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Pension expenses under the Company's 2022 and 2021 defined pension appropriation measures are NTD 4,794 thousand and NTD 4,934 thousand respectively, which have been allocated to the Bureau of Labor Insurance. (XVIII) Income taxes

1. The Company's 2022 and 2021 income tax expenses (benefits) are detailed as follows:

Current income tax expense Current period Underestimation of income tax benefit for prior years Deferred tax expense (benefit) Occurrence and reversal of temporary differences Income tax expense (benefit)	2022 $ 6,659 (316)	2021 6,075 94 6,169 11,481 17,650
	6,343
	(6,601)
	$ (258)

Income tax benefit (expense) recognized by the Company under other comprehensive income in 2022 and 2021 are detailed as follows:

Components of other comprehensive income that will not be reclassified to profit or loss: Remeasurement of defined benefit plan	2022 $ (543)	2021 10

The Company's 2022 and 2021 income tax expenses (benefits) and reconciliation with net profit before tax are detailed as follows:

2022 Net profit before tax $ 415,793 Income tax calculated at the domestic tax rate of the Company's location $ 83,159 Tax-exempt dividend income (25,633) Valuation loss (gain) of financial assets (1,424) Gain in investments accounted for using the equity method (10,537) Liquidation losses - Non-deductible expenses 2,598 Subsidiary capital reduction to make up for losses (55,721) Recognition of tax losses not recognized in the previous period - Tax difference in depreciation expenses (374)	2022 $ 415,793	2021 297,080 59,416 (23,116) 756 (10,844) (9,651) 3,725 - (22,810) (3,196)

～ 40 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Changes in deferred tax assets Previous underestimation Undistributed surplus earnings Other Total	- 17,201 (316) 94 6,659 6,075 1,331 - $ (258) 17,650

2. Deferred tax assets and liabilities

(1) Unrecognized deferred tax assets

Items not recognized as deferred tax assets by the Company are as

follows:

Temporary differences that can be deducted Tax loss	2022.12.31 $ 2,624,107 1,596,547	2021.12.31 2,902,710 1,596,634 4,499,344
	$ 4,220,654

Taxable losses are subject to the provisions of the Income Tax Act. As approved by the tax collection authority, losses for the previous ten years may be deducted from the net profit of the current year to re-assess income tax. These items are not recognized as deferred tax assets. This is because it is not probable that the Company will have sufficient taxable income for the temporary difference in the future.

As of December 31, 2022, the Company has not yet recognized tax losses as deferred tax assets. The deduction period is as follows:

Year of loss	Loss not yet deducted $ 36,458 274,845 370,175 98,904 808,806 7,359	The last year for which the deduction can be made
2013 approved number 2014 approved number 2015 approved number 2016 approved number 2017 approved number 2018 declared number Total		2023 2024 2025 2026 2027 2028
	$ 1,596,547

(2) Deferred tax assets and liabilities recognized

Changes in deferred tax assets and liabilities for 2022 and 2021 were as follows:

Deferred tax assets:

～ 41 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

January 1, 2022 Credit (debit) profit and loss Credit to other comprehensive income December 31, 2022 January 1, 2021 Credit (debit) profit and loss Credit to other comprehensive income December 31, 2021 Deferred tax liabilities: January 1, 2022 Debit (credit) profit and December 31, 2022 January 1, 2021 Debit (credit) profit and December 31, 2021	Inventory allowance for impairment losses		Expected credit impairme nt losses 4,749 (2,955) -	Other 14,252 4,675 (543)
	$ 6,751 3,485 -
	$ 10,596		1,794	18,384

3. Income tax approval status

The Company’s tax returns for the years through 2020 were examined and approved by the tax authority.

(XIX) Capital and other equity

1. Issuance of ordinary shares

As at December 31, 2022 and 2021, the Company's total authorized capital stock is NTD 2,000,000 thousand and the par value of each share is NTD 10. Total issued shares amount to 151,328 thousand shares.

2. Capital reserve

The balance of the Company's capital reserve is as follows:

2022.12.31 2021.12.31

～ 42 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Additional paid-in capital - may be used to	$	1,934,757	2,010,421
compensate for losses, distributed in
cash, or recapitalized.
Additional paid-in capital may be		50,804	50,804
used - only to compensate for prior
losses.
Changes in the net equity value of affiliated
companies recognized under the equity
method		13,634	13,634
Employee stock options		2,321	2,321
	$	2,001,516	2,077,180

In accordance with provisions of the Company Act, after capital reserve is given priority to cover losses, it may be issued to new shares or cash in proportion to the shareholders' original shares in the form of realized capital gains. Realized capital gains as mentioned in the preceding paragraph includes excess from the issuance of shares in excess of par value as well as grants received. In accordance with provisions of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the total amount of capital reserves that can be used as capital shall not exceed 10% of the paid-in capital. 3. Retained earnings

According to the provisions of the earnings distribution policy of the Articles of Incorporation of the Company, if there is a surplus in the annual final accounts, taxes should first be paid to offset any prior deficit, and 10% is to be subsequently set aside as legal reserve. In addition, in accordance with the provisions of Article 41, Paragraph 1 of the Securities and Exchange Act, for the deduction amount of shareholders' equity incurred in the current year, the same amount of special reserve shall be set aside from the after-tax surplus earnings of the current year and the undistributed surplus earnings of the previous period. For the deduction amount of other shareholders' equity accumulated in the previous period, the special reserve of the same amount shall not be distributed from the undistributed surplus earnings in the previous period. In the event of a subsequent reversal of the amount of the deduction of shareholders' equity,earnings may be distributed to the reversed portion.

In addition, and in accordance with the Articles of incorporation of the Company, the dividend policy of the Company is based on current and future development plans while considering the investment environment, capital needs, and the domestic and foreign competitive environment, and takes into account the interests of shareholders and other factors. Each year, no less than 20% of the distributable surplus shall be allocated for distribution to shareholders as dividends and bonuses; but when the accumulated distributable surplus is less

～ 43 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

than 100% of paid-in capital, it may not be distributed.

(1) Legal reserve

When the Company has no losses, then subject to a resolution of the shareholders' meeting there may be issuance of new shares or cash with the legal reserve. However, this is limited to the portion of the reserve exceeding 25% of the paid-in capital.

(2) Earnings distribution

At its respective General Meetings of Shareholders onJune 29, 2022 and August 3, 2021, the Company passed corresponding resolutions for 2021 and 2020, announcing cash dividends from capital reserve and earnings distribution with the amounts of cash dividends being as follows:

Dividends distributed to owners of ordinary shares: Cash - retained earnings Cash - capital reserve Distribution rate in NT dollars (NTD)	2021

Information on the distribution of earnings as resolved by the Company's shareholders' meeting can be inquired through the Market Observation Post System.

4. Other equity (net of tax)

Balance as at January 1, 2022 Exchange differences on translation of foreign financial statements Share of other comprehensive income of subsidiaries, affiliates, and joint ventures recognized using the equity method Unrealized valuation gains and losses on financial assets at fair value through other comprehensive income Balance as at December 31, 2022 Balance as at January 1, 2021 Exchange differences on translation of	Exchange differences on translation of foreign financial statements		Unrealized valuation gains (losses) on financial assets at fair value through other comprehensive income 1,152,720 - - 21,486	Total 1,062,751 102,110 1,386 21,486 1,187,733 599,232 (110,763)
	$ (89,969) 102,110 1,386 - $ 13,527 $ 21,361 (110,763)
			1,174,206
			577,871 -

～ 44 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

foreign financial statements Share of other comprehensive income of subsidiaries, affiliates, and joint ventures recognized using the equity method Unrealized valuation gains and losses on financial assets at fair value through other comprehensive income Balance as at December 31, 2021	(567) - $ (89,969)	- (567) 574,849 574,849 1,152,720 1,062,751

(XX) Earnings per share

Basic EPS and diluted EPS for 2022 and 2021 are calculated as follows: Unit: Thousand shares

Basic EPS: Net profit attributable to holders of ordinary shares of the Company Weighted average number of ordinary shares outstanding Basic EPS (Unit: New Taiwan Dollars) Diluted EPS: Net profit attributable to holders of ordinary shares of the Company Weighted average number of ordinary shares outstanding Effect of dilutive potential ordinary shares Employees’ compensation Weighted average number of ordinary shares outstanding (diluted) Diluted EPS (Unit: New Taiwan Dollars)	2022		2021 279,430 151,328 1.85 279,430 151,328 332 151,660 1.84
	$ 416,051
	151,328
	$ 2.75
	$ 416,051
	151,328 390
	151,718
	$ 2.74

• (XXI) Revenue from contracts with customers

• Details of revenue

Principal regional markets: Asia Americas Taiwan		2022	Total 118,263 27,406 1,403,186 1,548,855 **Total **
	Optoelectronics **Division **	Electromechanical Division 1,428 - 669,174
	$ 116,835 27,406 734,012
	$ 878,253	670,602
		2021
	Optoelectronics **Division **	Electromechanical Division

～ 45 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Principal regional markets: Asia Americas Taiwan 2. Contract balances Notes receivable Accounts receivable Accounts receivable - related parties Less: Loss allowance－ notes receivable Less: Loss allowance - accounts receivable Total Contract Liabilities - Merchandise Sales	$ 156,395 14,686 713,863	1,061 - 566,290	157,456 14,686 1,280,153 1,452,295 2021.1.1 131,181 82,781 321 (8,609) (165) 205,509 14,983
	$ 884,944	567,351
	2022.12.31 $ 113,919 96,903 24,026 (10,967) (1,007) $ 222,874	2021.12.31 139,266 159,832 15,476 (27,548) -
		287,026
	$ 5,579	6,028

The opening balances of contract liabilities on January 1, 2022 and 2021 were recognized as revenue in 2022 and 2021, amounting to NTD 2,335 thousand and NTD 14,303 thousand respectively.

(XXII) Remuneration of employees and directors

According to the Articles of Incorporation of the Company, if there is profit for the year then not less than 2% shall be set aside for employees’ remuneration and not more than 1.5% shall be set aside as remuneration for directors. However, when the Company still has accumulated losses, it should reserve the compensatory amount in advance. Stock or cash may be distributed to persons to whom employee remuneration is to be distributed as in the preceding paragraph, including employees of controlling or subordinate companies meeting certain conditions.

The Company’s estimated amounts of employee remuneration for 2022 and 2021were NTD 8,636 thousand and NTD 6,353 thousand respectively. The corresponding estimated amounts for directors' remuneration were NTD 6,463 thousand and NTD 4,765 thousand. The estimated amounts mentioned above are calculated based on net profit before tax of the Company, excluding remuneration to employees and directors, and multiplied by the percentage of remuneration to employees and directors as stipulated in the Company’s Articles of Incorporation. These remunerations were reported under operating expenses. The differences between the actual distributed amounts, as determined by the Board of Directors, and those recognized in the financial statements, if any, shall be accounted for as

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

changes in accounting estimates and recognized in profit or loss in the following year. Relevant information can be inquired through the Market Observation Post System. If the Board of Directors decides to pay employee compensation in stock, the numbers of shares to be distributed were calculated based on the closing price of the Company’s shares one day before the date of the decision of the Board of Directors.

The estimated compensation to directors and employees recognized in the 2021 consolidated financial statements differed from the distribution amount approved by the Board of Directors meeting dated May 11, 2022 by (142) thousand, primarily due to variation in accounting estimates. Such differences were accounted for as changes in accounting estimates, and recognized in profit or loss of 2022. For details, see the Market Observation Post System (MOPS).

(XXIII) Non-operating revenue and expenses

1. Interest income

Details of the interest income of the Company are as follows:

2022 Bank deposit interest $ 3,544 er income Details of other income of the Company are as follows: 2022 Lease income $ 2,292 Dividend income 128,166 Other income 5,735 $ 136,193	2022 $ 3,544	2021 490 2021 2,215 115,581 5,606 123,402
	$ 136,193

2. Other income

3. Other gains and losses

Other gains and losses of the Company are detailed as follows:

Proceeds from disposal of property, plant and equipment Proceeds from disposal of non-current assets held for sale Foreign currency exchange loss, net Gain (loss) on financial assets at fair value through profit or loss Investment real estate depreciation expense Other	2022 2021 $ 15,990 $ 120 - 65,633 29,528 (4,071) 7,120 (3,780) (179) (179) (11) (477)

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

$ 52,448 57,246

4. Finance costs

The finance costs of the Company are detailed as follows:

Bank loans Lease liabilities Other	2022 $ 289 847 3	2021 168 587 3 758
	$ 1,139

(XXIV) Financial instruments

1. Credit risk

(1) Credit risk exposure

The carrying amount of financial assets represents the maximum credit risk exposure amount.

(2) Concentration of credit risk

Among the balances of accounts receivable and notes receivable of the Company as at 31 December 2022 and 2021, three major customers accounted for 51% and 63% respectively.

• (3) Credit risk on receivables and financial assets at amortized cost

For credit risk exposure of notes receivable and accounts receivable, please refer to Note 6 (5). For credit risk exposure of other receivables and long-term receivables, please refer to Note 6 (6). Other receivables, long-term receivables and other financial assets measured at amortized cost are financial assets with low credit risk. The loss allowance for that period is therefore measured at the twelve-month expected credit loss amount.

2. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents to support the Company's operations and mitigate the impact of fluctuations in cash flow. The Company's management supervises the use of bank financing lines and ensures compliance with terms of the loan contracts.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

Carrying amount December 31, 2022 Non derivative financial liabilities Notes payable $ 546 Accounts payable (including related parties) 223,027 Other payables 150,685 Lease liabilities 58,080	Carrying amount	Contractual cash flows	Within 1 **year **	1-2years	2-5 years	More than 5 years
		546 223,027 150,685 59,635	546 223,027 150,685 14,909	- - - 14,909	- - - 29,817	- - - -

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Deposits received 400 400 Other non-current liabilities 61,312 61,312 $ 494,050 495,605 December 31, 2021 Non derivative financial liabilities Short-term loans $ 41,297 41,414 Notes payable 675 675 Accounts payable (including related parties) 239,993 239,993 Other payables 139,174 139,174 Lease liabilities 65,558 67,521 Deposits received 414 414 Other non-current liabilities 55,262 55,262 $ 542,373 544,453	400 400 61,312 61,312 $ 494,050 495,605	25 155 220 - - - - 61,312
		389,192 15,064 30,037 61,312
		41,414 - - - 675 - - - 239,993 - - - 139,174 - - - 15,341 29,817 22,363 - 414 - - - - - - 55,262
		437,011 29,817 22,363 55,262

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier or in significantly different amounts.

1. Exchange rate risk

2. (1) Exposure to exchange rate risk

The Company’s financial assets and liabilities exposed to foreign currency exchange rate risk were as follows:

Financial assets Monetary items US Dollar JPY Financial liabilities Monetary items US Dollar		**2022.12.31 **			**2021.12.31 **	New Taiwan Dollar 512,743 2,746 237,886
	Foreign currency	Exchange rate 30.7100 0.2324 30.7100	New Taiwan **Dollar **	Foreign currency 18,524 11,418 8,594	Exchange rate 27.6800 0.2405 27.6800
	$ 8,964 164,474 6,554		275,274 38,224 201,287

(2) Sensitivity analysis

The Company’s exposure to exchange rate risk arises from the translation

of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable (including related parties), accounts payable (including related parties), and other payables that are denominated in foreign currency. As at December 31, 2022 and 2021, if the TWD, when compared with the USD and JPY, had appreciated or depreciated 5% with all other factors remaining constant, then net profit before tax for 2022 and 2021 would have respectively increased or decreased by approximately NTD 5,611 thousand and NTD 13,880 thousand. The analysis is performed on the same basis for both periods.

(3) Exchange gains and losses on monetary items

Due to the wide variety of foreign currency transactions of the Company, gains or losses on foreign exchange are summarized as a single amount.

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Foreign currency exchange gains and (losses) (including both realized and unrealized) in 2022 and 2021 were approximately NTD 29,528 thousand and NTD (4,071) thousand, respectively.

1. Interest rate risk

The following sensitivity analysis is based on the exposure to interest rate risk of non-derivative financial instruments on the reporting date. For floating rate financial instruments, the sensitivity analysis assumes that the amounts of assets and liabilities outstanding at the reporting date were outstanding throughout the year. The rate of change used in reporting interest rates internally to key management of the Company constituted a 1% increase or decrease in interest rates; this also represented the range of changes in interest rates considered by management to be reasonably possible.

If interest rates had increased or decreased by 1% and all assuming all other variable factors remained constant, pre-tax net profit in 2022 and 2021 would have increased or decreased by approximately NTD 0 thousand and NTD 410 thousand respectively, mainly due to the Company's variable interest rate borrowings.

1. Other market price risk

Sensitivity analyses for changes in securities prices vs. impact on items of comprehensive income at the reporting date are shown as follows (the analysis is performed on the same basis for both periods and assuming other variables remain constant):

Price of securities at reporting date Up 5% Down 5%	2022 $ 167,576	2021 164,364 (164,364)
	$ (167,576)

6. Fair value information

• (1) Hierarchy and fair value of financial instruments

The Company's financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured at fair value on a recurring basis. The carrying amount and fair value of each category of financial assets and liabilities, including the information on fair value hierarchy were as follows; however, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value and of lease liabilities, disclosure of fair value information is not required by the regulations:

2022.12.31 Fair value Carrying amount Level 1 Level 2 Level 3 Total

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Financial assets at fair value through profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Domestic TWSE (TPEx) listed shares Equity instruments without an active market measured at fair value Subtotal Financial assets measured at amortized cost Cash and cash equivalents Current financial assets at amortised cost Notes receivable and accounts receivable (including related parties) Other receivables Other receivables - related parties Refundable deposits Subtotal Total Financial liabilities measured at amortized cost Notes payable and accounts payable (including related parties) Other payables Lease liabilities Deposits received Other non-current liabilities Total	$ 74,970 74,970 -	- 74,970 - 3,334,383 17,142 17,142 17,142 3,351,525 - - - - - - - - - - - - - - 17,142 3,426,495 - - - - - - - - - - - -
	3,334,383 3,334,383 - 17,142 - -
	3,351,525 3,334,383 -
	474,968 - - 30,710 - - 222,874 - - 2,201 - - 1,790 - - 5,211 - -
	737,754 - -
	$ 4,164,249 3,409,353 -
	$ 223,573 - - 150,685 - - 58,080 - - 400 - - 61,312 - -
	$ 494,050 - -

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Financial assets at fair value through profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Domestic TWSE (TPEx) listed shares Equity instruments without an active market measured at fair value Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes receivable and accounts receivable (including related parties) Other receivables Other receivables - related parties Refundable deposits Subtotal Total Financial liabilities measured at amortized cost Bank loans Notes payable and accounts payable (including related parties) Other payables Lease liabilities Deposits received Other non-current liabilities		**2021.12.31 **	**2021.12.31 **			Total 57,132 3,271,638 15,642 3,287,280 - - - - - - 3,344,412 - - - - - -
	Carrying amount $ 57,132		Fair	value
		Level 1 57,132	Level 2		Level 3 -
			-
	3,271,638 15,642	3,271,638 - 3,271,638	- - -		- 15,642
	3,287,280				15,642
	279,313 287,026 1,814 122,700 6,192	- - - - -	- - - - -		- - - - -
	697,045	-	-		-
	$ 4,041,457	3,328,770	-		15,642
	$ 41,297 240,668 139,174 65,558 414 55,262	- - - - - -	- - - - - -		- - - - - -

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Total $ 542,373 - - - -

• (2) Valuation techniques for financial instruments measured at fair value—nonderivative financial instruments

If there is a quoted market price in an active market for a financial instrument, the fair value is based on the quoted market price in an active market. The market price announced by the major exchanges for all listed (over-the-counter) equity instruments taken as the basis for fair value. Among financial instruments held by the Company, the stocks of listed (over-the-counter listed) companies and gold passbook accounts are financial assets with standard terms and conditions and are traded in the active market, and their fair values are determined by reference to market quotations.

Except for the above-mentioned financial instruments for which there is an active market, the fair values of other financial instruments are based on valuation techniques. Fair value obtained through valuation techniques may refer to the current fair value of other financial instruments with substantially similar conditions and characteristics, discounted cash flow methods, or other valuation techniques including those calculated using models based on market information available at the balance sheet date.

Financial instruments held by the Company constitute equity instruments without an active market that are not publicly quoted and are measured at fair value. Fair value is estimated using the market comparables approach as well as net asset value. The main assumptions of the market comparables approach are based on the after-tax net profit or equity net worth of the investee and the earnings or book value multipliers derived from market quotations of comparable listed companies. This estimate has been adjusted for the discounting effect of the lack of market liquidity of the equity securities. Because the amount of equity investment estimated by the Company using the market comparable company method and net asset value to estimate the fair value is not significant, there is no intention to disclose quantitative information.

(XXV) Financial risk management

The Company's financial management department provides services for each business units including overall coordination of access to domestic and international financial market operations, supervision and management of financial risks related to the Company's operations through internal risk reports that analyze exposure in accordance with risk procedures and breadth. Such risks include market risk (including exchange rate risk, interest rate risk, and other price risk), credit risk, and liquidity risk.

The Company avoids exposure to risk through derivative financial instruments to mitigate the impact of these risks. The use of derivative financial instruments is

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

regulated by the policies adopted by the Board of Directors of the Company, which are written principles of exchange rate risk, interest rate risk, credit risk, and the use of derivative financial instruments. Internal auditors continually review policy compliance and exposure limits. The Company does not trade in financial instruments for speculative purposes (including derivative financial instruments).

1. Credit risk

Credit risk refers to the risk of financial losses by the Company caused by a counterparty defaulting on its contractual obligations. As of the balance sheet date, the Company's largest credit risk exposure for financial losses arising from a counterparty's failure to perform its obligations is mainly from the book values of financial assets recognized in the balance sheet.

The policy adopted by the Company is to only deal with reputable parties, and, if necessary, obtain sufficient guarantee to reduce the risk of financial loss due to default. The Company continuously monitors the credit risk insurance and the credit ratings of counterparties and distributes the total transaction amounts to customers with qualified credit ratings. The credit risk is controlled through the counterparty's credit limit, which is reviewed and approved by the Company's most competent personnel every year.

The Company continuously evaluates the financial status of accounts receivable customers. The Company has no significant credit exposure to any single counterparty or any group of counterparties with similar characteristics. When the counterparty to a transaction is an affiliated company, the Company defines it as a counterparty with similar characteristics. The Company has no significant concentration of credit risk.

1. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents to support the Group's operations and mitigate the impact of fluctuations in cash flows. The Company's management supervises the use of bank financing lines and ensures compliance with terms of the loan contracts.

The Company's working capital is sufficient to cover its needs; therefore, there is no liquidity risk due to an inability to raise funds to fulfill contractual obligations. Bank borrowings are an important source of liquidity for the Company. As at December 31, 2022 and 2021, the Company's unutilized short-term bank facilities amounted to NTD 1,384,924 thousand and NTD 1,223,246 thousand respectively. 3. Market risk

Market risk refers to changes in market prices such as changes in exchange rates, interest rates, and equity instrument prices, and the risk that this affects the Company's income or the value of financial instruments held. The objective of

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

market risk management is to control the exposure of market risks within an acceptable range and optimize the return on investment.

• (1) Currency risk

The Company is exposed to exchange rate risks arising from sales, purchases, fixed deposits and borrowing transactions that are not denominated in the functional currency of the Company. The functional currency of the Group companies is mainly New Taiwan Dollars. The main denomination currencies for these transactions are New Taiwan Dollars, US Dollars, and Renminbi.

There is no significant difference or significant change in the receivables and payables of the Company. Therefore, the Company currently adopts natural hedging as the main exchange rate avoidance policy in terms of exchange rate risk.

• (2) Interest rate risk

The Company's financial assets with fair value risk from changes in interest rates are bank deposits; financial liabilities are short-term borrowings, but the impact on the fair value of the relevant financial assets due to changes in interest rates is not material.

• (3) Other market price risk

The Company’s holdings of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income are invested in domestic gold passbook accounts as well as domestic TWSE and TPEx listed company stocks. Because they are measured at fair value, the Company will be exposed to the risk of changes in the market prices of equity securities. We thus prudently select investment targets and control the positions held for the sake of managing market risk.

• (XXVI) Capital management

The Company's capital risk management policy is based on the existing and possible future assets, liabilities and capital structure, taking moderate risks, and earning reasonable profits for shareholders. The goal is to achieve an ideal balance between risk control and business development and to optimize shareholder value.

In addition to appropriating legal reserve and special reserve according to law, the Company retains surplus funds and capital increase premium funds for plant expansion and operating turnover. The debt ratio is controlled below 30%, and we maintain adequate asset liquidity.

(XXVII) Investing and financing activities not affecting current cash flow

The Company's investing and financing activities not affecting current cash flow in 2022 and 2021 were as follows:

1. For acquisition of the right-of-use asset by leasing, please refer to Note 6

(11).

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

2. Reconciliation of liabilities from financing activities is as follows:

Short-term loans Lease liabilities Total liabilities from financing activities Short-term loans Lease liabilities Total liabilities from financing activities	2022.1.1	Cash flows (41,297) (14,439) (55,736) Cash flows 36,263 (12,850) 23,413		**Non **	cash changes	2022.12.31 - 58,080 58,080 2021.12.31 41,297 65,558 106,855
				**Addition **	Disposal and Remeasurement Contracts in the Current Period - 4,973 4,973 cash changes
	$ 41,297 65,558 $ 106,855 2021.1.1			- 1,988 1,988 **Non **
				**Addition **	Disposal and Remeasurement Contracts in the Current Period - (13,436) (13,436)
	$ 5,034 19,710 $ 24,744			- 72,134 72,134

VII. Related party transactions

(I) Names and relationship with related parties

Related parties having transactions with the Company during the period covered by the parent company only financial statements are as follows: Name of related party Relationship with the Company Young Fast (BELIZE) Co., Ltd. Subsidiaries of the Company (Young Fast Belize) Young Fast (SAMOA) Co., Ltd. Subsidiaries of the Company (Young Fast Samoa)

Young Fast Optoelectronics (VIETNAM) Co., Ltd. (Young Fast Vietnam)

Subsidiaries of the Company

Young Fast Optoelectronics (HK) Co., Subsidiaries of the Company Ltd. (Young Fast Hong Kong)

Tengyang Optoelectronics (Huizhou) Subsidiaries of the Company Co., Ltd. (Tengyang Optoelectronics)

Taiwan SRU Corporation Limited (Taiwan SRU)

Luminous Optical Technology Co., Ltd. (Luminous Optical Technology)

Luminous Optical Technology (Vietnam) Co., Ltd. (Luminous

Subsidiaries of the Company

Other related parties (de facto related parties)

Other related parties (de facto related parties)

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Optical Technology Vietnam)

Hold-Key Electric Wire & Cable Co., Other related parties (major Ltd. (Hold-Key) shareholders of the Company) Epoch Chemtronics Corp (Epoch) Associate of the Company

• (II) Significant transactions with related parties

• Operating revenue

ant transactions with related parties erating revenue	ant transactions with related parties erating revenue
The Company's significant sales amounts with related parties are as follows: Related party 2022 2021 Subsidiaries of the Company $ 3,429 3,273 Hold-Key 141,164 90,014 $ 144,593 93,287
Subsidiaries of the Company Hold-Key
	$ 144,593

1. Purchase and processing costs

Amounts of purchase, provide labor services and processing costs between the Company and related parties are as follows:

Related party	2022 $ 475,177 135,035 3,993 111 11	2021 576,858 127,819 3,890 7,882 - 716,449
Young Fast Vietnam Taiwan SRU Corp. Tengyang Optoelectronics Other related parties Associate of the Company
	$ 614,327

The Company's purchase, sales, provide labor services and processing costs for the above-mentioned related parties are in the form of cooperative export or division of production and sales. Therefore, the purchase, sales prices, receipt and payment terms, and processing costs between the Company and the related parties are mutually negotiated.

3. Receivables from related parties

Details of the Company's receivables from related parties are as follows:

Accounts	Related Party Category/Name	2022.12.31 $ 24,026 1,001 788 1	2021.12.31 15,476 - 791 - 16,267
Accounts receivable Other receivables	Hold-Key Young Fast Vietnam Subsidiaries of the Company Other related parties
		$ 25,816

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

As of December 31, 2022 and 2021, none of the above accounts receivable and other receivables has any loss allowance.

4. Payable to related parties

Details of the Company's payables to related Accounts Related Party Category/Name	Details of the Company's payables to related Accounts Related Party Category/Name	parties are as follows: 2022.12.31 2021.12.31 $ 93,363 69,731 46,494 39,359 36 102 139,893 109,192 20 - 416 486 $ 140,329 109,678
Accounts payable Other payables	Young Fast Vietnam Taiwan SRU Corp. Other related parties Subtotal Young Fast Vietnam Other related parties
		139,893
		20 416
		$ 140,329

5. Lease expenses

The Company leased a factory from Hold-Key in January 2018, negotiating the lease according to the agreed price and signing five-year lease contract with a total contract value of NTD 50,046 thousand. In April 2022, the Company renewed a five-year lease contract with Hold-Key for a portion of the above contract. The total value of the renewed contract was $72,868 thousand. As of December 31, 2022, lease liabilities decreased by NTD 4,973 thousand due to early termination of a portion of the above lease contract. The interest expense recognized by the Company for the above lease liabilities in 2022 and 2021 was NTD 847 thousand and NTD 587 thousand respectively, and the balances of unpaid lease liabilities as of December 31, 2022 and 2021 was NTD 58,080 thousand and NTD 65,558 thousand.

6. Loans to related parties

Accounts	Related Party Category/Name	2022.12.31 $ -	2021.12.31 121,792 2021 327 5 332
Other receivables Accounts	Young Fast Belize Related Party Category/Name
		2022 $ 341 -
Interest income	Young Fast Belize Young Fast Vietnam
		$ 341

The Company was approved by the Board of Directors to provide short-term loans to Young Fast Belize. The annual interest rates in 2022 and 2021 respectively ranged at 0.65% and 0.20%-0.65%. Interest receivable as of

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

December 31, 2022 and 2021 respectively amounted to NTD 0 thousand and NTD 117 thousand, having been accounted for under other receivables due from related parties.

1. Endorsements / guarantees provided

The amounts of endorsements/guarantees by the Company to related parties is as follows:

Related party	2022.12.31 Endorseme nt/guarantee amount Usage amount $ 138,195 - 767,750 -	2022.12.31 Endorseme nt/guarantee amount Usage amount $ 138,195 - 767,750 -	2021.12.31 Endorsemen t/guarantee amount Usage amount 249,120 33,216 1,439,360 58,128 1,688,480 91,344
	Endorseme nt/guarantee amount $ 138,195 767,750		Endorsemen t/guarantee amount 249,120 1,439,360
Subsidiary Young Fast Vietnam Young Fast Samoa Total
	$ 905,945	-	1,688,480

The Company's unutilized bank facilities shared with subsidiaries as at December 31, 2022 and 2021 amounted to NTD 905,945 thousand and NTD 725,216 thousand respectively.

• (III) Remuneration of key management personnel

Remuneration of key management personnel

5,216 thousand respectively. muneration of key management personnel Remuneration of key management personnel
Short-term employee benefits Retirement benefits	2022 $ 37,233 484	2021 31,724 466 32,190
	$ 37,717

VIII. Pledged assets: None.

IX. Significant commitments and contingencies

Amounts of unused standby letters of credit that the Company has issued for the

purchase of raw materials and machinery and equipment are as follows:

JPY USD NTD	2022.12.31 JPY 131,103 USD 85 NTD -	2021.12.31 JPY 28,667 USD 349 NTD 25,907

X. Losses Due to Major Disasters: None.

XI. Subsequent Events: None.

XII. Other

A summary of current period employee benefits, depreciation, and amortization, by function, is as follows:

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

By function By nature	2022	2022	2022	2021	2021	2021
	Classified as operating costs	Classified as operating expenses	Total	Classified as operating costs	Classified as operating expenses	Total
Employee benefits Salary Health and labor insurance Pension Director's remuneration Other employee benefit expenses Depreciation expense (Note) Amortization expense	50,550 4,867 2,573 - 2,214 31,278 335	103,859 5,480 2,272 7,892 1,300 11,436 553	154,409 10,347 4,845 7,892 3,514 42,714 888	48,438 4,862 2,461 - 2,066 19,114 73	104,959 6,387 2,515 6,385 1,217 10,346 5	153,397 11,249 4,976 6,385 3,283 29,460 78

Note: Depreciation expenses incurred for investment real estate in 2020 and 2021 were NTD 179 thousand both, accounted under other gains and losses.

Additional information on the number of employees and employee benefit expenses of the Company in 2022 and 2021 is as follows:

e Company in 2022 and 2021 is as follows:
Number of employees Number of directors not concurrently serving as employees Average employee benefit expense Average employee salary expense Adjustment of average employee salary expenses Supervisor remuneration	2022 148	2021 153 5 1,168 1,036 3.19% -
	5
	$ 1,211
	$ 1,080
	4.25% $ -

Information on the Company's salary and remuneration policy (including directors, supervisors, managers, and employees) is as follows:

(I) Remuneration of directors

1. Remuneration of directors

Remuneration of directors of the Company is based on provisions of Article 24 of the Company's Articles of Incorporation, such that if there is profit for the year then not more than 1.5% shall be set aside as remuneration for directors.

The remuneration of non-independent directors who participate in the daily operations of the Company shall be governed by Article 21 of the Articles of Incorporation of the Company. The Board of Directors is authorized to receive remuneration according to the management responsibilities of directors and the

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

degree of operational participation and the value of their contributions, as well as the usual level of payment in the industry.

Basic salaries, position bonuses, allowance, various bonuses and benefits, pensions, severance pay, and other salaries of non-independent directors in the Company's daily operations are handled in accordance with the Company's Salary Management Measures.

1. Remuneration of functional committee members

Remuneration for the Audit Committee stands at a fixed monthly remuneration of NTD 40 thousand. Remuneration for serving as a functional committee member other than for the Audit Committee shall be submitted to the Remuneration Committee and the Board of Directors for discussion and approval. Remuneration for the resigning committee members in the current year shall be calculated through the end of the month of resignation. For newly elected members, calculation of remuneration begins on the first day of the month following their election.

1. Expenses related to business execution

For independent directors or for external committee members other than independent directors serving as functional committee members, the travel fee for each meeting is NTD 10 thousand.

• (II) Remuneration of employees and managers

• Employee remuneration

Remuneration of employees of the Company is based on provisions of Article 24 of the Company's Articles of Incorporation, such that if there is profit for the year then not less than 2% shall be set aside for employees’ remuneration. Employee salary is based on the Company’s Salary Management Measures and with reference to market salary conditions and organizational structure, and are adjusted according to market salary trends and government regulations in a timely manner.

1. Remuneration of managers

Basic salaries, position bonuses, allowance, various bonuses and benefits, pensions, severance pay, and other salaries of managers who are not directors of the Company are handled in accordance with the Company's Salary Management Measures.

XIII. Other disclosures

• (I) Information on significant transactions:

The following is the information on significant transactions required for disclosure by the Regulations Governing the Preparation of Financial Reports by Securities Issuers for 2022:

1. Loans to other parties:

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

Number (Note 1)	Lending company	Loan and counter party	Whether the current subject	is a relate d party	Maximum amount for the current period (Note 2)	Ending balance (Note 3)	Actual expenditur e amount	Interes t rate range (%)	Nature of the loan of funds (Note 4)	Transactio n amount for business between two parties	Reasons for necessity of short- term financing	Allow ance for bad debt	Collateral	Collateral	Loan of funds and limit for individual counterpart ies (Notes 5 and 6)	Loan of funds and total limit (Notes 5 and 6)
													Name	Value
0 1 2 3	The Company Young Fast Hong Kong Young Fast Belize Young Fast Samoa	Young Fast Belize Young Fast Belize Young Fast Samoa Young Fast Vietnam	Other receivabl es Other receivabl es Other receivabl es Other receivabl es	Yes Yes Yes Yes	135,124 852,180 767,750 153,550	- - - 153,550	- - - -	0.65 0 0.25 0.20~ 0.65	2 2 2 2	- - - -	Loan repayment and operating turnover In response to capital needs arising from investment structure adjustments of the Group In response to capital needs arising from investment structure adjustments of the Group Operating turnover	- - - -		- - - -	559,133 - 794,310 1,309,961	1,118,267 - 794,310 1,309,961

Note 1: The method for filling in the “Number” column is as follows:

1. The Company is filled in as 0.

2. Subsidiaries - in sequence by company from the Arabic numeral 1.

Note 2: The highest balance of funds loaned to others in the current year.

Note 3: Refers to the quota approved by the Board of Directors as of December 31, 2022.

Note 4: Method for filling in “Nature of the loan of funds”:

1. For those with business dealings please fill in “1.”

2. If there is a need for short-term financing, please fill in “2.”

3. Note 5: The total amount of the Company's loans of funds to others shall not exceed 40% of the net value of the Company. If the nature of the loans of funds is short-term financing, the total loan amount shall not exceed 20% of the net value of the Company, and the total amount of loans of funds to individual counterparties shall not exceed 10% of the net value of the Company. If the nature of the loans of funds is for business transactions, the amount of individual loans should not exceed the transaction amount for business between the two parties involved in the previous year or in the current year. For companies that have short-term financing with Young Fast Hong Kong, the individual loan and limit amount shall not exceed 10% of the net value of Young Fast Hong Kong, and the total loan and amount shall not exceed 30% of the net value of Young Fast Hong Kong. When the counterparty of a loan of funds is the Company or is a company of the Group not located in Taiwan and in which the Company holds 100% of its total shares, the total amount and individual loans and limit amounts shall not exceed 150% of the net worth of Young Fast Hong Kong. For companies that have short-term financing with Young Fast Belize and Young Fast Samoa, the individual loan amount shall not exceed 10% of the net value of the Company, and the total loan amount shall not exceed 30% of the net value of the Company. When the counterparty of a loan of funds is the Company or is a company of the Group not located in Taiwan and in which the Company holds 100% of its total shares, the total amount and individual loans and limits shall not exceed 150% of the net worth of Young Fast Belize and Young Fast Samoa.

Note 6: Loans of funds and limit amounts are calculated based on the most recent financial statements audited and certified by an accountant.

Note 7: Young Fast Hong Kong completed all liquidation proceedings on August 19, 2022.

2. Guarantees and endorsements for other parties:

Number (Note 1)	Endorsemen t/guarantee company name	Counterparty of guarantee/ endorsement	Counterparty of guarantee/ endorsement	Endorseme nt/guarante e limit for a single business (Note 3)	Maximum endorsement /guarantee balance in the current period	Endorseme nt/guarante e balance at end of period	Actual expendit ure amount	Endorseme nt/guarante e amount by property guarantee	Proportion of cumulative endorsement/gu arantee amounts to the net value of the most recent financial statements(%)	Maximum endorseme nt/guarante e amount (Note 3)	Parent company to subsidiar y Endorse ment/gua rantee	Subsid iary to parent compa ny Endors ement/ guaran tee	Endorse ment/gua rantee for the Mainland China region
		Company name	Relationship (Note 2)
0 0	The Company The Compan	Young Fast Vietnam y Young Fast Samoa	2 2	1,677,400 1,677,400	276,390 1,596,920	138,195 767,750	- -	- -	2.47 13.73	2,795,667 2,795,667	Y Y	N N	N N

Note 1: The method for filling in the “Number” column is as follows:

1. The Company is filled in as 0.

2. Subsidiaries - in sequence by company from the Arabic numeral 1.

3. Note 2: The relationship between the one providing endorsements/guarantees and the one receiving endorsements/guarantees is classified into six types:

4. Intercompany business transactions

5. Companies in which the Company directly and indirectly holds more than 50% of the voting rights.

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

1. Companies that directly and indirectly hold more than 50% of the voting shares of the Company.

2. The Company holds, directly or indirectly, 90% or more of the voting shares of the Company.

3. Companies that are mutually protected under contractual requirements based on the needs of the contractor.

4. Companies that are endorsed by shareholders in accordance with their shareholding ratios because of the joint investment relationship.

5. Performance guarantees for pre-sale contracts under the Consumer Protection Act.

6. Note 3: The total amount of the Company's endorsements/guarantees shall be 50% of the net value of the Company's most recent financial statements, and endorsements/guarantees for a single enterprise shall not exceed 20% of the net value of the Company's most recent financial statements. Endorsements/guarantees for a single overseas affiliate shall not exceed 30% of the net value of the Company's most recent financial statements.

3. Securities held at the end of the period (excluding investment in subsidiaries,

associates and joint ventures):

Name of holder	Category and name of security	Relationship with issuer of securities	Account title		End ofperiod	End ofperiod	End ofperiod	Note
				Shares/Units	Carrying amount	Percentag e of ownership	Fair value
The Company The Company	Shares: Promell Materials Technology Inc. Ritfast Corporation Shares: First Financial Holding Co.,Ltd. Mega Financial Holding Company Limited Taiwan Cooperative Financial Holding Co., Ltd. Taiwan Business Bank Taiwan Fertilizer Co., Ltd. Cathay Financial Holdings Co., Ltd. Hold-Key Electric Wire & Cable Co., Ltd. Sol Young Enterprises Co., Ltd. ICP Technology Co., Ltd. Willide Optoelectronics Co., Ltd.	- - - - - - - - Major shareholders of the Company Corporate director of the Company - -	Financial assets mandatorily designated as at fair value through profit or loss-current " Financial assets at fair value through other comprehensive income- current " " " " " Financial assets at fair value through other comprehensive income －non current " " "	2,647 245 28,133 23,319 55,445 13,732 2,039 1,672 9,600 356 295 1.5	- - 745,533 707,724 1,389,557 177,832 109,087 66,887	7.42% 0.74% 0.21% 0.17% 0.38% 0.17% 0.21% 0.01% 4.98% 0.55% 0.94% 15.00%	- - 745,333 707,724 1,389,557 177,832 109,087 66,887
					3,196,620		3,196,620
					137,763 12,610 3,032 1,500		137,763 12,610 3,032 1,500
					154,905		154,905

1. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

2. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

3. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

1. Related party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Purchasing (selling) company	Name of transaction counterpart y	Relationshi p	Transaction status	Transaction status	Transaction status	Transaction status	Circumstances and reasons why transaction conditions different from normal trading	Circumstances and reasons why transaction conditions different from normal trading	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Note
			Purchase d(sold)	Amount	Proportion of total purchased (sold) (%)	Credit period	Unit price	Credit period	Balance	Proportion of total notes and accounts receivable **(payable) (%) **
The Company The Company The Company Young Fast Vietnam Taiwan SRU Corp.	Hold-Key Young Fast Vietnam Taiwan SRU Corp. The Company The Company	Other related parties Sub- subsidiary Subsidiary Parent company Parent company	Sales Purchase of goods Purchase of goods Sales Sales	141,164 475,177 135,035 (475,177) (135,035)	9.11 47.20 13.41 99.96 100.00	Note 1 Note 1 Note 1 Note 1 Note 1	Note1 Note1 Note1 Note1 Note1	Note1 Note1 Note1 Note1 Note1	24,026 (93,363) (46,494) 93,363 46,494	10.78 (41.76) (20.80) 100.00 100.00

Note 1: The Company's transaction conditions with the related party are mutually negotiated.

1. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

2. Trading in derivative instruments: None.

3. (II) Information on investees

Information on the company's reinvestment business in 2022 is as follows

(excluding investments in Mainland China companies):

Investing company name	Investee company name	Region	Main business items	Initial investment amount (Note 3)	Initial investment amount (Note 3)	Held at the end of theperiod	Held at the end of theperiod	Held at the end of theperiod	Profit and loss of the investee company for the current period (Note 2)	Investment gains and losses recognized in the current period (Note 2)	Note
				End of the currentperiod	End of prior year	Number of shares	Percenta ge (%)	Carrying amount (Note 2)
The Company " " " Young Fast Belize Young Fast Samoa	Young Fast Belize Young Fast Samoa Taiwan SRU Corp. Epoch Young Fast Hong Kong Young Fast Vietnam	Belize Samoa Taiwan Taiwan Hong Kong Vietnam	Professional investment Professional investment Manufacturing of wire and cable accessories Optical instruments Professional investment Manufacture and sales of touch panels	3,000,130 (USD 100,000 ) 1,946,551 (USD 66,500 ) 30,960 150,626 - 965,402 (USD 32,200 )	3,000,130 (USD 100,000 ) 1,262,218 (USD 43,000 ) 30,960 150,626 3,093,236 (USD 103,080 ) 965,402 (USD 32,200 )	100,000 57,195 3,096 8,080 - -	100.00% 100.00% 51.00% 23.75% 100.00% 100.00%	- 866,518 63,738 327,189 - 791,565	4,522 (25,541) 43,621 221,374 4,624 (746)	4,522 (22,959) 18,544 52,576 4,624 3,730	Note 5 Note 1 Note 1 Note 3 Note 1

• Note 1: Taking into account unrealized and realized gains and losses on intercompany transactions.

• Note 2: The amounts of investment gains and losses recognized by the Company are based on financial statements of the investee company audited by accountants and estimated by the equity method.

• Note 3: On November 13, 2019, the Board of Directors of the Company passed a resolution for the liquidation of Young Fast Hong Kong, and all liquidation procedures were completed on August 19, 2022.

Note 4: Initial investment amount is calculated based on historical exchange rates.

Note 5: Young Fast Belize was still undergoing the liquidation proceeding on December 31, 2022, and already wired back the liquidation proceeds of 529,540 thousand..

(III) Information on investment in Mainland China:

1. Information on business reinvestment in Mainland China:

～ 64 ～

Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

==> picture [446 x 74] intentionally omitted <==

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

Accumulated Investment amount
investment remitted or recovered in Accumulated
amount the current period investment Investment
remitted amount Profit and Shareholding gains and Book value Investment
from Taiwan remitted loss of the ratio of direct losses of income
Investm at the from Taiwan investee or indirect recognized investments repatriated
Mainland ent beginning of at the end of company for investment in the current at the end of up to the
investee Paid-in method the current the current the current by the period (Note the period current
company name Main business items capital (Note 1) period Outflow Inflow period period Company (%) 3) (Note 3) period
Tengyang After sales services 4,660 (II) - - - - 431 100.00 431 2,518 -
Optoelectronics (labor) (USD 150 )
----- End of picture text -----

Note 1: The investment methods are divided into the following three categories, and it is sufficient to indicate the category:

• (I) Direct investment in mainland China.

• (II) Reinvestment in mainland China through a company in a third region. The current investment amount of USD 150 thousand is invested by Young Fast Samoa using its own funds. (III) Other methods.

Note 2: The amounts of investment gains and losses recognized by the Company and the book values of investments at the end of the period are based on financial statements of the investee company checked by CPAs of the parent company with estimation carried out using by the equity method.

Note 3: The above listed USD to NTD exchange rates are based on historical exchange rates.

1. Limits on reinvestment in mainland China:

. Limits on reinvestment in mainland China:	. Limits on reinvestment in mainland China:	. Limits on reinvestment in mainland China:
Unit: NTD thousand Accumulated investment amount remitted from Taiwan to the mainland at the end of the current period (Note 3) Investment amounts authorized by the Investment Commission of the Ministry of Economic Affairs (Note 2) Investment limits for the Mainland Area in accordance with the regulations of the Investment Committee of the Ministry of Economic Affairs (Note 1) - 2,242,106 (USD 73,009 ) 3,354,800
Accumulated investment amount remitted from Taiwan to the mainland at the end of the current period (Note 3)	Investment amounts authorized by the Investment Commission of the Ministry of Economic Affairs (Note 2)	Investment limits for the Mainland Area in accordance with the regulations of the Investment Committee of the Ministry of Economic Affairs (Note 1)
-	2,242,106 (USD 73,009 )	3,354,800

Note 1: 60% of net value.

Note 2: Accumulated remittance amount from Taiwan at the end of the current period (net

of repatriation) calculated using historical exchange rates. The amount approved by the Investment Committee of the Ministry of Economic Affairs is calculated at the exchange rate of December 31, 2022 (USD:NTD exchange rate = 1:30.71).

Note 3: Does not include cumulative disposals (including sale, liquidation, dissolution, merger and bankruptcy, etc.) (net of repatriation). The amount of investment that has not been repatriated is NTD 2,044,027 thousand (USD 66,559 thousand).

3. Significant transactions: None.

(IV) Information on major shareholders:

Unit: Shares

Shares **Name of major shareholder **	Number of shares held	Percentage of shareholding
Sol Young Enterprises Co., Ltd. Hold-Key Electric Wire & Cable Co., Ltd. Zhangmiao Development Co., Ltd.	30,605,114 20,414,832 9,403,000	20.22% 13.49% 6.21%

Note: (1) Information on major shareholders in this table is calculated from the depository company on the last business day at the end of each quarter, and includes shareholders holding more than 5% of ordinary shares and preferred shares of the Company that have completed physical registration and delivery (including treasury shares). As for share capital

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Young Fast Optoelectronics Co., Ltd. Notes to Parent Company Only Financial Statements (Continued)

recorded in the Company's financial statements and the actual number of shares delivered by the Company without physical registration, there may be differences or discrepancies due to different calculation bases.

• (2) If the above-mentioned information indicates that shareholders are to hand over shares to a trust, this shall be disclosed by the trustee who has opened an individual sub-account of the trustor of the special trust account. As for the insider shareholding declaration of shareholders holding more than 10% of the shares in accordance with the Securities and Exchange Act, such shareholdings include self-held shares plus the shares that are delivered to the trust and have the right to exercise decision-making power over the trust property, and so on. Please refer to the Market Observation Post System for information on insider shareholding declarations.

• (3) Shareholding ratios are unconditionally rounded to two decimal places.

XIV. Segment information

Please refer to the 2022 consolidated financial statements for details.

～ 66 ～

Young Fast Optoelectronics Co., Ltd. Statement of Cash and Cash Equivalents

December 31, 2022

Unit: NTD Thousand or Single Units of Foreign Currency

Item Cash Cash in banks	Summary Petty cash Cash in foreign currencies: Japanese yen (JPY 78,000 @ 0.2324) Vietnamese Dong (VND 49,570,000@ 0.0013) US Dollar (USD 731 @ 30.71) Hong Kong Dollar (HKD 2,169 @ 3.9382) Renminbi (CNY 12,915 @ 4.408) Korean Won (KRW 4,045,090 @ 0.0246) Thai Baht (THB 14,607 @ 0.8941) Subtotal Checking deposits Demand deposits: New Taiwan Dollar US Dollar (USD 2,853,078.70 @ 30.71) Hong Kong dollar (HKD 200,875.50 @ 3.938) Japanese yen (JPY 164,396,132 @ 0.2324) Renminbi (CNY 277,119.40 @ 4.408) Term deposits: US Dollar (USD 1,000,000.00 @ 30.71，Expiry date: 2023/2/1；interest rates at 4.06%) Subtotal	Amount
		$ 105 18 64 22 9 57 99 13 387 80 315,955 87,618 791 38,206 1,221 30,710 474,581 $ 474,968

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Young Fast Optoelectronics Co., Ltd.

Statement of financial assets at fair value through other comprehensive income - current

December 31, 2022

Unit: NTD Thousand

Financial instrument	Summary	Number of shares or number of lots	Face value		Total amount - - - - - -	Interest rate		Acquisitio ncost 432,023 554,954 730,093 130,467 107,100 69,888	Fair value Changes in fair value attributable to changes in credit risk Unit price (NTD) Total amount Note 26.50 745,533 - 30.35 707,724 - 26.00 1,389,557 - 12.95 177,832 - 53.50 109,087 - 40.00 66,887 - 3,196,620 -	Fair value Changes in fair value attributable to changes in credit risk Unit price (NTD) Total amount Note 26.50 745,533 - 30.35 707,724 - 26.00 1,389,557 - 12.95 177,832 - 53.50 109,087 - 40.00 66,887 - 3,196,620 -
									Unit price (NTD) 26.50 30.35 26.00 12.95 53.50 40.00
Shares: First Financial Holding Co.,Ltd. Mega Financial Holding Company Limited Taiwan Cooperative Financial Holding Co., Ltd. Taiwan Business Bank Taiwan Fertilizer Co., Ltd. Cathay Financial Holdings Co., Ltd.		28,133 - 23,319 - 53,445 - 13,732 - 2,039 - 1,672 -				- % - % - % - % - % - %
					-		$ 2,024,525

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Young Fast Optoelectronics Co., Ltd.

Schedule of Notes Receivable

December 31, 2022

Unit: NTD Thousand

Client name Non-related party: Company A Company B Company C Company D Others (individual balance not attaining 5%) Subtotal Less: Loss allowance	Summary Business 〃 〃 〃 〃	Amount $ 49,493 31,459 16,864 12,263 3,840 113,919 10,967 $ 102,952	Note

Schedule of Accounts Receivable

Client name	Summary	Amount Note
Related party: Hold-Key Non-related party: Company A Company B Company C Others (individual balance not attaining 5%) Subtotal Less: Loss allowance Subtotal	Business Business 〃 〃 〃	$ 24,026 37,781 11,340 10,413 37,369 96,903 1,007 95,896 $ 119,922

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Young Fast Optoelectronics Co., Ltd.

Statement of inventories

December 31, 2022

Unit: NTD Thousand

Item	Amount	Amount	Net realizable value Note
	Cost
Raw materials Work in process Manufactured goods Goods Total Less: Allowance for depreciation losses on inventories	$ 158,105 32,741 15,344 15,276		136,878 Market price refers to estimated net realizable value 13,140 〃 25,293 〃 14,495 〃 189,806
	221,466 52,980
	$ 168,486

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Young Fast Optoelectronics Co., Ltd.

Statement of changes in financial assets at fair value through other comprehensive

income - non current

January 1 to December 31, 2022

Unit: NTD Thousand

Name Shares: Hold-Key Electric Wire & Cable Co., Ltd. Sol Young Enterprises Co., Ltd. ICP Technology Co., Ltd. Willide Optoelectronics Co., Ltd..	Beginning of period Number of shares or number of lots Fair value 7,767 $ 112,624 356 12,610 295 3,032 - - $ 128,266	Beginning of period Number of shares or number of lots Fair value 7,767 $ 112,624 356 12,610 295 3,032 - - $ 128,266	Increase in period (Note 1) Number of shares or number of lots Amount 1,833 25,139 - - - - 1.5 1,500 26,639	Increase in period (Note 1) Number of shares or number of lots Amount 1,833 25,139 - - - - 1.5 1,500 26,639	Increase in period (Note 1) Number of shares or number of lots Amount 1,833 25,139 - - - - 1.5 1,500 26,639	**Decrease **	inperiod Amount - - - -	inperiod Amount - - - -	**End of **	**End of **	period Collate ral or pledge Fair value 137,763 None 12,610 None 3,032 None 1,500 None 154,905	Note
			Number of shares or number of lots 1,833 - - 1.5			Number of shares or number of lots			Number of shares or number of lots 9,600 356 295 1.5
						- - - -
		$ 128,266			26,639			-

Note 1: Including new investment cost of NTD 26,415 thousand and unrealized appraisal gains and losses of NTD 224 thousand in the current period.

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Young Fast Optoelectronics Co., Ltd.

Statement of Changes in Investments Accounted for Using the Equity Method

January 1 to December 31, 2022

Unit: NTD Thousand

Name Young Fast Belize Epoch Young Fast Samoa Taiwan SRU Corp.	Opening balance Number of shares Amount 100,000 $ 501,249 8,080 297,329 43,000 126,803 3,096 56,030 $ 981,411	Opening balance Number of shares Amount 100,000 $ 501,249 8,080 297,329 43,000 126,803 3,096 56,030 $ 981,411	Increase in period (Note 2) Number of shares Amount - 28,291 - 54,101 23,500 762,674 - 18,544 863,610	Increase in period (Note 2) Number of shares Amount - 28,291 - 54,101 23,500 762,674 - 18,544 863,610	Increase in period (Note 2) Number of shares Amount - 28,291 - 54,101 23,500 762,674 - 18,544 863,610	Decrease in period (Note 3) Number of shares Amount - 529,540 - 24,241 9,305 22,959 - 10,836 587,576	Decrease in period (Note 3) Number of shares Amount - 529,540 - 24,241 9,305 22,959 - 10,836 587,576	Decrease in period (Note 3) Number of shares Amount - 529,540 - 24,241 9,305 22,959 - 10,836 587,576	Ending balance Number of shares Percentag e of shareholdi ng Amount 100,000 100.00% - 8,080 23.75% 327,189 57,195 100.00% 866,518 3,096 51.00% 63,738 1,257,445	Ending balance Number of shares Percentag e of shareholdi ng Amount 100,000 100.00% - 8,080 23.75% 327,189 57,195 100.00% 866,518 3,096 51.00% 63,738 1,257,445	Ending balance Number of shares Percentag e of shareholdi ng Amount 100,000 100.00% - 8,080 23.75% 327,189 57,195 100.00% 866,518 3,096 51.00% 63,738 1,257,445	Ending balance Number of shares Percentag e of shareholdi ng Amount 100,000 100.00% - 8,080 23.75% 327,189 57,195 100.00% 866,518 3,096 51.00% 63,738 1,257,445	Market price or net value of equity (Note 1)	Market price or net value of equity (Note 1)	Market price or net value of equity (Note 1)
			Number of shares			Number of shares			Number of shares 100,000 8,080 57,195 3,096	Percentag e of shareholdi ng 100.00% 23.75% 100.00% 51.00%			Unit price - 37.91 13.13 24.00		Total price
			- - 23,500 -			- - 9,305 -
		$ 981,411			863,610			587,576				1,257,445

Note 1: Long-term equity is fairly valued at the net value of equity at the balance sheet date.

• Note 2: Including new investment cost for the period NTD 684,333 thousand, Investment gain of NTD 75,642 thousand,re-measurement of defined benefit plan of NTD139 thousand, and exchange differences of NTD 103,496 thousand from the exchange differences on translation of foreign financial statements.

• Note 3: Includes cash dividends of NTD 35,077 thousand for the current period,to receive subsidiary liquidated refunded payment of NTD 529,540 thousand and investment loss of NTD 22,959 thousand.

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Young Fast Optoelectronics Co., Ltd.

Schedule of Notes Payable December 31, 2022 Unit: NTD Thousand

Client name Company A	Summary Business	Amount $ 546	Note

Schedule of Accounts Payable

Client name Related party: Young Fast Vietnam Taiwan SRU Corp. Luminous Optical Technology Subtotal Non-related party: Company A Company B Company C Company D Company E Company F Others (individual balance not attaining 5%) Subtotal	Summary Business 〃 〃 Business 〃 〃 〃 〃 〃 〃	Amount $ 93,363 46,494 36 139,893 19,437 10,417 7,884 8,033 4,269 4,182 28,912 83,134 $ 223,027	Note

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Young Fast Optoelectronics Co., Ltd.

Schedule of Other Payables

December 31, 2022

Unit: NTD Thousand

Item	Summary	Amount $ 110,466 8,636 31,583 $ 150,685
Non-related party: Salary and bonus payable Employee compensation payable Others (individual balance not attaining 5%)	Business 〃 〃

Statement of operating revenue January 1 to December 31, 2022

Item Touch panels Terminal boxes and splice boxes	Quantity	Amount $ 878,253 670,602	Note
		$ 1,548,855

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Young Fast Optoelectronics Co., Ltd.

Schedule of Operating Costs

January 1 to December 31, 2022

Unit: NTD Thousand

Item Cost of goods sold for self-manufactured products Direct raw materials Add: Beginning inventory Feedstock in this period Less: End-of-period inventory Inventory obsolescence loss Other Direct materials Add: beginning inventory Feedstock in this period Less: end-of-period inventory Other Direct labor Manufacturing expense Manufacturing cost Add: Beginning work in process inventory Feedstock in this period Less: Ending work in process inventory Inventory obsolescence loss Other Subtotal of cost of finished goods Add: Inventory of finished products at the beginning of the period Less: Inventory of finished products at the end of the period Inventory obsolescence loss Other Cost of goods sold of outsourced goods Add: beginning inventory Purchases in this period Less: end-of-period inventory Inventory obsolescence loss Other Total cost of goods sold Inventory obsolescence loss Inventory valuation and obsolescence loss Other operating costs Total operating costs

Amount Subtotal Total $ 837,604 509,357 133,815 534,501 (156,936) (147) (1,876) 2,840 845 3,252 (1,169) (88) 33,470 95,455 641,122 50,655 155,570 (32,741) (280) (12,774) 801,552 51,759 (15,344) (114) (249) 314,700 18,132 313,424 (15,276) (1,354) (226) 1,152,304 1,895 19,223 39,294 $ 1,212,716

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Young Fast Optoelectronics Co., Ltd.

Schedule of marketing expenses

January 1 to December 31, 2022 Unit: NTD Thousand

Item	Summary	Amount $ 10,513 9,414 3,762 5,054	Note
Salary expenses Commission expenses Import and export expenses Others (individual balance not attaining 5%)
		$ 28,743

Schedule of management expenses

Item	Summary	Amount $ 71,247 8,011 7,892 22,664	Note
Salary expenses Depreciation Director and supervisor expenses Others (individual balance not attaining 5%)
		$ 109,814

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Young Fast Optoelectronics Co., Ltd.

Schedule of research and development expenses

January 1 to December 31, 2022

Unit: NTD Thousand

Item	Summary	Amount $ 25,470 4,589 3,514 2,911 4,608	Note
Salary expenses R&D material expense Labor expense Depreciation Others (individual balance not attaining 5%)
		$ 41,092

Please refer to Note 6 (10) of the financial statements for a detailed schedule of changes in property, plant and equipment.

Please refer to Note 6 (11) of the financial statements for a detailed schedule of changes in right-of-use assets.

Please refer to Note 6 (12) of the financial statements for a detailed schedule of changes in investment real estate.

Please refer to Note 6 (13) of the financial statements for a detailed schedule of changes in intangible assets.

Please refer to Note 6 (15) of the financial statements for a detailed schedule of lease liabilities.

Please refer to Note 6 (16) of the financial statements for a detailed schedule of provisions. Please refer to Note 6 (23) of the financial statements for a detailed schedule of other revenues.

Please refer to Note 6 (23) of the financial statements for a detailed schedule of other gains and losses.

Please refer to Note 6 (23) of the financial statements for a detailed schedule of finance costs.

～ 77 ～