TSE: 2451

Transcend Information, Inc.
Annual Report 2022

Notice to readersThis English-version annual report is a summary translation of the Chinese version
and is not an official document of the shareholders’ meeting. If there is any
discrepancy between the English and Chinese versions, the Chinese version shallprevail.

Printed on May 15, 2023
Transcend Information, Inc. annual report is available at https://tw.transcend-info.com/about/stockholders
Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw/mops/web/t57sb01_q5

Spokesperson
Name: Chen, Po-Shou
Title: Sales Vice General manager
Tel: (02) 2792-8000 #7533
E-mail: ir@transcend-info.com
Deputy Spokesperson
Name: Andrew, Shu
Title: Director of Marketing
Tel: (02) 2792-8000 #7533
E-mail: ir@transcend-info.com
Headquarters and Plant
Headquarters: No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan
Plant: No. 70, XingShan Rd., NeiHu Dist., Taipei 114, Taiwan
Tel: (02) 2792-8000
Fax: (02) 2792-3375 (Headquarters)(02) 2792-0517 (Plant)
Stock Transfer Agent
CTBC Bank Transfer Agency Department
Address: 5F., No.83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei 100,
Taiwan (R.O.C.)
Tel: (02) 6636-5566
Website: http://www.ctbcbank.com
Auditors
PricewaterhouseCoopers Taiwan
Auditors: Chen,Chin-Chang, Lin, Yi-Fan
Address: 27F, No. 333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei 110, Taiwan
Tel: (02) 2729-6666
Website: http://www.pwc.com/tw
The name of any exchanges where the company's securities are tradedoffshore, and the method by which to access information on said offshore
securities: Not applicable
Corporate Website: https://tw.transcend-info.com/

1.

LETTER TO SHAREHOLDERS------------------------------------------------------------------------------------------ 1

2.

COMPANY PROFILE ------------------------------------------------------------------------------------------------------- 3
2.1.
2.2.

3.

DATE OF INCORPORATION -------------------------------------------------------------------------------------------------------- 3
COMPANY HISTORY --------------------------------------------------------------------------------------------------------------- 3
CORPORATE GOVERNANCE REPORT ------------------------------------------------------------------------------ 8

3.1.
3.2.
3.3.
3.4.
3.5.
3.6.

3.7.

3.8.
3.9.

4.

ORGANIZATION -------------------------------------------------------------------------------------------------------------------- 8
BACKGROUND INFORMATION ON DIRECTORS, GENERAL MANAGERS, VICE GENERAL MANAGERS,ASSISTANT MANAGERS AND HEADS OF VARIOUS DEPARTMENT AND BRANCHES --------------------------------------10
IMPLEMENTATION OF CORPORATE GOVERNANCE ---------------------------------------------------------------------------32
INFORMATION ON CPA FEES ----------------------------------------------------------------------------------------------------70
REPLACEMENT OF CPA ----------------------------------------------------------------------------------------------------------70
WHERE THE COMPANY'S CHAIRMAN, GENERAL MANAGER, OR ANY MANAGERIAL OFFICER IN CHARGE OFFINANCE OR ACCOUNTING MATTERS HAS IN THE MOST RECENT YEAR HELD A POSITION AT THE ACCOUNTINGFIRM OF ITS CERTIFIED PUBLIC ACCOUNTANT OR AT AN AFFILIATED ENTERPRISE OF SUCH ACCOUNTING FIRM,
THE NAME AND POSITION OF THE PERSON, AND THE PERIOD DURING WHICH THE POSITION WAS HELD, SHALLBE DISCLOSED. --------------------------------------------------------------------------------------------------------------------70
ANY TRANSFER OF EQUITY INTERESTS AND/OR PLEDGE OF OR CHANGE IN EQUITY INTERESTS BY A DIRECTOR,MANAGERIAL OFFICER, OR SHAREHOLDER WITH A STAKE OF MORE THAN 10 PERCENT DURING THE MOSTRECENT FISCAL YEAR AND DURING THE CURRENT FISCAL YEAR UP TO THE DATE OF PUBLICATION OF THISANNUAL REPORT. -----------------------------------------------------------------------------------------------------------------70
RELATIONSHIP INFORMATION, IF AMONG THE COMPANY'S TOP 10 SHAREHOLDERS ANY ONE IS A RELATEDPARTY, SPOUSE OR A RELATIVE WITHIN THE SECOND DEGREE OF KINSHIP OF ANOTHER --------------------------------72
THE TOTAL NUMBER OF SHARES AND TOTAL EQUITY STAKE HELD IN ANY SINGLE ENTERPRISE BY THE
COMPANY, ITS DIRECTORS, MANAGERIAL OFFICERS, AND ANY COMPANIES CONTROLLED EITHER DIRECTLY OR
INDIRECTLY BY THE COMPANY. -------------------------------------------------------------------------------------------------77

CAPITAL OVERVIEW ----------------------------------------------------------------------------------------------------- 78
4.1.
4.2.
4.3.
4.4.
4.5.
4.6.
4.7.
4.8.

5.

CAPITAL AND SHARES------------------------------------------------------------------------------------------------------------78
STATUS OF CORPORATE BONDS ------------------------------------------------------------------------------------------------82
STATUS OF PREFERRED SHARES------------------------------------------------------------------------------------------------82
STAUTS OF OVERSEAS DEPOSITARY RECEIPTS -------------------------------------------------------------------------------82
STATUS OF EMPLOYEE STOCK OPTION ----------------------------------------------------------------------------------------82
STATUS OF NEW RESTRICTED EMPLOYEE SHARES --------------------------------------------------------------------------82
STATUS OF NEW SHARES ISSUANCE IN CONNECTION WITH MERGERS OR ACQUISITIONS ----------------------------82
IMPLEMENTATION OF THE CAPITAL ALLOCATION PLANS ------------------------------------------------------------------82
OPERATIONAL HIGHLIGHTS ----------------------------------------------------------------------------------------- 83

5.1.
5.2.
5.3.
5.4.
5.5.
5.6.
5.7.
6.

BUSINESS ACTIVITIES ------------------------------------------------------------------------------------------------------------83
MARKETS AND OVERVIEW OF PRODUCTION AND SALES -------------------------------------------------------------------96
THE NUMBER OF EMPLOYEES, AVERAGE SERVICE YEAR, AVERAGE AGE AND EDUCATIONAL LEVEL
DISTRIBUTION RATIO IN LAST TWO YEARS AND UP TO THE PUBLICATION DATE OF THIS ANNUAL REPORT ------ 105
ENVIRONMENTAL PROTECTION EXPENDITURES --------------------------------------------------------------------------- 106
LABOR RELATIONS ------------------------------------------------------------------------------------------------------------- 106
INFORMATION SECURITY MANAGEMENT ----------------------------------------------------------------------------------- 108
IMPORTANT CONTRACTS ------------------------------------------------------------------------------------------------------ 109
FINANCIAL INFORMATION ------------------------------------------------------------------------------------------ 110

6.1.
6.2.
6.3.
6.4.
6.5.
6.6.

CONDENSED BALANCE SHEET AND STATEMENT OF COMPREHENSIVE INCOME FOR THE MOST RECENT FIVEYEARS – BASED ON IFRS ----------------------------------------------------------------------------------------------------- 110
FINANCIAL ANALYSIS FOR THE MOST RECENT FIVE YEARS – BASED ON IFRS -------------------------------------- 114
AUDIT COMMITTEE’S REVIEW REPORT FOR THE MOST RECENT YEAR ------------------------------------------------ 118
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020, AND
INDEPENDENT AUDITORS’ REPORT------------------------------------------------------------------------------------------- 119
FINANCIAL STATEMENTS OF PARENT COMPANY ONLY FOR THE YEARS ENDED DECEMBER 31, 2021 AND
2020, AND INDEPENDENT AUDITORS’ REPORT ----------------------------------------------------------------------------- 190
THE COMPANY SHOULD DISCLOSE THE FINANCIAL IMPACT TO THE COMPANY IF THE COMPANY AND ITS
AFFILIATED COMPANIES HAVE INCURRED ANY FINANCIAL OR CASH FLOW DIFFICULTIES IN 2021 AND AS OF

THE DATE OF THIS ANNUAL REPORT. ---------------------------------------------------------------------------------------- 267

7.

REVIEW AND ANALYSIS OF FINANCIAL POSITION, FINANCIAL PERFORMANCE, AND
RISK MANAGEMENT --------------------------------------------------------------------------------------------------- 267
7.1.
7.2.
7.3.
7.4.
7.5.
7.6.
7.7.

8.

SPECIAL DISCLOSURE ------------------------------------------------------------------------------------------------ 277
8.1.
8.2.
8.3.
8.4.

9.

ANALYSIS OF FINANCIAL POSITION ------------------------------------------------------------------------------------------ 267
ANALYSIS OF FINANCIAL PERFORMANCE ----------------------------------------------------------------------------------- 268
ANALYSIS OF CASH FLOW ----------------------------------------------------------------------------------------------------- 270
THE EFFECT UPON FINANCIAL OPERATIONS OF ANY MAJOR CAPITAL EXPENDITURES DURING THE MOSTRECENT FISCAL YEAR --------------------------------------------------------------------------------------------------------- 270
REINVESTMENT POLICY FOR THE MOST RECENT FISCAL YEAR, THE MAIN REASONS FOR PROFITS OR
LOSSES GENERATED THEREBY, IMPROVEMENT PLANS, AND INVESTMENT PLANS FOR THE COMING YEAR------ 270
ANALYSIS OF RISK MANAGEMENT------------------------------------------------------------------------------------------- 271
OTHER MATERIAL MATTERS -------------------------------------------------------------------------------------------------- 275
INFORMATION OF AFFILIATED COMPANIES --------------------------------------------------------------------------------- 277
PRIVATE PLACEMENT OF SECURITIES IN 2022 AND AS OF THE DATE OF THIS ANNUAL REPORT --------------------- 280
STATUS OF THE COMPANY’S COMMON SHARES HELD AND DISPOSED BY SUBSIDIARIES IN 2021 AND AS OF
THE DATE OF THIS ANNUAL REPORT ----------------------------------------------------------------------------------------- 280
OTHER NECESSARY SUPPLEMENT-------------------------------------------------------------------------------------------- 280
LATEST MATTERS WITH MATERIAL IMPACTS ON SHAREHOLDERS’ INTERESTS OR
SECURITY PRICES INDICATED IN PARAGRAPH 3 SUBPARAGRAPH 2 OF ARTICLE 36 OF
THE SECURITIES AND EXCHANGE ACT IN 2021 AND AS OF THE DATE OF THIS ANNUALREPORT --------------------------------------------------------------------------------------------------------------------- 280

1.

Letter to Shareholders

Dear Shareholders,Though global industrial and economic development in 2022 continued to be affected by
COVID-19 pandemic, Russia-Ukraine war, and regional trade conflicts, which caused supply chain
disruptions, inflation spikes, and weakened PC demand. As a result, major suppliers faced excess
inventory, and declining DRAM and NAND flash prices. Despite this unfavorable condition,
Transcend agilely adjusted procurement strategies and carried out a destocking approach. With
stable product supply, good manufacturing performance, and rigorous pricing strategies, Transcend
maintained solid and stable performance last year. I would like to express my sincere gratitude to
all the shareholders, suppliers, and employees. It is your support and trust that have led Transcend
to overcome all the obstacles.
2022 Business Report(1) 2022 Business Report, Financial Highlights & Analysis
Transcend’s consolidated revenue totaled NT$12.1 billion in 2022, a decrease of 15.3% fromthe previous year. Consolidated gross profit also decreased, totaling NT$1.51 billion, which is
47.9% lower than the last year. However, benefiting from the US currency rate increase andhigher non-operating profit generated from land and building disposal by Transcend
Information (Shanghai), Ltd., the net income reached NT$2.45 billion, a YoY decrease of
3.12%. Earnings per share were NT$5.72, calculated at the weighted average of outstanding
share capital of NT$4.3 billion. The overall business performance in 2022 was poorer
compared to 2021. In addition, equity attributable to owners of the Company reached NT$19.6
billion, accounting for 90.8% of total assets. The ratio of long-term capital to property, plantand equipment was 1.272%, the current ratio was 1.139%, the return on assets was 11.2%, andthe return on equities was 12.5%.
(2) Budget Execution
Transcend did not have public financial forecast.
(3) Research & Development
As a brand pioneer in memory products, Transcend never stops moving forward with
innovation and improvement in mind. In recent years, IoT, VR/AR, 5G, AI, and machinelearning have been developed in unprecedented speed, which has further accelerated thedemands for high-performance storage devices. In the embedded market, Transcend launched
new-gen DDR5 DRAM modules, and designed industrial solid-state drives (SSDs) using new
112-layer 3D NAND flash. Transcend also adopted multiple technologies, such as SLC Mode,TCG Opal, Power Loss Protection (PLP), to enhance drive endurance and reliability. For the
consumer market, Transcend has been dedicated to high-capacity SSDs and high-performance
products, including the PCIe SSD 250H designed for professional gamers, the high-speed
portable SSD ESD380C featuring USB 3.2 Gen 2x2 interface, the super tiny portable SSD
JF940C , and the DrivePro Body 70 developed for law enforcement personnel.
2023 Business Plan
(1) Main Strategies
With innovation and improvement in mind, Transcend regards top quality, good service, andefficient operation as its core management principles.
-1-(2) Estimated Sales Volume
The estimation is based on the forecast of overall economy in 2023, market trend, and potential
sales orders in the future.
Product
Estimated Sales Volume/Unit: Thousand pieces
DRAM+Flash products
20,000
Others2,000(3) Fundamental Sales Policies
a. DRAM Modules
The strong demands from cloud computing, servers, IoT, and data centers have steadily
increased sales of DRAM modules, and the ratio of server-grade DRAM modules has risen
particularly fast. Moreover, the demands for new-gen DDR5 DRAM modules are expected
to surge in the second half of 2023 as more consumer devices support this specification.
b. Flash Products
In the first half of 2023, although inflation caused the enterprise and consumer PC demands
to reduce and data center investment withdrawn, the significant price drop of NAND flash
prompted more SSD delivery as more household gaming consoles tend to expand capacity
at more affordable prices. As inventory is cleared in the first half of the year, the market is
expected to recover and normal supply-demand balance can be fulfilled. One aspect that is
worth mentioning is the rising popularity of artificial intelligence, which boosts thedemands for high-speed storage and high-performance data transfer, creating greater
opportunities for Transcend embedded SSDs.
Regarding memory cards, as the pandemic comes under control and many countries
gradually lift the border lockdowns, triggering more traveling, the demands for memory
cards in digital cameras and dash cameras is expected to soar. In terms of industrial
applications, the chip shortage issue is expected to be improved, and the automotive
industry, electric vehicles in particular, is anticipated to bounce back, fueling strong
demands for memory cards.
In addition to its business, Transcend also puts shareholders’ rights at the forefront by actively
engaging in corporate governance and fully disclosing investment information. Transcend is also
active in social engagement in Taiwan, by continuously sponsoring youth athletic activities such as
the High School Basketball League, High School Volleyball League and Black Panthers Cup. For
the ninth consecutive year, Transcend has been awarded the Sport Activists Awards, symbolizing
our long-term dedication to youth training and cultivation. Transcend has also initiated thelong-term Remote Area Baseball Seed Program aimed at underprivileged school baseball teams
since 2015, expecting to nurture more future sport stars for Taiwan.
2023 is an era with exponential growth of data volume. Storage demands from enterprises andindividual consumers are escalating. High-speed and large-capacity DRAM/SSDs are becoming themain trend. Transcend will continue to develop more competitive products, strengthen supply chain
management, increase production efficiency to create a more sustainable future. We thank you forthe trust and support you have placed in Transcend, and we are excited about a long and prosperous
relationship together.

Chairman: Shu, Chung-Won-2-

2. Company Profile
2.1. Date of Incorporation
Date of Incorporation: August 30, 1989.
2.2. Company History
Year
1989

-

1990

-

1991
1992

-

1993
1994

1995

1996

-

1997

-

1998

-

Milestones
Transcend Information, Inc. is founded by Peter Shu in Taipei,
Taiwan.
The first products offered are the “JetMate” laser printer driverand the “KeyPro” software protection s ys tem.
Authorized and paid-in capital: NT$ 10,000,000
Transcend USA opens in Los Angeles, California.
Transcend begins manufacturing Taiwan's earliest laser printercontroller for producing Chinese characters.
Transcend begins to offer PCRAM expansion cards for desktops.
Authorized and paid-in capital: increased to NT$ 20,000,000
Transcend opens its Hamburg, Germany office.
Transcend begins manufacturing software securit y solutions.
Authorized and paid-in capital: increased to NT$ 60,000,000
Transcend is recognized as one of Taiwan's remarkable Smalland Medium Enterprises (SMEs) for outstanding performance ininformation application.
Transcend begins to offer PCMCIA expansion products for
laptop computers.
Transcend's annual revenue totaled NT$1.5 billion, up 135%.
Authorized and paid-in capital: increased to NT$ 102,000,000
Transcend begins to offer PCMCIA flash card products.
Transcend's annual revenue totaled NT$2.4 billion, up 62%.
Authorized and paid-in capital: increased to NT$ 162,000,000
Transcend expands its European operations by opening an officein Rotterdam, the Netherlands.
Transcend launches proprietary memory products for fax
machines and video game consoles.
Transcend opens distribution centers and bonded factories,
facilitating foreign trade.
Transcend opens a branch office in Tokyo, Japan.
Transcend launches its first digital still camera memory
products.
Transcend is awarded ISO-9001 Certification.
Transcend merged Won Deng Co., Ltd. Authorized and paid-in
capital: increased to NT$ 182,000,000.
Executed capital increase through capitalization of retained earnings of NT$
182,000,000 and cash capital increase of NT$ 60,700,000. The authorized
and paid-in capital was increased to NT$ 424,700,000. In addition, theretroactive handling of public offering was performed.
Transcend receives the National Award of Outstanding SMEs.
Executed capital increase through capitalization of retained earnings of NT$
84,940,000 and capital increase through capitalization of capital reserves of
-3-

1999

-

2000

-

2001

-

2002

-

2003

-

2004
2005

2006

-

NT$ 42,470,000. The authorized and the paid-in capital was increased toNT$ 552,110,000.
Transcend begins offering PC133 and Rambus memory modules.
Transcend receives Taiwan's 2nd annual Rising Star Award foroutstanding performance in foreign trade.
Transcend opens its first two retail stores in Taipei.
Transcend's annual revenue totaled NT$4.3 billion, up 34%.
Executed capital increase through capitalization of retained earnings of NT$
331,266,000 and capital increase through capitalization of capital reserves of
NT$ 55,211,000. The authorized capital was NT$ 2,000,000,000 and thepaid-in capital was increased to NT$ 938,587,000.
Transcend opens its retail store in Hong Kong.
Transcend launches its first DDR memory products.
Transcend moves into E-commerce by offering on-line direct B2C sales ofTranscend-brand products in Taiwan.
Transcend's annual revenue totaled NT$5.74 billion, up 42%.
Executed capital increase through capitalization of retained earnings of NT$
328,505,450, capital increase through capitalization of capital reserves of
NT$ 46,929,350 and the cash capital increase of NT$ 10,978,200. The
authorized capital remains NT$ 2,000,000,000, and the paid-in capital wasincreased to NT$ 1,325,000,000.
Transcend holds its Initial Public Offering on the Taiwan Stock
Exchange.on May 3, 2001.
Executed capital increase through capitalization of retained earnings of NT$
331,250,000 and capital increase out of employee bonus of NT$ 8,870,000.
The authorized capital was increased to NT$ 2,500,000,000 and the paid-in
capital was increased to NT$ 1,665,120,000.
Transcend expands its product line to include JetFlash USB flash
drives and card readers.
Executed capital increase through capitalization of retained earnings of NT$
340,880,000. The authorized capital was NT$ 2,500,000,000 and the paid-in
capital was increased to NT$ 2,006,000,000.
Transcend company headquarter is relocated to its large newfacilit y in Taipei's Neihu Technology District.
Transcend launches its StoreJet line of flash memory storage
products.
Transcend expands product line to include disk storage anddisplay s ystems.
Issuance of Euro-Convertible Bonds US$35,000,000.
Transcend's annual revenue totaled NT$9.52 billion, up 47%.
Transcend begins offering DDR2 memory modules andintroduces a number of multimedia products to the market.
Transcend's annual revenue totaled NT$14.59 billion, up 53%.
Transcend opens branch offices in Hertfordshire, England andMaryland, USA.
Transcend diversifies its range of flash products to include MP3
music players.
Transcend receives the 13th National Qualit y Award.
Transcend wins iF Design Award 2005.
Transcend unveils its Operation Facilit y in Shanghai, China.
-4-

2007

-

2008
2009
2010

-

2011

-

2012

-

Transcend becomes the first company in the world to receive ISO 9001, ISO
14001 and HSPM (QC 080000) certifications.
Transcend is honored with 2006 Taiwan Superior Brands award from the
Bureau of Foreign Trade, commissioned by the Ministry of Economics
Affairs (MOEA) of Taiwan.
Transcend celebrates its 20th anniversary as it opens its
Shanghai factory.
Transcend opens office in Osaka, Japan.
Transcend is named by GfK the No.1 brand of Memory Devices (Memory
Cards and USB drive) in 2006 in Taiwan's retail market.
Transcend Korea opens in Seoul, South Korea.
Transcend wins Best Taiwan Global Brands commissioned by the MOEA of
Taiwan with a brand value of USD $244 million.
Transcend wins Taiwan Excellence Award for 5 consecutive years with a
total of 19 products being awarded.
Transcend is ranked 62nd place as "Top 100 IT Brands o 2008"
by Bloomberg Businessweek.
Transcend wins Germany's Red Dot award for its product design.
Transcend wins Japan's Good Design award.
Transcend is the first memory module manufacturer in the world to garnerfive Quality Management System certificates issued by the International
Organization for Standardization.
Transcend's patented non-volatile memory technology wins the silver prizeof National Invention and Creation Award from the Taiwan Intellectual
Property Office (IPO).
Transcend's StoreJet 25M and StoreJet 25C external hard drives wins
Germany's Red Dot award for their design.
Transcend's JetFlash T5 USB flash drive wins Japan's Good Design award.
Transcend is the world's third-largest flash drive manufacturer with a global
market share of 11.6%, according to a Gartner survey in 2008.
Transcend launches a complete series of USB 3.0 flash solutions.
Transcend's patented flash memory technology wins the golden prize of
National Invention and Creation Award from the Taiwan IPO.
Transcend completes its Neihu factory in Taipei, Taiwan.
Transcend opens its third US office in Miami, Florida.
Transcend wins for the 5th consecutive year Best Taiwan Global Brands
commissioned by the MOEA of Taiwan.
Transcend's patented non-volatile memory technology wins the silver prizeof National Invention and Creation Award from the Taiwan IPO.
Transcend extends its corporate social responsibility by sponsoring youth
sports activities, such as the HBL.
Transcend organizes its first Working Holiday program, aiming to attract
young talents from all over the globe.
Transcend expands its product line with wireless storage products.
Transcend wins the award for best companies to work for commissioned by
Taipei City Government Labor Affairs Bureau.
Transcend is named the third-largest manufacturer of USB flash drives andthe fourth-largest manufacturer of memory cards in the world, according to a
Gartner survey in 2012.
Transcend continues to expand its sponsorship of all youth sports events,
-5-

2013

-

2014

-

2015

-

2016

-

2017

-

2018

-

including basketball, volleyball, cheerleading, soccer, and softball
tournaments.
Transcend opens office in Silicone Valley, USA.
Transcend expands its product line to include DrivePro dashcams.
Transcend receives the ISO/TS 16949:2009 Quality Management System
Certification by SGS, demonstrating Transcend’s continuous improvement inquality management to meet the needs of the automotive industry.
Transcend wins Taiwan Excellence Award for the 10th consecutive year witha total of 48 products being awarded.
Transcend's patented memory block management technology wins the silver
prize of National Invention and Creation Award from the Taiwan IPO.
Transcend wins the award for best companies to work for commissioned by
Taipei City Government Labor Affairs Bureau.
Transcend expands its product line to include Mac-compatible upgrade
solutions.
Transcend expands its DrivePro dashcam product line and is honored with
ICT Month 100 I.T. Innovative Elite Award.
Transcend begins to sponsor the 2nd Black Panther High School BaseballTournament.
Transcend expands its product line to include DrivePro Body wearable
cameras.
Transcend wins Good Design Award 2015 for the design of its DrivePro 520
dashcam and JetDrive Lite expansion cards for Mac.
Transcend initiates its long-term Baseball Mentoring Program aimed atunderprivileged school baseball teams, aspiring to help young promisingathletes fulfill their dreams.
Transcend expands its product line to include StoreJet Cloud personal cloudstorage.
Transcend wins for the 10th consecutive year Best Taiwan Global Brands
commissioned by the MOEA of Taiwan.
Transcend's DrivePro 50 dashcam wins Japan's Good Design Award 2016.
Transcend's embedded SSDs are in fourth place in global market share,
according to a Gartner survey in 2015.
Transcend launches its first PCIe M.2 SSD series.
Transcend wins Good Design Award 2017 for its CM42 M.2 SSD enclosure
kit.
Transcend is honored by Taiwan's Ministry of Education for the first time in2017 for actively promoting sports activities.
Transcend continues to sponsor youth sports events, winning the silver prizeof Sports Activist Awards and the Long-Term Sponsorship Award in 2017.
Transcend launches a dual lens dashcam and a body camera with a tetheredcamera unit, and is honored with ICT Month 100 I.T. Innovative EliteAward.
Transcend wins Taiwan Excellence Award for the 15th consecutive year witha total of 77 products being awarded.
Transcend's JetDrive 855 SSD Upgrade Kits for Mac wins Japan's Good
Design award.
Transcend is honored with the golden prize of Sports Activist Awards for its
continuous efforts in sponsoring youth sports events.
-6-

2019

2020

-

2021

2022

-

Transcend unveils its cutting-edge Portable SSD product series.
Transcend is granted 2019 Badge of Accredited Healthy Workplace by
Taiwan's Ministry of Health and Welfare for health promotion at theworkplace.
Transcend wins Taiwan Excellence Award for the 17th consecutive year.
Transcend expands its product line to include 3D NAND SSDs with
Extended Temperature Tolerance.
Transcend launches its first CFExpress Type B memory card.
Transcend launches its first QLC NAND SSD.
Transcend wins Top 25 Internation Brands in Taiwan for the 15th
consecutive year.
Transcend launches its first PCIe Gen4 x4 SSDs.
Transcend launches its first motorcycle dashcam DrivePro 20.
Transcend launches the DDR5-4800 DRAM module product line.
Transcend launches industrial-grade 112-layer 3D NAND SSDs.
Transcend wins Top 25 Internation Brands in Taiwan for the 16th
consecutive year.
Transcend wins Taiwan Excellence Award for the 18th year.
Transcend launches PCIe 4.0 M.2 SSD MTE250H, equipped withprofessional aluminum fin Heat Sink.
Transcend launches high-speed and anti-shock portable SSD ESD380C
Transcend launches industrial-grade 112-layer 3D NAND SLC Mode, TCG
Opal, and PLP SSD product lines with power-off protection-7-

3. Corporate Governance Report
3.1. Organization
3.1.1. Organizational Chart-8-

3.1.2. Major Corporate Functions
Department

Sales

Functions

Responsible for the establishment of the sales plan for all markets worldwide, including
physical/virtual channels, direct stores and project brands of the Company, industry grade,
network communication/POS/medical/military application/automobile application and OEM
customers, as well as the development and maintenance of customers, business management
and promotion, collection and response to new business opportunities.

Responsible for the research, development and design related matters for memory products,
R&D
computers and mobile phone peripheral products and vehicle continuous video recording (CVR)
Tech Support
and wearable cameras.
Responsible for product production, testing, repair and production schedule control, productProduction shipping operation, production technologies, manufacturing quality improvement and related
matters.
Responsible for the management of reasonable pricing and fair distribution of the Company’s
products, summarization and analysis of product information and pros/cons of products of eachproduct line, and also provide assistance to customization demands. Responsible for mattersPM &related to the brand marketing activities, strengthening of brand image, product and market
Marketinginformation collection, establishment and execution of marketing plans, contact and applicationof broadcast media, planning of the Company’s website and assistance to sales activity
arrangement and design, etc.
FAD

Responsible for the Company’s financial analysis, accounting affairs, statements preparation,difference analysis, fund management, planning of the Company’s taxes, finance, stock affairs
and investments as well as monitoring of the cash flow of all subsidiaries.

PUR

Responsible for understanding the quality condition and price trend of raw materials,
component parts, machine equipment and office supplies necessary for the products andoperation of the Company in order to perform price negotiation and purchase. It is also
responsible for maintaining the safety stock of the purchase items and assisting the handling ofslow-moving materials.

ADM

Responsible for coordinating the Company’s administrative management, human resource,
legal, patent and trademark related affairs, in order to ensure that all administrative affairs of theCompany comply with the laws and regulations, and also responsible for establishing internal
regulations according to laws in order to ensure the compliance of all employees in theorganization.

Information Responsible for matters related to the Company’s software and hardware constructions for
Systemsystems, networks and computers.
Responsible for the establishment of the Company’s quality assurance system, promotion of
Quality
ISO system and QA management system, direct internal audit and external certification, andAssurance communication with other departments to achieve objectives of the organization, customer audit
and subsequent follow-up management.
Responsible for the monitoring and assessment of the design of internal control systems of the
Audit Office parent company and its subsidiaries and also determine whether their executions are effective,
and propose improvement recommendations.
Responsible for leading and executing occupational safety and health policies, ensuring the
Occupational implementation of the occupational safety and health management system, controlling
Safety Office occupational safety and health documents, regularly conducting workplace environmental
monitoring, and managing and supervising contracting and construction activities.
-9-3.2. Background Information on Directors, General Managers, Vice General Managers, Assistant Managers and Heads of Various Department and Branches
3.2.1. Directors
April 18, 2023

Title

Nationality/
Place of
Incorporation

Name

GenderAge

DateElectedTerm(Years)Date FirstElectedShareholding when
Current Shareholding
ElectedShares%Shares%Spouse & Minor
Shareholding

Shareholding by
NomineeArrangement

SharesShares

%

R.O.C

SHU,
CHUNG-WON

61-70
years old

2021.08.26

3

2003.06.03

9,990,453

2.33%

9,990,453

2.33%

-

0.00%

CEO of Transcend Information Inc.
Chairman of Taiwan IC Packaging
Corporation
Department of Electrical
Director of C-Tech Corporation andEngineering, National Cheng
Transcend Information Trading GmbH
Kung University
0.00%
General Manager of Transcend Information
Project Manager of HewlettInc.
Packard Development
President of Transcend Information Trading
Company, L.P.
GmbH
Independent Director of Sports Gear Co.,
Ltd.

-

Male
Director

R.O.C

SHU,
CHUNG-CHENG

71-80
years old

2021.08.26

3

2004.06.11

6,244,098

1.46%

6,244,098

1.46%

-

0.00%

-

R.O.C

CHUI, LI-CHU

61-70
years old

2021.08.26

32021.08.26

3

2003.06.03(discharged
on2009.6.13
after
expiration of
two terms ofoffice)2021.08.26

32021.08.26

Male
Director

R.O.C

HSU,
CHIA-HSIAN

Director

R.O.C

CHEN, PO-SHOU

61-70
years old2015.06.12

-

0.00%

-

0.00%

9,990,453

2.33%

487,2440.11%

437,2440.10%

26,744

0.01%

-

0.00%

-

0.00%

-

0.00%

-

0.00%

Title

Name

Relation

Director

SHU,
CHUNGCHENG

Brother

Department of French,
Tamkang University
Administrative officer of Ho
Cheng Investment Inc.

Supervisor of Won Chin Investment Inc.

Remark(Note)

Note

Director

CHUI,
LI-CHU

SpouseBrother

Seconddegree
Relatives

ChairmanSHU,
and CEO andCHUNGGeneral
WON
Manager

SpouseDirector

SHU,
CHUNGCHENG

Seconddegree
Relatives--

Department of AutomaticControl Engineering, Feng
0.00% Chia University
President of China area ofTranscend Information Inc.

Consultant of Transtech Trading (Shanghai)Co., Ltd.

None

None

None

-

-

0.00%

San Jose State University
Economics
Sales Director of Transcend
Information, Inc.

Sales Vice General Manager of Transcend
Information, Inc.

None

None

None

-

Male
41-50
years old

Executives, Directors or
Supervisors Who are Spouses orwithin Two Degrees of Kinship

Chairman of C-Tech Corporation, Cheng
Chairman
Chuan Technology Development Inc. andSHU,
and CEO and
Shu Min Investment Inc.
CHUNGGeneral
Executive Director of Transcend Information
WON
Department of Civil
Manager(Shanghai), Ltd. and Transtech Trading
Engineering, National Taipei(Shanghai) Co., Ltd.
0.00% Institute of Technology
Director of Wan An Technology Inc., Won
General Manager ofChin Investment Inc., Wan Min Investment
Transcend Information Inc.
Inc., Wan Chuan Investment Inc., Saffire
CHUI,
Investment Ltd., Memhiro Pte. Ltd. andDirector
LI-CHU
Transcend Information (H.K.) Limited.
Consultant of Transcend Information Inc.

FemaleDirector

Other Position%

Male
Chairman

Experience（Education）

Note : Due to the needs of the Company’s operation and business development, presently, the Chairman, CEO and General Manager refer to the same person. However, a majority of the directors are notconcurrently assuming the positions of employees or managerial officers. The supervisory function of the board of directors is still complete. In the future, to cope with the regulatory requirements, thestructure of the board of directors will be adjusted.

-10-

April 18, 2023

Title

Director

Indeoendent
Director

Nationality/
Place of
Incorporation

R.O.C

R.O.C

Name

WU,
KUAN-DEWANG,
YI-HSIN

Term
GenderDate Elected (Years)
Age

Date FirstElectedShareholding
when Elected

Current
Shareholding

Spouse & Minor
Shareholding

Shareholding by
NomineeArrangement

SharesSharesSharesShares%%%2021.08.26

32021.08.26

-

0.00%

-

0.00%

-

0.00%

-

Female61-70
years old

2021.08.26

3

2012.06.15

-

0.00%

-

0.00%

-

0.00%

-11-

Other Position

%

Male
41-50
years oldExperience（Education）-

Master of Mechanical Engineering,
National Taiwan University
Factory Chief of Transcend
0.00% R&D Director of Transcend Information,
Information, Inc.
Inc.

Ph.D, Accounting, University of Kentucky
Professor of Department of Accounting,National Chung Hsing University
Vice President of National Taipei
University, Library Director
Independent Director of Bestcom Infotech
Corp.
Independent Director of United
BioPharma Inc.
Professor of Department of Accounting,President and Professional Development National Taipei University
Committee Chairperson, Institute of
Chairman of Accounting Research andInternal Auditors-Chinese Taiwan
Development Foundation
Director and Member of Professional
Chairman of Taipei Trend Research
Ethics Committee and International
Foundation
0.00% Relationship Committee, International
Supervisor of Telecom Technology
Internal Audit Association
CenterFinancial Officer of Asian Alliance,
Consultant of Professional
International Internal Audit Association Development Committee, Institute ofCommittee Member of “Park Operation Internal Auditors-Chinese Taiwan
Fund Supervisory Management
Director of Yu Da University ofCommittee,” National Science Council,
Science and Technology
Executive Yuan
Committee Member of “Committee forGovernment Accounting Standards,”
Directorate-General of Budget,
Accounting and Statistics, Executive Yuan
Director of First Financial Holding Co.,
Ltd.

Executives, Directors or
Supervisors Who are Spouses orwithin Two Degrees of Kinship

Remark(Note)

Title

Name

Relation

None

None

None

-

None

None

None

-

TitleIndeoendent
Director

Indeoendent
Director

Nationality/
Place of
Incorporation

R.O.C

R.O.C

Name

CHEN,
YI-LIANG

CHEN,
LO-MIN

Term
GenderDate Elected (Years)
Age

Date FirstElectedShareholding
when Elected

Current
Shareholding

Spouse & Minor
Shareholding

Shareholding by
NomineeArrangement

SharesSharesSharesShares%%%2021.08.26

3

2012.06.15

-

0.00%

-

0.00%

-

0.00%

-

Male
61-70
years old

2021.08.26

3

2012.06.15

-

0.00%

-

0.00%

-

0.00%

Other Position

%

Male
61-70
years oldExperience（Education）-

MBA, University of California, Los
AngelesPresident of China area of HewlettPackard Development Company, L.P.
Financial Vice President of Taiwan area of
Hewlett-Packard Development Company,
0.00%
Director of Tai Hwa Oil Industrial Co.,
L.P.
Ltd.
Independent Director of Nano-Op Co.,Ltd.
Independent Director of Lextar
Electronics Corp.

Department of Business Administration of
National ChengChi University
Global Executive Vice President of
Diebold Inc.
President of Asia-Pacific area of Diebold
Independent Director of Hitron
0.00% Inc.
Technologies Inc.
President of Great China Business divisionof Royal Phlips
President of NCR China Co., Ltd.
Vice President of Taiwan branch of NCR
Corp.

Executives, Directors or
Supervisors Who are Spouses orwithin Two Degrees of Kinship
Title

Name

Relation

None

None

None

-

None

None

None

-

3.2.2. Disclose the name of the Institutional Shareholders if the Company’s Direcor is a representative of an Institutional Shareholder: None.
3.2.3. Top 10 Shareholders’ Names and Shareholding Ratio of the Institutional Shareholders: Not applicable.

-12-

Remark(Note)

3.2.4. Disclosure of information as professional qualifications and independent status of directors and independent directors
Criteria

Professional Qualifications and Experience

Independent Status

Department of Electrical Engineering, National Cheng Kung University.
He is former Project Manager of Hewlett-Packard Development Company,
L.P. Presently, he has been dedicated in the memory industry business
management for more than 35 years since the establishment of theCompany in 1988. In addition to the positions of Director and President at
a subsidiary 100% owned by the Company, he also acted as the Chairmanof the affiliated company of Taiwan IC Packaging Corporation andvertically integrates the industry value chain.

He is the CEO and General Manager of the Company, and concurrently
acts as the Director and President of the affiliated company of Transcend
Information Trading GmbH.

Name

SHU,
CHUNG-WONSHU,
CHUNG-CHENG

He is equipped with extensive industry knowledge, practical experience,business management and leadership, and he is also equipped with insighton the industrial development trend. With regard to the promotion ofoverseas market business, he also understands various commercial
environment, economy, culture and relevant risks. Accordingly, his
valuable experience is able to propose comments and directives on mattersrelated to corporate governance, operational management and risk
management to the board of directors of the Company, thereby achieving
the functions of strategic guidance and performance improvement.

Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

He is in a marital relationship with Director CHUI, LI-CHU.
SHU, CHUNG-CHENG is a second-degree relative of him and he also
acts the Director of affiliated companies of Transcend Information(Shanghai) Ltd., Transtech Trading (Shanghai) Ltd., Transcend
Information (H.K.) Ltd., Won Chin Investment Inc., Saffire Investment
Ltd., and Memhiro Pte. Ltd.
The number of shares held by him and his second-degree relative SHU,CHUNG-CHENG is 16,234,551 shares, accounting for 3.78%, and he islisted as individual shareholder of the top 10 shareholding percentage.

1

Act as the Chairman of Taiwan IC Packaging Corporation, an affiliatedcompany invested under the equity method.

Have Work Experience in the Areas of Commerce, Law, Finance, or
Accounting, or Otherwise Necessary for the Business of the Company.

He has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.

Not been a person of any conditions defined in Article 30 of the Company
Law.

Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.

Department of Civil Engineering, National Taipei Institute of Technology.
Acted as the President of the Company from November 1998 to March

He is the Director of affiliated companies of Transcend Information(Shanghai) Ltd., Transtech Trading (Shanghai) Ltd., Transcend

-13-

0

Criteria

Professional Qualifications and Experience

Independent Status2020. Currently acts as a consultant of the Company. He has been
dedicated in the memory industry business management for more than 25
years, and also acts as the Chairman or Director in related companies of
the Company, in order to contribute his expertise in corporate governance.

Information (H.K.) Ltd., Won Chin Investment Inc., and Saffire
Investment Ltd., Memhiro Pte. Ltd.

Name

He is equipped with extensive industry knowledge, practical experience,business management and crisis handling capabilities, and also has certain
understanding on the overall business policy, objective of the overall
operation as well as major business decision of the Company, such that heis able to promptly adopt changes, adjust strategies and implement timely
responsive measures. Accordingly, with his valuable experience he is able
to propose comments and directives on matters related to corporate
governance, operational management and risk management to the board of
directors of the Company, and provide references and adjustments for the
management team.
Have Work Experience in the Areas of Commerce, Law, Finance, or
Accounting, or Otherwise Necessary for the Business of the Company.
Not been a person of any conditions defined in Article 30 of the Company
Law.

Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

He is in the second-degree relative relationship with Director CHUI, LICHU.
SHU, CHUNG-WON is a second-degree relative of him and he also acts
the Director and President of affiliated companies of Transcend
Information Trading GmbH.
The number of shares held by him and his second-degree relative SHU,CHUNG-WON is 16,234,551 shares, accounting for 3.78%, and SHU,CHUNG-WON is listed as individual shareholder of the top 10
shareholding percentage.
He acts as the Chairman of Cheng Chuan Technology and also acts as the
Director of Won Chin Investment Inc., where both Cheng Chuan
Technology and Won Chin Investment Inc. are business partners of theCompany.
He has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.
Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.

CHUI, LI-CHU

Department of French, Tamkang University. Since 2006, she has assumed
positions of Supervisor of Won Chin Investment Inc. and Administrative
officer of Ho Cheng Investment Inc. She is equipped with more than 16

She is not an employee, director of affiliates.
0
Her spouse SHU, CHUNG-WON is the Director and President of-14-

Criteria

Professional Qualifications and Experience

Independent Status

years of working experience in investment business, and is able topromptly propose comments and directives related to corporate
governance and operation management to the board of directors of theCompany.

Transcend Information Trading GmbH.
SHU, CHUNG-CHENG is a second-degree relative of her and he also acts
the Director of affiliated companies of Transcend Information (Shanghai)Ltd., Transtech Trading (Shanghai) Ltd., Transcend Information (H.K.)
Ltd., Won Chin Investment Inc., Saffire Investment Ltd., and Memhiro
Pte. Ltd.

Name

Have Work Experience in the Areas of Commerce, Law, Finance, or
Accounting, or Otherwise Necessary for the Business of the Company.
Not been a person of any conditions defined in Article 30 of the Company
Law.

Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

The number of shares held by her spouse SHU, CHUNG-WON and her
second-degree relative SHU, CHUNG-CHENG is 16,234,551 shares,
accounting for 3.78%, and they are listed as individual shareholders of the
top 10 shareholding percentage.
She acts as the Supervisor of Won Chin Investment Inc. in business
relationship with the Company.
She has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.
Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.

HSU,
CHIA-HSIAN

Department of Automatic Control Engineering, Feng Chia University. He
participated in the Company since the establishment in 1988 and retired in2015. He has been dedicated in the memory industry for more than 28
years and has participated in numerous projects. His last position was the
President of China area, and he is responsible for the development ofbusiness and factory establishment and management in the China region.
He is equipped with extensive information electronic industry knowledge,

He is not an employee, director and supervisor of affiliates.
His spouse, relative within the second degree of kinship or direct blood
relative within the third degree of kinship is not an employee, director andsupervisor of the Company or its affiliates.
The number of shares held by him is 437,244 shares, accounting for
0.10%.

-15-0Criteria

Professional Qualifications and Experience

Independent Status

Name
practical experience, business management and decision making
capabilities, and he is also equipped with extensive experience in industry
development along with several years of overseas practical experience. He
is able to communicate on relevant business management affairs withother directors and to provide comments and directives to the management
team.

CHEN,PO-SHOU

He is not assuming any position of director, supervisor or employee of acompany having a special relationship with the Company.
He has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.

Have Work Experience in the Areas of Commerce, Law, Finance, or
Accounting, or Otherwise Necessary for the Business of the Company.

Not having a marital relationship, or a relative within the second degree ofkinship to any other director of the Company.

Not been a person of any conditions defined in Article 30 of the Company
Law.

Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.

San Jose State University Economics. Since July 1, 2019, he has acted as
the Business Vice President of the Company and he is also equipped withthe seniority of 15 years of service. He is mainly responsible for thebusiness unit’s annual operation goal and sales strategy of the Company,and he also provides guidance on the business development direction andmaintains customer relationships.

He is the Sales Vice General Manager of the Company.

He is equipped with extensive industry experience, and has in-depth

understanding on the industry development trend, marketing, sales andrelevant risk management. Act as the manager of the board of directors topromptly propose comments and directives related to corporate
governance, operation management and risk management.
Have Work Experience in the Areas of Commerce, Law, Finance, or
Accounting, or Otherwise Necessary for the Business of the Company.

Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

His spouse, relative within the second degree of kinship or direct blood
relative within the third degree of kinship is not an employee, director andsupervisor of the Company or its affiliates.
The number of shares of the Company held by him and his spouse,
relatives within the second degree of kinship (or under the name of others)
is 0 shares.
He is not assuming any position of director, supervisor or employee of acompany having a special relationship with the Company.
He has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.

-16-

0

Criteria

Professional Qualifications and Experience

Independent Status

Not been a person of any conditions defined in Article 30 of the Company
Law.

Not having a marital relationship, or a relative within the second degree ofkinship to any other director of the Company.

Name

Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.
Master of Mechanical Engineering, National Taiwan University. He has
serviced the Company since October 18, 2010, and was promoted to
Factory Director from R&D Department Director on October 1, 2020,
with nearly 13 years of seniority. He is mainly responsible for the productmanufacturing process arrangement, improvement of manufacturing
technologies and process quality, as well as application of relevant
information technology on manufacturing process.

WU, KUAN-DE

He is equipped with the memory industry knowledge, R&D and productmanagement, information technology application, leadership and crisis
handling capability, and he is also able to propose comments anddirectives related to the operation of the Company to the board of
directors.

He is the manufacturing unit factory affairs responsible officer of theCompany.
His spouse, relative within the second degree of kinship or direct blood
relative within the third degree of kinship is not an employee, director andsupervisor of the Company or its affiliates.
The number of shares of the Company held by him and his spouse,
relatives within the second degree of kinship (or under the name of others)
is 0 shares.
He is not assuming any position of director, supervisor or employee of acompany having a special relationship with the Company.

Have Work Experience in the Areas of Commerce, Law, Finance, or
Accounting, or Otherwise Necessary for the Business of the Company.

He has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.

Not been a person of any conditions defined in Article 30 of the Company
Law.

Not having a marital relationship, or a relative within the second degree ofkinship to any other director of the Company.
Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.

-17-

0

Criteria

Professional Qualifications and Experience

Independent Status

MBA, University of California, Los Angeles. He currently acts as the
Director of Tai Hwa Oil Industrial Co., Ltd. He once acted as the Presidentof China area of Hewlett-Packard Development Company, L.P., Financial
Vice President of Taiwan area of Hewlett-Packard Development Company,
L.P., and Independent Director of Nano-Op Co., Ltd. He is equipped withthe experience in corporate governance, finance, operation management
capability and cooperate business development. He is able to provide
recommendations to the management team, to improve the corporate
governance quality of the board of directors, to implement audit
committee supervisory authority and to strengthen the salary andremuneration management function.

He is not an employee, a director and supervisor of the Company or any of
its affiliates.

Name

CHEN,
YI-LIANG

Have Work Experience in the Areas of Commerce, Law, Finance, or
Accounting, or Otherwise Necessary for the Business of the Company.
(with more than 30 years of professional experience in commerce, financeand corporate business development).
Not been a person of any conditions defined in Article 30 of the Company
Law.

Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

His spouse, relative within the second degree of kinship or direct blood
relative within the third degree of kinship is not an employee, director andsupervisor of the Company or its affiliates.
The number of shares of the Company held by him and his spouse,
relatives within the second degree of kinship (or under the name of others)
is 0 shares.
He is not assuming any position of director, supervisor or employee of acompany having a special relationship with the Company.

0

He has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.
Not having a marital relationship, or a relative within the second degree ofkinship to any other director of the Company.
Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.

CHEN, LO-MIN

Department of Business Administration of National ChengChi University.
He currently acts as the Independent Director of Hitron Technologies Inc.
He once acted as the Global Executive Vice President of Diebold Inc.,
President of Asia-Pacific area of Diebold Inc., President of Great China
Business division of Royal Phlips, President of NCR China Co., Ltd., andHe is not an employee, a director and supervisor of the Company or any of
its affiliates.
1
His spouse, relative within the second degree of kinship or direct blood
relative within the third degree of kinship is not an employee, director and-18-

Criteria

Professional Qualifications and Experience

Independent Status

Vice President of Taiwan branch of NCR Corp. He is equipped with theexperience in corporate governance, operation management capability andcooperate business development. He is able to provide recommendations
to the management team, to improve the corporate governance quality ofthe board of directors, to implement audit committee supervisory authority
and to strengthen the salary and remuneration management function.

supervisor of the Company or its affiliates.
The number of shares of the Company held by him and his spouse,
relatives within the second degree of kinship (or under the name of others)
is 0 shares.

Name

Have Work Experience in the Areas of Commerce, Law, Finance, or
Accounting, or Otherwise Necessary for the Business of the Company.
(with more than 30 years of professional experience in commerce, financeand corporate business development).
Not been a person of any conditions defined in Article 30 of the Company
Law.

Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

He is not assuming any position of director, supervisor or employee of acompany having a special relationship with the Company.
He has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.
Not having a marital relationship, or a relative within the second degree ofkinship to any other director of the Company.
Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.

WANG, YI-HSIN

Ph.D, Accounting, University of Kentucky. She is equipped with financial
and accounting processional expertise. She currently acts as the Professorof Department of Accounting, National Taipei University, Chairman of
Accounting Research and Development Foundation, Consultant ofProfessional
Development
Committee,
InstituteofInternal
Auditors-Chinese Taiwan, and Director of Yu Da University of Scienceand Technology. She once acted as the Professor of Department of
Accounting, National Chung Hsing University, Vice President of National
Taipei University, Director of First Financial Holding Co., Ltd.,
Independent Director of Bestcom Infotech
Corp., Independent Director of United BioPharma Inc., President andProfessional Development Committee Chairperson, Institute of Internal

She is not an employee, a director and supervisor of the Company or anyof its affiliates.
Her spouse, relative within the second degree of kinship or direct blood
relative within the third degree of kinship is not an employee, director andsupervisor of the Company or its affiliates.
The number of shares of the Company held by her and her spouse,
relatives within the second degree of kinship (or under the name of others)
is 0 shares.
She is not assuming any position of director, supervisor or employee of a

-19-

0

Criteria

Professional Qualifications and Experience

Independent Status

Auditors-Chinese Taiwan, Director and Member of Professional Ethics
Committee and International Relationship Committee, International
Internal Audit Association and Financial Officer of Asian Alliance,
International Internal Audit Association. She is equipped with theprofessional skills in corporate governance, finance and accounting, as
well as internal audit. She is able to provide recommendations to the
management team, to improve the corporate governance quality of theboard of directors, to implement audit committee supervisory authority
and to strengthen the salary and remuneration management function.

company having a special relationship with the Company.
She has not provided the services of commerce, law, finance andaccounting to the Company or its affiliates in the last 2 years.

Name

Not having a marital relationship, or a relative within the second degree ofkinship to any other director of the Company.
Not a governmental, juridical person or its representative as defined in
Article 27 of the Company Law.

Have an Instructor or Higher Position in a Department of Commerce, Law,
Finance, Accounting, or Other Academic Department Related to the Business
Needs of the Company in a Public or Private Junior College, College or
University., and Work Experience in the Areas of Commerce, Law,

Finance, or Accounting, or Otherwise Necessary for the Business of theCompany. (with more than 30 years of professional experience incommerce, finance and corporate business development).
Not been a person of any conditions defined in Article 30 of the Company
Law.

-20-

Number of Other
Public Companies
in Which the
Individual is
Concurrently
Serving as an
Independent
Director

3.2.5. Diversity and Independence of the Board of Directors(1)Diversity of the Board of Directors
The nomination and election of board members of the Company comply with the ”Procedures for Election of Directors” and ”Corporate
Governance Best-Practice Principles” , in order to ensure the diversity and independence of board members. According to Article 20 ofthe”Corporate Governance Best-Practice Principles” of the Company, the composition of the board of directors shall consider the diversity,
focusing on gender equality, and directors shall be generally equipped with knowledge, skills and expertise necessary for executing their job duties.
To realize the ideal of corporate governance, the board of directors as a whole shall possess the abilities, including operational judgment capability,
accounting and financial analysis capability, business management capability, crisis handling capability, industrial knowledge, international market
view, leadership capability, decision-making capability, etc.
Specific management objectives and achievement of the Board's Diversity Policy
Management Objectives

Achieved

There should be at least one female board member

Achieved

At least one-third of the directors have computer industry,marketing or technology expertiseAchieved

At least one-third of independent directors have legal,
accounting or technological expertiseAchieved

The Company’s diversity policy for current Board members and its implementation are as follows:-21-Core ofdiversify

Basic composition
Tenure and seniority
of independent
directors

Age40-60 61-70

Shu,
Chung-Won
Shu,
Chung-Cheng

V

Professional ability
Accounting

Bank

NationalityGender Employee
Name

Industry experience

Over Below 3-9 Over 9
71 3 years years years

Business
Marketingmanagement

R&D

and

Information

Risk

Financial Technology Management
Analysis

R.O.C

Male

V

R.O.C

Male

Chui, Li-Chu

R.O.C

FemaleV

V

Hsu,
Chia-Hsian

R.O.C

Male

V

V

Chen, Po-Shou

R.O.C

Male

V

V

V

Wu, Kuan-De

R.O.C

Male

V

V

V

Chen, Yi-Liang

R.O.C

Male

V

V

V

V

V

Chen, Lo-Min

R.O.C

Male

V

V

V

V

V

Wang, Yi-Hsin

R.O.C

Female

V

V

V

V

V

V

-22-

V

V

V

V

V

V

V
V
V

V

V

V

V
V

V

V

V

All directors are equipped with extensive experience in leadership, decision, operation determination, business management, crisis handling, andare also equipped with industrial knowledge and international market view such that they are equipped with various capabilities necessary to
execute the corporate governance. Independent directors, Mr. CHEN, YI-LIANG, Mr. CHEN, LO-MIN and Ms. WANG, YI-HSIN, are equippedwith the professional backgrounds in accounting and financial analysis, such they are able to provide professional recommendations to theCompany from different viewpoints and aspects.
The current nine directors are of the nationality of the R.O.C., and the composition structure includes three independent directors, accounting for
33% of all directors. Three directors have the identity of an employee, accounting for 33%, and two directors are female directors (including one
independent director), accounting for 22%. Furthermore, with regard to the age distribution, one director is above the age of 71 years old, six
directors are of the age of 61–70 years old, and two directors are under the age of 60 years old.
(2) Independence of the Board of Directors
According to the provisions of the Securities and Exchange Act, the Company has obtained written declarations issued by all independent directors
during their assumption of office, and they are confirmed to comply with the provision specified in Article 14-2 of the Securities and Exchange Act
and relevant requirements specified in Regulations Governing Appointment of Independent Directors and Compliance Matters for PublicCompanies. The number of terms of office of the independent directors of the Company has reached four terms consecutively, and to further
emphasize the supervision and implement external independent functions, fixed compensation is provided to independent directors only.
Accordingly, after evaluation, the independence thereof is not reduced.
The Company is of the opinion that the board of directors is able to evaluate the independence of directors according to actual condition, including
the required recusal of directors due to conflict of interest, and to provide reports on important operation affairs, risk management, sustainable
operation issues and corporate governance, and whether directors are able to express perspectives different from other directors. In addition,according to the provisions of Paragraph 3 and Paragraph 4 of Article 26-3 of the Securities and Exchange Act, the percentage of directors having
the relationship of a spouse or relatives within the second degree is 33% only, less than half of the total number of directors, and it is evaluated ascomplying with the regulations.

-23-

3.2.6. Management Team
April 18, 2023
Title

Nationality

Name

Gender

Date
ElectedShareholding

Spouse & Minor
Shareholding

Shareholding
by Nominee
Arrangement

SharesSharesShares%%Experience (Education)

Other
Position%
Department of ElectricalEngineering, National
Cheng Kung University
 Project Manager of
0.00%
Hewlett-Packard
Development Company,
L.P.
 Chairman of Transcend
Information, Inc.
 Master of Information
Management, National
Taiwan University of
0.00%
Science and Technology
 R&D Vice General
Manager of Transcend
Information, Inc.
 University of Southern
California ElectricalEngineering
0.00%  Administration Vice
General Manager ofTranscend Information,
Inc.
 San Jose State University
Economics
0.00%  Sales Vice General
Manager of Transcend
Information, Inc.
 Master of Accountancy,
National Cheng Kung
0.00%
University
 Financial andManagers who are Spouses orWithin Two Degrees of Kinship

Remark(s)

Title

Name

Relation(Note 2)

None

None

None

-

None

None

None

None

-

None

None

None

None

-

None

None

None

None

-

None

None

None

None

-



Chairman,
CEO andGeneralManager(Note 1)

R.O.C

Shu,
Chun-Won

Male

1991.06.01 9,990,453

2.33%

-

0.00%

-

Vice
GeneralManager

R.O.C

LI,
TSENG-HOMale

2020.10.01

-

0.00%

4,000

0.00%

-

Vice
GeneralManager

R.O.C

Fang,
Wen-JengMale

2019.09.01

-

0.00%

25,9670.01%-

Director &Vice
GeneralManager

R.O.C

Chen,
Po-ShouMale2019.07.01

-

0.00%

-

0.00%

-

CFO &
Corporate
Governance
Officer

R.O.C

Chi,
Wen-Hui

Female(Note 3)

1,000

0.00%

-

0.00%

-

-24-

April 18, 2023
Title

Nationality

Name

Gender

Date
ElectedShareholding

Spouse & Minor
Shareholding

Shareholding
by Nominee
Arrangement

SharesSharesShares%%%Experience (Education)

Other
PositionManagers who are Spouses orWithin Two Degrees of Kinship
Title

Name

Remark(s)Relation

Accounting Manager ofTranscend Information,
Inc.
Note 1: Due to the needs of the Company’s operation and business development, presently, the Chairman, CEO and General Manager refer to the same person. However, a majority of the directors are notconcurrently assuming the positions of employees or managerial officers. The supervisory function of the board of directors is still complete. In the future, to cope with the regulatory requirements,
the structure of the board of directors will be adjusted.
Note 2: Chairman of Taiwan IC Packaging Corporation
Director of C-Tech Corporation and Transcend Information Trading GmbH
General Manager of Transcend Information Trading GmbH
Independent Director of Sports Gear Co., Ltd.
Note 3: Elected date of CFO and Corporate Governance Officer: January 19, 2023; The date approved by Board of Directors March 2, 2023.

-25-

3.2.7. Remuneration of Directors, Independent Directors, General Manager and Vice General Managers
1. Remuneration of Directors and Independent Directors
Dec.31,2022; Unit:NT$ thousands
Remuneration

Title

Base
Compensation (A)Severance Pay(B)

Directors
Compensation (C)Allowances (D)Companies intheconsolidatedfinancialstatemen
ts

The
com
pany

Companies in the
consolidatedfinancialstatemen
ts

The
comp
any

Companies in the
consolidatedfinancialstatemen
ts

The
com
pany

Companies intheconsolidatedfinancialstatemen
ts

-

-

-

2,300

2,300

220

Name
The
comp
any

Chairman
Director
Director
Director
Director
Director
Independent
Director
Independent
Director
Independent
Director

Shu,
Chung-Won
Shu,
Chung-Cheng
Chui, Li-Chu
Hsu,
Chia-Hsian
Chen,
Po-Shou
Wu,
Kuan-DeChen,
Yi-Liang
Chen,
Lo-MinWang,
Yi-Hsin

Total compensation
and Ratio of totalcompensation(A+B+C+D) to Net
Income (%)

The
compa
ny

Companies in the
consolidatedfinancialstatemen
ts

2,520
-

2,880

2,880

-

-

-

-

270

Relevant Remuneration Received by Directors Who are Also Employees

Salary, Bonuses,
and Allowances (E)Severance Pay(F)

Companies intheconsolidatedfinancialstatemen
ts

The
com
pany

Companies in the
consolidatedfinancialstatements

12,127

-

The
compa
ny

The company

Companies intheconsolidated
financialstatements

Cash

Stock

Cash

Stock

682

-

682

-

2,520

220

12,127
0.10%

0.10%

3,150

3,150

270

0.13%

Employee Compensation (G)(Note)

0.13%

-

-

-

-

-

-

-

Total compensation
and Ratio of totalcompensation(A+B+C+D) to Net
Income (%)

The
compa
ny

Companies in theconsolidatedfinancialstatements

15,32915,329

0.62%

0.62%

3,150

3,150

0.13%

0.13%

Remunerationfrom
venturesother
thansubsidiaries orfrom theparentcompan
y

286

-

-

1. Please describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time input with the amount of remuneration:
Transportation allowance is issued according to the attending status of the independent directors of the Company in the board of directors’ meetings and functional committees. The determination of the remuneration of directors is made based on the considerationof the overall business performance of the Company, future operational risk and development trend of the industry, along with the consideration of the contribution of each director on the operation of the Company and the annual performance evaluation result by
the board of directors (including individual director), in order to issue reasonable remuneration. According to Article 22 of the Articles of Incorporation of the Company, where the Company has a profit for each fiscal year, the Company shall set aside no morethan 0.2% of the profit for distribution to directors as remuneration.
2. In addition to the above remuneration, director remuneration shall be disclosed as follows when received from companies included in the consolidated financial statements in the most recent year to compensate directors for their services, such as being independent
contractors: NT$2,817 thousands.
Note 1: The compensation of employees approved by the Board of Directors for the year ended December 31, 2022 is NT$30,987,026.

-26-

Name of Directors
Total of (A+B+C+D)

Range of Remuneration

Total of (A+B+C+D+E+F+G)
Compensation Paid to Directors
The company
from Parent Company andInvested Companies

The company

Companies in the consolidated
financial statements

Less thanNT$ 1,000,000

Shu, Chung-Won,
Shu, Chung-Cheng, Chui, Li-Chu,
Hsu, Chia-Hsian,Chen, Po-Shou, Wu, Kuan-De

Shu, Chung-Won,
Shu, Chung-Cheng, Chui, Li-Chu,
Hsu, Chia-Hsian,Chen, Po-Shou, Wu, Kuan-De

Shu, Chung-Cheng,Shu, Chung-Cheng,
Chui, Li-Chu, Hsu, Chia-Hsian Chui, Li-Chu, Hsu, Chia-Hsian

NT$1,000,000 ~ NT$1,999,999

Chen,Yi-Liang, Chen, Lo-Min,
Wang, Yi-Hsin

Chen,Yi-Liang, Chen, Lo-Min,
Wang, Yi-Hsin

Chen, Yi-Liang, Chen, Lo-Min, Chen, Yi-Liang, Chen, Lo-Min,
Wang, Yi-Hsin
Wang, Yi-Hsin

NT$2,000,000 ~ NT$3,499,999

Chen, Po-Shou, Wu, Kuan-De

Chen, Po-Shou, Wu, Kuan-De

Shu, Chung-Won

Shu, Chung-Won

99

NT$3,500,000 ~ NT$4,999,999
NT$5,000,000 ~ NT$9,999,999
NT$10,000,000 ~ NT$14,999,999
NT$15,000,000 ~ NT$29,999,999
NT$30,000,000 ~ NT$49,999,999
NT$50,000,000 ~ NT$99,999,999
Greater than or equal to NT$100,000,000
Total

9

9

-27-

2. Remuneration of the General Manager and Vice General Managers
Salary (A)
Title

Name

Chairman and
CEO

Shu,
Chung-Won

General Manager

Hong,
Wan-HoonVice General
Manager

Wang,
Jen-Ming

Vice General
ManagerLi,
Tseng-HoVice General
Manager

Fang,
Wen-Jeng

Director andVice General
Manager

Chen,
Po-Shou

Severance Pay (B)Employee Compensation (D)(Note 1)

Bonuses and Allowances (C)Companies in
Companies in
Companies inThe
the consolidatedThe
the consolidatedThe
the consolidated
company
financialcompany
financialcompany
financialstatements
statements
statements

Cash

Stock

25,700937-

25,700

-

-

5,312

5,312

Note 1: The compensation of employees approved by the Board of Directors for the year ended December 31, 2022 is NT$30,987,026-28-

The company

Companies in the
consolidated
financial statements
Cash
Stock

937

Dec. 31, 2022; Unit: NT$ thousands
Total compensation and Ratio of Remuneration
total compensationfrom ventures(A+B+C+D) to Net Income (%) other thansubsidiaries
Companies in theor from theTheconsolidated
parentcompany
financial statements
company

31,94931,949

1.30%

1.30%

-

286

Name of General Manager and Vice General Managers
Range of Remuneration
Less than NT$ 1,000,000
NT$1,000,000 ~ NT$1,999,999
NT$2,000,000 ~ NT$3,499,999
NT$3,500,000 ~ NT$4,999,999
NT$5,000,000 ~ NT$9,999,999
NT$10,000,000 ~ NT$14,999,999
NT$15,000,000 ~ NT$29,999,999
NT$30,000,000 ~ NT$49,999,999
NT$50,000,000 ~ NT$99,999,999
Greater than or equal to NT$100,000,000
Total

The company

Compensation Paid to Directors from Parent Company andInvested Companies

Wang, Jen-Ming
Li, Tseng-Ho,
Fang, Wen-Jeng, Chen, Po-Shou

Wang, Jen-Ming
Li, Tseng-Ho,
Fang, Wen-Jeng, Chen, Po-Shou

Shu, Chung-Won
Hong, Wan-Hoon

Shu, Chung-Won
Hong, Wan-Hoon

6

6

-29-

3. Employee Compensation for Managerial Officers
Title

Dec. 31, 2022; Unit: NT$ thousands
Ratio of Total
Employee Compensation
Total Amount to Net
in Stockin CashIncome (%)

Name

Chairman and CEO (Note 1)
Shu, Chung-Won
General Manager (Note 1)
Hong, Wan-Hoon
Vice General Manager (Note 2)
Wang, Jen-Ming
Vice General Manager
Li, Tseng-Ho
Managerial
1,110
1,110
0.05
Vice General Manager
Fang, Wen-Jeng
Officers
Director andChen, Po-Shou
Vice General Manager
CFO and
Hsiao, Sheng-Yin
Corporate Governance Officer
Note1: Announced the change of general manager on December 29, 2022; dismissal of General Manager on December 31,
2022. and the position temporary hold by Shu, Chung-Won, the appointment effected on January 1, 2023.
Note2: Dismissal of Vice General Manager on April 29, 2022.

3.2.8. The ratio of total remuneration paid by the Company and by all companies included in the
consolidated financial statements for the two most recent fiscal years to Directors, General
Manager and Vice General Managers of the Company, to the net income:
Year
Title

Ratio of total remuneration paid to Directors, General Manager andVice General Manager to net income (%)
2022
2021
Companies in the
Companies in the
The company
consolidated
The company
consolidated
financial statements
financial statements

Directors

0.75%

0.75%

0.91%

0.91%

General Manager andVice General Managers

1.30%

1.30%

1.43%

1.43%

3.2.9. The policies, standards, and portfolios for the payment of remuneration, the procedures fordetermining remuneration, and the correlation with risks and business performance:
Transportation allowance is issued according to the attending status (listed for attendance) of thedirectors and independent directors of the Company in the board of directors’ meetings andfunctional committees. The determination of the remuneration of directors is made based on theconsideration of the overall business performance of the Company, future operational risk anddevelopment trend of the industry, along with the consideration of the contribution of eachdirector on the operation of the Company and the annual performance evaluation result by theboard of directors (including individual director), in order to issue reasonable remuneration.
Furthermore, according to Article 22 of the Articles of Incorporation of the Company, when the
Company has a profit for each fiscal year, an amount no more than 0.2% of the profit shall beappropriated as the remuneration of directors, and after the resolutions of the Remuneration
Committee and the Board of Directors, the remuneration is then issued to each director.
The salaries of the CEO, General Manager, Vice General Managers and other managerial officers,etc., are issued based on the consideration of the standard adopted in the same industry, market
status, professional competence and job duties. According to Article 22 of the Articles ofIncorporation of the Company, when the Company has a profit for each fiscal year, an amount
not less than 1% of the profit shall be appropriated as the remuneration of employees, and thepersonal annual work performance, including the achievement rate of revenue and profit of theentire company and his/her in-charge department, personal goal achievement rate, operational-30-

management capability, and whether there is any special contribution or negative events, etc.,
such that the amount of distribution is determined after comprehensive evaluation of all aspects.
Remuneration performance evaluation and reasonableness for directors and managerial officers
are reviewed and approved by the Remuneration Committee and Board of Directors. The
remuneration system is also reviewed according to the actual condition of business and relevantlaws and regulations appropriately at all times.

-31-

3.3. Implementation of Corporate Governance3.3.1. Operations of the Board of Directors
A total of 4 meetings of the Board of Directors were held in the previous period. The attendance of
directors were as follows:
Title

Name

Attendancein Person

By ProxyAttendance Rate (%)

ChairmanShu, Chung-Won

4

0

100

DirectorShu, Chung-Cheng

4

0

100

Director

Chui, Li-Chu

4

0

100

Director

Hsu, Chia-Hsian

2

0

50

Director

Chen, Po-Shou

4

0

100

DirectorWu, Kuan-De

4

0

100

3

1

75

4

0

100

4

0

100

Independent
Chen, Yi-Liang
Director
Independent
Chen, Lo-Min
Director
Independent
Wang, Yi-Hsin
Director
Other mentionable items:
1.

Remarks
2021.08.26
Renewal of office2021.08.26
Renewal of office2021.08.26
Renewal of office2021.08.26
Renewal of office2021.08.26
New term ofoffice2021.08.26
New term ofoffice2021.08.26
Renewal of office2021.08.26
Renewal of office2021.08.26
Renewal of office

If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, allindependent directors’ opinions and the company’s response should be specified:(1) Matters referred to in Article 14-3 of the Securities and Exchange Act.
(2) Other matters involving objections or expressed reservations by independent directors that were recorded orstated in writing that require a resolution by the board of directors.
None. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of Directors Meetings, Audit
Committee meetings and Remuneration Committee meetings in the most recent year and up to the publication
date of this Annual Report” for major resolutions of Board of Directors Meetings in the most recent year and up
to the publication date of this Annual Report.

2.

If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion,
causes for avoidance and voting should be specified:
Our leasing renewal of the land at No. 70, Xingshan Rd., is the contract between the Company, Won Chin
Investment Inc., and Cheng Chuan Technology Development Inc. with Mr. SHU, CHUNG-CHENG
representing Won Chin's director and Cheng Chuan's chairman. As Directors SHU, CHUNG-WON, SHU,CHUNG-CHENG, and CHUI, LI-CHU are the stakeholders of the said contract, they were temporarily absent
without engaging in the discussion to avoid conflicts of interest; the remaining directors unanimously agreed
that the discussion shall be moderated by the Independent Director WANG, YI-HSIN who acted as the acting
chair. All participating directors, after being consulted by the chair, unanimously agreed and authorized that the
Independent Director WANG, YI-HSIN shall sign documents related to such land leasing contract on the
Company's behalf.
-32-

Evaluation

Evaluation

Scope of

Evaluation

cycle

periodevaluation

methodOnce aJanuary 1,

Board ofSelf-assessment (1) Board performance evaluation: level ofyear

2022 toDirectors,

by directors,

participation in company operations, theDecemberindividualinternal

quality of Board decisions, Board

31, 2022

directors,

self-evaluation

composition and structure, appointment ofandby the Board of

directors and their continued development,functional

Directors andand internal controls.

committees

functional(2) Individual director performance evaluation:committees

grasp of company targets and missions,

Evaluation items

understanding of the director's role andresponsibilities, level of participation incompany operations, internal relationshipmanagement and communication, director's
specialty and continued development, andinternal controls.
(3) Audit committee performance evaluation:
Participation in company operations,
understanding of the responsibilities of Audit
committees, improvement of thedecision-making quality of Audit
committees, composition of Audit
committees, and member selection andinternal control.
(4) Remuneration committee performance
evaluation: Participation in company
operations, understanding of the
responsibilities of Remuneration committees,
improvement of the decision-making qualityof Remuneration committees, andcomposition of Remuneration committees,
and member selection.
The results of the Board performance evaluation for the year ended December 31, 2022 have been disclosed on
corporate website at: https://tw.transcend-info.com/about/board_of_directors
-33-

3.

Evaluation of targets for strengthening of the functions of the board during the current and immediately
preceding fiscal years, and measures taken toward achievement thereof:(1) The Company established Remuneration committee in 2011 and Audit Committee in 2012 to assist theBoard of Directors in carrying out its various duties. The board of directors also established the ”Codes of
Ethical Conduct for Directors and Managerial Officers” in 2013 in order to provide guidance to the
conducts of directors and managerial officers for compliance with the moral standards, thereby achievingsound corporate governance.
(2) To strengthen the independent directors’ participation in the operation of the board of directors and to
improve the understanding of the company affairs, at least two independent directors are required to attend
a board of directors’ meeting in person. (Note)(3) To implement corporate governance and to improve the function of the board of directors, performancegoals are established in order to enhance the operational efficiency of the board of directors. The
Company’s board of directors approved the “Rules for Performance Evaluation of Board of Directors” onMarch 5, 2020 and implemented them in 2021. The evaluation period was from January 1, 2022 to
December 31, 2022, and the evaluation result was reported to the board of directors on March 2, 2023.
Please refer to the aforementioned Point 3 for the evaluation content and result.
(4) To strengthen the effective operation of the board of directors, the Company established Corporate
Governance Officer on May 6, 2021 to assist the Board of Directors in carrying out its various duties andcompliance with the laws and regulations.

Note: Attendance of each independent directors during Board of Director meetings held in 2022.
Independent
The First
The Second
The Third
The Forth
Directors
Meeting
Meeting
Meeting
Meeting
Attendance
Attendance
Attendance
Attendance
Chen, Yi-Liangby Proxyin Person
in Person
in Person
Attendance
Attendance
Attendance
Attendance
Chen, Lo-Min
in Person
in Person
in Person
in Person
Attendance
Attendance
Attendance
Attendance
Wang, Yi-Hsinin Person
in Person
in Person
in Person

3.3.2. Operations of the Audit Committee
1. Information on the members of the Audit Committee
Criteria
Professional Qualificationand Experience

Identity

Independent Director
Independent Director
Independent Director& Convener

NameChen, Yi-Liang
Chen, Lo-Min
Wang, Yi-Hsin

Independent Status

Please refer to “3.2.4 Information disclosure of the professional
qualifications of directors and independence of independent
directors”.

2. The Company established Audit Committee on June 2012. The Committee composed of theentire number of independent directors, which are three persons in total. The Committee
operations by the Company’s Audit Committee Charter, and the main function of the Audit-34-

Committee is to supervise the following matters:(1) Fair presentation of the financial reports of this Corporation.
(2) The hiring (and dismissal), independence, and performance of certificated public
accountants of this Corporation.
(3) The effective implementation of the internal control system of this Corporation.
(4) Compliance with relevant laws and regulations by this Corporation.
(5) Management of the existing or potential risks of this Corporation.
3. The powers of the Committee are as follows:(1) The adoption of or amendments to the internal control system pursuant to Article 14-1 of
the Securities and Exchange Act.
(2) Assessment of the effectiveness of the internal control system.
(3) The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act,of the procedures for handling financial or business activities of a material nature, suchas acquisition or disposal of assets, derivatives trading, loaning of funds to others, andendorsements or guarantees for others.
(4) Matters in which a director is an interested party.
(5) Asset transactions or derivatives trading of a material nature.
(6) Loans of funds, endorsements, or provision of guarantees of a material nature.
(7) The offering, issuance, or private placement of equity-type securities.
(8) The hiring or dismissal of a certified public accountant, or their compensation.
(9) The appointment or discharge of a financial, accounting, or internal audit officer.
(10) Annual financial reports and second quarter financial reports that must be audited andattested by a CPA, which are signed or sealed by the chairman, managerial officer, andaccounting officer.
(11) Other material matters as may be required by this Corporation or by the competentauthority.
4. The key tasks of the Audit Committee of the Company for the year of 2022 includes: Review
of all quarterly and annual financial statements, review of annual earning distribution proposal,
examine the effectiveness of the internal control system, review of material asset transactions,
corporate governance related affairs, risk management matters, appointment and compensationof CPAs, etc. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of
Directors Meetings, Audit Committee meetings and Remuneration Committee meetings in themost recent year and up to the publication date of this Annual Report” for major resolutions ofAudit Committee meetings in the most recent year and up to the publication date of thisAnnual Report.
5. A total of 4 Audit Committee meetings were held in the previous period. The attendance of the
independent directors was as follows:
Title

Name

Attendancein Person

By ProxyAttendance Rate (%)

Independent
Director
Independent
Director
Independent
Director

Chen, Yi-Liang

3

1

75

Chen, Lo-Min

4

0

100

Wang, Yi-Hsin

4

0

100

Remarks

Other mentionable items:
1.

If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, the-35-

content of the objections, reservations or material recommendations of independent directors, resolutionsof the Audit Committee and the Company’s response to the Audit Committee’s opinion should bespecified:(1) Matters referred to in Article 14-5 of the Securities and Exchange Act.
(2) Other matters which were not approved by the Audit Committee but were approved by two-thirds ormore of all directors.
None. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of Directors Meetings,
Audit Committee meetings and Remuneration Committee meetings in the most recent year and up to the
publication date of this Annual Report” for major resolutions of Audit Committee meetings in the mostrecent year and up to the publication date of this Annual Report.
2.

If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names,
contents of motion, causes for avoidance and voting should be specified:
None.

3.

Communications between the independent directors, the Company's chief internal auditor and CPAs (e.g.
the material items, methods and results of audits of corporate finance or operations, etc.):(1) The internal auditors have communicated the result of the audit reports to the members of the Audit
Committee periodically, and have presented the findings of all audit reports in the quarterly meetingsof the Audit Committee. The internal auditors report the next Annual Audit Plan and get the approvalof the Audit Committee in the last Audit Committee meeting every year. Should the urgency of thematter require it, the Company's chief internal auditor will inform the members of the Audit Committee
outside of the regular reporting. There was no such special situation in 2022. The communication
channel between the Audit Committee and the internal auditor has been functioning well.
(2) The Company’s CPAs have presented the findings or the comments for the quarterly corporate
financial reports, as well as those matters communication of which is required by law, in the regularquarterly meetings of the Audit Committee. Under applicable laws and regulations, the CPAs are
required to communicate to the Audit Committee any material matters that they have discovered. There
was no such special situation in 2022. The communication channel between the Audit Committee andthe CPAs has been functioning well.

-36-

3.3.3. Corporate Governance Implementation Status and Deviations from “the Corporate
Governance Best-Practice Principles for TWSE/TPEx Listed Companies”
Implementation Status

1.

2.

Deviations
from “theCorporate
GovernanceBest-PracticeEvaluation Item
Principles for
Yes NoAbstract Illustration
TWSE/TPEx
ListedCompanies”
and Reasons
Does the company establish v
The Company has established the Corporate Noneand disclose the Corporate
Governance Best-Practice Principles based on the
Governance Best-Practice“Corporate Governance Best-Practice Principles for
Principles based on
TWSE/TPEx Listed Companies”. The information“Corporate Governancehas been disclosed on the Company’s website.
Best-Practice Principles for
http://tw.transcend-info.com/about/policies
TWSE/TPEx Listed
Companies”?
Shareholding structure &shareholders’ rights(1) Does the company establish
an internal operatingprocedure to deal withshareholders’ suggestions,doubts, disputes andlitigations, and implement
based on the procedure?

v

The Company has established spokesperson and None
investor relationship unit to handle issues ofshareholders’ suggestions or disputes.

(2) Does the company possess
the list of its major
shareholders as well as theultimate owners of thoseshares?

v

The Company reports the shareholding change None
status of insiders (directors, managerial officers andshareholders with shareholding over 10% of thetotal number of shares) in time, and also discloses
the top 10 shareholders’ information in theshareholders’ meeting annual report every year.
Furthermore, the financial statements also disclose
the information of major shareholders with theshareholding over 5% on a quarterly basis.

(3) Does the company establish
and execute the risk
management and firewall
system within its
conglomerate structure?

v

The Company and its affiliated enterprises enter None
into inter-company business transactions, a writtenagreement governing the relevant financial andbusiness operations between them shall be made inaccordance with the principle of fair dealing andreasonableness, and the procedures including theactivities of trading, acquisition or disposal of
assets, endorsement and loans between the
Company and its affiliates, in order to implement
the risk control mechanism thoroughly.

(4) Does the company establish
internal rules against
insiders trading withv

The Company has established and disclosed Nonethe”Codesof
EthicalConduct
for
Employees”, ”Codes of Ethical Conduct for-37-

Implementation Status

Evaluation ItemYes Noundisclosed information?

3.

Composition andResponsibilities of theBoard of Directors(1)

Does the Board of Directors v
establish a diversified
policy, set goals andimplement themaccordingly?

Abstract Illustration

Deviations
from “theCorporate
GovernanceBest-PracticePrinciples for
TWSE/TPEx
ListedCompanies”
and Reasons

Directors
andManagerial
Officers”
and ”Procedures for Handling Material Inside
Information” on the Company’s website, in order toprohibit employees to allow themselves or any third
party to gain personal benefits through the use of
the Company’s assets, information of through one’s
job duties.

1. The nomination and election of board members None.
of the Company comply with the ”Procedures forElection of Directors” and ”Corporate
Governance Best-Practice Principles” , in orderto ensure the diversity and independence ofboard members. According to Article 20 ofthe”Corporate
GovernanceBest-PracticePrinciples” of the Company, all directors are
preferably required to possess knowledge, skills
and literacy necessary for performing duties, anddiversity directives have been established, fordetails on the implementation of diversification
objectives and achievement, please refer tosection 3.2.5.
2. All directors are equipped with extensive
experienceinleadership,
operation
determination, business management, crisis
handling, and are also equipped with industrial
knowledge and international market view suchthat they are equipped with various capabilities
necessary to execute the corporate governance.
Independent directors, Mr. CHEN, YI-LIANG,
Mr. CHEN, LO-MIN and Ms. WANG, YI-HSIN,
are equipped with the professional backgrounds
in accounting and financial analysis, such they
are
able
to
provideprofessional
recommendations to the Company from different
viewpoints and aspects.
3. The ratio of directors equipped with the identityof employees of the Company accounts for 33%
of all directors, the ratio of independent directors
accounts for 33% of all directors, and the female
director ratio accounts for 22%. Three
independent directors have the term of office-38-

Implementation Status

Evaluation ItemYes NoAbstract Illustration

Deviations
from “theCorporate
GovernanceBest-PracticePrinciples for
TWSE/TPEx
ListedCompanies”
and Reasonsseniority above 9 years, one director at the age
above 71 years old, six directors at the age
between 61–70 years old, and two directors at
the age under 60 years old.
4. The board of directors has disclosed the policy
for the formation of diverse board members on
the Company’s website and the Market
Observation Post System (MOPS).
v

Presently, the Company has established theRemuneration Committee and Audit Committee, Noneand these two committees are composed of all of
the independent directors. Other types of functional
committees are continuously being assessed.

(3)

Does the company establish v
a standard to measure theperformance of the Boardand implement it annually,
and are performance
evaluation results submitted
to the Board of Directors
and referenced when
determining the
remuneration of individual
directors and nominations
for reelection?

The Company has established and disclosed
the ”Rules for Performance Evaluation of Board of None
Directors” on the Company’s website, and theevaluation period is from January 1 to December 31
of each year. The result is reported to the board of
directors before the end of March of the following
year in order to be used as a reference for review
and improvement. The evaluation result on theperformance of the board of directors of theCompany will be used as a reference for election or
nomination of directors. The result of 2022 boardof directors performance evaluation has beenreported to the board of directors’ meeting on
March 2, 2023. Please refer to “3.3.1 Operationsof the Board of Directors”.

(4)

Does the company regularly v
evaluate the independenceof CPAs?

The Company periodically evaluates theindependence and suitability of the CPAs on an Noneannual basis, and the recently result has been
approval by the board of directors on March 2,2023. After examination of the CPAs’ independence
and suitability evaluation checklist, and theevaluation items include that the CPAs have no
direct or material indirect financial benefit
relationships with the Company, not assuming theposition of director, managerial officer or any job
position that has material impack on the audit workof the Company, not engaging in any financing or(2) Does the company
voluntarily establish otherfunctional committees in
addition to theRemuneration Committee
and the Audit Committee?

-39-Implementation Status

Evaluation ItemYes NoAbstract Illustration

Deviations
from “theCorporate
GovernanceBest-PracticePrinciples for
TWSE/TPEx
ListedCompanies”
and Reasons

guarantee activities with the Company or directorsof the Company, not acting or representing as anagent of the Company, or involving any defense orcoordination for the Company, not providing
non-audit services other than certification andfinancial tax services to the Company that may
have direct impact on the audit word, and not
relatives to all of the aforementioned personnel, etc.
Accordingly, the independence and suitability of
the CPAs of the Company has been evaluatedproperly and confirmed to comply with therequirements
4.

Does the company appointa suitable number ofcompetent personnel and asupervisor responsible forcorporate governancematters (including but notlimited to providing
information for directors
and supervisors to performtheir functions, assisting
directors and supervisors
with compliance, handlingwork related to meetings ofthe board of directors andthe shareholders' meetings,
and producing minutes ofboard meetings andshareholders' meetings)?

v

The Company assigns FAD as the main Nonepromotional unit for corporate governance. The
board of directors appointed the CFO of theCompany to act as the Corporate Governance
Officer to be in charge of corporate governancerelated affairs. The officer is equipped with theexperience of the supervisor role in the financial,stock affairs and corporate governance relatedaffairs units of publicly listed companies for morethan three years. The main responsibilities andauthorities of the corporate governance unit are toprovide documents and information necessary fordirectors to perform duties, to assist the Company
and directors in the compliance with the laws andregulations, and to handle affairs for board of
directors’ meetings and shareholders’ meetings.
The key operational tasks for the current year are as
follows:
1. Organize 2022 board of directors’ meetings,
functional
committees’
meetings,
andshareholders’ meetings, including planning andestablishment of agenda, mailing of meeting
notice within the statutory time-limit, providing
all documents and data necessary for the
meetings, and also prepare meeting minutes after
such meetings.
2. Assist and organize continuing educationalcourses for directors.
3. Perform 2021 board of directors’ performance
evaluation, and submitted the evaluation result tothe board of directors’ meeting on March 3,
2022.
-40-

Implementation Status

Evaluation ItemYes NoAbstract Illustration

4. Summarize amendments of latest laws of thecompetent authority, and revise internal
regulations of the Company accordingly.
5. Provide appropriate and timely company
information to directors.
6. Make public announcements on all material
resolutions reached by the Company andmaterial information of the Company according
to the laws.
7. Update and disclose all corporate governanceinformation, including the composition of boardof directors and functional committees, audit
plan of each year, organization and management
team of the Company, important internal
regulations of the Company and interested party
section, etc.
8. Handle directors liability insurance relatedaffairs.
9. Other matters related to corporate governance.
Continuing Education Training of Corporate
Governance Officer in 2022
Training/Speech
Hours
Title
ChineseDiscussion of FAQ
National
on Board
2022/04/08 Association of of Directors &3
Industry andShareholders
Commerce
meetings in 2022
Self-compilation of
Accounting financial reports in
Research andresponse to2022/04/14
3
Development
practice:
Foundation reinvestment using
the equity method
TaiwanThe Risk Trends ofCorporate Smart Technologies
2022/04/15
3
Governancein the Cloud
Association
Generation
TaiwanSeriously Net Zero
Institute for2022/04/22
Achieving
3
Sustainable
Sustainability 2030
EnergyDate

Host by

The Company has established the Corporate
Governance Officer section on the Company’s
website, please refer tohttps://tw.transcend-info.com/about/directors-41-

Deviations
from “theCorporate
GovernanceBest-PracticePrinciples for
TWSE/TPEx
ListedCompanies”
and ReasonsImplementation Status

5.

Deviations
from “theCorporate
GovernanceBest-PracticeEvaluation Item
Principles for
Yes NoAbstract Illustration
TWSE/TPEx
ListedCompanies”
and Reasons
Does the company establish v
The definition of interested parties of the Company Nonea communication channel
includes employees, suppliers, shareholders andand build a designatedcustomers. The Company has established various
section on its website forcommunication and compliant channels, such as thestakeholders (including but
spokesperson system, contact mailbox and website,
not limited to shareholders,etc., and feedback information of theemployees, customers, andaforementioned interested parties are collected, in
suppliers), as well as handle
order to provide the latest information andall the issues they care forcommunication channels of the Company. In
in terms of corporate social
addition, international trend and regulations,
responsibilities?
customer demands and methods adopted in thesame industry are also considered, and issues
concerned by all interested parties are identified, inorder to list out the responsiveness andcommunication method for each issue.
The Company has established the Interested Party
section on the Company’s website, please refer to:https://tw.transcend-info.com/about/stakeholders

6.

Does the company appointa professional shareholder
service agency to deal withshareholder affairs?

7. Information Disclosure(1) Does the company have a
corporate website todisclose both financial
standings and the status ofcorporate governance?

v

The Company has appointed Transfer Agency None
Department of CTBC Bank to handle stock affairsof the Company.

v

1. The Company has established official corporate None
website to disclose relevant information timely.
The website address is: http://tw.transcend-info.com/
2. Financial information disclosure status:
The Chinese and English versions of theCompany’s website are established with theInvestor Information section, disclosing financial
information, and the information is updated
periodically for investors’ reference.
https://tw.transcend-info.com/about/month_sales
https://us.transcend-info.com/about/month_sales

3. Corporate governance information disclosure
status:The Company has disclosed the information on
the composition of the committees, including
board of directors, annual audit plan, company
organization and management team, importantinternal regulations and interested party sectionof the Company on the Company’s website.
http://tw.transcend-info.com/about/board_of_directors-42-

Implementation Status(2)

Deviations
from “theCorporate
GovernanceBest-PracticeEvaluation Item
Principles for
Yes NoAbstract Illustration
TWSE/TPEx
ListedCompanies”
and Reasons
Does the company havev
1. The Company has assigned dedicated personnel Noneother information disclosure
to be responsible for the collection andchannels (e.g. building an
disclosure of the Company’s information, andEnglish website, appointing
spokesperson system is implemented according
designated people to handle
to the regulations. The presentation files andinformation collection andfull audio and video recording of institutional
disclosure, creating a
investors’ conferences are also published on the
spokesman system,
Company’s website.
http://tw.transcend-info.com/about/conference
webcasting investor
2. The Company has set up the English website toconferences)?
provide investors from all countries to makeinquiries and to understand relevant information.
Please refer to:https://us.transcend-info.com/(3)

Does the company
announce and report annual
financial statements within
two months after the end ofeach fiscal year, andannounce and report Q1,
Q2, and Q3 financial
statements, as well asmonthly operation results,
before the prescribed time
limit?

8.

Is there any other important v
information to facilitate abetter understanding of thecompany’s corporate
governance practices (e.g.,
including but not limited to
employee rights, employee
wellness, investor relations,
supplier relations, rights ofstakeholders, directors’ andsupervisors’ training
records, the implementationof risk management policies
and risk evaluation
measures, thev The Company convened the board of directors’ The Company
meeting on March 2, 2023 to approve the annual makes publicfinancial statements for 2022, and the annual announcement
financial statements were publicly announced and and reports thereported on the same day. And financial statements annual andfor Q1, Q2 and Q3 of the fiscal year were reported quarterly
to the board of directors’ meetings on May 5, 2022, financial
August 4, 2022 and November 10, 2022 statements
respectively. And they were also publicly according toannounced and reported on the same day.
the time limits
specified in
Article 36 of
the Securities
and ExchangeAct.
1. Employees’ rights and interests, employee care None
execution status: Please refer to ”5.5 Labor
Relations” of this Annual Report.
2. Investor relationship, supplier relationship,
interested parties’ rights and customer policy
execution status: The Company has set up theInterested Party section on the Company’s
website.
https://tw.transcend-info.com/about/stakeholders

3. Continuing education status of directors andsupervisors: Please refer to ”3.3.5.Continuing
Education/Training of Directors in 2022” of thisAnnual Report.
4. Risk Management Policies and risk evaluation
measures execution status: Please refer to ”7.6
-43-

Implementation Status

Evaluation Item

implementation of customer
relations policies, andpurchasing insurance fordirectors and supervisors)?

Yes NoAbstract Illustration

Analysis of Risk Management” of this Annual
Report and the Company’s website:
https://tw.transcend-info.com/about/risk_management_policy

5. Customer policy execution status: The Company
rigorously complies with the customer
confidentiality rules and the Ethical Corporate
Management Best-Practice Principles. In
addition, the Company maintains excellent
supply relationship with customers and has
established different internal teams to service
customers.
6. Status on the Company’s purchase of liability
insurance for directors and supervisors: The
Company has purchased directors’ and officers
liability insurance, which has been approved by
the board of directors on November 10, 2022
and has been publicly announced on MOPS.
7. The Company emphasizes the cultivation ofsenior management talents and promotes R&D
Vice General Manager, Sales Vice General
Manager and Directors of all divisions. The
Company also focuses on the management
capability and professional competence of senior
managers, and through the transfer of different
duties, senior managers are able to develop
different attributes and capabilities, thereby
achieving integration and utilization to enhance
decision making and understanding ofmanagement principles. Accordingly, candidates
for board of directors and CEO can beappropriately selected from the senior managers.

-44-

Deviations
from “theCorporate
GovernanceBest-PracticePrinciples for
TWSE/TPEx
ListedCompanies”
and Reasons

9.

Please explain the improvements which have been made in accordance with the results of the Corporate
Governance Evaluation System released by the Corporate Governance Center, Taiwan Stock Exchange,and provide the priority enhancement measures.
(1) Status of improvement:
A. The Compnay in order to enhance information transparency and promote Sustainable
Management, has started the preparation of ESG report since 2022. The 2021 ESG report has
been completed and uploaded onto the the Market Observation Post System(MOPS) and theCompany’s website every year.
https://tw.transcend-info.com/about/ESG_report(2) For the one item without scores, explanations are provided in the following:
A. For the global trend of Sustainable Development Goals, Since 2023 the Company according theframework of Task Force on Climate-Related Financial Disclosures (TCFD), disclose the risk
and opportunities of corporate governance, strategy, risk management and objectives. The
relevant information will be provided on ESG report, Annual report and the Company’s website
every year.
B. Due to the needs of the Company’s operation and business development, presently, theChairman, CEO and General Manager refer to the same person. In the future, to cope with theregulatory requirements, the structure of the board of directors will be adjusted.

-45-

3.3.4. Composition, Responsibilities and Operations of the Remuneration Committee
To achieve sound corporate governance and to enhance remuneration management function,
the Company has established the Remuneration Committee in accordance withthe ”Regulations Governing the Appointment and Exercise of Powers by the Remuneration
Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei
Exchange”. The number of members of the Remuneration Committee of the Company is three,
and the members are to be appointed in accordance with the resolution of the board of
directors. The committee is formed by three external experts satisfying the professional
qualification and independence requirements. For the Remuneration Committee meetings of
the Company, at least two regular meetings are convened annually in order to periodicallyreview the remuneration regulations of the Company and to provide recommendations onamendments, to periodically review the performance evaluation of directors and managerial
officers and the policy, system, standard and structure for the salary and remuneration, as wellas to periodically evaluate and establish salary and remuneration of directors and managerial
officers of the Company. For the content of the performance evaluation standards for directors
and managerial officers, please refer to ”3.2.8. The ratio of total remuneration paid by theCompany and by all companies included in the consolidated financial statements for the twomost recent fiscal years to Directors, General Manager and Vice General Managers of theCompany, to the net income” and ”3.2.9. The policies, standards, and portfolios for thepayment of remuneration, the procedures for determining remuneration, and the correlation
with risks and business performance”.
1. Information on the members of the Remuneration Committee
Criteria
Professional
Qualificationand Experience

Identity

Independent Status

Name
Independent Director& Convener
Independent Director
Independent Director

Chen, Yi-Liang
Chen, Lo-Min

Number of Other PublicCompanies inWhich the Individual is
Concurrently Serving as
an Remuneration
Committee Member
0

Please refer to “3.2.4 Information disclosure of
the professional qualifications of directors andindependence of independent directors”.

Wang, Yi-Hsin

1
0

-46-

2. Operation of Remuneration Committee:(1) There are three members in the Remuneration Committee.
(2) Term of service: August 26, 2021 to August 25, 2024.
A total of two Remuneration Committee meetings were held in the previous period. The
attendance record of the Remuneration Committee members was as follows:
Attendance
Attendance Rate
Remarks
Title
Name
By Proxyin Person(%)
Convener Chen, Yi-Liang1
150%
MemberWang, Yi-Hsin
20100%
MemberChen, Lo-Min20100%
Other mentionable items:
1.

If the board of directors declines to adopt or modifies a recommendation of the
remuneration committee, it should specify the date of the meeting, session, content of
the motion, resolution by the board of directors, and the Company’s response to the
remuneration committee’s opinion:
None. Please refer to “3.3.12 Major resolutions of Shareholders’ Meeting, Board of
Directors Meetings, Audit Committee meetings and Remuneration Committee
meetings in the most recent year and up to the publication date of this Annual Report”
for major resolutions of Remuneration Committee meetings in the most recent year and
up to the publication date of this Annual Report.

2.

Resolutions of the remuneration committee objected to by members or expressed
reservations and recorded or declared in writing, the date of the meeting, session,
content of the motion, all members’ opinions and the response to members’ opinion
should be specified:
None.

-47-

3.3.5. Continuing Education/Training of Directors in 2022
Title/Name
Director/Shu, Chung-Won

Director/Shu, Chung-Cheng

Director/
Chui, Li-Chu

Date

3

2022/04/22
2022/05/20
2022/06/22
2022/06/29

Director/
Chen, Po-Shou2022/04/22

Director/Wu, Kuan-De

2022/04/22

Independent
Director/
Chen, Lo-Min

2022/06/22

2022/05/20

2022/05/20

2022/05/20

2022/06/29
2022/04/18
2022/04/27
2022/07/18
2022/08/15
2022/04/22
2022/06/22

Corporate Governance and Corporate
Sustainable Operation Workshop
The first part of personal response to
Taiwan Corporate Governance
CFC: Know Your Competitors andAssociation
Yourself
Taiwan Institute for
Seriously Net Zero Achieving
Sustainable Energy
Sustainability 2030
2022 Insider trading prevention
Securities and Futures Instituteeducational seminar
Taiwan Academy of Banking Corporate Governance and Corporate
and Finance
Sustainable Operation Workshop
The first part of personal response to
Taiwan Corporate Governance
CFC: Know Your Competitors andAssociation
Yourself
Taiwan Institute for
Seriously Net Zero Achieving
Sustainable Energy
Sustainability 2030
2022 Insider trading prevention
Securities and Futures Instituteeducational seminar
Taiwan Institute for
Seriously Net Zero Achieving
Sustainable Energy
Sustainability 2030
2022 Insider trading prevention
Securities and Futures Instituteeducational seminar
Taiwan Institute for
Seriously Net Zero Achieving
Sustainable Energy
Sustainability 2030
2022 Insider trading prevention
Securities and Futures Instituteeducational seminar
Taiwan Academy of Banking Corporate Governance and Corporate
and Finance
Sustainable Operation Workshop
The first part of personal response to
Taiwan Corporate Governance
CFC: Know Your Competitors andAssociation
Yourself
Accounting Research andDirectors, supervisors and executives
Development Foundation
supervise the company's implementationof ESG
Accounting Research andRead the TCFD Report: Grasp the Key
Development Foundation
Points of Information
Accounting Research andNew reporting trends in ESG and TCFD:
Development Foundation
Grasp the key points of information
Accounting Research andConcept Analysis of ISSB S1 Standard
Development Foundation"General Requirements for Disclosure of
Sustainability-Related Financial
Information"
Taiwan Institute for
Seriously Net Zero Achieving
Sustainable Energy
Sustainability 2030
Taiwan Academy of Banking Corporate Governance and Corporate
and Finance
Sustainable Operation Workshop

Hours

2022/06/29

2022/04/22

Independent
Director/
Chen, Yi-Liang

Training/Speech Title

3

Director/
Hsu, Chia-Hsian

Independent
Director/
Wang, Yi-Hsin

Host by

Taiwan Academy of Banking
2022/06/22 and Finance

-48-

3
3
3
3
3
3
3
3
3
3
3
3
1
1
1
3
3
3

3.3.6. Implementation of sustainable development promotion and difference from the Sustainable
Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Implementation Status

Deviations from“the Sustainable
Development
Best-PracticeAssessment Item
Principles for
Yes NoAbstract Explanation
TWSE/TPEx Listed
Companies” andReasons
1. Does the companyv
Transcend Information appoints the Administration Noneestablish the governance
Vice General Manager Office - Administration
structure for promoting the
Department to be the main unit for promoting thesustainable development,sustainable development, and the directors of otherand set up a unit thatdivisions assume the positions of team leader
specializes (or is involved)
according to the nature of business. The Marketingin the promotion ofdivision is dedicated in the social participation andsustainable development,
feedback activities in addition to the promotion ofand does the board ofsustainable development. The Marketing division also
directors authorize thediscusses routine business promotion affairs andsenior management for
performs information collection and summarization as
handling such mater, andwell as reviews the execution status of the sustainable
the supervision status ofdevelopment with the Chairman.
the board of directors?
The division also provides report to the board of
directors on important promotion items once annually.
The board of directors reviews the management
directives, execution status and future plans, and also
provides opinions to the management team forreference to make adjustment, the result of 2022
execution status of the sustainable development has
been reported to the board of directors’ meeting on
November 10, 2022.
Please refer to the Company’s website for detailed
information:
https://tw.transcend-info.com/about/social_responsibility

2. Does the company assess
ESG risks associated with
its operations based on theprinciple of materiality,and establish related risk
management policies or
strategies?

v

1. This risk assessment boundary mainly focuses on None
the Taiwan headquarters and factory site as the coreof the assessment, and overseas business offices are
excluded.
2. During the pursuit of sustainable operation andprofit, the Company also conducts relevant risk
assessment on environment, society and corporate
governance related to the company operation inaccordance with the materiality principle. By
activelyfulfilling
sustainable
development
responsibilities, and through communication withinternal and external stakeholders, review ofdomestic and international relevant reports in thesame industry and evaluation documents of all
department, as well as incorporates such matters
into the management directives and operating
activities of the Company, thereby achieving thegoal of sustainable operation.
3. To enhance the corporate governance and to-49-

Implementation Status

Assessment ItemYes NoAbstract Explanation

Deviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasons

establish sound risk management operation, theboard of directors has approved the Risk
Management Policies on November 10, 2020, in
order to provide guidance on effective
identification, measurement, supervision andcontrol of all kinds of risks to all units of theCompany during the performance of duties, and toalso control the possible risks within the acceptablelevel, thereby achieving the goal of reasonable risk
and compensation as well as the objective ofsustainable operation of the Company.
Reported various business risks and proposed
control strategy and method in the board of
director’s meeting on November 10, 2022, pleaserefer to the Company’s website:
https://tw.transcend-info.com/about/risk_management_p
olicy

3. Environmental issues(1) Does the company
establish proper
environmental
management systems
based on thecharacteristics of theirindustries?

(2) Does the company
endeavor to utilize all
resources more efficiently
and use renewablematerials which have low
impact on theenvironment?

v

Transcend adopts the product life cycle notion and None
performs planning based on the characteristics of ourindustry and also obtains the ISO14001:2015
environmental management system certification.
Accordingly, we continue to reduce negative impacts
on the environment and improve our environmental
performance.
In addition, based on the climate-related financial
disclosure(TCFD)
framework,
Transcend's
implementation results are explained from the four
core elements of TCFD: "Governance", "Strategy","Risk Management", and "Objectives".

v

1. Products: During the product manufacturing None
process, the Company uses parts complying with
RoHS EU environmental protection standards, andall of the Company’s products qualify for the
QC080000 certification in order to reduce negative
impacts on the environment.
2. Energy saving:i. In 2022, the factory 3F-5F lighting fixture power
consumption reduction and replacement project
was completed, achieving an annual electricity
saving rate of 50%..
ii. In 2022, the R&D unit completed eco-friendly
and power-saving product designs in which theefficiency of DPB lenses is improved through a
30% power reduction of the CMOS sensors.
-50-

Implementation Status

Assessment ItemYes NoAbstract Explanation

Deviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasonsiii. In 2022, the Company continually dedicated in
the promotion of document digitization, andpropagate avoidance of unnecessary waste, andreduces paper usage by 48%.
iv. At the end of 2022, the company purchased new
high-efficiency and energy-saving processcooling equipment, and the replacement projectis expected to start in 2023..
3. Resource recycling: The wastepaper, waste plastics,
waste metals and lighting fixtures generated by theCompany daily are recycled by qualified recycling
vendor periodically.
(3) Does the companyv
evaluate the potential risks
and opportunities inclimate change with regard
to the present and future ofits business, and takeappropriate action tocounter climate change
issues?

1. For the climate-related risks and opportunities Nonederived from climate change, Transcend evaluates
the possibility of occurrence and analyzes thedegreeofimpact,anddiscloses
theimplementation results from the four core elementsof TCFD: "Governance", "Strategy", "RiskManagement" and "Objectives".
Please find below a brief of the implementation
results:
Governance:
Through annual and ad hoc discussions between
the relevant departments of the ADM, FAD,
Engineering Department, and Quality Assurance
Department, assessments of the risks andopportunities pertaining to climate change werereported to the chairman where, once approved by
the chairman, they will be reported to the board of
directors on a regular basis each year to ensure
thorough discussion.
Strategy:
Strategies to mitigate and adapt to the effects ofclimate change are as follows:
1.Mitigation:Implementation of energy-efficient
improvements,
andpropagate
theenergy-saving concepts;
2. Adaptation: Replace old equipment and add
protective facilities to reduce the impact ofnatural disasters.
Risk Management and Objectives:
After identifying risks, assess the possibility of
improvement, set reasonable management goals,
plan countermeasures and implementation, andconduct annual assessment and review.
-51-

Implementation Status

Assessment Item

Abstract Explanation

Yes NoDeviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasons

Future potential risks and opportunities
derived from climate change:
In 2022, the risks and opportunities identified by
the company should be paid high attention:
Risks:(1) increases in average temperature, which may
result in higher energy consumption (2)Old
equipment may lead to inefficient energy
conversion (3) Extreme weather events, resulting
in unexpected asset damage or factory shutdown
Opportunities:(1)Replacing old equipment to improve energy
efficiency(2)Replacewithenergy-saving
equipment and propagate energy-saving concepts
to reduce electricity costs (3)Add protective
facilities and establish a response process, avoid
natural disasters from damaging assets or delaying
production plan.
2. While facing potential impacts on the caused byclimate change, the Company also understands theopportunities for operation improvement associatedwith relevant responsive measure. For example,
during the replacement of old machines with newones, the Company cooperates with the government
subsidy policy and applies for relevantenergy-saving subsidy and incentives. To create afriendly environment, the Company enhances green
manufacturing and develops technologies beneficial
to the environment, including semi-high PCB andnew packaging materials, product improvement etc.
The Company also develops relevant manufacturing
processes to reduce energy consumption in order toachieve a low-carbon future. Please refer to theCompany’s website for details:
https://tw.transcend-info.com/about/energysaving
https://tw.transcend-info.com/about/green(4) Does the company takev
inventory of its greenhousegas emissions, water
consumption, and total
weight of waste in the last
two years, and implement
policies on energy
efficiency and carbon
dioxide reduction,
greenhouse gas reduction,

1. This data covers the Taiwan headquarters and None
factory site; however, overseas business offices are
excluded.
2.
i. Greenhouse gas emissions:Year

Scope 1

Scope 2

2022
2021

34,99037,721

4,087,881
3,953,752-52-

Unit: KgCO2e
Emission per unit
revenue
0.00030.0003

Implementation Status

Assessment Item

Abstract Explanation

Yes Nowater reduction, or waste
management?

Deviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasonsii. Water consumption:
Unit: million tons
Water consumption
28.38
27.71

Year
2022
2021

iii. Total weight of waste:
Year
2022
2021

Hazardous industrial
waste
10.70513.038

Unit: tons
General industrial
waste
206.439219.064

3. The Company evaluates the risks and opportunitiesof all units in order to establish environmental
objective plans and to execute follow-up
appropriately every year. Some of theenvironmental objective plans are described in thefollowing:
2021: Complete eco-friendly vehicle replacements
for all existing vehicles, and factory 1F lighting
fixture replacement project2022: Factory 3F–5F lighting fixture replacement
project and improvement for DPB30.
2023: Improvement for Drive Pro 10, and factory
introduced a new high-efficiency cooling systemand the replacement project of the chilled water
system.
The Company establishes environmental objectiveplans and executes follow-up appropriately every
year. For relevant objective plans and specificexecution measures, please refer to the Company’s
website for details:
https://tw.transcend-info.com/about/energysaving

4. Presently, the Company has passed environment
related certifications, including ISO 14001 and
QC080000.
4. Social issues(1) Does the company
formulate appropriate
management policies andprocedures according torelevant regulations andthe International Bill of
Human Rights?

v

The Company is committed to complying with the None
national labor laws, “BSCI Code of Conduct”, “RBA
Responsible Business Alliance Code of Conduct” andother applicable industrial standards and international
conventions. The Company also continues to improve
the working environment and employee welfare for all
employees.
To achieve such commitment, the Company
periodically identifies employee occupational safety-53-Implementation Status

Assessment ItemYes NoAbstract Explanation

Deviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasons

and health risks, material environmental concerns, andentrusts a third-party authentication institution to
perform audit periodically. Please refer to theCompany’s website for detailed information:
https://tw.transcend-info.com/about/human(2) Does the company havev

reasonable employee
benefit measures(including salaries, leave,
and other benefits), and do
business performance or
results reflect on employee
salaries?

1. The Company has established the salary Nonemanagement regulations and employee bonus
distribution system. In addition to the distribution of
year-end bonus, the Company also distributes
performance bonus quarterly depending on the
profit of the Company in order to share the businessoutcome with employees, thereby encouraging andrewarding employees for their effort at work.
2. The Company has established the employee welfarecommittee to plan and provide various welfare to
employees, such as wedding gift money, childbirthgift money, funeral condolence, groupmeal
compensation, annual and holiday gifts. To allow
employees to achieve a balance between work andliving, the Company has set up recreation facilities
and a gym in order to allow employees to relax andrelieve pressure. Furthermore, the Company alsoplans free annual health examinations and arranges
for a physician to provide on-site periodic
consultation in order to care for and protect theemployees’ health properly.
3. The Company promotes the equal remuneration
criteria for same job duties and equal promotion
opportunities for employees of different genders. In
2022, the number of female employees accounted
for 49% of all employees, and the number of female
supervisors accounted for 16% of all management
staff.
4. Please refer to ”5.5.1 Employee benefit plans,continuing education, training, retirement systems,
the status of their implementation, and the status oflabor agreements and measures for preserving
employees' rights and interests” and corporatewebsite:https://tw.transcend-info.com/about/employee_benifit(3) Does the company provide
a healthy and safe working
environment and organize
training on health andsafety for its employees onv

1. Environmental Safety and Health Policy
None
The Company is committed to continuously
promoting various handling/control mechanism
plans, to fulfill corporate responsibilities inenvironmental protection and employee safety and-54-

Implementation Status

Assessment Itema regular basis?

Yes NoAbstract Explanation

health, prevention of occupational injuries anddisease, reduction of environmental/safety andhealth management risks, and maintaining thecompetitiveness and improvement status of theCompany. In addition, the Company also aims toconvey its philosophy to all staff working for theorganization and even to all stakeholders, in order toestablish the cornerstone for the sustainable
operation of the Company.
2. Health and Safety of Employees in the Workplace
The Company, according to the hazard identification
and risk opportunity assessment, effectively controls
hazards and reduces risks, in order to improve thesafety and health performance. In addition, theCompany has also established the safety and healthrelated operation control, in order to ensure that
operations comply with the regulations andmanagement system requirements. The Company
also continues to implement the five main plans(human factor engineering, abnormal workload,
illegal infringement, labor health service andmaternity protection plans), and performs
monitoring and performance measurement analysis
and evaluation, and periodically convenes safetycommittee review meetings, in order to ensure theeffective operation of safety and health, and toprovide physical and mental protection toemployees, thereby achieving zero-hazard safety
and health working environment.
In 2022, the Company continues to participate in the“Healthy Workplace” of the Health Promotion
Administration and “111 National Occupational
Safety and Health Week Event” of Occupational
Safety and Heatlth Administration..
3. Labor Working Environment Monitoring andTesting
The Company implements workplace monitoringsemi-annually in order to protect employees fromphysical and chemical hazards in the workplace andto ensure exposure concentration complies with theregulatory standards. The chemical exposure
concentrations of the Company are far lower than
1/2 of the acceptable concentration standards forhazardous substances in the air specified by thelaws.
4. Health Management and Health Promotion
The Company sets up the health management room
-55-

Deviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasonsImplementation Status

Assessment ItemYes NoAbstract Explanation

and also employs full-time nursing personnel
according to the provisions of health protection laws
in order to handle on-site worker health service
affairs. In addition, the Company also contracts a
specialized physician for labor health service inorder to provide the monthly on-site service in theplant.
The
Company
providesregularphysicalexamination before the on-boarding of all new
employees, and all of the expenses for the
aforementioned examination are borne by theCompany. In 2022, the Company provided all
employee health examination and items superior to
the regulatory requirements, and employee relatives
and friends are also entitled to the healthexamination based on the benefit plan, in order toachieve greater health benefits. After healthexamination, the internal professional nurse
classifies the health reports of all employees forhealth management, and provides active care andconducts tracking on abnormal health items, inorder to allow employees to understand theirpersonal health conditions.
The internal nurse promotes various healthpromotion activities and targets annually according
to the employee health abnormality items, andevaluatestheoutcomeandprovidesrecommendations, in order to improve potential andexisting health issues of employees, thereby
preventing occurrence of diseases, improving
personal health condition and promoting employee
health. In the future, the Company will continue to
implement the same activities in conjunction withappropriate reward measures to allow employees tounderstand health and to achieve balance between
work and life.
5. Safety and Health Education and Training
The Company organizes safety and health educationand training annually, in order to improve the safety
and health knowledge of employees. In 2022, there
was a total of five types of courses organized for theinternal education and training, and a total of 1,059
employees participated the training. There was a
total of eight types of license courses, and a total of
11 employees participated in such courses.
6. Corporate Certification Status
The Company and all factory sites in Taiwan have
-56-

Deviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasonsImplementation Status

Assessment ItemYes NoAbstract Explanation

Deviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasons

obtained the dual system certifications of ISO 45001
and CNS 45001 (TOSHMS).
7. Occupational Accident Prevention and Improvement
In 2022, the number of disability injuries was 0
cases. If injuries event is happened, the Company
will conduct investigations on all accidents,
analyzes causes and executes improvement, in orderto prevent re-occurrence of the same problems,
including review of hazard identification and risk
and opportunity assessment content, engineering
improvement priority execution, procedure revision
document and enhancement of education in order toimprove
employees’
understandingandknowledge.
Please refer to the Company’s website for detailed
information:
https://tw.transcend-info.com/about/healthy_safety(4) Does the company provide
its employees with careerdevelopment and training
sessions?

v

The Company establishes annual education and None
training plan to provide knowledge necessary for
employees to perform works. Supervisors of all units
also provide training planning necessary for the careerand competence development of their department staff.
In 2022, training sessions were held 41 times, and a
total of 2,472 people participated in these sessions.

(5) Do the company's products v
and services comply with
relevant laws andinternational standards inrelation to customer healthand safety, customer
privacy, and marketing andlabeling of products andservices, and are relevant
consumer protection andgrievance procedure
policies implemented?

1. The Company has established the “Privacy None
Policy,” and for both domestic or overseas
companies, all personal information collection,
processing, use and protection shall comply with
GDPR。
2. Transcend is a global leading manufacturer in
consumer electronics and industrial products, andrecommendations on products provided by
end-users are the most important basis for theCompany’s product improvement. The Company
has established the Technical-Support Division in
charge of the handling of product related issues forcustomers. The Customer Service Department is
responsible for irregularly and actively inspecting
and confirming the execution status of customer
policies and accepting customer complaints andhandling. In addition, the Company has establishedthe “Customer Service Satisfaction Investigation
Operation Procedure” and “CAR Work Handling
Guideline” in order to allow consumers to resolve
problems promptly and receive professional-57-

Implementation Status

Assessment ItemYes NoAbstract Explanation

Deviations from“the Sustainable
Development
Best-PracticePrinciples for
TWSE/TPEx Listed
Companies” andReasons

services, thereby properly protecting the interests ofcustomers.
(6) Does the company
implement suppliermanagement policies,
requiring suppliers to
observe relevant
regulations onenvironmental protection,
occupational health andsafety, or labor and humanrights? If so, describe theresults.

v

1. The Company has established the “Supplier None
Selection and Management Work Guideline,” andthe standard selection process has been
implemented before the addition of new suppliers,
and suppliers are also requested to sign thefollowing
documentsof“environmental
protection regulations compliance guarantee”,“supplier ethics undertaking”, “supplier social
responsibility
undertaking”and“Review
Supply chain security of Authorized Economic
Operator” , or the supplier is requested to provide
relevant responsibility statements. in order tocomply with the regulations of environmental
protection, occupational safety and health or laborrights, Supply chain security.
2. The Company has established the GMP system to
inform suppliers of the latest hazardous substancestandard and relevant environmental protection
regulations of the Company in real time.
3. Supplier evaluation is performed annually. For the2022 supplier evaluation result, all of the suppliers
qualified the evaluation standard and complied withthe supplier code of practice.
Please refer to the Company’s website for detailed
information:
https://tw.transcend-info.com/about/vendor_management

5. Does the company
reference internationallyaccepted reporting
standards or guidelines,
and prepare reports that
disclose non-financial
information of thecompany, such as ESG
reports? Do the reports
above obtain assurance
from a third party
verification unit?

v 1. When we prepared our sustainability report, we None.
made reference to the core option and the content
and quality principles of the GRI Sustainability
Reporting Standards, and prepared the report on thebasis on the four principles of Materiality,
inclusivity, responsibility, and impact of the
AA1000 Accountability Standard as well as inresponse to the Sustainability Accounting Standards
Board (SASB) standards, through which prominentissues of concern to stakeholders can be covered asmuch as possible, and sustainable behaviors of ourcorporate operations demonstrated.
2. Although not verified by external third parties, theaccuracy of all financial, environmental, and social
statistics herein are ensured by our stringent internal
control and audit mechanism.
-58-

Implementation Status

Deviations from“the Sustainable
Development
Best-PracticeAssessment Item
Principles for
Yes NoAbstract Explanation
TWSE/TPEx Listed
Companies” andReasons
6. Describe the difference, if any, between actual practice and the sustainable development principles, if thecompany has implemented such principles based on the Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies:
The Company has established the “Corporate Social Responsibility Best-Practice Principles” in 2014, having nomajor difference from the “Sustainable Development Best-Practice Principles for TWSE/TPEx Listed
Companies”, and there have been no major abnormalities in the actual operation.
7. Other useful information for explaining the status of sustainable development practices:(1) Environmental protection: Please refer to “5.4. Environmental Protection Expenditures”.
(2) Consumers’ rights and interests: The Company has established the dedicated Customer Service Center tohandle customer complaint issues. The direct-sale stores of the Company also provide the service of productreturn and exchange to consumers.
(3) Employees’ rights and interests: Please refer to “5.5.1 Employee benefit plans, continuing education,
training, retirement systems, the status of their implementation, and the status of labor agreements andmeasures for preserving employees' rights and interests”.
(4) Safety and health: The Company has obtained the ISO 45001 occupational safety and health management
system certification for the workplace, and has also qualified the TOSHMS certification standard (CNS
45001).
(5) Products: In terms of the quality management, the Company has obtained the ISO 9001 quality management
system certification. With outstanding product design and research and development strength, the Company
has received the honor of Taiwan Excellence Award for consecutive years, thereby establishing a quality
brand image.
(6) Specific promotion plan and implementation outcome for corporate social responsibility: The Company
upholds the value of creating a better future for the society and actively engages in social participation.
Through long-term support in sports related sponsorship and numerous domestic and overseas youth
cultivation events, the Company is active in promoting the development of youth and sports in Taiwan. The
Company collaborates with the Chinese Taipei School Sport Federation and provides schematic supports insports events, such as HTV and HBL contests, etc., through monetary sponsorship and product sponsorship.
In addition, to further promote the junior league baseball in Taiwan, the Company launches the remotebaseball seed project and sponsors remote elementary schools with hardware equipment and materials, inorder to fulfill the corporates responsibility and to return to the society. The youth sports development
outcome achieved by the Company has been well recognized, and the Company has received the honor ofSports Activist Award for nine consecutive years. The Company has further received the “Long-termSponsorship Award in Sponsorship Category” for the Sports Activist Award in 2022.

-59-

3.3.7. Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate
Management Best Practice Principles for TWSE/GTSM Listed Companies"
Implementation Status
Evaluation ItemYes NoAbstract Illustration

Deviations from the“Ethical Corporate
Management Best
Practice Principles
for TWSE/GTSM
Listed Companies”
and Reasons

1. Establishment of ethicalcorporate management
policies and programs(1) Does the company have a
Board-approved ethicalcorporate management
policy and stated in its
regulations and externalcorrespondence theethical corporate
management policy andpractices, as well as theactive commitment of theBoard of Directors andmanagement towards
enforcement of suchpolicy?

v

The “Ethical Corporate Management Best-Practice None
Principles” of the Company has been approved in theboard of directors’ meeting in 2014, and theregulations of the “Codes of Ethical Conduct for
Directors and Managerial Officers” and “Codes of
Ethical Conduct for Employees” , etc. have also been
approved in the board of directors’ meeting in 2013.
The Company requests directors and all employees tocomply with such provisions accordingly. Please referto the Company’s website:
https://tw.transcend-info.com/about/policies(2) Does the company havev
mechanisms in place toassess the risk ofunethical conduct, andperform regular analysis
and assessment ofbusiness activities withhigher risk of unethicalconduct within the scopeof business? Does thecompany implement
programs to prevent
unethical conduct basedon the above and ensure
the programs cover at
least the matters describedin Paragraph 2, Article 7of the Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies?

The Company has established the “Ethical Corporate None
Management Best-Practice Principles”, “Codes of
Ethical Conduct for Directors and Managerial
Officers” and “Codes of Ethical Conduct for
Employees”, and all of these provisions have covered
the operating activities of relatively higher risk ofunethical conduct described in the content of all
subparagraphs of Paragraph 2 of Article 7 of the“Ethical Corporate Management Best-PracticePrinciples for TWSE/GTSM Listed Companies” andother operating scope.
Ethical corporate management and ethical code of
conduct are the core guidelines for the Company. The
contents of these provisions are published on the
Company’s website for relevant personnel’s review at
any time.
The Company provides internal and externalreporting channels. In case where a violation is foundto be true, different level of disciplinary action is
imposed depending upon the severity of the violation.

-60-

Implementation Status

Evaluation Item

(3) Does the company
provide clearly theoperating procedures,code of conduct,
disciplinary actions, andappeal procedures in the
programs against
unethical conduct? Does
the company enforce theprograms above
effectively and perform
regular reviews andamendments?
2. Fulfill operations integrity
policy(1) Does the company
evaluate business
partners’ ethical records
and include ethics-relatedclauses in business
contracts?

Deviations from the“Ethical Corporate
Management Best
Practice Principles
Yes NoAbstract Illustration
for TWSE/GTSM
Listed Companies”
and Reasonsv
The Company has established the “Ethical Corporate None
Management Best-Practice Principles”, “Codes of
Ethical Conduct for Directors and Managerial
Officers” and ”Codes of Ethical Conduct for
Employees” . All of these provisions are published on
the Company’s website for relevant personnel’s
review. The Company also requests all employees
and directors to comply with these provisions
accordingly.

v

Prior to engaging in business dealings with suppliers, None
the Company conducts evaluation and review process
on all aspects of the suppliers, and requests the
suppliers to provide the “Supplier Ethics
Undertaking.” Prior to engaging in business dealings
with customers, the Company evaluates the financial
and credit status according to the credit investigation
policy of the Company. In case where transaction
counterparty involves in unethical conducts, theCompany may terminate or rescind contracts at anytime.

(2) Does the company have aunit responsible for
ethical corporate
management on afull-time basis under the
Board of Directors which
reports the ethicalcorporate management
policy and programs
against unethical conduct
regularly (at least once ayear) to the Board of
Directors while
overseeing suchoperations?

v

The Company assigns the Financial and Accounting None
Department and the Administration Department to be
the concurrent units responsible for the establishmentof ethical corporate management policies andexecution of supervision, and according to the job
duties and scope of each unit, including theestablishment and revision of the “Ethical Corporate
Management Best-Practice Principles,” organizing
ethical corporate management related propaganda andeducational training, etc., in order to ensure thethorough implementation of ethical corporate
management principles. Important items and relevant
affairs promotion status are reported to the board of
directors once annually.

(3) Does the company
establish policies toprevent conflicts ofinterest and provide
appropriatev

The Company has established the “Codes of Ethical None
Conduct for Directors and Managerial Officers”,“Codes of Ethical Conduct for Employees”,“Employee Code of Conduct and Reward andDiscipline Management Regulations”, “Regulations-61-

Implementation Status
Evaluation ItemYes Nocommunication channels,
and implement it?

Abstract Illustration

Deviations from the“Ethical Corporate
Management Best
Practice Principles
for TWSE/GTSM
Listed Companies”
and Reasons

Governing Procedure for Board of Directors
Meetings” and “Audit Committee Charter.” All ofthese provisions have clearly specified mattersrequiring recusal in case of encountering the situationof conflict of interest. The Company provides
complaint channel, such that in case where any
director, managerial officer or employee is verified tohave violated the code of ethical conduct, then such
violator shall be punished in accordance with thedisciplinary measures specified in the code of ethicalconduct.

(4) Does the company haveveffective accounting andinternal control systems inplace to implement ethicalcorporate management?
Does the internal audit
unit follow the results of
unethical conduct risk
assessments and devise
audit plans to audit thesystems accordingly toprevent unethical conduct,or hire outsideaccountants to performthe audits?

The Company prepares the financial statements in Noneaccordance with the International Financial ReportingStandards (IFRSs),
International AccountingStandards (IAS) and interpretations. For the 2022
consolidated financial statements, the PwC Taiwan
has issued the audit report with unqualified opinion.
The Company establishes an internal control system
for all operating activities. The internal audit unit
performs audit work according to the audit plan andalso reports to the Audit Committee and board of
directors periodically.

(5) Does the company
regularly hold internaland external educational
trainings on operational
integrity?

To establish the corporate culture of ethical Nonemanagement and sound development, the Company
has constructed a proper business operation structureand has established the “Ethical Corporate
Management Best-Practice Principles,” and theseprinciples are implemented in the daily operation.
The new employees’ orientation training includes
ethical management related education courses, andthe content mainly covers the courses employee
ethical conduct, employee code of conduct, ethics andfair trade and duty of confidentiality, etc. In 2022,
three orientation training sessions were held, and a
total of 65 people participated in these sessions. The
period of each training session is 0.5 hours. The
course materials are provided to employees after theorientation training. The Company also places thecourse contents related to internal material
information handling operation and insider trading
related courses in the Company’s system and website
as references for directors, managerial officers and

v

-62-

Implementation Status
Evaluation ItemYes NoAbstract Illustration

Deviations from the“Ethical Corporate
Management Best
Practice Principles
for TWSE/GTSM
Listed Companies”
and Reasons

employees.
3. Operation of the integrity
channel(1) Does the company
establish both areward/punishment
system and an integrity
hotline? Can the accused
be reached by anappropriate person forfollow-up?

v

The Company has established the “Regulations for None
Company’s Whistleblowing Reports on Illegal andUnethical Conducts” and has also set up specificwhistleblowing mailbox and employee suggestion
box in order to allow internal and external personnel
to file complaint or whistleblowing reports to theCompany. After the receiving unit clarifies relevantfacts and evidence, it is reported to the managementlevel for handling.

(2) Does the company havein place standard
operating procedures forinvestigating accusation
cases, as well as
follow-up actions andrelevant ost-investigation
confidentiality measures?

v

The content of the “Regulations for Company’s None
Whistleblowing Reports on Illegal and UnethicalConducts” established by the Company specifies thehandling procedures related to the filing ofcomplaints, investigation and post-investigation
measures, and the whistleblower’s identity is kept
strictly confidential.

(3) Does the company
v
provide proper
whistleblower protection?

The “Regulations for Company’s Whistleblowing None
Reports on Illegal and Unethical Conducts” of theCompany also specifies that the whistleblower shallnot be subject to unfavorable disposal due to thewhistleblowing report, and the Company shallprovide sufficient protection to all whistleblowers.

4. Strengthening information
disclosure
Does the company disclose
its ethical corporate
management policies andthe results of its
implementation on thecompany’s website and
MOPS?

v

The Company has disclosed relevant ethical Nonemanagement principles on the Company’s website
and MOPS. The Company has also set up the EthicalManagement section on the Company’s website andhas disclosed ethical management related informationin the annual report.
https://tw.transcend-info.com/about/integrity

5. If the company has established the ethical corporate management policies based on the Ethical Corporate
Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy
between the policies and their implementation:
The Company has established the “Ethical Corporate Management Best-Practice Principles” in 2014, having nomajor difference from the “”Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed
Companies,” and there have been no major abnormalities in the actual operation.
-63-

Implementation Status

Deviations from the“Ethical Corporate
Management Best
Evaluation Item
Practice Principles
Yes NoAbstract Illustration
for TWSE/GTSM
Listed Companies”
and Reasons
6. Other important information to facilitate a better understanding of the company’s ethical corporate management
policies (e.g., review and amend its policies)(1) The Company periodically reviews the update status of the “Ethical Corporate Management Best-PracticePrinciples for TWSE/TPEx Listed Companies” and timely reviews and conducts evaluation to determine
necessary amendments.
(2) In the provisions of the “Codes of Ethical Conduct for Directors and Managerial Officers”, “Codes of EthicalConduct for Employees” and the “Employee Code of Conduct and Reward and Discipline Management
Regulations,” the Company has specified that unethical conducts are prohibited, conflict of interests shall be
avoided and obtaining of improper personal benefits and interests shall be prevented.
(3) In the “Audit Committee Charter” and “Regulations Governing Procedure for Board of Directors Meetings,”
the Company has specified the directors’ recusal system for conflict of interest.
(4) To implement the education on ethical management, the Company includes the ethical management in thecourse content of new employees’ orientation training, thereby allowing new employees to understand theCompany’s policy and direction on ethical management.
(5) The Company has established the “Patent Management Regulations” and “Intellectual Property Right
Management Control Operation” in order to serve as the basis for the obtaining, protection and managementof intangible assets. Company has also periodically introduced the concepts of the intellectual property rights
to all employees.

3.3.8. Corporate Governance Guidelines and Regulations
Please refer to the Company’s website at http://tw.transcend-info.com/about/policies
3.3.9. Other Important Information Regarding Corporate Governance
The Company has established the “Procedures for Handling Material Inside Information”.
The Company informs all employees via e-mail when newly establishment of the procedures
and subsequent amendments, and also makes public announcement through the intranet of theCompany for employees’ review and use. All departments and employees handling possible
material information and disclosure of such information are required to comply with theseprocedures as well as laws and regulations. “Procedures for Handling Material Inside
Information” has been disclosed on the Company’s website.
Please refer to: http://tw.transcend-info.com/about/policies-64-3.3.10. Implementation of Internal Control Systems
1. Statement of Internal Control Systems
Transcend Information, Inc.
Statement of Internal Control Systems
March 2, 2023
Based on the findings of a self-assessment, Transcend Information, Inc. (Transcend) states thefollowing with regard to its internal control system during the year 2022:
1.

Transcend’s Board of Directors and management are responsible for establishing, implementing,and maintaining an adequate internal control system. Our internal control is a process designed
to provide reasonable assurance over the effectiveness and efficiency of our operations(including profitability, performance and safeguarding of assets), reliability, timeliness,transparency of our reporting, and compliance with applicable rulings, laws and regulations.

2.

An internal control system has inherent limitations. No matter how perfectly designed, aneffective internal control system can provide only reasonable assurance of accomplishing its
stated objectives. Moreover, the effectiveness of an internal control system may be subject tochanges due to extenuating circumstances beyond our control. Nevertheless, our internal control
system contains self-monitoring mechanisms, and Transcend takes immediate remedial actions
in response to any identified deficiencies.

3.

Transcend evaluates the design and operating effectiveness of its internal control system basedon the criteria provided in the Regulations Governing the Establishment of Internal Control
Systems by Public Companies (herein below, the“Regulations”). The criteria adopted by theRegulations identify five key components of managerial internal control: (1) control environment,(2) risk assessment, (3) control activities, (4) information and communication, and (5)monitoring activities.

4.

Transcend has evaluated the design and operating effectiveness of its internal control system
according to the aforesaid Regulations.

5.

Based on the findings of such evaluation, Transcend believes that, on December 31, 2022, it has
maintained, in all material respects, an effective internal control system (that includes thesupervision and management of our subsidiaries), to provide reasonable assurance over ouroperational effectiveness and efficiency, reliability, timeliness, transparency of reporting, andcompliance with applicable rulings, laws and regulations.

6.

This Statement is an integral part of Transcend’s annual report and prospectus, and will be madepublic. Any falsehood, concealment, or other illegality in the content made public will entail
legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.

7.

This Statement was passed by the Board of Directors in their meeting held on March 2, 2023,
with none of the nine attending directors expressing dissenting opinions, and the remainder all
affirming the content of this Statement.
Transcend Information, Inc.
Chairman: Shu, Chung-Won
General Manager: Shu, Chung-Won-65-

2. If CPA was Engaged to Conduct a Special Audit of Internal Control System, Provide Its
Audit Report: None.
3.3.11. If there has been any legal penalty against the company and its internal personnel, or any
disciplinary penalty by the company against its internal personnel for violation of the internal
control system, during the most recent fiscal year or during the current fiscal year up to the
publication date of the annual report, where the result of such penalty could have a material
effect on shareholder interests or securities prices, the annual report shall disclose the penalty,
the main shortcomings, and condition of improvement:
None.
3.3.12. Major resolutions of Shareholders’ Meeting, Board of Directors Meetings, Audit Committee
meetings and Remuneration Committee meetings in the most recent year and up to the
publication date of this Annual Report:
1. Major resolutions of Shareholders’ MeetingDate2022.06.17

Material Decisions
Adoption of 2021 Business Report and(1)
Financial Statements.

Resolutions and Implementation Status
Approved after voting.

Approved after voting. To appropriate legal
Adoption of the proposal for distribution of reserve NT$254,464,351 and special reserve(2)2021 earnings.
NT$73,270,371 from 2021 earnings inaccordance with the regulations.

2. Material resolutions of Board of Directors Meetings
Date

Material Decisions(1)

Resolutions and Implementation Status

2021 Business Report and Financial
Statements.

(2) Proposal for distribution of 2021 earnings.

(3)

Cash distribution from 2021 retained
earnings.

2022.03.03(The First(4) Cash distribution from capital surplus.
Time in
2022)(5) Change of CPA.

(6) CPA Independence Assessment.

Approved by all presented directors andproposed to Shareholders’ meeting for
ratification.
Approved by all presented directors andproposed to Shareholders’ meeting for
ratification.
Approved by all presented directors. To
appropriate cash dividend NT$2,231,120,710(NT$5.20 per share) from 2021 earnings andsubmit a report to Shareholders’ meeting.
Approved by all presented directors. The capitalsurplus derived from the issuance of new sharesat a premium totaling NT$343,249,340 will be
distributed in cash of NT$0.80 per share. And
submit a report to Shareholders’ meeting.
Approved by all presented directors. The original
CPA in charge of the audit of the Company has
serviced the Company for seven years, therefore
starting from the 2022 Q1 financial statements,
CPA for auditing the Company have beenchanged.
Approved by all presented directors.

Extension of the period of endorsement and Approved by all presented directors. The(7) guarantee to subsidiary Transcend Japan
handling department has executed such matterInc.
according to the regulations.
-66-

(8)
2022.05.05(The
SecondTime in2022)

Renewal of land lease agreement at No. 70
Xingshan Road.

For this proposal, except directors of
stakeholders who recused themselves fromparticipating in the discussion due to conflict ofinterest, this proposal was approved by theattending directors.

Amendments to “Corporate Governance BestApproved by all presented directors.
Practice Principles”.

Extension of the period of endorsement and Approved by all presented directors. The
handling department has executed such matter
2022.08.04 (1) guarantee to subsidiary Transcend JapanInc.
according to the regulations.
(The ThirdTime inApproved by all presented directors andAmendments to “Procedures for
2022)
(2)
proposed to Shareholders’ meeting for
Acquisition and Disposal of Assets”
discussion.
Approved by all presented directors. The Audit(1) 2023 Annual Internal Audit Plan.
Office is requested to execute such matteraccording to the regulations.
2022.11.10
Approved by all presented directors. The
Renewal of Directors and Officers’ Liability(The(2)
handling department has executed such matter
Insurance.
Fourthaccording to the regulations.
Time in
Implementation of Employee Stock(3)
Approved by all presented directors.
2022)
Ownership Trust in 2023
Amendments to “Procedures for Handling(4)
Approved by all presented directors.
Material Inside Information”
Approved by all presented directors and2022 Business Report and Financial(1)
proposed to Shareholders’ meeting forStatements.
ratification.
Approved by all presented directors and(2) Proposal for distribution of 2022 earnings. proposed to Shareholders’ meeting for
ratification.
Approved by all presented directors. To
Cash distribution from 2022 retained
appropriate cash dividend NT$2,059,496,040(3)earnings.
(NT$4.80 per share) from 2022 earnings andsubmit a report to Shareholders’ meeting.
Approved by all presented directors. The capital
2023.03.02
surplus derived from the issuance of new shares(The First(4) Cash distribution from capital surplus.
at a premium totaling NT$343,249,340 will beTime indistributed in cash of NT$0.80 per share. And
2023)
submit a report to Shareholders’ meeting.
CPA Independence and Suitability(5)
Approved by all presented directors.
Assessment.
Extension of the period of endorsement and Approved by all presented directors. The(6) guarantee to subsidiary Transcend Japan
handling department has executed such matterInc.
according to the regulations.
Ratification of the Appointment of the(7)
Approved by all presented directors.
financial and accounting officer
Ratification of the Appointment of(8) Corporate GovernanceApproved by all presented directors.
Officer
2023.05.04
Planned issuance of restricted stock awards(1)
Approved by all presented directors.
(Theby the company-67-SecondTime in2023)(2)

Amendments to “Sustainable

Approved by all presented directors.

Development Best Practice Principles”.
Amendments to “Rules of Procedure for(3)
Approved by all presented directors.
Board of Directors Meetings”.

3. Material resolutions of Audit Committee Meetings
Date

Material Decisions

Resolutions and Implementation Status
Approved by all presented committee members
2021 Business Report and Financial(1)
and proposed to Board of directors’ meeting forStatements.
discussion.
Approved by all presented committee members(2) Proposal for distribution of 2021 earnings. and proposed to Board of directors’ meeting fordiscussion.
Approved by all presented committee members
and proposed to Board of directors’ meeting for
Cash distribution from 2021 retained(3)
discussion. To appropriate cash dividend
earnings.
NT$2,231,120,710 (NT$5.20 per share) from2021 earnings.
2022.03.03
Approved by all presented committee members(The Firstand proposed to Board of directors’ meeting forTime indiscussion. The capital surplus derived from the(4) Cash distribution from capital surplus.
2022)
issuance of new shares at a premium totaling
NT$343,249,340 will be distributed in cash of
NT$0.80 per share.
Approved by all presented committee members(5) Change of CPA.
and proposed to Board of directors’ meeting fordiscussion.
Extension of the period of endorsement and Approved by all presented committee members(6) guarantee to subsidiary Transcend Japanand proposed to Board of directors’ meeting forInc.
discussion.
Approved by all presented committee members
Renewal of land lease agreement expiration(7)
and proposed to Board of directors’ meeting for
at No. 70 Xingshan Road.
discussion.
2022.05.05(The
Approved by all presented committee members
The first quarter 2022 consolidated financial
Secondand proposed to Board of directors’ meeting forstatements.
Time indiscussion.
2022)
Extension of the period of endorsement and Approved by all presented committee members(1)
guarantee to subsidiary Transcend Japanand proposed to Board of directors’ meeting for2022.08.04
Inc.
discussion.
(The ThirdTime inApproved by all presented committee members
Amendments to “Procedures for
2022)
(2)
and proposed to Board of directors’ meeting for
Acquisition and Disposal of Assets”
discussion.
2022.11.10(The
Approved by all presented committee members
Fourth2023 Annual Internal Audit Planand proposed to Board of directors’ meeting forTime indiscussion.
2022)
Approved by all presented committee members
2023.03.02
2022 Business Report and Financial
and proposed to Board of directors’ meeting for(The First (1) Statements.
discussion.
Time in2023)(2) Proposal for distribution of 2022 earnings.
-68-

Approved by all presented committee members

and proposed to Board of directors’ meeting fordiscussion.
Approved by all presented committee members
and proposed to Board of directors’ meeting for
Cash distribution from 2022 retained(3)
discussion. To appropriate cash dividend
earnings.
NT$2,059,496,040 (NT$4.80 per share) from2022 earnings.
Approved by all presented committee members
and proposed to Board of directors’ meeting fordiscussion. The capital surplus derived from the(4) Cash distribution from capital surplus.
issuance of new shares at a premium totaling
NT$343,249,340 will be distributed in cash of
NT$0.80 per share.
Extension of the period of endorsement and Approved by all presented committee members(5) guarantee to subsidiary Transcend Japanand proposed to Board of directors’ meeting forInc.
discussion.
Ratification of the Appointment of the(6)
Approved by all presented directors.
financial and accounting officer
2023.05.04(The
Planned issuance of restricted stock awards by
Secondthe company
Time in2023)

Approved by all presented committee members
and proposed to Board of directors’ meeting fordiscussion.

4. Material resolutions of Remuneration Committee Meetings
Date2022.03.03(The FirstTime in2022)

Material Decisions
Resolutions and Implementation Status
Distribution of 2021 employees’ profit(1)
sharing bonus and directors’ compensation. Approved by all presented committee members
Remuneration of managerial officers inand proposed to Board of directors’ meeting for
(2)
2022.
discussion.
(3) Remuneration of directors in 2022.

2022.11.10 (1) Remuneration of managerial officers in
2022.
(The
Approved by all presented committee members
Second (2) Remuneration of directors in 2022.
and proposed to Board of directors’ meeting forTime indiscussion.
Implementation of Employee Stock
(3)
2022)
Ownership Trust in 2023
Distribution of 2022 employees’ profit
2023.03.02 (1) sharing bonus and directors’ compensation.
Approved by all presented committee members(The First
Remuneration of managerial officers inand proposed to Board of directors’ meeting forTime in (2) 2023.
discussion.
2023)(3) Remuneration of directors in 2023.

3.3.13. Major Issues of Record or Written Statements Made by Any Director Dissenting to Important
Resolutions Passed by the Board of Directors in the Most Recent Year up to the Publication
Date of this Annual Report:
None.

-69-

3.3.14. Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO,and Heads of Accounting, Finance, Internal Audit, Corporate Governance and R&D in the
Most Recent Year and up to the Publication Date of this Annual Report:
Name

Date ofAppointment

Date ofTermination

Wang, Jen-Ming

2017/07/01

2022/04/29

Resignation

Hong, Wan-Hoon

2020/03/05

2022/12/31

Retirement

Hsiao, Sheng-Yin

2019/08/01

2023/01/19

Resignation

Title
Vice General
Manager
General Manager
CFO & Corporate
Governance Officer

April 18, 2023
Reasons for
Resignation or
Dismissal

3.4. Information on CPA fees
Unit: NT$ thousands
Accounting Firm

Name of
CPA

Audit Period

Chen,
Pricewaterhouse Chin-Chang
2022.01.01~2022.12.31
Coopers
Lin, Yi-Fen

Audit Fee
3,735

Non-audit Fee(Note)
2,310

Total

Remark

6,045-

Note: The non-audit services are for Transfer Pricing Report, Tax Compliance Audit service
and other Tax Consulting services.
3.4.1. When the company changes its accounting firm and the audit fees paid for the fiscal year inwhich such change took place are lower than those for the previous fiscal year, the amounts of
the audit fees before and after the change and the reasons shall be disclosed.
Not applicable.
3.4.2. When the audit fees paid for the current fiscal year are lower than those for the previous fiscal
year by 10 percent or more, the reduction in the amount of audit fees, reduction percentage,
and reason(s) therefor shall be disclosed.
None.
3.5. Replacement of CPA
In 2022, the company changed the CPA due to the internal rotation of the CPA firm inaccordance with relevant laws and regulations.
3.6. Where the company's chairman, general manager, or any managerial officer in charge offinance or accounting matters has in the most recent year held a position at the accounting firmof its certified public accountant or at an affiliated enterprise of such accounting firm, the nameand position of the person, and the period during which the position was held, shall be
disclosed.
None.
3.7. Any transfer of equity interests and/or pledge of or change in equity interests by a director,
managerial officer, or shareholder with a stake of more than 10 percent during the most recent
fiscal year and during the current fiscal year up to the date of publication of this Annual Report.
None.

-70-

3.7.1. Changes in shares held by Directors, Managerial Officers and Major Shareholders
2022

Title

Chairman and CEO
and General manager
Director
Director
Director
Director & Sales Vice
General Manager
Director
Independent Director
Independent Director
Independent Director
General Manager

As of April 18, 2023
Increase
Increase
Increase
Increase(decrease)(decrease)(decrease) of(decrease) ofof sharesof shares
shares held
shares held
pledgedpledgedName

Shu, Chung-Won (Note 2)

-

-

-

-

Shu, Chung-Cheng
Chui, Li-Chu
Hsu, Chia-Hsian--(50,000)-

Chen, Po-Shou

-

-

-

-

Wu, Kuan-De

-

-

-

-

Chen, Yi-Liang
Chen, Lo-Min
Wang, Yi-Hsin
Hong, Wan-Hoon(Dismissal date: 2022/12/31)
Wang, Jen-Ming(Dismissal date: 2022/04/29)

-

-

-

-

-

-

-

-

Sales Vice General
ManagerR&D Vice General
Li, Tseng-Ho
Manager
Administration Vice
Fang, Wen-Jeng
General Manager
Financial andHsiao, Sheng-Yin
Accounting Officer & (Dismissal date: 2023/01/19)
Corporate Governance
Chi, Wen-Hui (Note 3)
Officer
Shareholder holding
Won Chin Investment Inc.
10% or more of shares
Note 1: The status of the increase/decrease of shares held and pledged shall be based on the period of thedirectors and managerial officers’ term of office.
Note 2: The general manager temporary hold by Shu, Chung-Won, the appointment effected on January 1,
2023.
Note 3: New appointment of Financial and Accounting Officer & Corporate Governance Officer on January 19,
2023, and approved by Board of Directors March 2, 2023.

3.7.2. Shares Trading with Related Parties
Not applicable.
3.7.3. Shares Pledge with Related Parties
Not applicable.

-71-3.8. Relationship information, if among the company's Top 10 shareholders any one is a related
party, spouse or a relative within the second degree of kinship of another

Name

Current Shareholding
Shares%Shareholding
Name and Relationship Between the
Spouse’s/minor’s
by Nominee Company’s Top Ten Shareholders, or Spouses
Shareholding
Arrangement
or Relatives Within Two Degrees
Shares%Shares %Name
Relationship
Wan An Technology
Inc.

Same person as the
ChairmanWan Min Investment
Inc.

Same person as the
Chairman

Wan Chuan Investment Same person as theInc.
ChairmanCheng Chuan
Technology
Development Inc.
Won ChinInvestment Inc.
Representative:
Shu, Chung-Yu

74,783,600 17.43%

-

-

-

Ho Cheng Investment
Inc.

Shin Chuang
Investment Inc.

Shu, Chung-Won

Won Chin Investment
Inc.

Wan AnTechnology Inc.
Representative:
Shu, Chung-Yu

34,142,854

7.96%

-

-

-

-72-

-

The Chairman of thecompany listed here isa relative within two
degrees of kinship of
the Chairman of Won
Chin
The Chairman of thecompany listed here isa relative within two
degrees of kinship of
the Chairman of Won
Chin
The Chairman of thecompany listed here isa relative within two
degrees of kinship of
the Chairman of Won
Chin
This shareholder is arelative within two
degrees of kinship of
the Chairman of Won
Chin
Same person as the
ChairmanSame person as the
Chairman; Investment
Wan Min Investmentof Wan An on Wan
Inc.
Min is evaluatedunder equity method
Same person as the
Chairman; Investment
Wan Chuan Investmentof Wan An on Wan
Inc.
Chuan is evaluatedunder equity method
The Chairman of thecompany listed here isCheng Chuana relative within two
Technology
degrees of kinship ofDevelopment Inc.
the Chairman of Wan
An

Name

Current Shareholding
SharesCheng Chuan
Technology
Development Inc.
32,971,701
Representative:
Shu,
Chung-Cheng

%

7.68%

Shareholding
Name and Relationship Between the
Spouse’s/minor’s
by Nominee Company’s Top Ten Shareholders, or Spouses
Shareholding
Arrangement
or Relatives Within Two Degrees
Shares%Shares %Name
Relationship
The Chairman of thecompany listed here isa relative within two
degrees of kinship of
Ho Cheng Investment
the Chairman of Wan
Inc.
An; Investment of
Wan An on He Chengis evaluated underequity method
The Chairman of thecompany listed here is
Shin Chuanga relative within two
Investment Inc.
degrees of kinship of
the Chairman of Wan
An
This shareholder is arelative within two
Shu, Chung-Won
degrees of kinship of
the Chairman of Wan
An
The Chairman of thecompany listed here is
Won Chin Investment a relative within twoInc.
degrees of kinship of
the Chairman ofCheng Chuan
The Chairman of thecompany listed here is
Wan An Technology
a relative within twoInc.
degrees of kinship of
the Chairman ofCheng Chuan
The Chairman of thecompany listed here is
Wan Min Investmenta relative within twoInc.
degrees of kinship of
the Chairman ofCheng Chuan
The Chairman of thecompany listed here is
Wan Chuan Investment a relative within twoInc.
degrees of kinship of
the Chairman ofCheng Chuan
The Chairman of thecompany listed here is
Ho Cheng Investment a relative within twoInc.
degrees of kinship of
the Chairman ofCheng Chuan
The Chairman of thecompany listed here is
Shin Chuanga relative within two
Investment Inc.
degrees of kinship of
the Chairman ofCheng Chuan
-73-

Name

Current Shareholding
Shares%Shareholding
Name and Relationship Between the
Spouse’s/minor’s
by Nominee Company’s Top Ten Shareholders, or Spouses
Shareholding
Arrangement
or Relatives Within Two Degrees
Shares%Shares %Name
RelationshipThis shareholder is arelative within two
Shu, Chung-Won
degrees of kinship of
the Chairman ofCheng Chuan
Won Chin Investment
Inc.

Same person as the
Chairman

Wan An Technology
Inc.

Same person as the
Chairman; Wan Min
is an investee of Wan
An under equity
methodWan Chuan Investment Same person as theInc.
ChairmanWan MinInvestment Inc.
Representative:
Shu, Chung-Yu

Cheng Chuan
Technology
Development Inc.
29,726,397

6.93%

-

-

-

Ho Cheng Investment
Inc.

Shin Chuang
Investment Inc.

Shu, Chung-Won

Wan Chuan
Investment Inc.
Representative:
Shu, Chung-Yu

29,505,896

6.88%

-

-

-

-74-

-

The Chairman of thecompany listed here isa relative within two
degrees of kinship of
the Chairman of Wan
Min
The Chairman of thecompany listed here isa relative within two
degrees of kinship of
the Chairman of Wan
Min
The Chairman of thecompany listed here isa relative within two
degrees of kinship of
the Chairman of Wan
Min
This shareholder is arelative within two
degrees of kinship of
the Chairman of Wan
Min

Won Chin Investment
Inc.

Same person as the
Chairman

Wan An Technology
Inc.

Same person as the
Chairman; Wan
Chuan is an investeeof Wan An underequity method

Wan Min Investment
Inc.

Same person as the
ChairmanHo Cheng Investment
Inc.

The Chairman of thecompany listed here isa relative within two
degrees of kinship of
the Chairman of Wan
Chuan

Name

Current Shareholding
Shares%Shareholding
Name and Relationship Between the
Spouse’s/minor’s
by Nominee Company’s Top Ten Shareholders, or Spouses
Shareholding
Arrangement
or Relatives Within Two Degrees
Shares%Shares %Name
Relationship
The Chairman of thecompany listed here is
Shin Chuanga relative within two
Investment Inc.
degrees of kinship of
the Chairman of Wan
Chuan
The Chairman of thecompany listed here isCheng Chuana relative within two
Technology
degrees of kinship ofDevelopment Inc.
the Chairman of Wan
Chuan
This shareholder is arelative within two
Shu, Chung-Won
degrees of kinship of
the Chairman of Wan
Chuan
Shin Chuang
Investment Inc.

Ho Cheng
Investment Inc.
Representative:
Shu, Chung-Mei

14,426,462

3.36%

-

-

-

-75-

-

Same person as the
Chairman

The Chairman of thecompany listed here is
Won Chin Investment a relative within twoInc.
degrees of kinship of
the Chairman of Ho
Cheng
The Chairman of thecompany listed here isa relative within two
Wan An Technology
degrees of kinship of
Inc.
the Chairman of Ho
Cheng; He Cheng is
an investee of Wan An
under equity method
The Chairman of thecompany listed here is
Wan Min Investmenta relative within twoInc.
degrees of kinship of
the Chairman of Ho
Cheng
The Chairman of thecompany listed here is
Wan Chuan Investment a relative within twoInc.
degrees of kinship of
the Chairman of Ho
Cheng
The Chairman of thecompany listed here isCheng Chuana relative within two
Technology
degrees of kinship ofDevelopment Inc.
the Chairman of Ho
Cheng
This shareholder is arelative within two
Shu, Chung-Won
degrees of kinship of
the Chairman of Ho
Cheng

Name

Current Shareholding
Shares%Shareholding
Name and Relationship Between the
Spouse’s/minor’s
by Nominee Company’s Top Ten Shareholders, or Spouses
Shareholding
Arrangement
or Relatives Within Two Degrees
Shares%Shares %Name
Relationship
Ho Cheng Investment
Inc.

Shin Chuang
Investment Inc.
Representative:
Shu, Chung-Mei

13,947,294

3.25%

-

-

-

-

Shu, Chung-Won 9,990,453

2.33%

-

-

-

-

-76-

Same person as the
Chairman

The Chairman of thecompany listed here is
Won Chin Investment a relative within twoInc.
degrees of kinship of
the Chairman of Shin
ChuangThe Chairman of thecompany listed here isCheng Chuana relative within two
Technology
degrees of kinship ofDevelopment Inc.
the Chairman of Shin
ChuangThe Chairman of thecompany listed here is
Wan An Technology
a relative within twoInc.
degrees of kinship of
the Chairman of Shin
ChuangThe Chairman of thecompany listed here is
Wan Min Investmenta relative within twoInc.
degrees of kinship of
the Chairman of Shin
ChuangThe Chairman of thecompany listed here is
Wan Chuan Investment a relative within twoInc.
degrees of kinship of
the Chairman of Shin
ChuangThis shareholder is arelative within two
Shu, Chung-Won
degrees of kinship of
the Chairman of Shin
ChuangThis shareholder is arelative within two
Wan An Technology
degrees of kinship of
Inc.
the Chairman of thecompany listed here
This shareholder is arelative within two
Wan Min Investment
degrees of kinship of
Inc.
the Chairman of thecompany listed here
This shareholder is arelative within two
Wan Chuan Investment
degrees of kinship of
Inc.
the Chairman of thecompany listed here

Name

Current Shareholding

Shareholding
Name and Relationship Between the
Spouse’s/minor’s
by Nominee Company’s Top Ten Shareholders, or Spouses
Shareholding
Arrangement
or Relatives Within Two Degrees
Shares%Shares %Name
RelationshipThis shareholder is a
Cheng Chuanrelative within two
Technology
degrees of kinship ofDevelopment Inc.
the Chairman of thecompany listed here
This shareholder is arelative within two
Ho Cheng Investment
degrees of kinship of
Inc.
the Chairman of thecompany listed here
This shareholder is arelative within two
Shin Chuang
degrees of kinship ofInvestment Inc.
the Chairman of thecompany listed here
This shareholder is arelative within two
Won Chin Investment
degrees of kinship of
Inc.
the Chairman of thecompany listed here

Shares%Yuanta Taiwan
High Dividend
Low Volatility
ETF

7,154,000

1.67%

-

-

-

-

None

None

HI-JET
Incorporation
Representative:
Yeh,Chia-Wen

6,824,000

1.59%

-

-

-

-

None.

None

3.9. The total number of shares and total equity stake held in any single enterprise by the company,
its directors, managerial officers, and any companies controlled either directly or indirectly by
the company.

AffiliatedEnterprises(Note)

April 18, 2023; Unit: Shares
Direct or Indirect Ownership
Ownership by the Company
by Directors/
Total OwnershipManagerial officers
Shares%Shares%Shares%Taiwan IC Packaging
Corporation

21,928,036

12.50%

4,471,641

Saffire Investment Ltd.

6,600,000

100%-

Transcend Information
Inc. (USA)625,000

100%

Transcend Japan Inc.

6,400

Transcend Korea Inc.

40,00026,399,677

15.05%-

6,600,000

100%

-

-

625,000

100%

100%

-

-

6,400

100%

100%

-

-

40,000100%

Note: Invested by the company using the equity method.
-77-

2.55%

4. Capital Overview
4.1. Capital and Shares
4.1.1. Source of Capital
Authorized CapitalFace Value
Per Share(NT$)
10

Shares500,000,000

Type of
Stock
CommonStock

Paid-in Capital

Amount(NT$ thousands)
5,000,000

RemarkAmount(NT$ thousands)

Shares429,061,675

4,290,617

No change in Authorized Capital andPaid-in Capital in 2022 and as of thedate of this Annual Report.

Authorized Capital
Shares Outstanding(Note)

Un-issued Shares

429,061,675

RemarkTotal Shares

70,938,325

25,000,000 shares arereserved for employee stock
options.

500,000,000

Note: Listed Shares.

Information for Shelf Registration: None.
4.1.2. Shareholder Structure
As of April 18, 2023
Shareholders
Structure Government
Quantity

Agencies

Number of
Shareholders
Shareholding(Shares)
Holding
Percentage

Financial
Institutions

Foreign
Other Juridical
Domestic
Institutions andPersons
Natural Persons
Natural Persons

Total

-

10

106

26,513

218

26,847-

5,785,944

256,610,572

124,464,118

42,201,041

429,061,675

0.00%

1.35%

59.80%

29.01%

9.84%

100.00%4.1.3. Shareholding Distribution Status
As of April 18, 2023 (Note 1)
Class of shareholding(Shares)
1~999
1,000~5,000
5,001~10,000
10,001~15,000
15,001~20,000
20,001~30,000
30,001~40,000
40,001~50,000
50,001~100,000
100,001~200,000
200,001~400,000

Number of shareholders

Shareholding (Shares)

Shareholding percentage (%)

4,785
18,040
2,171
584
375
323
144
91
164
83
36

759,983
35,287,297
17,013,975
7,475,064
6,901,037
8,264,728
5,130,232
4,223,591
11,836,553
11,549,421
10,094,270

0.18%
8.22%
3.97%
1.74%
1.61%
1.93%
1.20%
0.98%
2.76%
2.69%
2.35%

-78-

400,001~600,000
600,001~800,000
800,001~1,000,000
1,000,001 or over

12
12
4
23

5,686,973
8,175,000
3,552,379
293,111,172

1.33%
1.91%
0.83%
68.30%

Total

26,847429,061,675

100.00%Note 1: It refers to the most recent shareholding dispersal base date provided by the stock affairs agent.
Note 2: The Company does not issue preferred shares.

4.1.4. List of Major Shareholders
SharesShareholding(Shares)Name of major shareholders
Won Chin Investment Inc.

Percentage (%)

74,783,600
34,142,854
32,971,701
29,726,397
29,505,896
14,426,462
13,947,294
9,990,453
7,154,000
6,824,000
253,472,657

Wan An Technology Inc.
Cheng Chuan Technology Development Inc.
Wan Min Investment Inc.
Wan Chuan Investment Inc.
Ho Cheng Investment Inc.
Shin Chuang Investment Inc.
Shu, Chung-Won
Yuanta Taiwan High Dividend Low Volatility ETF
HI-JET Incorporation
Total

17.43%
7.96%
7.68%
6.93%
6.88%
3.36%
3.25%
2.33%
1.67%
1.59%
59.08%

4.1.5. Market Price, Net Worth, Earnings, and Dividends per Share in the Past Two Years
Unit: NT$; Thousand shares
Year
Item

2021

2022

As of March 31,
2023(Note 1)

73.80
91.90
75.80
Market Highest
Price per Lowest
65.40
61.40
57.90
Share
Average
69.13
69.81
68.34
40.65
46.23
45.57
Net Worth Before distribution
per Share After distribution
40.65
40.23
39.97
Earnings Weighted Average Shares
429,062
429,062
429,062
per Share
Earnings per Share (EPS)
5.90
5.72
2.17(Note 2)
(EPS)
5.20
4.80
Not applicable
Dividend Cash dividendper Share Cumulative unpaid dividends
Return on Price-to-earning ratio
11.83
11.95
31.86 (Note 2)
Investment Price-dividend ratio
11.64
12.20
Not applicable
(ROI)
8.59
8.19
Not applicable
Analysis Cash dividend yield rate
Note 1: The consolidated financial statements of 2023 Q1 have been prepared in accordance to the IFRS andhave been reviewed by the CPAs.
Note 2: The calculation of Earnings per Share (EPS) and Price-to-Earnings Ratio for 2023 Q1 have beenannualized.
-79-4.1.6. Dividend Policy and Implementation Status
1. Dividend Policy
According to Article 22-1 of the Company’s Articles of Incorporation, if the Company has
earnings after the annual final accounting, it shall be allocated in the following order:(1) To pay taxes.
(2) To cover accumulated losses, if any.
(3) To appropriate 10% legal reserve unless the total legal reserve accumulated has alreadyreached the amount of the Company’s authorized capital.
(4) To appropriate or reverse special reserve in accordance with the regulations.
(5) To reserve certain amount, on the premise that there is no effect on the Company’s
normal operations and no violation of regulations, for maintaining stability of
dividends.
(6) For any remainder, adding on accumulated unappropriated retained earnings, the boardof directors shall propose the earnings distribution proposal and shall handle inaccordance with the following provision: the board of directors is authorized to
distribute dividends and bonuses or legal reserve and capital reserve in whole or in partwhich be paid in cash after a resolution has been adopted by a majority vote at a
meeting of the board of directors attended by two-thirds of the total number of directors;
and in addition thereto a report of such distribution shall be submitted to theshareholders’ meeting in accordance with Section 5 of Article 240 and Section 1 of
Article 241 of the Company Act. In case of the dividends and bonuses or legal reserveand capital reserve in whole or in part be distributed in the form of new shares to beissued by the company, shall be proposed to the shareholders' meeting for review andapproval by a resolution in accordance with Article 240 of the Company Act.
The Company distributes dividends taking into consideration the Company's economic
environment and growth phases, future demands of funds, long-term financial planning,
and the cash flows that the stockholders desire. Under the circumstances of no material
investment plans and other special situation, the proportion of dividend distributed shall not
be less than 80% of after-tax profit, and cash dividends shall account for at least 5% of thetotal dividend distributed. The Company currently distributes dividend all in cash, andthere is no consideration for the distribution of stock dividends.
2. Proposed Distribution of Dividend:
The appropriation for cash dividends from 2022 earnings and cash payment from capitalsurplus have been approved by the Board of Directors during its meeting on March 2, 2023.
Unit: NT$
year

2022

Dividends per Share
Retained Earnings
Cash
Dividend
Capital surplus
Retained
Earnings
Free Share
Assignment
Capital surplus
Total

4.80
0.80
0.00
0.00
5.60

3. Major Change Expected in the Dividend Policy:
None.
4.1.7. Impacts of free share assignment intended through the current shareholders meeting on the
Company's operational performance and earnings per share:
Not applicable.
-80-4.1.8. Compensation for Employees and Directors
1. The percentage or range of compensation for employees and directors based on the Article
of Incorporation:
Bases on Article 22 of the Article of Incorporation, where the Company has a profit before
tax for each fiscal year, the Company shall first reserve certain amount of the profit torecover losses for preceding years, and then set aside no less than 1% of the remaining
profit for distribution to employees as compensation and no more than 0.2% of theremaining profit for distribution to directors as compensation.
The compensation may be paid in stock or cash. For remuneration in the form of shares, theemployees of subsidiaries meeting specific condition are also entitled to the payment. The
Board is authorized to decide such qualifications and allocation.
2. Basis for estimating the amount of compensation for employees and directors, basis forcalculating the number of shares to be distributed as employee compensation, and theaccounting treatment of the discrepancy, if any, between the actual distributed amount andthe estimated amount, for the current period:
If the actual amounts approved by board of directors differ from the estimated amount, thedifference will be recorded in the year when board of directors makes the resolution as achange in accounting estimate.
3. Distribution of Compensation of Employees and Directors for 2022 Approved in the Boardof Directors Meeting:
The compensation of employees and directors for the year ended December 31, 2022 hasbeen approved by the Board of Directors during its meeting on March 2, 2023.
Unit: NT$
Compensation of Employees andApproved in the Board of
Estimated Amount
Directors for 2022
Directors Meeting
Employee Compensation – in Cash
30,987,026
31,729,233
Directors’ Compensation – in Cash
2,300,000
Note 1: The difference between the actual amounts approved by board of directors and theestimated amount will be taken as a change in accounting estimate and adjusted in profit
or loss for 2023.
Note 2: The Company did not distribute the compensation of employees and directors in stocks.

4. The actual distribution of employee and director compensation for the previous fiscal year(with an indication of the number of shares, monetary amount, and stock price, of theshares distributed), and, if there is any discrepancy between the actual distribution and therecognized employee and director compensation, additionally the discrepancy, cause, andhow it is treated:
Unit: NT$
Approved in the Board ofCompensation of Employees andDirectors Meeting
Estimated Amount
Directors for 2021
(Actual distribution Amount)
Employee Compensation – in Cash
31,542,266
32,690,586
Directors’ Compensation – in Cash
3,200,000
4,576,682
Note: The above-mentioned actual distribution of compensation of employees and directors wasin line with the resolution of the Board of Directors. The difference between the actual
distribution amounts and the estimated amount was taken as a change in accounting
estimate and adjusted in profit or loss for 2022.

-81-4.1.9. Buy-back of Treasury StockNone.
4.2. Status of Corporate Bonds
None.
4.3. Status of Preferred SharesNone.
4.4. Stauts of Overseas Depositary Receipts
None.
4.5. Status of Employee Stock Option
None.
4.6. Status of New Restricted Employee SharesNone.
4.7. Status of New Shares Issuance in Connection with Mergers or Acquisitions
None.
4.8. Implementation of the Capital Allocation Plans
Any uncompleted public issue or private placement of securities, or issues and placements thatwere completed but have not yet fully yielded the planned benefits: None.

-82-

5. Operational Highlights
5.1. Business Activities
5.1.1. Business Scope
1. Main areas of business operations
The main areas of business operations of the Company registered on the registration
alternation form issued by the Ministry of Economic Affairs are as follows:(1) Computers and Peripheral Equipment Manufacturing.
(2) Data Storage Media Manufacturing and Duplicating.
(3) Wholesale of Computers and Clerical Machinery Equipment.
(4) Wholesale of Computer Software.
(5) Wholesale of Electronic Materials.
(6) International Trade.
(7) Information Software Services.
(8) Electronics Components Manufacturing.
(9) Restrained Telecom Radio Frequency Equipment and Materials Import.
(10) Restrained Telecom Radio Frequency Equipment and Materials Manufacturing.
(11) All business items that are not prohibited or restricted by law, except those that are
subject to special approval.
2. Revenue distribution in the Most Recent Two Fiscal Years

Item

Unit: NT$ thousands
2021
Amount%2022
Amount%

FLASH+DRAM products

10,212,330

84.24

11,996,864

83.81

Others1,910,020

15.76

2,317,951

16.19

Total

12,122,350

100.0014,314,815

100.00(1) Main Products
A. DRAM Modules
UDIMM, SODIMM, ECC UDIMM, ECC SODIMM, RDIMM, and the application
scope includes memory modules for desktop/notebook computers, memory
modules for servers/workstations, memory modules for routers, and memory
modules for commercial and industrial applications, etc.
B. Flash Products
SSD with the interface of PATA/SATA/PCIe, form factor including 2.5", M.2,
mSATA, mSATA mini, half-slim, and external SSD. Type of memory cards
includes CF Card, CFast Card, SD Card and microSD Card, flash memory modules
with the interface of PATA/SATA/USB for special industrial application platform,
and portable disks complying with the standards of USB 2.0, USB3.0 & USB3.1
specifications.
C. Multimedia Products
Dashcam, body camera, and external DVD writers, etc.
D. Hard Disk Products
Various types of portable hard disk storage devices, and NAS cloud hard disks, etc.
E. Card Readers and Accessories
Various types of card readers, hubs and adapter cards, etc.
-83-(2) New products development
A. DRAM Modules
DRAM modules of higher frequency, DRAM modules of higher capacity, DRAM
modules for gaming sports, wide temperature DRAM modules for industrial
purposes, and memory modules for servers / workstations / desktop computers /notebook, etc.
B. Flash Products
i. SSD: Capacity expansion, higher transmission speed, various form factors, highspeed USB portable disks, high-endurance SSD for embedded products, wide
temperature SSD, SSD with power loss protection, and SSD with AES function.
ii. Memory cards: Memory cards for surveillance cameras, high speed memory
cards, memory cards with high Read/Write numbers, wide temperature memory
cards for embedded products.
iii. USB portable disks: Type-C series of portable disks, flash memory portabledisks built-in with multiple functions, flash memory portable disks with highspeed, flash memory portable disks with ultra-high capacity, and flash portabledisks equipped with encryption specification, etc.
C. Multimedia Products
Motorcycle Dashcams, various body cameras, personal portable recording devices
and accessories and NAS cloud storage products, etc.
D. Hard Disk Products
2.5,” various types of high capacity SSD (Solid State Disk), various 2.5”/3.5” large
capacity portable hard disks of stylish appearance and different functions, Network
Attached Storages (NAS) and external DVD writers, etc.
E. Card Readers and Accessories
Type-C interface related peripheral products, such as Hub, card reader, andDocking Station, etc. Card readers equipped with stylish appearance and support
the latest memory card specification, and card readers equipped with encryptionfunction. Card readers which are applicable to OTG portable disks, etc.
5.1.2. Industry Overview
1. The Current Status and Development of the Industry(1) DRAM Memory Industry Overview
Still widely used in industrial applications, and the demand for commercial
applications continues to increase. With the broad applications of Internet of Things(IoT) and the increasing need of industrial computers, cloud computers and servers, inconjunction with increase of the applications in the fields of the edge computing,media streaming and auto electronics, etc. derived from the AI technologies, DDR4
has certainly become the main stream specification in the market, and the capacity ofmemory modules continues to increase. DDR5 has gradually grown since its launch
last year, and is expected to be widely used this year. Transcend will continue todevelop modules of higher frequency and larger capacity, and work in the industrial
market.
(2) Flash Memory Industry Overview
Memory cards are small in size and have a variety of applications. In addition to smart
phones, digital cameras and gaming devices used by consumers, the demand of
surveillance cameras, network cameras and cloud cameras for commercial use
continues to grow such that memory cards are maintained with a certain sales volume;-84-

however, the demand for USB portable disks, except for developing countries, hasslowed down due to the development of cloud storage.
SSDs have greater speed than traditional hard disks, and they are also equipped withthe advantages of compact, lightweight, energy saving and shock resistant, etc. In
terms of price, consumer acceptance has increased significantly. Compact and light
Notebooks equipped with SSD are still the mainstream in the market. The newgeneration of game consoles are also mostly equipped with SSDs as storage devices.
Diverse machine requirements include different form factors and customization
demands will also drive the demand for SSDs.
Under the rapid development and the transformation of manufacturing process of TLC
and 3D Nand in recent years, the production costs of suppliers have decreased, which
is beneficial to the transformation of need and the continuous growth of the demandfor Nand flash. In 2021, the main application of Nand Flash were mobile phone
built-in Nand flash and SSD products. After 2022, 5G smartphones, automobile
application, data center and HPC, etc. are the main demands for Nand Flash.
Accordingly, for flash products, Transcend will still focus on the development of fieldsof SSD and industrial applications as the main targets.
2. The Links Between Upstream, Midstream and Downstream of the Industry Supply Chain
Upstream

Middle Stream

Dynamic Random Access
Memory (DRAM)
Manufacturer

Downstream
SystemIntegrator

Static Random Access
Memory (SRAM)
Manufacturer
Flash Memory (FLASH)
Manufacturer

End User
DRAM Module/
Flash Memory
Manufacturer

PCB
Manufacturer
ChipsetManufacturer

Retailer

Connecter
Manufacturer
Electronic Component(Resistor, Capacitor, Plate,Lens, Display, & Power
Supply, etc) Supplier

Distributor-85-

3. Development Trends and Competition status of Products
In the consumer market, with the saturated demand and fierce competition in major
markets, such as personal computer and smartphone, and the expansion of cloud storage
applications in recent years, the demand for traditional personal storage devices isdeclining. However, the demand for enterprise applications is growth under two major
trends of cloud and automation. The module industry also adjusts the strategy and has
shifted the main product development focus to niche products, such as AI edge computing,
5G products, data center, servers or industrial applications, etc.
The popularity of 5G infrastructure has driven the rapid development of powerful Internet
technologies, such as AI and IoT platform. Such applications bring about massive amountsof data and the market demand for real-time computing and powerful storage, which will
drive the sales of DRAM and Flash.
In general, since consumer products are affected by the the reduction of market scale, thecompetition becomes more severe.The industrial application market will continue to growand the demand will be diversified, which will drive the demand and growth of relevant
part markets. Industrial applications are equipped with the characteristics of higer quality,
stable and long-term focus on research and development, capability for high customizationand flexibility in operation as well as stable supply, etc., the entry barrier is high.
Transcend has deep-rooted in the management of the industrial application market andcontinue to invest in research and development. Under the ever-changing market
environment, the Company has been able to achieve continuous growth. The Company has
not only been ranked 62nd by the U.S. Bloomberg Businessweek among Top 100
Technology Company Worldwide but also been ranked by Ministry of Economic Affairs as
Top 25 International Brand in Taiwan for the 16th consecutive year, indicating that undersuch increasingly severe international market, the Company has been able to demonstrate
its stable brand development and management strength.
The competitive advantages of the Company are well demonstrated in the following four
aspects:(1) Supply and Logistics
A. Rigorous supply chain management
B. Global timely logistics: virtual warehouse
C. Excellent inventory management(2) Innovation and Production
A. Professional internal research, development and design teams
B. Own factory manufacturing and rigorous quality control(3) Product and Inventory
A. Diverse product lines offering a wide range of products
B. Professional pre-sale service
C. Complete after-sale service
D. Global inventory real-time management(4) Comprehensive Backend Support
A. Rigorous financial and accounting management
B. Brand reputation and global marketing support
C. Product return and exchange management and repair technical service-86-As a leading manufacturing well-known for its professional storage media, all employeesof the Company continue to pursuit greater achievements. To development of channel
service, we also establish a broader vision: with our technology advantages in the productsof memory cards, flash memory products, storage equipment products, multimedia
products and industrial products, along with the global logistics and marketing network
providing quality and professional pre-sale and after-sale services, we have been able tosuccessfully establish a sound brand image and has become the leading manufacturer in
global consumer electronics and embedded products.

-87-5.1.3. Technologies, Research and Development Overview
1. A Listing of Research and Development Expenditures as well as Technologies and/or
Products Successfully Developed in 2022 and as of the date of this Annual Report
Year R&D Expenses

2022

137,105

Unit: NT$ thousands
R&D Achievements[Memory Card] Utilizing top-quality 112-layer 3D NAND flash with SLC
Mode technology, and rated to endure 100K P/E cycles, microSDXC 240I
SD card combines the advantages of high performance and exceptional
endurance at an affordable price. microSDXC 240I is able to operate inwide operating temperatures of -40 ℃ ~85 ℃ ,ideal for write-intensive
applications such as outdoor transportation, surveillance systems, digital
signage, and POS terminals.
[Memory Card] Utilizing top-quality 3D NAND Flash and rated to endure
3K P/E cycles, microSDXC 460T memory cards combine the advantagesof high performance and exceptional endurance at an affordable price. They
are ideal for write-intensive applications such as medical devices,surveillance systems, and POS terminals.
[Memory Card] Utilizing top-quality 112-layer 3D NAND flash with SLC
Mode technology, and rated to endure 100K P/E cycles, SDXC 240I SD
card combines the advantages of high performance and exceptional
endurance at an affordable price. SDXC 240I is able to operate in wide
operating temperatures of -40℃~85℃,ideal for write-intensive applications
such as outdoor transportation, surveillance systems, digital signage, andPOS terminals.
[Memory Card] Utilizing top-quality 3D NAND Flash and rated to endure
3K P/E cycles, SDXC 460T memory cards combine the advantages of highperformance and exceptional endurance at an affordable price, making
them ideal for demanding industrial applications such as POS terminals aswell as portable devices equipped with an SD memory card slot.
[Memory Card] CF180 SLC Mode technology is a cost-effective solutionthat offers performance close to that of SLC NAND flash at a more
affordable price. Boasting a high-speed data transfer rate, Transcend's SLC
Mode CF180 CompactFlash cards are perfect for embedded systems,
medical instruments, road surveillance systems, and other industrial
applications having high performance and capacity demands. Thanks totheir use of Static Data Refresh technology, CF180 CF cards feature error
correction capability, maintain data integrity, and have an extended
lifespan.
[Memory Module] DDR5 4800 U-DIMM/ SO-DIMM/ ECC-DRMM/
R-DIMM memory modules are suitable to industrial desktop computersand notebook computers.
[SSD] ESD380C is a portable solid state drive featuring a ruggedized
silicone rubber case in military green. Its USB 3.2 Gen 2x2 interface offers
unmatched transfer rates. With its high capacity and compatibility, theESD380C is no doubt the perfect choice for secure and portable storage.
[SSD] HSD460I half-slim SSD is built with 112 layers of 3D NAND flash
and the SATA III 6Gb/s interface, delivering never-before-seen transfer
speeds. Applied with the Corner Bond technology and anti-sulfur resistor,
the HSD460I is fortified to withstand demanding industrial applications.
Following JEDEC's MO-297 standard, the HSD460I is fully tested
in-house and is able to operate in wide operating temperatures ranging from
-40℃~85℃, ideal for read-heavy applications and space-limited mobile
devices such as industrial control systems, medical equipment, mobile
devices, and POS terminals.
-88-Year R&D Expenses

R&D Achievements[USB Flash Drives] JetFlash 180I comes with the 3D NAND flash and the
SLC Mode, offering performance close to that of SLC NAND flash at amore affordable price. Its superior transfer speeds, longer lifespan, compact
size, and high compatibility are suitable for mobile storage applications
including healthcare, military, and industrial automation. The
wide-temperature (-40°C ~ 85°C) capability ensures sustainable
functionality in mission-critical applications. The JetFlash 180I can also be
empowered by Transcend's UFD Security Toolbox software. Password canbe set to secure the drive. Users can even get a One-time Password (OTP)
through SMS message on the user's phone to unlock the drive, which
ensures higher data security.
[SSD] Featuring the Serial ATA interface and built around a powerfulcontroller, Transcend's SATA III 6Gb/s MSA470T mSATA SSD delivers
blazing-fast performance. The MSA470T features the latest 112-layer 3D
NAND technology for high storage efficiency, 30µ" PCB gold finger andCorner Bond technology for enhanced durability, built-in DRAM cache forfast access, an extended operating temperature range from -20°C to 75°C,
and an endurance rating of 3K Program/Erase cycles for reliable operation.
The compact mSATA form factor is just one-eighth the size of a standard
2.5" SSD, making it perfect for use in space-constricted portable devices
such as Ultrabooks, tablet PCs, and slim servers.
[SSD] Exhibiting more than just ultra speeds, the MTE250H PCIe SSD
delivers unbridled performance, low latency, and high stability forpassionate gamers. Built with a PCI Express® Gen 4 x4 interface, 3D
NAND flash, an 8-channel controller, a DRAM cache, and an aluminumheatsink, the MTE250H PCIe SSD is ready to put excellence in your hand.
[SSD] M.2 2230 SSD MTE370T features state-of-the-art 3D NAND
technology, which allows 112 layers of 3D NAND flash chips to bevertically stacked. This density breakthrough greatly improves storage
efficiency. The MTE370T features the PCI Express (PCIe) Gen 3 x4interface and is compatible with NVM Express (NVMe) 1.3 specifications
to achieve never-before-seen transfer speeds. Applied with the 30µ" gold
finger PCB and Corner Bond technology, the MTE370T is fully tested
in-house to guarantee reliability in mission-critical applications, boastingan endurance rating of 3K Program/Erase cycles and an extended operating
temperature ranging from -20℃~75℃.
[SSD] MTE460T PCIe M.2 SSD features a PCIe Gen 3x2 interface and112-layer 3D NAND flash, delivering breakthrough density that greatly
improves storage efficiency. In addition, the 30µ" gold finger PCB, Corner
Bond technology, and anti-sulfur resistors guarantee its reliability in harshconditions. Transcend's MTE460T is also 100% chamber tested in-housefor extended operating temperatures of -20℃~75℃. Wide-temp capability(-40℃~85℃) can also be provided upon request, optimizing stability inextreme environments.
[SSD] MTE672A is a self-encrypting drive (SED) that complies with the
TCG (Trusted Computing Group) Opal 2.0 standards. Data is protectedusing hardware-based AES 256-bit encryption and LBA (Logical Block
Address) sector-specific permissions.
[SSD] MTE712A is a self-encrypting drive (SED) that complies with the
TCG (Trusted Computing Group) Opal 2.0 standards. Data is protectedusing hardware-based AES 256-bit encryption and LBA (Logical Block
Address) sector-specific permissions.
-89-Year R&D Expenses

R&D Achievements[SSD] MTE720T features the 112-layer 3D NAND flash, a PCI Express(PCIe) Gen 4 x4 interface, and an 8-channel controller, compatible with
NVM Express (NVMe) 1.4 specifications to achieve never-before-seentransfer speeds. Its built-in DRAM cache enables fast random read andwrite speeds, and improves drive endurance. In addition, the 30µ" gold
finger PCB, Corner Bond technology, and anti-sulfur resistors guarantee its
reliability in harsh conditions. Transcend's MTE720T is also 100%chamber tested in-house for extended operating temperatures of -20℃~75℃.
[SSD] MTS200I features a SATA III 6Gb/s interface, 112-layer 3D NAND
flash, and SLC Mode technology, delivering high sustained speeds and
SLC-grade durability. In addition, the 30µ" gold finger PCB, Corner Bondtechnology, and anti-sulfur resistors guarantee its reliability in harshconditions. Transcend's MTS200I is also 100% chamber tested in-house forwide operating temperatures of -40℃~85℃.
[SSD] The MTS210I features the SATA III 6Gb/s interface and 112-layer
3D NAND flash, delivering density breakthrough that greatly improves
storage efficiency. Its built-in DRAM cache allows faster random speeds
while the 30µ" gold finger PCB, Corner Bond technology, and anti-sulfur
resistor guarantee its reliability in harsh conditions. Transcend also adopts
the SLC Mode technology to enable the drive to reach competitive speeds
and endurance that are equal to the SLC flash. The MTS210I is fully tested
in-house, operating stably in a wide operating temperature range(-40℃~85℃).
[SSD] The MTS260I features the SATA III 6Gb/s interface and 112-layer
3D NAND flash, delivering density breakthrough that greatly improves
storage efficiency. Its built-in DRAM cache allows faster random speeds
while the 30µ" gold finger PCB, Corner Bond technology, and anti-sulfur
resistor guarantee its reliability in harsh conditions. Transcend also adopts
the SLC Mode technology to enable the drive to reach competitive speeds
and endurance that are equal to the SLC flash. The MTS260I is fully tested
in-house, operating stably in a wide operating temperature range(-40℃~85℃).
[SSD] MTS570T features the SATA III 6Gb/s interface and thestate-of-the-art 3D NAND technology, which allows 112 layers of 3D
NAND flash chips to be vertically stacked. Compared to 3D NAND at 96
layers, this density breakthrough greatly improves storage efficiency, andits built-in DRAM cache allows faster access. Applied with 30µ" gold
finger PCB and Corner Bond technology, the MTS570T is fully tested
in-house to guarantee reliability in mission-critical applications, boastingan endurance rating of 3K Program/Erase cycles and an extended operating
temperature ranging from -20℃~75℃.
[SSD] Industrial M.2 DRAM-less SSD MTS960T features the SATA III
6Gb/s interface and state-of-the-art 3D NAND technology, which allows
112 layers of 3D NAND flash chips to be vertically stacked. Compared to
3D NAND at 96 layers, this density breakthrough greatly improves storage
efficiency. The MTS960T can operate in an extended temperature range
from -20°C to 75°C. Its space-saving M.2 form factor is ideal forspace-limited devices. It is fully tested in-house to guarantee reliability in
mission-critical applications, boasting an endurance rating of 3K
Program/Erase cycles.
[SSD] MTS970T features the SATA III 6Gb/s interface and thestate-of-the-art 3D NAND technology, which allows 112 layers of 3D-90-Year R&D Expenses

R&D Achievements
NAND flash chips to be vertically stacked. Compared to 3D NAND at 96
layers, this density breakthrough greatly improves storage efficiency, andits built-in DRAM cache allows faster access. Applied with 30µ" gold
finger PCB and Corner Bond technology, the MTS970T is fully tested
in-house to guarantee reliability in mission-critical applications, boastingan endurance rating of 3K Program/Erase cycles and an extended operating
temperature ranging from -20℃~75℃.
[SSD] Industrial 2.5" DRAM-less SSD SSD460K features the SATA III
6Gb/s interface and state-of-the-art 3D NAND technology, which allows
112 layers of 3D NAND flash chips to be vertically stacked. Compared to
3D NAND at 96 layers, this density breakthrough greatly improves storage
efficiency. The SSD460K is fully tested in-house to guarantee reliability in
mission-critical applications, boasting an endurance rating of 3K
Program/Erase cycles and an extended operating temperatures ranging
from -20℃~75℃[SSD] Transcend's 2.5" SATA III SSD550I features the 112-layer 3D
NAND flash and the SLC Mode technology, achieving remarkable
endurance and sustained speeds equivalent to SLC flash. Its built-in DRAM
cache allows faster random speeds while the anti-sulfur resistor guarantees
its reliability in harsh conditions. The SSD550I is thoroughly tested
in-house, operating stably in wide operating temperatures ranging from -40℃~85℃.

-91-

[SSD] MSA460T DRAM-less mSATA SSD adopts the SATA III
6Gb/s interface, powerful built-in controller, and the latest
generation of 112 layers of 3D flash memory, thereby
significantly breaking through the upper limit of unit density,and achieving higher storage performance. It is also equippedwith a 30µ" gold finger coating layer PCB, Corner Bond edge
reinforcement technology, and a sulfurization-resistant resistor
to enhance the protection of key components and safeguard
against harsh industrial application environments. In addition,
the MSA460T SSD is certified by our stringent in-house tests
and equipped with the characteristic of quasi-wide temperature(-20°C to 75°C), empowering it with heat- and cold-resistance2023
Q1

36,822

as well as outstanding and reliable performance, such as theability to satisfy the demands of task-intensive applications
completely.The compact mSATA form factor is just one-eighth
the size of a standard 2.5" SSD, making it perfect for use inspace-constricted portable devices such as Ultrabooks, tablet
PCs, and slim servers.
[SSD] PCIe M.2 SSD MTE300S has a compact form factor andhigh-quality 3D NAND flash, making it easy to upgrade
Ultrabooks, lightweight notebooks, tablets, and handheld
gaming PCs. It is designed with multiple firmware optimization
technologies, including SLC caching and LDPC ECC
mechanism, which improve storage reliability and extend thedrive lifespan. The MTE300S is a great choice for boosting theperformance of modern work platforms.

-92-

[SSD] PCIe M.2 SSD MTE400S has a compact form factor andhigh-quality 3D NAND flash, making it easy to upgrade
Ultrabooks, lightweight notebooks, tablets, and handheld
gaming PCs. It is designed with multiple firmware optimization
technologies, including SLC caching and LDPC ECC
mechanism, which improve storage reliability and extend thedrive lifespan. The MTE300S is a great choice for boosting theperformance of modern work platforms[SSD] SSD470P 2.5" SSD is a Power Loss Protection (PLP) SSD.
During unexpected power outages, the built-in tantalum
capacitor provides power to the controller and DRAM cache,ensuring data integrity and storage reliability.
The above information for the year 2022 has been summarized for the period from January 1 to
December 31, 2022. The information for year 2023 has been summarized for the period fromJanuary 1 to March 31, 2023.

-93-

2. Ongoing R&D Projects
Product
Line

Ongoing Projects

DRAM
Products

DRAM modules ofhigher frequency,
DRAM modules ofhigher capacity,
DRAM modules forgaming sports, andwide temperature
DRAM modules forembedded products,
etc.

Flash
Products

Capacity expansion,
higher transmission
speed, various form
factors, high speed
USB portable disks,
SSD with high R/W
numbers, wide
temperature SSD forembedded products,
SSD for special
purposes such as
power failure protector
and encryptionfunction.

Strategy
Products

Storage devices withvarious new
specifications/interfaces, dual lens Dash Cam,body camera
equipment andaccessories, and otherperipheral application
products.

Current
Progress

Expected Mass
Production Time

Key Success Factors

Developmentin progressSome products have (1) Specialized
entered the mass
specification for
production stage,different fields
and others under(2) Increase of data
development
transmission speed
progress are(3) Increase of productexpected to enter
reliability andthe mass production
compatibility, increase
stage starting fromof operating2023.
temperature

Developmentin progress(1) Increase of accessSome products havecapacity and R/Wentered the mass
speed
production stage,(2) Increase of dataand others under
security anddevelopment
encryption level
progress are(3) Compact and light
expected to enterwith great portability
the mass production(4) Implementation ofstage starting fromnew memory2023.
manufacturing process

Developmentin progress(1) Product specifications
and functions withunique characteristics
in comparison to otherproducts in the market
Some products have(2) Proper control ofentered the mass
product mass
production stage,
production and market
and others underlaunch scheduledevelopment(3) Completeness ofprogress areaccessories
expected to enter(4) Exclusive functions
the mass production
for regional market
stage starting fromand special groups
2023.
(5) Increase of data
security andencryption level(6) Simplify productcomplexity

The R&D budget for the ongoing projects accounts for approximately 80% of the total R&D budget in
2023. And the R&D budget is estimated to account for 1.0%–1.5% of the whole-year revenue in 2023.

-94-5.1.4. Long-term and Short-term Business Development Plans
1. Short-term Business Development Plan
(1) Embedded Business Management
The Company has focused on embedded market and invested a great amount of
resources in the development of embedded products for a long period of time, and theCompany has always adopted the business philosophy of excellent quality andcustomer-oriented approach; consequently, the Company has been able to successfully
gain customers’ trust and support and became the leading brand in the embedded field.
Transcend further actively invests in the embedded products business and copes withthe development trend of industrial computer and automation, etc., thereby expanding
the business performance in the embedded field.
(2) Adjustment of R&D Department
The Company is equipped with a complete R&D team, and in the future, the Company
will continue to actively recruit outstanding R&D talents in order to continuously
develop and launch comprehensive and multi-function product series based on theattitude of pursuit for excellence and perfection, in order to provide quality products to
consumers and to establish brand loyalty, to satisfy the market trend and to meet
consumer demands, as well as to effectively reduce cost and improve production
efficiency at the same time.
2. Long-term Business Development Plan
(1) Brand Management and Channel Planning
A. Global Comprehensive Planning
The Company establishes its headquarters in Taipei, and subsidiaries or service
centers are also established in Germany, the Netherlands, United Kingdom, UnitedStates, Japan, Hong Kong, Beijing, Shanghai, Shenzhen and South Korea. The
Company’s products are sold in more than 130 countries, and more than 80% of theCompany’s customers are from markets outside Taiwan. To continue to enhance theplanning and establishment of sales channel, collaborate with online and offline
global channel distributors/retailers closely, and deep-rooted in 3 channel systems(traditional IT channel, camera channel and Telecommunication Channel), theCompany will continue to establish sales points at all major areas worldwide,
thereby raising the brand image and visibility of the Company.
B. Investment in Marketing Activities
The Company promotes the market with the own brand of “Transcend.” ,and has
always been active in the development of marketing activities. Throughcollaboration with local channel distributors/retailers in different regions, theCompany provides the marketing budget and organizes various marketing activities,
such as online and offline advertisement, new product launch, product media testing,
distributor training and contest and show, etc., while matching with the local
customs and culture, thereby achieving local market development and expand thebrand of Transcend. Consequently, maximum marketing effect through limited
resources can be achieved.
C. Deep-rooted in Local Market
The Company recruits outstanding talents at overseas subsidiaries and implements
the strategy of recruiting local sales specialists and management personnel in orderto develop the market in depth and to enhance management performance through thelocal talent’s language advantages and cultural understanding. The Company also
engage in close collaboration with local channel distributors/retailers to develop
marketing channels.
-95-

(2) Continue to Optimize Operational System
A. Completeness and Diversity of Product Lines
The greatest advantage of the Company lies in the diversity of products capable ofsatisfying the one-stop shopping demand of customers. The product lines of theCompany include standard and special memories, various types of flash memory
cards, portable disks, SSDs, portable hard disks, Dashcam, body cameras, andpersonal cloud storage devices, with the number of product types reaching more than
1,000.
B. Product Customization Service and Comprehensive Embedded Solution
The Company provides complete product customization service to satisfy demandsof different customer groups. Plentiful embedded product lines demonstrating
diverse solutions for embedded purposes. In addition, the Company upholds theprinciple of excellence and perfection to continuously optimize the quality control
system. The Company will continue to collaborate with outsourcing wafer
packaging vendors equipped with ISO/IATF16949 certification, in order to ensure
the best protection for customers and to push the Company’s products to the global
market.
For diverse and comprehensive product functions, the Company aims to satisfy thepurchase characteristics of different consumer groups through various sales channels inorder to further expand the depth and breadth of the sales level, thereby achieving thebenefit of economics of scale and increasing the global market share.
(3) Complete Pre-Sale and After-Sale service
Because industrial control customers have more stringent standards and customization
demands for product specifications and reliability – mostly long-term project demands –in addition to the rapid evolution of the manufacturing processes of the DRAM/Flashproduction line, Transcend offers a pre-sales service export team to help customers
select the right products to meet their expectations for product quality and performance,
thereby realizing the benefits of long-term, stable cooperation.
Since customers emphasize the after-sale service and product quality, rather than mere
price difference, brand value becomes apparent when products are of excellent quality.
The function and performance differences among memory products are reducing;
therefore, the Company aims to demonstrate the strength and to differentiate from thecompetitors through kind product consultation and complete after-sale service while
continuously improving the product quality, thereby establishing the brand recognition
and trust of Transcend among distributors and users.
5.2. Markets and Overview of Production and Sales
5.2.1. Market Analysis
1. Main Products and Sales Region
The Company has diverse and comprehensive products. The product lines of the Company
cover channel products and embedded products, including special and standard memories,
various types of small flash memory cards, portable disks, portable hard disks, Dashcam,
body camera and personal cloud storage devices, etc. Under the complete global planning,
the Company has 13 business locations worldwide and Taiwan as the main production base,and the region of sales further includes all global markets. Through comprehensive sales
strategy and excellent quality, the brand of Transcend is promoted worldwide.

-96-

Sales region in the last two years:
Unit: NT$ thousands
Area
TaiwanAsia
Americas
EuropeOthersTotal

2022
Amount2,803,950
3,805,341
2,038,051
2,741,912
733,096
12,122,350

2021
%
23.13
31.39
16.81
22.62
6.05
100.00

Amount3,400,049
5,221,283
1,759,042
3,155,301
779,140
14,314,815

%
23.75
36.48
12.29
22.04
5.44
100.002. Market Share
Regarding the DRAM memory industry and the flash memory industry, due to the fine
product categories (SDRAM, DDR, DDR2, DDR3, DDR4, DDR5, flash memory card,
portable disk, Dashcam, body camera, personal cloud storage device, and SSD, etc.), anddue to the difference between the contract market and spot market, the market share cannot
be estimated precisely. According to the results of various market survey institutions, theglobal market share of Transcend continues to increase. Looking into the future, theCompany will continue to increase the market share and achieve the goal of reasonableprofit through continuous effort.
3. Future Market Demand/Supply Conditions and Growth Potential(1) DRAM Module
DRAM module carrying rate continues to increase, the shipping ratio for themainstream 4GB/8GB/16GB modules continue to rise. As the quantity of cloudcomputers, servers and data centers increases, the shipping volume of 16GB/32GB
module is expected to grow rapidly. With the popularization of the new DDR5, a newwave of demand will drive performance growth.
(2) Flash Products
As the application of SSD becomes more popular, including broad applications in
portable hard disks and built-in storage devices of handheld video recorders, theconsumption volume of SSD will continue to increase. Regarding the field ofembedded products, applications related to 5G, AI and data center in 2022 have grown,
and the demand for workstation and server have increased. All of these applications
require massive data storage; therefore, the data storage demand will continue toincrease, which will further drive the shipping volume of SSD.
For memory cards, the applications will continue to be widely used as storage medium
for channel products, such as 3C consumer electronics of smart phones, digital video
recorders, tablet computers, Notebook, Ultrabook, multimedia players, gaming devices,surveillance cameras, home care cameras and automobile navigators, etc. In addition,with the continuous shipping of new applications, it is expected that there will still bea stable demand for memory cards.
4. The Company’s Competitive Niche(1) Internationalization of sales network, distribution of market channels
Since the establishment, the Company has been committed to the own brandmanagement and channel planning and continuously exerts efforts in differentiating
the Company from traditional domestic professional OEM manufacturer. In terms of-97-

the sales and marketing strategies, the Company aims to establish the brand image ofhigh quality for the brand of “Transcend,” and in the professional storage field, theCompany targets the “End Customers,” supply distributors, system operators and retailmarket, thereby reducing the channel gap and allowing both the Company andcustomers to obtain greater profits. In addition, with the continuous improvement of
the Company’s position in the industry and through providing comprehensive productlines and complete after-sale service system, the Company is able to increase customer
sales continuously, including strategic collaboration with international front line
channel operators. Presently, the Company has over 5,000 loyal customers worldwide
and has established a solid and stable sales network with cooperation of subsidiaries invarious countries.
(2) Establish brand image, deep-rooted in local market“Transcend” is one of the few successful domestic brands that have received highpraise internationally. For both domestic and international memory product markets,
Transcend is the brand representing stability and high quality, and such brand image
has been deep-rooted in the mind of consumers. Through advertising on social media,
internet, magazines, newspapers, and large outdoor signage, as well as new release,sports event sponsorship, and public welfare activity engagement, Transcend's brandimage can be nurtured, which is beneficial to the improvement of the brand awareness;nevertheless, the Company still values excellent product and quality service as themost essential factors to achieve high brand value. Furthermore, through the Transcend
online shopping website, the Company is able to obtain the comments and feedback
from the end consumers directly, thereby using such comments and feedback as thereference for product and service improvement.
(3) Utilize purchase advantage effectively, expand product competitiveness
The Company has been established for more than thirty years, and the type andquantity of purchase items are enormous and continue to increase. Through excellent
partnership with upstream vendors of DRAM and NAND Flash established for a long
period of time over the past years, the Company is able to achieve the best cost
structure, thereby increasing the product price competitiveness. In addition, throughthe in-depth collaboration with the upstream vendors, the Company is able tointroduce new products in the market faster than competitors, in order to seize thebusiness opportunities in the market effectively and to become the leading brand in themarket.
(4) Continue to develop strategy products, strengthen brand value
The Company started the business based on the niche memory modules, following
which the Company then entered the standard memory module and flash memory
market. As the Company’s planning in the global traditional sales channel becomes
more complete, the Company actively engages in the development of strategic
products of Dash Cam, body camera, external portable hard disks, card readers,personal cloud storage device and SSDs, etc., such that through diverse product series
along with the addition of other sales channels, the Company is able to satisfy thepurchase characteristics of different consumer groups and to further expand the depth
and breadth of sales level.
5. Favorable and Unfavorable Factors for Future Development and Response to Such Factors
Favorable Factors(1) Complete product lines, diverse product types
With more than thirty years of development, the Company invests great research and-98-

development budget and human resource for the establishment of complete productlines, and the main products include various memories, digital memory cards, USB
portable disks, external hard disks, card readers, personal cloud storage devices,
Dashcam, body camera and SSDs, etc. There are more than 1000 types of products
available for all kinds of electronic product applications, thereby satisfying thecustomers’ demand of “one-stop shopping.”
With more than thirty years of experience and qualified technical personnel, the R&D
team of the Company also synchronizes with the market trend, and will continue todevelop and launch innovative products satisfying the market demands.
(2) Establish brand image, deep-rooted in local market
Over the past years, the Company has invested important resources in both productappearance design and product packaging continuously, in order to design and provide
products meeting the global trend. In addition, the Company has received greatrecognition with numerous international industrial design awards, and also provides
multi-language instruction manuals and product catalogues for various countries inorder to be deep-rooted in the local market. Accordingly, the Company has
successfully obtained great support from consumers on the Company’s products.
(3) Internationalization of sales network, distribution of market channels
The Company is devoted to the own brand management and marketing, and customers
around the globe are considered to be the market for the Company. Through theestablishment of international market channels and after extensive years of market
development and deep-rooted in new emerging markets and countries, the Company
has accumulated more than 5,000 loyal customers worldwide, and through thecooperation of branch offices in various countries, the Company has established asolid and stable sales network. The overseas customers of the Company accounts fornearly 80%, demonstrating the solid international sales network of the Company.
(4) Equipped with comprehensive global logistics management capability
The Company has established subsidiaries or sales offices at Germany, the Netherlands,
the United Kingdom, the United States, Japan, Hong Kong, Beijing, Shanghai,
Shenzhen and South Korea. Due to the great number of product types, customers arewidely distributed worldwide. To effectively control inventory and to manage the sales
targets, the Company and all overseas sales offices are established with computer
information system with complete functions. Accordingly, the headquarters is able tosufficiently and promptly understand the order receipt and inventory status of all
overseas sales offices through network, in order to reduce the cost associated withoverstock and to successful delivery, thereby improving product image andcompetitiveness.
(5) Increase product value with outstanding industrial design
Transcend has already realized the importance of industrial design, and the Company
is staffed with a professional industrial design team in pursuit of outstanding industrial
design in order to improve product value. In recent years, the Company has received
numerous important industrial grant awards of Germany iF design award, reddot
design award, Japan Good Design award, etc., and also received the honor of “Taiwan
Excellence Award” for the eighteen years, a remarkable record achieved by theCompany.
(6) Professional and dedicated R&D team
The Company has established a professional and dedicated R&D team for eachproduct, whether standard products in large quantities or highly customized products,-99-the Company’s own R&D team is able to promptly satisfy all aspects of demands ofcustomers in terms of the product compatibility, reliability and yield rate, etc., thereby
establishing an irreplaceable team and strength that cannot be overcome or surpassedby operators in the same industry.
Unfavorable Factors and Actions(1) Violent price fluctuation of critical raw materials of DRAM chips, affecting
operational stability
The prices of the critical raw materials of DRAM, NAND Flash chips of the Company
fluctuate violently, and if a downstream operator cannot effectively manage the chip
supply sources and control the inventory, then under the situation where the demandfor chips is higher than supply and the market price surges, such operator would not beable to handle customers’ strong demand and to provide sufficient products.
Furthermore, when the chips are under the condition of supply over demand and themarket price plunges, then the production cost and overstock cost would become
overly high due to the high purchase price of the original raw materials. Consequently,
market price fluctuation often results in the control difficulty of the sales price andcost, such that the stability of the operation is affected in certain extend.
Action
The Company has constructed a complete information system, and the inventory
level can be reasonably controlled and enhanced through the assistance of such
system. Furthermore, the Company focuses on the operation and long-term
collaboration relationship with the suppliers and customers, and the Company also
appropriately controls risks and adjusts strategies according to the market condition
periodically, thereby ensuring reasonable price and maintaining a health inventory
level.
(2) Low entrance barrier for standard memory card products and flash memory card
products, leading to price war
Most of the operators in the same industry expand production capacity to seek highrevenue; however, the market demand is not as optimistic as expected. To fill up the
production capacity gap newly created, a lot of the operators are lowering their prices
for competition, or even selling products for minimum profit or no profit, leading to
the situation of chaotic market prices that is unfavorable to the product development
and promotion. Unless a company is able to manage niche products and channels, or isequipped with brand value, it would be difficult to achieve stable development.
Transcend is equipped with both of these characteristics and values them as thelong-term goal.
 Action
In addition to standard products, for DRAM and NAND Flash related products, theCompany also offers special products at a certain ratio. The Company also develops
numerous industrial control products and strategic products in order to increase thedifference from the competitors and to improve profitability while providing the
one-stop shop service to customers.
5.2.2. Main Usage and Manufacturing Processes of Main Products
1. Main Products and Their Main Usage(1) Digital memory card/USB portable disk products
For flash memory card/USB portable disk, the main application is to increase the data-100-

storage memory capacity of various digital equipment, such as multimedia mobile
phones, digital cameras, tablets, PC/NB, surveillance cameras, gaming devices andsmart phones.
(2) Solid State Drive (SSD)
The company's main products are SSDs. SSD is equipped with the characteristics thatare absent in traditional hard disks, and such characteristics include shock resistant,high Read/Write speed, quiet and low power consumption, etc. Presently, for bothnotebook computers and desktop computers, the ratio of SSD has increased
significantly, and the individual upgrades with SSD made by end users in theafter-market also indicate great popularity. As the price of SSD becomes widely
accepted by consumers, flash memories are expected to have the greatest popularity
and application in the future.
(3) Memory products
The memory modules are another main products, its function is to expand thecomputer data processing capacity and to increase the processing speed, and the main
applications include personal computer system, network system, industrial computers,
as well as equipment, such as desktop computers, notebook computers, laser printers,
servers, workstations, routers and fax machines.
(4) Dashcam
As the global automotive market continues to grow, consumers focus more on the
personal driving safety. Transcend continued to launch a variety of Dashcam and kept
develop in the Dashcam market.
(5) Body Camera
In addition to the automotive market, Transcend has launched Body Camera, which isthe best partner for military and police security. The Company continuously launched
new models and achieves further growth in the security and surveillance market.
(6) Storage equipment
To satisfy the demand for information and personnel mobility, portable hard disks areequipped with the characteristics of compact size, high capacity and portability. The
personal data portability and the design of confidentiality and security are increased inorder to provide a comprehensive portable data solution for professionals in various
sectors. As the industrial control application demand increases, Transcend launches
numerous storage products satisfying different industrial applications, such as SSD,
flash memory modules and industrial grade CF/SD memory cards.
(7) Accessories and card readers
As the popularity of digital camera, smartphones and multimedia devices increase, thedemand for transmitting and exchanging videos, music and various multimedia data
effectively and swiftly among personal computers and other portable devices are
increasing. Transcend launches various types of portable card readers and adapters,
providing direct and convenient access interfaces, such that they offer the best choices
to users having the preference of using high speed memory cards for transmission ofdigital data, music and photos. In addition, in view of the great popularity ofsmartphones and tablets nowadays, Transcend further launches high speed products
and OTG/Type-C flash drives products, allowing users to enjoy faster transmission
speed and achieving greater convenience in cross-platform data transmission, also
making the overall storage product series more complete.
-101-2. Main Products and Their Manufacturing Processes
Flow Chart of Manufacturing Processes
Sales

Finished goods

Department

Warehouse

N

N
ManufacturingY
Production Schedule

W/O

Material Preparation

SMT

Y

Outsourced Processing

In-plant Processing

Incoming Quality

SecondStage

N

Testing

Control (IQC)

Packaging

Final Quality Control(FQC)

Warehouse Receiving-102-

5.2.3. Supply Status of Major Raw Materials
Major Raw Materials

DRAM

Purchasing Strategy and Supply Situation
The Company maintains excellent and long-term relationship withmain suppliers in the industry and also signed memorandums ofcooperation with them. Accordingly, even under the condition oftight supply, the Company is still able to obtain stable supply withan advantageous price, thereby ensuring sufficient supply of
products to downstream customers.

Nand FlashThe Company maintains excellent relationship with leading
operators in the industry. In addition to obtaining stable supply
source and cost advantages through purchase strategy, the Company
has established long-term technical collaboration relationship with
suppliers in order to maintain strong competitiveness for, NAND
FLASH related products of the Company.

Hard Drive

As the hard disk market supply is considered stable, after the
strategic adjustment, the prices of suppliers are maintained at adecreasing trend. The Company will continue to control inventory inorder to prevent the risk of price dropping. The Company will also
maintain close relationship with the key suppliers in order toachieve clear advantages in terms of material supply, quality andcost.

Controller

The Company selects cooperating partners carefully, and all of thecooperating partners are well-known operators with excellent
company structure, thereby ensuring the product quality and costadvantages.

PCB

All of the cooperating partners of the Company are global top
hundred PCB suppliers, and the Company also places orders
according to the capacity and competitive advantage of suppliers,
such that the effects of quality and cost can be achieved at the sametime while maintaining stable product supply.

Optical Disk Device

The overall market for optical drive indicates slow decline. The
Company and suppliers are long-term partners, and adopts thestrategic collaboration method to ensure the quality, stable supply
and price competitiveness.

Mechanical Part

Most of the designs of mechanical parts are customized. The
Company is able to select stable long-term cooperating partners
through detailed cost structure analysis and comparison in order tomaintain stable quality and to continue to contact new suppliers forcost comparison, thereby ensuring price competitiveness.

-103-5.2.4. Company Names, Amount and Percentage of Major Suppliers and Customers which were commanding 10%-plus Share of annual ordervolume in the Last Two Years
1. Major Suppliers
Unit: NT$ thousands
2021
2022
2023(as of March 31, 2023) (Note 3)
Ratio toRatio toRatio toRelation
Relation
Relation
Item Company
Annual Net
Company
Annual Net
Company
Quarterly
AmountwithAmountwithAmountwith
NameSupplies
Name
Supplies
Name
Net Supplies
Transcend
Transcend
Transcend
(%)
(%)
(%)
1
A
3,794,965
31.66
None
B
1,772,896
29.13
None
B
305,479
25.66
None
2
B
2,939,313
24.52
None
A
1,404,055
23.07
None
A
219,921
18.47
None
3
C
1,741,714
14.53
None
C
643,842
10.58
None
C
136,083
11.43
None
OthersOthers3,511,626
29.29
2,265,766
37.22
Others529,190
44.44
Net Total
Net Total
Net Total
11,987,618
100.006,086,559
100.001,190,673
100.00
Supplies
Supplies
Supplies
Note 1: Due to the restrictions of commercial confidentiality and non-disclosure of contracts, the names of suppliers are shown by codes.
Note 2: Changes of increase/decrease were due to the business needs.
Note 3: The financial statements of 2023 Q1 have already been reviewed by the CPAs.

2. Major Customers
The sales income of one customer from the company between 2022 and 2021 did not show 10% of the consolidated net operating
income.

-104-5.2.5. Production in the Last Two Years
Major Products
FLASH+DRAM
Products
Others
Total

Unit: 1,000 pieces; NT$ thousands
2021
Quantity
Capacity
AmountCapacity

2022
Quantity

20,837

17,174

7,336,326

22,59019,784

8,101,610

1,969
22,806

1,788
18,962

1,511,642
8,847,968

2,454
25,044

1,898
21,682

1,808,793
9,910,403

Capacity

5.2.6. Sales in the Last Two Years
2022
Major Products
Qty
FLASH+DRAM
Products
Others
Total

Local
Amount

Qty

ExportAmount

Unit: 1,000 pieces; NT$ thousands
2021
Local
Export
Qty
Amount
Qty
Amount

4,762 2,515,514 14,634

7,696,816 11,737 3,094,895

16,8218,901,969

190
288,436 1,383
4,952 2,803,950 16,017

1,621,584 2,224
305,154
9,318,400 11,961 3,400,049

1,826 2,012,797
18,647 10,914,766

5.3. The Number of Employees, Average Service Year, Average Age and Educational Level Distribution
Ratio in Last Two Years and up to the Publication Date of this Annual ReportYear
Number of
EmployeeDirectIndirect
Total

Average Age
Average Years of
Ph.D.
Masters
Bachelor’s
DegreeEducation
SeniorHigh
Below
Senior

2021

2022

642
604
1,246
38.6
9.1
0.0%
14.7%

618
584
1,202
39.4
10.1
0.0%
14.0%

As of
April 18, 2023
611
581
1,192
39.6
10.4
0.0%
14.8%

59.5%

60.2%

59.7%

22.4%

22.4%

22.1%

3.4%

3.4%

3.4%

-105-

5.4. Environmental Protection Expenditures
For all selected raw materials, auxiliary materials and packaging materials, internal professional
personnel has performed product compliance inspection in order to ensure that the products comply
with the international environmental protection laws and regulations.
The main manufacturing processes of the Company’s products include component mounting, board
cutting, assembly, testing, packaging and sales to the customer end. During the manufacturing
process, no waste gas or wastewater is discharged, and only industrial wastes are generated from theprocess. The industrial wastes are collected and classified according to their properties, andqualified supplier approved by the Environmental Protection Administration is entrusted to handle
the cleaning and disposal of the wastes. The qualification certificate of the supplier entrusted isreviewed rigorously, and testing and reporting are performed in accordance with the laws andregulations in order to ensure that the industrial wastes are properly handled.
1. Any losses and disposition suffered by the company in the most recent fiscal year and up to thisAnnual Report publication date due to environmental pollution incidents: None.
2. Material Environmental Protection Expenditures: None.
5.5. Labor Relations
5.5.1. Implementation of various employee welfare measures, continuing education, training, andretirement systems, and maintenance of the collective bargaining agreement and various employee
rights::1. Employee benefit plans:(1) Insurance: To provide greater living protection to employees, in addition to the enrollmentof labor and health insurances for employees according to the laws, the Company plans thegroup insurance for employees, and it covers term life insurance, accidental injury
insurance, hospitalization and medical insurance, and cancer health insurance, etc. For
employees traveling on business trips, additional business travel safety insurance is appliedin order to provide greater protection to employees.
(2) Entertainment activities: The Company has established the Employees’ Welfare Committee
according to the laws, and the activities of year-end party, family day and sports contest,
etc., are organized annually in order to achieve physical and mental relaxation and toachieve coherence. Furthermore, the activity center is also installed with various fitness
and recreation facilities, such as, table football, table tennis, snooker, fitness room andother equipment for employees’ use during their free time. Employees are also encouraged
to participate in club activities and to establish friendship and communication through club
activities.
(3) Other benefits: Employees’ health is considered a fundamental aspect for the Company’s
development. In addition to providing annual health examination to employees, theCompany also sets up basketball courts and fitness room to provide diverse sports andrecreation facilities. Employees are offered with the employee discount prices for thepurchase of the Company’s products for own use. The employee cafeteria and café alsooffer meals at discount prices to employees. The Company irregularly provides gifts andissues marriage and maternity cash gift and funeral consolation money. Furthermore,through cross-industry alliance with other vendors, the Company provides more
preferential information to the living of employees.
2. Emoloyee continuing education and training:
As the Company is in the highly competitive technology industry, talents are the key factors-106-determining the success of a corporate. Transcend has also valued talents as the most powerfuland significant backup to the company. Through various learning methods of professional
competence improvement courses, work transfer, overseas business trips and trade shows, etc.,
arranged by the Company, Transcend is able to cultivate employees equipped with functions ofgreater diversity and depth, thereby achieving the goals of the organization.
In terms of the training courses, each year, the Company organizes orientation training for new
employees and also organizes competence improvement courses for sales, purchase and R&D
personnel, as well as organizes or assigns personnel to participate in relevant external trainings
according to laws and regulations.
3. Retirement systems:
To meet the requirements specified by the laws and regulations, the Company contributes 6%of the insured monthly salary and deposits into the pension personal account at the Bureau ofLabor Insurance monthly for new employees on-board since July 1, 2005 and existing
employees who chose the new retirement pension system. For existing employees who chosethe old retirement pension system and maintained their service years under the old system, theCompany appropriates an appropriate pension reserve and deposits in the dedicated account at
Bank of Taiwan, and the Supervisory Committee members are responsible for the supervisionof the reserve fund.
4. Other labor agreements:
The agreements between the labor and management of the Company are handled in accordancewith the Labor Standards Act, and are explained in conjunction with the personnel management
regulations upon the time when employees joining the Company for service. Relevant
regulations are added or revised depending upon the operational needs of the Company.
5.5.2. Any Losses due to Labor Disputes and Any Estimated Losses and Countermeasures
1. Any losses and disposition suffered by the company in the most recent fiscal year and up to thisAnnual Report publication date due to labor disputes:(1)According to the result of the 2022 labor inspection, a total of 1 violation was found.
Date of punishment: 2022/03/28
Punishment No.: Taipei City Labor No.11160043441
Violated rules and regulations: Paragraph 1 of Article 24 of the Labor Standards Act
Violated contents of regulations: extended working hours without additional wages as
requiredAmount of fine: NTD 50,000(2)According to the result of the 2023 labor inspection, a total of 2 violation was found.
Date of punishment: 2023/04/24
Punishment No.: Taipei City Labor No.11260083031
Violated rules and regulations: Paragraph 1 of Article 24 of the Labor Standards Act andParagraph 6 of Article 30 of the Labor Standards Act
Violated contents of regulations: extended working hours without additional wages as
required and did not register the attendance of workers on a daily basis to the minute.
Amount of fine: NTD 120,000
2. Any estimanted losses and countermeasures: None.

-107-5.6. Information Security Management
5.6.1. Information Security Management Strategy and Structure
1. Information Security Risk Management Structure
The Company established the “Information Security Execution Team” in May 2019 to be
responsible for the establishment of policies, execution, recording and review of information
security events and information security accidents, and to also accept the annual information
cycle supervision of the Auditing Office. The Administrative Vice President concurrently acts
as the information officer to take the role of convener in order to convene meetings annually,
and to also report information security governance status to the board of directors.
2. Information Security Policy
To improve the information security management system, and to ensure the confidentiality,
legality, reliability and integrity of the Company’s information, personnel, assets, software andhardware, the Company establishes the information security policy according to the ISMS
information security management system, and the objective is to reduce information risk to theacceptable level through control methods, in order to improve the information security risk
management of the Company.
Information security control measures:(1) Establish information asset list, and perform classification control according to theinformation risk assessment.
(2) All new employees are required to participate in the information security education andtraining, in order to improve employees’ understanding and concept on the information
security. In addition, educational promotion on information security precautions are also
executed periodically.
(3) The internal and external networks of the Company are installed with firewall, andemployees are prohibited to use private network equipment to connect to the external
network or intranet of the Company.
(4) Mainframes of confidentiality are installed in an isolated network environment. For
database and file access, use authorities are established and remote backup is performed
periodically.
(5) Perform information asset inspection operation and system abnormality drill periodically, inorder to maintain the system reliability.
(6) Establish information security event management standard and information security event
reporting procedure.
(7) All employees using information provided by the Company to perform relevant information
job duties and suppliers with business dealings or visitors shall bear the responsibility andobligation to protect the information assets obtained or used, and it is prohibited to perform
access, modification or illegal disclosure without authorization.
(8) Personal computers shall be installed with anti-virus software and updated with the latest
virus codes. In addition, software management policy shall be established, and any
unauthorized software shall be prohibited from use.
(9) Employees possessing accounts, passwords and authorizations provided by the Company
shall bear the custody responsibility properly and shall also update passwords periodicallyaccording to the request.
(10) All employees of the Company shall comply with the laws and regulations as well as therequirements of the information security policy of the Company. The supervising unit shallbear the supervision responsibility, implement the system and improve employees’
understanding on the information security and legal concepts.
-108-3. Specific Management Plan
(1) It is necessary to identify the information security event root cause and adopt an effective
strategy, as well as establishing the method and procedure to improve future incident
handling according to the information security incident classification.
(2) The information security execution team proposes the information security incident
statistical information according to the internal audit information cycle requirements of the
Auditing Office, in order to facilitate the continuous improvement of the information
security management system.
(3) Important information security event handling result shall be periodically summarized, andunder condition where no personal privacy and trade secret is involved, announcement canbe published on the monthly report or intranet to describe the incident occurrence cause,
process, handling method, improvement and precaution recommendations, etc., in order to
use it as reference information for information security education and information security
event prevention.
(4) Based on the consideration that information security risk is a new emerging type of risk,
the Company is currently under the evaluation stage. In the future, the Company willcontinue to improve the information security system management and will also conduct
information security evaluation periodically. Through repetitive drills and continuous
review and improvement, the information security hazard awareness of employees andresponse capability of information security handling personnel of the Company can beenhanced, thereby preventing occurrence of information security events.
4. Information Security Management Resources
The Administrative Vice President concurrently acts as the information officer to take the roleof convener in order to convene meetings in October, to review report records and to review
information security policy and future development direction. In addition, the information
security governance status has been reported to the board of directors on November 10, 2022.
Please refer to the Company’s website for details:
https://tw.transcend-info.com/about/information_security_management
5.6.2. Losses, possible impacts and countermeasures as a result of major information security incidents
in the last year up to the publication date of this annual report, state the reasons if losses cannot bereasonably estimated: None.
5.7. Important Contracts
Agreement

Counterparty

Contract Period

Major Contents

Lease

Won Chin Investment Inc. 2022.6.12-2027.6.11

Land Lease Contract

None

Lease

Cheng Chuan Technology
2022.6.12-2027.6.11
Development Inc.

Land Lease Contract

None

License Intel Corporation
LicenseMemory Technologies
LLC

Thunderbolt Technology
License Agreement
MEMORY PATENT
2019.12.26-2024.12.31
LICENSE AGREEMENT

2014.4.18--109-

Restrictions

None
None

6. Financial Information
6.1. Condensed Balance Sheet and Statement of Comprehensive Income for the Most Recent Five Years– Based on IFRS
6.1.1. Consolidated Condensed Balance Sheet
Unit: NT$ thousands
Financial Summary for The Last Five Years (Note 1)

Year
Item

As of March
31, 2023(Note 2)

2018

2019

2020

2021

2022
(Note 3)Current assets
Property, Plant and Equipment
Intangible assets
Other assets
Total assets
Before distribution
Current
liabilities After distribution
Non-current liabilities
Before distribution
Total
liabilities After distribution

16,115,783
2,599,493
3,149,236
21,864,512
1,649,287
3,803,096
234,923
1,884,210
4,038,019

15,411,700
2,438,154
3,350,936
21,200,790
1,501,579
3,432,357
292,363
1,793,942
3,724,720

14,615,264
2,282,324
3,840,034
20,737,622
1,837,754
3,146,392
227,8422,065,596
3,374,234

16,773,957
1,942,013
3,722,531
22,438,501
2,401,653
4,976,023
202,0132,603,666
5,178,036

16,254,872
1,580,372
3,693,198
21,528,442
1,426,767
3,829,512
551,139
1,977,906
4,380,651

16,602,334
1,560,786
3,746,427
21,909,547
3,923,950
3,923,950
544,9424,468,892
4,468,892

Equity attributable toshareholders of the parent

19,980,302

19,406,848

18,672,026

19,834,835

19,550,536

17,440,655

Capital stock
4,307,617
4,307,617
4,290,617
4,290,617
4,290,617
4,290,617
Before distribution
4,605,233
4,346,854
3,945,369
3,730,914
3,387,781
3,044,532
Capitalsurplus
After distribution
4,346,775
3,960,698
3,730,838
3,387,665
3,044,532
3,044,532
11,129,024
10,999,853
10,553,284
12,003,819
12,229,955
10,404,348
Retained Before distribution
earnings After distribution
9,233,673
9,455,231
9,459,177
9,772,698
10,170,459
10,404,348
Other equity interest(61,572)(130,902)(117,244)(190,515)(357,817)(298,842)
Treasury stock(116,574)
Non-controlling interest
Before distribution
19,980,302
19,406,848
18,672,026
19,834,835
19,550,536
17,440,655
Total
equityAfter distribution
17,826,493
17,476,070
17,363,388
17,260,465
17,147,791
17,440,655
Note 1: 2018–2022 financial statements have been audited and certified by CPAs.
Note 2: The financial statements of 2023 Q1 have been reviewed by the CPAs.
Note 3: For the proposal for distribution of 2022 earnings, in accordance with the provisions of the Articles of Incorporation, theproposal on the distribution of earnings in cash and the proposal on the cash distribution from capital surplus have been
approved by the board of directors’ meeting through special resolution. The remaining distribution items have not been
approved through the resolution of the shareholders’ meeting; therefore, no adjustment has been made.

-110-

6.1.2. Condensed Consolidated Balance Sheet - Parent Company Only
Unit: NT$ thousands
Financial Summary for The Last Five Years (Note 1)

Year
Item

As of March
31, 2023(Note 2)

2018

2019

2020

2021

2022
(Note 3)Current assets
Property, Plant and Equipment
Intangible assets
Other assets
Total assets
Before distribution
Current
liabilities After distribution
Non-current liabilities
Before distribution
Total
liabilities After distribution

15,269,713
1,712,699
5,229,958
22,212,370
2,027,568
4,181,377
204,500
2,232,068
4,385,877

14,532,387
1,644,401
5,256,311
21,433,099
1,810,735
3,741,513
215,516
2,026,251
3,957,029

13,722,813
1,540,175
5,686,690
20,949,678
2,114,521
3,423,159
163,1312,277,652
3,586,290

15,783,618
1,435,144
5,511,805
22,730,567
2,746,155
5,320,525
149,577
2,895,732
5,470,102

14,578,379
1,374,912
5,707,881
21,661,172
1,604,918
4,007,663
505,718
2,110,636
4,513,381

Equity attributable toshareholders of the parent

19,980,302

19,406,848

18,672,026

19,834,835

19,550,536 Not Applicable

Capital stock
4,307,617
4,307,617
4,290,617
4,290,617
4,290,617
Before distribution
4,605,233
4,346,854
3,945,369
3,730,914
3,387,781
Capitalsurplus
After distribution
4,346,775
3,960,698
3,730,838
3,387,665
3,044,532
11,129,024 10,999,853 10,553,284 12,003,819 12,229,955
Retained Before distribution
earnings After distribution
9,233,673
9,455,231
9,459,177
9,772,698 10,170,459
Other equity interest(61,572)(130,902)(117,244)(190,515)(357,817)
Treasury stock(116,574)
Non-controlling interest
Before distribution
19,980,302 19,406,848 18,672,026 19,834,835 19,550,536
Total
equityAfter distribution
17,826,493 17,476,070 17,363,388 17,260,465 17,147,791
Note 1: 2018–2022 financial statements have been audited and certified by CPAs.
Note 2: Pursuant to Article 7 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers (adopting theInternational Financial Reporting Standards), the Company is not required to prepare the parent company only financial
statements of 2023 Q1; therefore, the Company provides no financial information for 2023 Q1.
Note 3: For the proposal for distribution of 2022 earnings, in accordance with the provisions of the Articles of Incorporation, theproposal on the distribution of earnings in cash and the proposal on the cash distribution from capital surplus have been
approved by the board of directors’ meeting through special resolution. The remaining distribution items have not been
approved through the resolution of the shareholders’ meeting; therefore, no adjustment has been made.

-111-

6.1.3. Consolidated Condensed Statement of Comprehensive Income
Unit: NT$ thousands
As of March
31, 2023(Note 2)Financial Summary for The Last Five Years (Note 1)

Year
Item
Operating revenue
Gross profit
Profit from operations
Non-operating income (expenses)
Profit before income tax
Profit from continuing operations
Loss from discontinued
operations
Profitfor the year
Other comprehensive income(loss), net of taxes

2018

2019

2020

2021

2022

17,615,965
3,530,250
2,139,754
513,7932,653,547
2,081,995
2,081,995

13,496,186
3,087,531
1,781,010
308,733
2,089,743
1,728,967
1,728,967

11,446,696
2,470,096
1,211,936
290,445
1,502,381
1,197,735
1,197,735

14,314,815
4,175,686
2,891,794
236,860
3,128,654
2,533,294
2,533,294

12,122,350
2,722,743
1,506,705
1,849,572
3,356,277
2,454,344
2,454,344

2,608,801
552,807
253,377
36,088289,465
232,365
232,365(15,418)(32,117)

12,175(61,923)(164,389)

60,4992,471,371

2,289,955

2,533,294

2,454,344

Total comprehensive income for
2,066,577
1,696,850
1,209,910
the year
Profit attributable to shareholders
2,081,995
1,728,967
1,197,735
of the parent
Profit attributable to noncontrolling interest
Total Comprehensive income
attributable to Shareholders of the
2,066,577
1,696,850
1,209,910
parentTotal Comprehensive income
attributable to non-controllinginterest
Earnings per share (Note 3)
4.83
4.01
2.79
Earnings per share (Note 4)
4.83
4.01
2.79
Note 1: 2018–2022 financial statements have been audited and certified by CPAs.
Note 2: The financial statements of 2023 Q1 have been reviewed by the CPAs.
Note 3: It is calculated based on the outstanding weighted average number of shares.
Note 4: It is calculated based on number of shares after retroactive adjustment.

-112-

2,471,371

2,289,955

292,864
232,365
292,864

-

-

-

5.90
5.90

5.72
5.72

0.54
0.54

6.1.4. Condensed Statement of Comprehensive Income - Parent Company Only
Unit: NT$ thousands
Financial Summary for The Last Five Years (Note 1)

Year
Item
Operating revenue
Gross profit
Profit from operations
Non-operating income (expenses)
Profit before income tax
Profit from continuing operations
Loss from discontinued operations
Profit for the year
Other comprehensive income(loss), net of taxes

2018

2019

2020

2021

2022

16,809,530
2,862,617
2,140,740
490,1392,630,879
2,081,995
2,081,995

12,860,887
2,521,479
1,871,034
173,005
2,044,039
1,728,967
1,728,967

10,937,519
1,982,871
1,315,135
146,157
1,461,292
1,197,735
1,197,735

13,747,158
3,586,255
2,883,281
233,678
3,116,959
2,533,294
2,533,294

11,386,995
2,115,053
1,455,913
1,611,060
3,066,973
2,454,344
2,454,344(15,418)(32,117)

12,175(61,923)(164,389)

As of March
31, 2023(Note 2)

Toal comprehensive income for2,289,955
2,066,577
1,696,850
1,209,910
2,471,371
Not
the yearApplicable
Profit attributable to shareholders
2,081,995
1,728,967
1,197,735
2,533,294
2,454,344
of the parent
Profit attributable to noncontrolling interest
Total Comprehensive income
attributable to Shareholders of the
2,066,577
1,696,850
1,209,910
2,471,371
2,289,955
parentTotal Comprehensive income
attributable to non-controllinginterest
Earnings per share (Note 3)
5.72
4.83
4.01
2.79
5.90
Earnings per share (Note 4)
4.83
4.01
2.79
5.90
5.72
Note 1: 2018–2022 financial statements have been audited and certified by CPAs.
Note 2: Pursuant to Article 7 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers (adopting
the International Financial Reporting Standards), the Company is not required to prepare the parent company only
financial statements of 2023 Q1; therefore, the Company provides no financial information for 2023 Q1.
Note 3: It is calculated based on the outstanding weighted average number of shares.
Note 4: It is calculated based on number of shares after retroactive adjustment.

6.1.5. Auditors’ Opinions from 2018 to 2022
Year

CPA Firm

CPA

Audit Opinion

2018

Pricewaterhouse Coopers

Lin Chun-Yao, Chou Chien-Hung

Unqualified Opinion

2019

Pricewaterhouse Coopers

Lin Chun-Yao, Chou Chien-Hung

Unqualified Opinion

2020

Pricewaterhouse Coopers

Lin Chun-Yao, Chou Chien-Hung

Unqualified Opinion

2021

Pricewaterhouse Coopers

Lin Chun-Yao, Chen Chin-Chang

Unqualified Opinion

2022

Pricewaterhouse Coopers

Chen Chin-Chang, Lin Yi-Fan

Unqualified Opinion-113-6.2. Financial Analysis for the Most Recent Five Years – Based on IFRS
6.2.1. Consolidated Financial Analysis
Financial Analysis for the Last Five Years (Note 2)
Year
Item

Financial
structure

2018
Debt Ratio (%)
Ratio of long-term capital to property,
plant and equipment (%)

Current ratio (%)
Quick ratio (%)
Interest earned ratio (times)
Accounts receivable turnover (times)
Average collection period
Inventory turnover (times)
OperatingAccounts payable turnover (times)
performance Average days in sales
Property, plant and equipment
turnover (times)
Total assets turnover (times)
Return on total assets (%)
Return on stockholders' equity (%)
Profit from
Pre-tax income operations
Profitability to paid-in
Profit before income
capital (%)
tax
Solvency

2019

2020

2021

2022

As of
March 31,2023
(Note 3)

8.62

8.46

9.96

11.60

9.19

20.40

777.66807.96828.101,031.76

1271.96

1,152.34

977.14261.44
7.57
48
3.34
11.26
109

1,026.37
432.06
1,121.51
7.44
49
3.96
9.11
92

795.28313.12738.18
7.85
47
3.41
8.05
107

698.43225.62
2,507.93
9.36
39
2.26
7.83
162

1139.28314.26
1,702.10
8.53
43
2.10
9.81
174

423.10104.40371.16
8.22
44
2.52
14.81
145

6.64

5.36

4.85

6.78

6.88

6.64

0.79
9.33
10.29
49.67

0.63
8.04
8.78
41.35

0.55
5.72
6.29
28.25

0.66
11.74
13.16
67.40

0.55
11.17
12.46
35.12

0.48
4.29
5.03
23.62

61.60

48.51

35.02

72.92

78.22

26.99

Profit ratio (%)
11.82
12.81
10.46
17.70
20.25
8.91
Earnings per share (NT$) (Note 1)
4.83
4.01
2.79
5.90
5.72
0.54
Cash flow ratio (%)
265.71
69.36(13.52)101.81358.17
24.27
Cash flow
Cash flow adequacy ratio (%)
86.36
84.50
65.18
62.14
75.20
80.68
Cash reinvestment ratio (%)
9.62(6.19)(12.99)
6.31
14.61
6.29
Operating leverage
1.61
1.69
1.98
1.41
1.75
2.12
Leverage
Financial leverage
1.00
1.00
1.00
1.00
1.00
1.00
Analysis of financial ratio differences for the last two years: (Not required if the difference does not exceed 20%)
1. Debt ratio: A decrease in the purchase amount in 2022 resulted in a corresponding decrease in accounts payable at the endof the period; because of this, the debt ratio decreased compared to last year.
2. Ratio of long-term capital to property, plant and equipment: Asset disposal in 2022 resulted in a decrease in property,
plant and equipment, which resulted in the ratio of long-term capital to property, plant and equipment increasing compared
to last year.
3. Current ratio and quick ratio: A decrease in the purchase amount in 2022 resulted in a decrease in accounts payable at theend of the period; because of this, the current ratio and the quick ratio increased as compared to last year.
4. Interest earned ratio (times): Increase in interest expenses in 2022 resulted in the interest earned ratio decreasing as
compared to last year.
5. Accounts payable turnover (times): A decrease in the purchase amount in response to market conditions in 2022 resulted
in a decrease in average accounts payable; the accounts payable turnover increased as compared to last year.
6. Pre-tax income to paid-in capital (%): A decrease in operating revenue and gross profit in 2022 resulted in a decrease inprofit from operations; the ratio of pre-tax income to paid-in capital decreased as compared to last year.
7. Cash flow: An adjustment of inventory in response to market conditions in 2022 was the main cause of a decrease of
inventory and increase of net cash flows from operating activities; all financial ratios related to cash flow increased
compared to last year.
8. Operating leverage: Mainly due to the facts that decrease in net profit from operations in 2022 was greater than decreasein operating revenue of the same year, the operating leverage increased as compared with that of last year.

Note 1: It was calculated based on the outstanding weighted average number of shares.
Note 2: 2018–2022 financial statements have been audited and certified by CPAs.
Note 3: The financial statements of 2023 Q1 have been reviewed by the CPAs.
-114-

1. Financial Structure(1) DebtrRatio=total liabilities/total assets(2) Ratio of long-term capital to property, plant and equipment=(total shareholders’ equity＋
non-current liabilities)/ net value of property, plant and equipment
2. Liquidity(1) Current ratio=current assets/current liabilities(2) Quick ratio=(current assets-inventory-pre-paid expense)/ current liabilities(3) Interest earned ratio =earning before income tax and interest expense/interest expense of the term
3. Operating Performance(1) Accoutns receivables(including accounts receivables and notes receivables due to business) turnover=Net sales/ average balance of accounts receivables(including accounts receivables and notes
receivables due to business)(2) Average collection period =365/ accounts receivables turnover(3) Inventory turnover =Cost of goods sold/average inventory(4) Accounts payable (including accounts payables and notes payables due to business) turnover =cost ofgoos sold/ average balance of accounts payables(including accounts payables and notes payables due
to business)(5) Average days in sales =365/ inventory turnover(6) Property, plant and equipment turnover=net sales/average net value of property, plant and equipment(7) Total assets turnover =net sales/average total assets
4. Profitability(1) Return on Assets=[profit(loss) for the year+interest expense×(1-tax rate)]/average total assets(2) Return on stockholders' equity = profit(loss) for the year /average total stockholders' equity(3) Profit ratio= profit(loss) for the year /net sales(4) Earnings per share=( Profit(loss) attributable to shareholders of the parent –preferred stock
dividends)/ weighted average share outstanding
5. Cash Flow
(1) Cash flow ratio = Cash inflow generated from operations / current liabilities(2) Cash flow adequacy ratio = Cash inflow generated from operations of the most recent five years /(capital expenditure+increased amount of inventory+cash dividends) of the most recent five years(3) Cash reinvestment ratio =( Cash inflow generated from operations –cash dividends)/( gross value of
property, plant and equipment +long-term investment+other assets+working capital)
6. Leverage(1) Operating leverage=(net sales-variable business costs and expenses)/ Profit(loss) from operations(2) Financial leverage= Profit from operations /( Profit from operations –interest expense)-115-6.2.2. Parent Conpany Only Financial Analysis
Financial Analysis for the Last Five Years (Note 2)
Year
Item

Financial
structure

2018
Debt Ratio (%)
Ratio of long-term capital toproperty, plant and equipment (%)

Current ratio (%)
Solvency
Quick ratio (%)
Interest earned ratio (times)
Accounts receivable turnover(times)Average collection period
Inventory turnover (times)
OperatingAccounts payable turnover (times)
performance
Average days in sales
Property, plant and equipment
turnover (times)
Total assets turnover (times)
Return on total assets (%)
Return on stockholders' equity (%)
Profit from
Pre-tax
operations
income toProfitability
paid-in capital Profit before(%)
income tax

2019

2020

2021

2022

10.05

9.45

10.87

12.74

9.74

1,178.54

1,193.28

1,222.92

1,392.50

1,458.73

753.10181.78-802.57
325.76
3,024.73

648.98574.75245.75
170.691,776.57 ########

908.36
185.642,476.36

7.44

7.67

8.50

10.45

8.89

49
3.45
8.21
106

48
4.12
6.66
89

43
3.55
5.89
103

35
2.34
5.97
156

41
2.14
6.77
171

9.78

7.66

6.87

9.24

8.10

0.74
9.18
10.29

0.59
7.93
8.78

0.52
5.66
6.29

0.63
11.60
13.16

0.51
11.06
12.46

49.70

43.44

30.65

67.20

33.93

61.08

47.45

34.06

72.65

71.48

As of
March 31,2023
(Note 3)Not
appicable

Profit ratio (%)
12.39
13.44
10.95
18.43
21.55
Earnings per share (NT$) (Note 1)
4.83
4.01
2.79
5.90
5.72
Cash flow ratio (%)
218.4347.98(11.99)89.74
298.75
Cash flow
Cash flow adequacy ratio (%)
85.80
82.60
62.32
60.46
72.98
Cash reinvestment ratio (%)
10.26(7.42)(13.61)
6.64
12.88
Operating leverage
1.29
1.30
1.45
1.21
1.40
Leverage
Financial leverage
1.00
1.00
1.00
1.00
1.00
Analysis of financial ratio differences for the last two years: (Not required if the difference does not exceed 20%)

1. Debt ratio: A decrease in the purchase amount in 2022 resulted in a corresponding decrease in accounts payableat the end of the period; the debt ratio decreased as compared to last year.
2. Current ratio: A decrease in the purchase amount in 2022 resulted in a corresponding decrease in accounts
payable at the end of the period; the current ratio increased as compared to last year.
3. Interest earned ratio (times): A decrease in gross profit in 2022 resulted in a corresponding decrease in net profit
before income tax and an increase in interest expenses; the interest earned ratio decreased as compared to lastyear.
4. Pre-tax income to paid-in capital (%): A decrease in operating revenue and gross profit in 2022 resulted in adecrease in profit from operations; the ratio of pre-tax income to paid-in capital decreased as compared to lastyear.
5. Cash flow: An adjustment of inventory in response to market conditions in 2022 was the main cause of adecrease of inventory and increase of net cash flows from operating activities; all financial ratios related to cash
flow increased compared to last year.
Note 1: It was calculated based on the outstanding weighted average number of shares.
Note 2: 2018–2022 financial statements have been audited and certified by CPAs.
Note 3: Pursuant to Article 7 of the Regulations Governing the Preparation of Financial Reports by Securities
Issuers (adopting the International Financial Reporting Standards), the Company is not required to prepare
the parent company only financial statements of 2023 Q1; therefore, the Company provides no financial
information for 2023 Q1.
-116-

1. Financial Structure(1) DebtrRatio=total liabilities/total assets(2) Ratio of long-term capital to property, plant and equipment=(total shareholders’ equity＋
non-current liabilities)/ net value of property, plant and equipment
2. Liquidity(1) Current ratio=current assets/current liabilities(2) Quick ratio=(current assets-inventory-pre-paid expense)/ current liabilities(3) Interest earned ratio =earning before income tax and interest expense/interest expense of the term
3. Operating Performance(1) Accoutns receivables(including accounts receivables and notes receivables due to business) turnover=Net sales/ average balance of accounts receivables(including accounts receivables and notes
receivables due to business)(2) Average collection period =365/ accounts receivables turnover(3) Inventory turnover =Cost of goods sold/average inventory(4) Accounts payable (including accounts payables and notes payables due to business) turnover =cost ofgoos sold/ average balance of accounts payables(including accounts payables and notes payables due
to business)(5) Average days in sales =365/ inventory turnover(6) Property, plant and equipment turnover=net sales/average net value of property, plant and equipment(7) Total assets turnover =net sales/average total assets
4. Profitability(1) Return on Assets=[profit(loss) for the year+interest expense×(1-tax rate)]/average total assets(2) Return on stockholders' equity = profit(loss) for the year /average total stockholders' equity(3) Profit ratio= profit(loss) for the year /net sales(4) Earnings per share=( Profit(loss) attributable to shareholders of the parent –preferred stock
dividends)/ weighted average share outstanding
5. Cash Flow
(1) Cash flow ratio = Cash inflow generated from operations / current liabilities(2) Cash flow adequacy ratio = Cash inflow generated from operations of the most recent five years /(capital expenditure+increased amount of inventory+cash dividends) of the most recent five years(3) Cash reinvestment ratio =( Cash inflow generated from operations –cash dividends)/( gross value of
property, plant and equipment +long-term investment+other assets+working capital)
6. Leverage(1) Operating leverage=(Net sales-variable business costs and expenses)/ Profit(loss) from operations(2) Financial leverage= Profit from operations /( Profit from operations –interest expense)-117-6.3. Audit Committee’s Review Report for the Most Recent Year
Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2022 Business Report, Financial Statements andEarnings Distribution Proposal. Transcend Corporation’s Financial Statements have been audited andcertified by Mr. Chin-Chang Chen and Mr. Yi-Fan Lin, the CPA of the Pricewaterhouse Coopers. The
Business Report, Financial Statements and Earnings Distribution Proposal have been reviewed andconsidered to be complied with relevant rules by the undersigned, the audit committee of Transcend
Corporation. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company
Act, we hereby submit this report.

The Audit Committee of Transcend Information, Inc.

Chairman of the Audit Committee: WANG, YI-HSIN

March 02, 2023

-118-

6.4. Consolidated Financial Statements for the Years Ended December 31, 2021 and 2020, andIndependent Auditors’ Report

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESREPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of Transcend
Information, Inc. as of and for the year ended December 31, 2022, under the Criteria Governing the
Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statementsof Affiliated Enterprises are the same as those included in the consolidated financial statements preparedin conformity with the International Financial Reporting Standard 10, “Consolidated Financial
Statements.” In addition, the information required to be disclosed in the combined financial statements is
included in the consolidated financial statements. Consequently, Transcend Information, Inc. andSubsidiaries do not prepare a separate set of combined financial statements.
Very truly yours,
TRANSCEND INFORMATION, INC.
Chairman: SHU, CHUNG-WON
March 2, 2023

-119-

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE
PWCR22000434
To the Board of Directors and Shareholders of Transcend Information, Inc.
OpinionWe have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and its
subsidiaries (the “Group”) as at December 31, 2022 and 2021, and the related consolidated statements ofcomprehensive income, of changes in equity and of cash flows for the years then ended, and notes to theconsolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at December 31, 2022 and 2021, and its consolidated
financial performance and its consolidated cash flows for the years then ended in accordance with theRegulations Governing the Preparation of Financial Reports by Securities Issuers and the International
Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC
Interpretations that came into effect as endorsed by the Financial Supervisory Commission.
Basis for opinion
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of
Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic of China.
Our responsibilities under those standards are further described in the Independent auditors’
responsibilities for the audit of the consolidated financial statements section of our report. We are
independent of the Group in accordance with the Norm of Professional Ethics for Certified Public
Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities inaccordance with these requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the Group’s 2022 consolidated financial statements. These matters were addressed in the context
of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we
do not provide a separate opinion on these matters.

-120-

Key audit matters for the Group’s 2022 consolidated financial statements are stated as follows:
Valuation of inventories
Description
Refer to Notes 4(13), 5(2) and 6(5) to the consolidated financial statements for the information on theGroup’s inventory accounting policy, estimates and assumptions and allowance for inventory valuation
losses.
The percentage of the Group’s inventories to total assets is material and the Group applies judgements
and estimates in determining the net realizable value of inventories at the balance sheet date. The Group
mainly produces DRAM and flash memory. As these products have a short life cycle and belong to ahighly competitive industry, the market prices change frequently. Since the Group’s inventories and theallowance for inventory valuation losses are material to the financial statements, the valuation of
inventories has been identified as a key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
A. Obtained an understanding of the Group’s operations and industry. Assessed the reasonableness ofthe policy and procedures to recognize allowance for inventory valuation losses.
B. Obtained an understanding of the Group’s inventory control procedures. Reviewed annual inventory
count plan and observed the annual physical count of material inventory storage location in order toassess the effectiveness of internal controls over inventory.
C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information toassess the reasonableness of allowance for inventory valuation losses.
Estimation of allowance for sales discounts
Description
In consideration of business volume, the Group provides a variety of business incentives to specificcustomers or products, and based on that, the Group can estimate the allowance for sales discounts
monthly. Refer to Notes 4(26) and 6(4) to the consolidated financial statements for the information on theestimation of allowance for sales discounts.
Since the contracts are numerous and the result could affect the net revenue in the consolidated financial
statements, the estimation of allowance for sales discounts has been identified as a key audit matter.

-121-

How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
A. Obtained an understanding of the Group’s operations, industry and the procedures to recognize
allowance for sales discounts.
B. Obtained an understanding of the Group’s sales procedures and interviewed management to assess
the appropriateness of sales allowance contracts and internal control over estimation of allowance.
C. Obtained the evaluation list of allowance for sales discounts, and tested material sales allowance
contracts and recalculated it to assess the reasonableness of allowance determined by the Group.
Other matter – Parent company only financial reports
We have audited and expressed an unqualified opinion on the parent company only financial statementsof Transcend Information, Inc. as at and for the years ended December 31, 2022 and 2021.
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the Regulations Governing the Preparation of Financial Reports by
Securities Issuers and the International Financial Reporting Standards, International AccountingStandards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the
Financial Supervisory Commission, and for such internal control as management determines is necessary
to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern andusing the going concern basis of accounting unless management either intends to liquidate the Group or tocease operations, or has no realistic alternative but to do so.
Those charged with governance, including the Audit Committee, are responsible for overseeing theGroup’s financial reporting process.

-122-Independent auditors’ responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with the Standards on Auditing of the Republic of China will always detecta material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise
professional judgement and professional skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial 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.
B. Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Group’s internal control.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
D. 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 orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors’ report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
E. Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.

-123-

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 othermatters 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 thatwere of most significance in the audit of the consolidated financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chen, Ching-Chang

Lin, Yi-Fan

For and on Behalf of PricewaterhouseCoopers, Taiwan
March 2, 2023------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results ofoperations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions otherthan the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of suchfinancial statements may differ from those generally accepted in countries and jurisdictions other than the Republic ofChina. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended
for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China,
and their applications in practice.
As the consolidated financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept
any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derivefrom the translation.
-124-

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan Dollars)
Assets

December 31, 2022
AMOUNT%

Notes

December 31, 2021
AMOUNT%

Current assets
Cash and cash equivalents

6(1)Financial assets at fair value through profit or

6(2)

$

loss - current

3,187,312

15

-

$

2,018,106

9-

1,506,595

7

Financial assets at amortised cost - current

6(3)8,611,357

40

5,567,177

25

Notes receivable, net

6(4)

867

-

2,499

-

Accounts receivable, net

6(4)1,217,936

6

1,622,484

7

77,626-

108,850-

Other receivables
Inventories

6(5)3,143,064

14

5,774,825

26

Non-current assets held for sale, net

6(6)

-

-

159,976

1

16,710-13,445-

16,254,872

75

16,773,957

75

51,463-

111,599-

comprehensive income - non-current

524,9393

629,576

3

Investments accounted for using equity method 6(8)136,710

1

148,514

1

Other current assets
Total current assets
Non-current assets
Financial assets at fair value through profit or6(2)loss - non-current
Financial assets at fair value through other6(7)Property, plant and equipment, net

6(9) and 8

1,580,372

7

1,942,013

9

Right-of-use assets

6(10) and 7

196,1901

124,054-

Investment property, net

6(12)2,593,931

12

2,602,088

12

Deferred income tax assets

6(24)137,7741

47,355-

Other non-current assets

6(13)52,191-

59,345-5,273,570

25

5,664,544

25

21,528,442

100

22,438,501

100

Total non-current assets
Total assets$(Continued)

-125-

$

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars)
Liabilities and equity

December 31, 2022
AMOUNT%

Notes

December 31, 2021
AMOUNT%

Current liabilities
Accounts payable$

472,677

2$

1,364,835

6

Accounts payable - related parties

7

27,442-

52,241-Other payables

7

271,9482

286,1681

581,5463

592,8863

47,806-

16,917-25,348-88,606

1

1,426,767

7

2,401,653

11

Current income tax liabilities
Lease liabilities - current

7

Other current liabilities
Total current liabilities
Non-current liabilities
Deferred income tax liabilities

6(24)376,4472

128,784

1

Lease liabilities - non-current

7132,962-

26,033-

Other non-current liabilities

6(14)41,730-47,196-551,1392

202,0131

1,977,906

92,603,666

12

4,290,617

20

4,290,617

19

3,387,781

16

3,730,914

16

Legal reserve

5,057,967

24

4,803,503

21

Special reserve

190,5141

117,2441

6,981,474

32

7,083,072

32

Total non-current liabilities
Total liabilities
Equity attributable to shareholders of parent
Share capital6(15)Common stock
Capital surplus

6(16)Capital surplus
Retained earnings

6(17)Unappropriated retained earnings
Other equity interest6(18)Other equity interest(

357,817) (Total equity
Significant contingent liabilities and2) (19,550,536

91

21,528,442

100

190,515) (1)

19,834,835

88

22,438,501

100

9unrecognized contract commitments
Significant events after the balance sheet date
Total liabilities and equity

11
$

$

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

-126-

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items
Notes
Operating revenue
6(19) and 7
Operating costs
6(5)(23) and 7
Gross profit
Operating expenses
6(23)Sales and marketing expenses
Administrative expenses
Research and development expenses
Expected credit impairment gain (loss)
6(4)Total operating expenses
Operating profit
Non-operating income and expenses
Interest income
6(3)(20)
Other income6(21)Other gains and losses
6(2)(22)
Finance costs
6(10)Share of profit of associates and joint ventures 6(8)accounted for using the equity method
Total non-operating income and expenses
Profit before income tax
Income tax expense
6(24)Profit for the year
Other comprehensive income (loss)
Components of other comprehensive
income (loss) that will not be reclassified to
profit or loss
Gains on remeasurements of defined benefit 6(14)plans
Unrealized (loss) gain on financial assets at
6(7)(18)
fair value through other comprehensive
incomeShare of other comprehensive (loss) income ofassociates and joint ventures accounted forusing the equity method
Components of other comprehensive
income (loss) that will be reclassified to
profit or loss
Financial statements translation differences of 6(18)foreign operations
Income tax related to components of other6(18)(24)comprehensive income that will bereclassified to profit or loss
Other comprehensive loss for the year
Total comprehensive income
Net profit attributable to:Shareholders of parent
Comprehensive income attributable to:Shareholders of parent
Earnings per share (in dollars)
Basic earnings per share
Diluted earnings per share

$
(

(
(
(

For the years ended December 31
2022
2021
AMOUNT%AMOUNT12,122,350
100 $
14,314,815
9,399,607) (77) (10,139,129) (2,722,743
23
4,175,686

%
100
71)
29

750,015) (329,213) (137,105) (295
1,216,038) (1,506,705

6) (
3) (
1) (
- (
10) (
13

765,171) (366,696) (151,458) (567)
1,283,892) (2,891,794

5)
3)
1)
9)
20

114,926
82,483
1,643,836
1,973)

1
1
13- (79,11744,04062,361
1,248)

1
1-$

10,3001,849,572
3,356,277
901,933) (2,454,344

15
28
8) (
20 $

52,590236,860
3,128,654
595,360) (2,533,294

2
22
4)
18

$

5,185

-

2,344

-

(

170,069) (1)

11,826

-

(

219)

-

200

-

892

- (

95,365) (

1)

(
($
$

178)
164,389) (2,289,955

1) ($
19 $

19,072
61,923) (2,471,371

1)
17

$

2,454,344

20$

2,533,294

18$

2,289,955

19$

2,471,371

17

5.72
5.71

$
$

(

(

(

$

6(25)
$
$

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

-127-

5.90
5.90

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars)
Equity attributable to shareholders of the parent
Retained Earnings

Capital Surplus

Notes

Common stock

Additional paid-in
capitalDonated assets
received

Net assets frommergerLegal reserve

Special reserve

Unappropriatedretained earnings

Other Equity Interest
Unrealised gains(losses) fromfinancial assets
Financialmeasured at fairstatements
value throughtranslation
other
differences ofcomprehensive
foreign operations
income

$

$

$

$

$

$

$

($

Total equity

For the year ended December 31, 2021
Balance at January 1, 2021
Net income for the year

4,290,617

3,905,963

4,278

35,1284,683,878

130,902

5,738,504

121,639 )

$

-

-

-

-

-

2,533,294

-

-

-

-

-

-

2,544

(

76,293 )11,826

-

-

-

-

-

-

2,535,838(

76,293 )11,826

Legal reserve

-

-

-

-

119,625-(

119,625 )--Cash dividends

-

-

-

-

-

-

(

1,094,107 )--Other comprehensive income (loss)

6(7)(18)

Total comprehensive income (loss)
Appropriations and distribution of 2020 earnings$ 18,672,026-

2,533,294(

61,923 )2,471,371

6(17)Reversal of special reserve
Cash payment from capital surplus

-

4,395

-

6(17)

-

(

214,531 )---

13,658

-

-

-

-

-

(

13,658 )
-

-

-

-

Net gain on disposal of financial assets at fair value through 6(7)(18)
other comprehensive income

-

-

-

-

-

-

8,804

-

Expired unclaimed dividends recognized as capital surplus

-

-

76

-

-

-

-

-

Balance at December 31, 2021((

1,094,107 )(

214,531 )-

8,804 )

-

-

76

$

4,290,617$

3,691,432

$

4,354

$

35,128$4,803,503$

117,244$

7,083,072($

197,932 )

$

7,417

$ 19,834,835$

4,290,617$

3,691,432

$

4,354

$

35,128$4,803,503$

117,244$

7,083,072($

197,932 )

$

7,417

$ 19,834,835

For the year ended December 31, 2022
Balance at January 1, 2022
Net income for the year

-

-

-

-

-

-

2,454,344

-

-

-

-

-

-

-

4,966

714

(

170,069 )

-

-

-

-

-

-

2,459,310

714(

170,069 )Legal reserve

-

-

-

-

254,464-(

254,464 )--Cash dividends

-

-

-

-

-

-

(

2,231,121 )

-

-

(

73,270 )Other comprehensive income (loss)

6(7)(18)

Total comprehensive income (loss)
Appropriations and distribution of 2021 earnings

6(17)

-

(

343,249 )---

73,270----Net loss on disposal of financial assets at fair value through 6(7)(18)
other comprehensive income

-

-

-

-

-

-

Expired unclaimed dividends recognized as capital surplus

-

-

116

-

-

-

Balance at December 31, 2022

2,454,344(

164,389 )2,289,9556(17)Special reserve
Cash payment from capital surplus-$

4,290,617$

3,348,183

$

4,470

$

35,128$5,057,967$

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

-128-

190,514$2,231,121 )(

343,249 )

-

-

-

-

2,053 )

-

2,053

-

-

-

-

116

(

(

6,981,474($

197,218 )($

160,599 )-$ 19,550,536

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars)Year ended December 31
Notes

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax
Adjustments
Adjustments to reconcile profit (loss)
Net loss (gain) on financial assets at fair value through profit or loss
Share of profit or loss of associates and joint ventures accounted forusing the equity method
Expected credit impairment (gain) loss
Gain on disposal of non-current assets held for sale
Loss (gain) on disposal of property, plant and equipment
Depreciation
Interest income
Interest expense
Dividend income
Changes in assets and liabilities relating to operating activities
Changes in assets relating to operating activities
Financial assets at fair value through profit or loss - current
Notes receivable
Accounts receivable
Other receivables
Inventories
Other current assets
Changes in liabilities relating to operating activities
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Dividends received
Interest received
Income tax paid
Net cash flows provided by operating activities$

3,356,277

6(2)(22)
6(8)
6(4)
6(22)
6(22)
6(23)
6(20)
6(10)
6(7)(21)$

3,128,654

8,271

(

84,872 )((10,300 )295 )1,324,180 )
448
194,624
114,926 )
1,973
35,592 )(52,590 )567
12 )253,806
79,117 )
1,248
6,787 )(

1,517,305
1,632
404,838
93,2472,631,761
3,265 )(((((

2,012,362
1,740 )
188,555 )
41,547 )2,584,359 )
2,950 )

(
(
(
(

(
(
(
(
(

892,158 )
24,799 )14,220 )63,258 )281 )5,727,102
35,592
103,776
756,207 )5,110,263(((

230,569
14,82539,533
15,5603,897 )
2,650,698
6,787
83,165295,582 )2,445,068((

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at fair value through profit or loss
- non-current
Acquisition of financial assets at fair value through profit or loss non-current
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at amortised cost
Proceeds from disposal of financial assets at fair value through other6(7)comprehensive income
Acquisition of financial assets at fair value through other comprehensive
incomeProceeds from disposal of non-current assets held for sale
Proceeds from disposal of property, plant and equipment
Acquisition of property, plant and equipment
6(26)Acquisition of right-of-use assets
Acquisition of investment property
6(12)Increase in other non-current assets
Dividends received
Net cash flows (used in) from investing activities

41,155
3,113,029
6,150,167 )(

841,021(130,785 )2,619,758
2,530,400 )

(

6,179
(
(
(
(
(
(

54,426

71,611 )
1,800,796
162
38,325 )692 )4,082 )
5,262 )
21,885
1,286,933 )(

2,574,370 )
55,289 )116
2,629,543 )
24,581 )
1,169,206
2,018,106
3,187,312((

561,176 )20
15,334 )2,409 )
11,934 )263,187(((

CASH FLOWS FROM FINANCING ACTIVITIESCash dividends paid (including cash payment from capital surplus)
Payment of lease liabilities
Expired unclaimed dividends recognized as capital surplus
Net cash flows used in financing activities
Effect of exchange rate changes
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

6(17)

(
(
(
(
$

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

-129-

(
(
$

1,308,638 )
56,105 )76
1,364,667 )
62,334 )1,281,254
736,852
2,018,106

TRANSCEND INFORMATION, INC. AND SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan Dollars, except as otherwise indicated)
1. HISTORY AND ORGANIZATION
Transcend Information, Inc. (the “Company”) was incorporated under the provisions of the Company
Law of the Republic of China (R.O.C.) in August 1989. The main activities of the Company and its
subsidiaries (collectively referred herein as the “Group”) are manufacturing, processing and sales ofcomputer software and hardware, peripheral equipment and other computer components. The Securities
and Futures Commission of the Republic of China had approved the Company’s shares to be listed on
the Taiwan Stock Exchange and the shares started trading on May 3, 2001.
2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND
PROCEDURES FOR AUTHORIZATION
These consolidated financial statements were authorized for issuance by the Board of Directors on
March 2, 2023.
3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS(1)Effect of the adoption of new issuances of or amendments to International Financial ReportingStandards (“IFRS”) that came into effect as endorsed by the Financial Supervisory Commission(“FSC”)New standards, interpretations and amendments endorsed by the FSC and became effective from2022 are as follows:

New Standards, Interpretations and Amendments
Amendments to IFRS 3, ‘Reference to the conceptual framework’
Amendments to IAS 16, ‘Property, plant and equipment:
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018–2020

Effective dateby International
AccountingStandards Board
January 1, 2022
January 1, 2022
January 1, 2022
January 1, 2022

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

~130~

(2)Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by
the Group
New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as
follows:

New Standards, Interpretations and Amendments
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arisingfrom a single transaction’

Effective dateby International
AccountingStandards Board
January 1, 2023
January 1, 2023
January 1, 2023

The above standards and interpretations have no significant impact to the Group’s financial
condition and financial performance based on the Group’s assessment.
(3)IFRSs issued by IASB but not yet endorsed by the FSC
New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs
as endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between
an investor and its associate or joint venture’

Amendments to IFRS 16,‘Lease liability in a sale and leaseback’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 –comparative information’
Amendments to IAS 1, ‘Classification of liabilities as current or noncurrent’
Amendments to IAS 1, ‘Non-current liabilities with covenants’

Effective dateby International
AccountingStandards Board
To be determinedby International
AccountingStandards Board
January 1, 2024
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2024
January 1, 2024

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

~131~

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies applied in the preparation of these consolidated financial statements
are set out below. These policies have been consistently applied to all the periods presented, unlessotherwise stated.
(1)Compliance statement
The consolidated financial statements of the Group have been prepared in accordance with theRegulations Governing the Preparation of Financial Reports by Securities Issuers, International
Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC
Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the“IFRSs”).
(2)Basis of preparation
A. Except for the following items, the consolidated financial statements have been prepared under
the historical cost convention:(a) Financial assets at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets lesspresent value of defined benefit obligations.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in theprocess of applying the Group’s accounting policies. The areas involving a higher degree ofjudgement or complexity, or areas where assumptions and estimates are significant to theconsolidated financial statements are disclosed in Note 5.
(3)Basis of consolidation
A. Basis for preparation of consolidated financial statements:(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries
are all entities (including structured entities) controlled by the Group. The Group controls anentity when the Group is exposed, or has rights, to variable returns from its involvement withthe entity and has the ability to affect those returns through its power over the entity.
Consolidation of subsidiaries begins from the date the Group obtains control of thesubsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealized gains or losses on transactions between
companies within the Group are eliminated. Accounting policies of subsidiaries have beenadjusted where necessary to ensure consistency with the policies adopted by the Group.

~132~

(c) Profit or loss and each component of other comprehensive income are attributed to theshareholders of the parent and to the non-controlling interests. Total comprehensive income
is attributed to the shareholders of the parent and to the non-controlling interests even if thisresults in the non-controlling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing
control of the subsidiary (transactions with non-controlling interests) are accounted for as
equity transactions, i.e. transactions with owners in their capacity as owners. Any difference
between the amount by which the non-controlling interests are adjusted and the fair value ofthe consideration paid or received is recognized directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retainedin the former subsidiary at its fair value. That fair value is regarded as the fair value on initialrecognition of a financial asset or the cost on initial recognition of the associate or joint
venture. Any difference between fair value and carrying amount is recognized in profit orloss. All amounts previously recognized in other comprehensive income in relation to thesubsidiary are reclassified to profit or loss on the same basis as would be required if therelated assets or liabilities were disposed of. That is, when the Group loses control of a
subsidiary, all gains or losses previously recognized in other comprehensive income inrelation to the subsidiary should be reclassified from equity to profit or loss, if such gains orlosses would be reclassified to profit or loss when the related assets or liabilities are disposedof.
B. Subsidiaries included in the consolidated financial statements:
Name ofInvestor
Transcend
Information,
Inc.

Name of
Subsidiary

Main Business
Activities

Ownership (%)
December December
31, 2022
31, 2021

Saffire Investment Ltd. Investment holdings(Saffire)

100

100

Transcend Japan Inc.
(Transcend Japan)

Wholesale and import ofcomputer memory
modules and peripheralproducts

100

100

Transcend Information Wholesale and import ofInc. (Transcend USA) computer memory
modules and peripheralproducts

100

100

Transcend Korea Inc.
(Transcend Korea)

100

100

Wholesale and import ofcomputer memory
modules and peripheralproducts~133~

Description

Name of
Name ofInvestor
Subsidiary
SaffireMemhiro Pte. Ltd.
Investment Ltd. (Memhiro)
MemhiroPte. Ltd.

Main Business
Activities
Investment holdings

Ownership (%)
December December
31, 2022
31, 2021
100
100

Transcend Information Wholesale and import ofEurope B.V.
computer memory(Transcend Europe)
modules and peripheralproducts

100

100

Transcend Information Wholesale and import of
Trading GmbH
computer memory(Transcend Germany) modules and peripheralproducts

100

100

Transcend Information Manufacture and sales of(Shanghai), Ltd.
computer memory(Transcend Shanghai) modules, storage products
and disks, and lease of
self-owned buildings

100

100

Transtech Trading(Shanghai) Co., Ltd.
(Transtech Shanghai)

100

100

100

100

Wholesale, agent, importand export and retail ofcomputer memory
modules, storage products
and computer components

Transcend Information Wholesale and import of(Hong Kong), Ltd.
computer memory(Transcend Hongmodules andKong)peripheral products

Description

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustment for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4)Foreign currency translation
Items included in the financial statements of each of the Group’s entities are measured using thecurrency of the primary economic environment in which the entity operates (the “functional
currency”). The consolidated financial statements are presented in New Taiwan dollars, which is theCompany’s functional and the Group’s presentation currency.
A. Foreign currency transactions and balances(a) Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of such transactions are~134~

recognized in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are
retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences
arising upon re-translation at the balance sheet date are recognized in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value
through profit or loss are re-translated at the exchange rates prevailing at the balance sheet
date; their translation differences are recognized in profit or loss. Non-monetary assets andliabilities denominated in foreign currencies held at fair value through other comprehensive
income are re-translated at the exchange rates prevailing at the balance sheet date; theirtranslation differences are recognized in other comprehensive income. However,non-monetary assets and liabilities denominated in foreign currencies that are not measured
at fair value are translated using the historical exchange rates at the dates of the initialtransactions.
(d) All foreign exchange gains and losses are presented in the statement of comprehensive
income within ‘other gains and losses’.
B. Translation of foreign operations
The operating results and financial position of all the group entities that have a functional
currency different from the presentation currency are translated into the presentation currency as
follows:(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange
rate at the date of that balance sheet;(b) Income and expenses for each statement of comprehensive income are translated at averageexchange rates of that period; and(c) All resulting exchange differences are recognized in other comprehensive income.
(5)Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets:(a) Assets arising from operating activities that are expected to be realized, or are intended to be
sold or consumed within the normal operating cycle;(b) Assets held mainly for trading purposes;(c) Assets that are expected to be realized within twelve months from the balance sheet date;(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are
to be exchanged or used to settle liabilities more than twelve months after the balance sheet
date.

~135~

Otherwise they are classified as non-current assets.
B. Liabilities that meet one of the following criteria are classified as current liabilities:(a) Liabilities that are expected to be settled within the normal operating cycle;(b) Liabilities arising mainly from trading activities;(c) Liabilities that are to be settled within twelve months from the balance sheet date;(d) Liabilities for which the repayment date cannot be extended unconditionally to more thantwelve months after the balance sheet date. Terms of a liability that could, at the option of thecounterparty, result in its settlement by the issue of equity instruments do not affect its
classification.
Otherwise they are classified as non-current liabilities.
(6)Cash equivalents
Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits
that meet the above definition and are held for the purpose of meeting short-term cash commitments
in operations are classified as cash equivalents.
(7)Financial assets at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured atamortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss arerecognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial liabilities at fair value. All relatedtransaction costs are recognized in profit or loss. The Group subsequently measures thesefinancial liabilities at fair value with any gain or loss recognized in profit or loss.
(8)Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities
which are not held for trading, and for which the Group has made an irrevocable election at
initial recognition to recognize changes in fair value in other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through othercomprehensive income are recognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs.
The Group subsequently measures the financial assets at fair value:
The changes in fair value of equity investments that were recognized in other comprehensive
income are reclassified to retained earnings and are not reclassified to profit or loss following
the derecognition of the investment. Dividends are recognized as revenue when the right toreceive payment is established, future economic benefits associated with the dividend will flow
to the Group and the amount of the dividend can be measured reliably.
~136~

(9)Financial assets at amortised cost
The Group’s time deposits which do not fall under cash equivalents are those with a short maturity
period and are measured at initial investment amount as the effect of discounting is immaterial.
(10)Accounts and notes receivable
A. Accounts and notes receivable entitle the Group a legal right to receive consideration in
exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently
measured at initial invoice amount as the effect of discounting is immaterial.
(11)Financial assets impairment
For financial assets at amortised cost and accounts receivable that have a significant financing
component, at each reporting date, the Group recognizes the impairment provision for 12 months
expected credit losses if there has not been a significant increase in credit risk since initialrecognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs)
if such credit risk has increased since initial recognition after taking into consideration all
reasonable and verifiable information that includes forecasts. On the other hand, for accounts
receivable or contract assets that do not contain a significant financing component, the Group
recognizes the impairment provision for lifetime ECLs.
(12)Derecognition of financial assets
The Group derecognizes a financial asset when the contractual rights to receive the cash flows
from the financial asset expire.
(13)Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using theweighted-average method. The cost of finished goods and work in progress comprises raw
materials, direct labour, other direct costs and related production overheads (allocated based on
actual operating capacity). It excludes borrowing costs. The item by item approach is used inapplying thelower of cost and net realizable value. Net realizable value is the estimated selling price in theordinary course of business, less the estimated cost of completion and the estimated costs
necessary to make the sale.
(14)Non-current assets (or disposal groups) held for saleNon-current assets (or disposal groups) are classified as assets held for sale when their carrying
amount is to be recovered principally through a sale transaction rather than through continuing use,
and a sale is considered highly probable. They are stated at the lower of carrying amount and fairvalue less costs to sell.

~137~

(15)Investments accounted for using equity method - associates
A. Associates are all entities over which the Group has significant influence but not control. In
general, it is presumed that the investor has significant influence, if an investor holds, directly
or indirectly 20 percent or more of the voting power of the investee. Investments in associates
are accounted for using the equity method and are initially recognized at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit orloss, and its share of post-acquisition movements in other comprehensive income is recognizedin other comprehensive income. When the Group’s share of losses in an associate equals or
exceeds its interest in the associate, including any other unsecured receivables, the Group does
not recognize further losses, unless it has incurred legal or constructive obligations or madepayments on behalf of the associate.
C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive
income of the associate and such changes do not affect the Group’s ownership percentage ofthe associate, the Group recognizes change in ownership interests in the associate in ‘capitalsurplus’ in proportion to its ownership.
D. Unrealized gains on transactions between the Group and its associates are eliminated to theextent of the Group’s interest in the associates. Unrealized losses are also eliminated unless thetransaction provides evidence of an impairment of the asset transferred. Accounting policies ofassociates have been adjusted where necessary to ensure consistency with the policies adopted
by the Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire newshares proportionately, which results in a change in the Group’s ownership percentage of theassociate but maintains significant influence on the associate, then ‘capital surplus’ and‘investments accounted for using the equity method’ shall be adjusted for the increase or
decrease of its share of equity interest. If the above condition causes a decrease in the Group’s
ownership percentage of the associate, in addition to the above adjustment, the amounts
previously recognized in other comprehensive income in relation to the associate arereclassified to profit or loss proportionately on the same basis as would be required if therelevant assets or liabilities were disposed of.
(16)Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during
the construction period are capitalized.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably. The carrying amountof the replaced part is derecognized. All other repairs and maintenance are charged to profit orloss during the financial period in which they are incurred.
~138~

C. Land is not depreciated. Other property, plant and equipment apply cost model and are
depreciated using the straight-line method to allocate their cost over their estimated useful lives.
Each part of an item of property, plant, and equipment with a cost that is significant in relation
to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each financial year-end. If expectations for the assets’ residual values and useful
lives differ from previous estimates or the patterns of consumption of the assets’ future
economic benefits embodied in the assets have changed significantly, any change is accounted
for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting
Estimates and Errors’, from the date of the change. The estimated useful lives of property, plantand equipment are as follows:

Buildings and structures
Machinery and equipment
Transportation equipment
Office equipment and others

8 ~ 50 years
2 ~ 10 years
3 ~ 5 years
2 ~ 5 years(17)Leasing arrangements (lessee) - right-of-use assets / lease liabilities
A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at
which the leased asset is available for use by the Group. For short-term leases or leases of
low-value assets, lease payments are recognized as an expense on a straight-line basis over thelease term.
B. Lease liabilities include the net present value of the remaining lease payments at thecommencement date, discounted using the incremental borrowing interest rate. Lease payments
are comprised of the following:(a) Fixed payments, less any lease incentives receivable; and(b) Variable lease payments that depend on an index or a rate.
The Group subsequently measures the lease liability at amortised cost using the interest method
and recognizes interest expense over the lease term. The lease liability is remeasured and theamount of remeasurement is recognized as an adjustment to the right-of-use asset when there
are changes in the lease term or lease payments and such changes do not arise from contract
modifications.
C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of theinitial measurement of lease liability.
The right-of-use asset is measured subsequently using the cost model and is depreciated fromthe commencement date to the earlier of the end of the asset’s useful life or the end of the lease
term. When the lease liability is remeasured, the amount of remeasurement is recognized as an
adjustment to the right-of-use asset.

~139~

(18)Investment property
An investment property is stated initially at its cost and measured subsequently using the costmodel. Except for land, investment property is depreciated on a straight-line basis over its
estimated useful life of 10 ~ 55 years.
(19)Impairment of non-financial assets
The Group assesses at each balance sheet date the recoverable amounts of those assets where there
is an indication that they are impaired. An impairment loss is recognized for the amount by which
the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higherof an asset’s fair value less costs to sell or value in use. When the circumstances or reasons forrecognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment
loss is reversed. The increased carrying amount due to reversal should not be more than what the
depreciated or amortised historical cost would have been if the impairment had not beenrecognized.
(20)Notes and accounts payable
Notes and accounts payable are obligations to pay for goods or services that have been acquired in
the ordinary course of business from suppliers. They are recognized initially at fair value andsubsequently measured at amortised cost using the effective interest method. However, short-term
accounts payable without bearing interest are subsequently measured at initial invoice amount as
the effect of discounting is immaterial.
(21)Offsetting financial assets and liabilities
Financial assets and liabilities are offset and reported in the net amount in the balance sheet when
there is a legally enforceable right to offset the recognized amounts and there is an intention tosettle on a net basis or realize the asset and settle the liability simultaneously.
(22)Employee benefits
A. Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits
expected to be paid in respect of service rendered by employees in a period and should berecognized as expense in that period when the employees render service.
B. Pensions(a) Defined contribution plans
For defined contribution plans, the contributions are recognized as pension expenses when
they are due on an accrual basis. Prepaid contributions are recognized as an asset to theextent of a cash refund or a reduction in the future payments.

~140~

(b) Defined benefit plansi.

Net obligation under a defined benefit plan is defined as the present value of an amountof pension benefits that employees will receive on retirement for their services with theGroup in current period or prior periods. The liability recognized in the balance sheet inrespect of defined benefit pension plans is the present value of the defined benefit
obligation at the balance sheet date less the fair value of plan assets. The net defined
benefit obligation is calculated annually by independent actuaries using the projected
unit credit method. The rate used to discount is determined by using interest rates ofgovernment bonds (at the balance sheet date) of a currency and term consistent with thecurrency and term of the employment benefit obligations.

ii. Remeasurements arising on defined benefit plans are recognized in othercomprehensive income in the period in which they arise and are recorded as retained
earnings.
iii. Past service costs are recognized immediately in profit or loss.
C. Employees’ compensation and directors’ remuneration
Employees’ compensation and directors’ remuneration are recognized as expense and liability,
provided that such recognition is required under legal or constructive obligation and thoseamounts can be reliably estimated. Any difference between the resolved amounts and thesubsequently actual distributed amounts is accounted for as changes in estimates.
(23)Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit
or loss, except to the extent that it relates to items recognized in other comprehensive income
or items recognized directly in equity, in which cases the tax is recognized in othercomprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or
substantively enacted at the balance sheet date in the countries where the Company and its
subsidiaries operate and generate taxable income. Management periodically evaluates positions
taken in tax returns with respect to situations in accordance with applicable tax regulations. It
establishes provisions where appropriate based on the amounts expected to be paid to the tax
authorities. An additional tax is levied on the unappropriated retained earnings and is recorded
as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
consolidated balance sheet. Deferred tax is determined using tax rates (and laws) that havebeen enacted or substantially enacted by the balance sheet date and are expected to apply when
the related deferred tax asset is realized or the deferred tax liability is settled.

~141~

D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilized. At each balance sheet
date, unrecognized and recognized deferred tax assets are reassessed.
(24)Share capital
A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s shares that have been issued, theconsideration paid, excluding any directly attributable incremental costs (net of income taxes)
is deducted from equity attributable to the Company’s equity holders.
(25)Dividends
Dividends are recorded in the Company’s financial statements in the period in which they are
resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock
dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shareson the effective date of new shares issuance.
(26)Revenue recognition
A. Sales of goods(a) The Group manufactures and sells computer software and hardware, computer peripheral
equipment, and computer component products. When the right of control is transferred tothe customer, sales revenue is recognized. Delivery occurs when the products have been
shipped to the specific location, the risks of obsolescence and loss have been transferred tothe customer, and either the customer has accepted the products in accordance with thesales contract, or the Group has objective evidence that all criteria for acceptance have beensatisfied.
(b) Sales revenue is recognized based on contract price, net of sales returns, volume discounts
and estimated sales discounts. The goods are often sold with volume discounts based on
aggregate sales over a one-month period. Sales discounts and allowances are estimated andprovided for based on customer contracts, and revenue is only recognized to the extent that
it is highly probable that a significant reversal will not occur. The estimation is subject to anassessment at each reporting date and recognized as allowance for sales discounts. No
element of financing is deemed present as the sales are made with a credit term of 30-60
days after monthly billing, which is consistent with market practice.
(c) A receivable is recognized when the goods are delivered as this is the point in time that theconsideration is unconditional because only the passage of time is required before thepayment is due.
B. Incremental costs of obtaining a contract
Given that the contractual period lasts less than one year, the Group recognizes the incremental
costs of obtaining a contract as an expense when incurred although the Group expects torecover those costs.
~142~

(27)Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to theChief Operating Decision-Maker. The Group’s Chief Operating Decision-Maker, who is
responsible for allocating resources and assessing performance of the operating segments, hasbeen identified as the Chairmen of the Board of Directors that makes strategic decisions..
5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF
ASSUMPTION UNCERTAINTY
The preparation of these consolidated financial statements requires management to make criticaljudgements in applying the Group’s accounting policies and make critical assumptions and estimatesconcerning future events. Assumptions and estimates may differ from the actual results and arecontinually evaluated and adjusted based on historical experience and other factors. Such assumptions
and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year; and the related information is addressed below:(1)Critical judgements in applying the Group’s accounting policies
Investment property
The Group uses a portion of the property for its own use and another portion to earn rentals or forcapital appreciation. When these portions cannot be sold separately and cannot be leased out
separately under a finance lease, the property is classified as investment property only if the own
use portion accounts for an insignificant portion of the property.
(2)Critical accounting estimates and assumptions
Valuation of inventories
As inventories are stated at the lower of cost and net realizable value, the Group must determine thenet realizable value of inventories on balance sheet date using judgements and estimates. Due to therapid technology innovation, the Group evaluates the amounts of normal inventory consumption,
obsolete inventories or inventories without market selling value on balance sheet date, and writes
down the cost of inventories to the net realizable value. The valuation of inventories is based onrecent market price and demand of products in the future specific period, thus there might besignificant changes in the valuation.
As of December 31, 2022, the carrying amount of inventories was $3,143,064.
.

~143~

6. DETAILS OF SIGNIFICANT ACCOUNTS(1)Cash and cash equivalents

December 31, 2022$
173
2,519,575
667,564$
3,187,312

Cash on hand and petty cash
Checking accounts and demand deposits
Time deposits

December 31, 2021$
217
1,931,009
86,880$2,018,106

A. The aforementioned time deposits pertain to high liquidity investments with maturity within
three months.
B. The Group transacts with a variety of financial institutions all with high credit quality to disperse
credit risk, so it expects that the probability of counterparty default is remote.
C. The Group has no cash and cash equivalents pledged to others.
(2)Financial assets at fair value through profit or loss

Items
Current items:
Financial assets mandatorily measured atfair value through profit or loss
Beneficiary certificates
Valuation adjustments

December 31, 2022

December 31, 2021

$

$

-

$
Non-current items:
Financial assets mandatorily measured atfair value through profit or loss
Beneficiary certificates
Valuation adjustments

$
(
$

$

1,501,948
4,647
1,506,595

61,481 $10,018)51,463 $100,976
10,623
111,599

A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit orloss are listed below:
For the years ended December 31,
2022
Financial assets at fair value through profit
or loss
Beneficiary certificates
Financial products

2021

($

17,262) $8,991

84,375497($

8,271) $84,872

B. The Group has no financial assets at fair value through profit or loss pledged to others.
~144~

(3)Financial assets at amortised cost

Items
Current items:
Time deposits with original maturity of morethan three months

December 31, 2022

December 31, 2021$$

8,611,357

5,567,177

A. Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed
below:For the years ended December 31,
2022$

Interest income

2021
87,929$24,813

B. The Group has no financial assets at amortised cost pledged to others as collateral.
C. The Group transacts time deposits with reputable domestic and foreign banks. The Group’s
counterparties have good credit quality, and the impairment loss is assessed using a 12-month
expected credit loss approach.
(4)Notes and accounts receivable

December 31, 2022
Notes receivable
Accounts receivable
Less: Loss allowance

December 31, 2021

$
$

867 $
1,218,446 $
510) (

2,499
1,623,284
800)$

1,217,936

1,622,484($

A. As of December 31, 2022 and 2021, the estimated sales discounts and allowances were $92,122
and $63,361, respectively. Since the sales discounts and allowances met the requirements foroffset of financial liabilities and financial assets, the net amounts were shown under accounts
receivable.
B. The ageing analysis of accounts receivable and notes receivable is as follows:~145~December 31, 2022
Accounts receivable$
961,768
238,088
8,809
5,776
4,005
$
1,218,446

Not past due
Up to 30 days
31 to 90 days
91 to 180 days
Over 180 days

Notes receivable
$
867
$
867

December 31, 2021
Accounts receivable$
1,347,477
258,288
11,418406
5,695$
1,623,284

Not past due
Up to 30 days
31 to 90 days
91 to 180 days
Over 180 days

Notes receivable
$
2,499
$
2,499

The above ageing analysis was based on past due date.
C. The Group has credit insurance that covers accounts receivable from major customers. Should
bad debts occur, the Group will receive 90% of the losses resulting from non-payment.
D. As of December 31, 2022 and 2021, notes receivable and accounts receivable were all fromcontracts with customers. As of January 1, 2021, the balance of notes receivable and accounts
receivable from contracts with customers amounted to $1,439,523.
E. As at December 31, 2022 and 2021, without taking into account any collateral held or othercredit enhancements, the maximum exposure to credit risk in respect of the amount that best
represents the Group’s notes receivable were $867 and $2,499, respectively; the maximum
exposure to credit risk in respect of the amount that best represents the Group’s accounts
receivable were $1,217,936 and $1,622,484, respectively.
F. The Group classifies customers’ accounts receivable in accordance with the credit rating of thecustomer. The Group applies the simplified approach to estimate expected credit loss under theprovision matrix basis.
G. The Group wrote-off the financial assets, which cannot reasonably be expected to be recovered,after initiating recourse procedures. However, the Group will continue executing the recourse
procedures to secure their rights. On December 31, 2022 and 2021, the Group has no written-off
financial assets that are still under recourse procedures.

~146~

H. The Group used forecastability, historical and timely information to assess the loss rate ofaccounts receivable. As of December 31, 2022 and 2021, the provision matrix is as follows:Notpast due
December 31, 2022
Expected loss rate
Total book value

0.003%~0.523% 0.017%~38%$
961,768 $
252,673Not
past due

December 31, 2021
Expected loss rate
Total book value

1-180 days
past due1-180 days
past due

0.002%~0.496% 0.015%~36%$
1,347,477 $
270,112Over 180 days
past due$

25%~100%
4,005

Total

$

Over 180 days
past due
25%~100%$
5,695

1,218,446

Total

$

1,623,284

I. The balance of allowance for loss and movements are as follows:

At January 1
Reversal of impairment
Effect of exchange rate changes

2022
Accounts receivable
Notes receivable
$
800 $
(
295)
5
-

At December 31$

At January 1
Provision for impairment
Write-offs
Reclassified to overdue receivables
Effect of exchange rate changes

2021
Accounts receivable
Notes receivable$
4,310 $
567
(
903)
(
3,132)(
42)-

At December 31$

J. The Group does not hold any collateral as security.

~147~

510

800

$

$

-

-

(5)Inventories

Raw materials
Work in progress
Finished goods$

December 31, 2022
Allowance for
Costvaluation loss
2,743,592 ($446,816) $285,227 (6,256)
601,619 (
34,302)$

3,630,438 ($487,374) $Book value
2,296,776
278,971567,317
3,143,064

December 31, 2021

Raw materials
Work in progress
Finished goods$$

Allowance for
Costvaluation loss
4,555,175 ($
48,311) $604,979 (438)
667,191 (
3,771)
5,827,345 ($
52,520) $Book value
4,506,864
604,541
663,420
5,774,825

A. The cost of inventories recognized as expense for the year:

For the years ended December 31,
2022
2021
Cost of goods sold
Loss on decline in market value of inventory$$

8,964,753
434,854
9,399,607$$

10,121,771
17,358
10,139,129

B. No inventories were pledged to others.
(6)Non-current assets held for sale

Buildings and structures held for sale
Right-of-use assets held for sale - land

December 31, 2022

December 31, 2021

$

$

$

-

$

143,596
16,380159,976

A. On November 26, 2021, the Board of Directors of the Group’s overseas second-tier subsidiary,Transcend Shanghai, resolved to sell its buildings in response to the land expropriation. As of
December 31, 2021, the related assets transferred to non-current assets held for sale amounted to$159,976 which were all disposed in 2022.
B. On February 18, 2022, the Board of Directors of the Group’s overseas second-tier subsidiary,Transcend Shanghai, resolved to sell land use rights, buildings and ancillary structures located inFengxian District, Shanghai. As of December 31, 2022, the related assets transferred to
non-current assets held for sale had all been disposed.
~148~

C. The carrying amount of non-current assets held for sale was lower than the fair value less costs
to sell based on the assessment. Thus, no impairment has occurred. Refer to table 4 for relatedtransactions.
(7)Financial assets at fair value through other comprehensive income - non-current
December 31, 2022

Items
Non-current items:
Equity instruments
Listed stocks
OthersValuation adjustments

December 31, 2021$

684,413 $
1,125
685,538
160,599)

621,034
1,125
622,159
7,417$

524,939

629,576($

A. The Group has elected to classify equity investments that are considered to be strategic
investments as financial assets at fair value through other comprehensive income. The fair valueof such investments amounted to $524,939 and $629,576 as at December 31, 2022 and 2021,
respectively.
B. For the years ended December 31, 2022 and 2021, the Group disposed equity investments whose
fair value was $6,179 and $54,426, and the cumulative (loss) gain on disposal was transferred toretained earnings in the amount of ($2,053) and $8,804, respectively.
C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial
assets at fair value through other comprehensive income are listed below:
For the years ended December 31,
2022
Equity instruments at fair value throughother comprehensive income
Fair value change recognized in othercomprehensive (loss) income
Cumulative (loss) gain reclassified to retained
earnings due to derecognition
Dividend income recognized in profit or loss
Held at end of year
Derecognized during the year

2021

($

170,069) $11,826($

2,053) $8,804$

35,59235,592

6,787
6,787

$

$
$

D. The Group has no financial assets at fair value through other comprehensive income pledged toothers as collateral.

~149~

(8)Investments accounted for using equity method
Investee Company

December 31, 2022$
136,710

Taiwan IC Packaging Corporation

December 31, 2021$
148,514

A. The basic information of the associate that is material to the Group is as follows:
AssociatenameTaiwan IC
Packaging Corp.

Principal
place ofbusiness
TaiwanShareholding ratio
December
December31, 2022
31, 2021
12.50%
12.52%Nature ofrelationship
Note

Method ofmeasurement
Equity method

Note: Taiwan IC Packaging Corporation is engaged in IC packaging and testing and is the
upstream supplier in the IT and semiconductor industries. In order to reach synergy ofvertical integration, Taiwan IC Packaging Corporation processes the raw materials
provided by the Group into relevant semi-finished goods.
B. The Group held a 12.5% equity interest in Taiwan IC Packaging Corporation, and is thecompany’s largest single shareholder. However, the Group does not hold the majority of thevoting power during the shareholders’ meeting of Taiwan IC Packaging Corporation and theGroup does not serve as corporate director of Taiwan IC Packaging Corporation, which indicatethat the Group has no control ability to direct the relevant activities of Taiwan IC Packaging
Corporation. In addition, the Company’s chairman is the same with Taiwan IC Packaging
Corporation; hence, the Group has significant influence over Taiwan IC Packaging Corporation.
C. The summarized financial information of the associate that is material to the Group is asfollows:
Balance sheet
Taiwan IC Packaging Corporation
December 31, 2022
December 31, 2021$
1,218,268 $
1,408,762
1,151,953
1,219,160(
167,786) (374,580)(
75,327) (83,523)$
2,127,108 $
2,169,819

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets$

Share in associate’s net assets
Net equity differences

(
$

~150~

265,889 $
129,179) (136,710 $271,661
123,147)
148,514

Statement of comprehensive income
Taiwan IC Packaging Corporation
For the years ended December 31,
2022

A
Revenue
Profit for the year from continuing
operations
Total comprehensive income
Dividends received from associates

2021

$

1,223,212$

1,944,950$$$

84,12896,327
21,885$$$

411,645409,917-

D. Share of profit of associates accounted for using the equity method is as follows:
Investee Company
Taiwan IC Packaging Corporation$

For the years ended December 31,
2022
2021
10,081 $
52,790E. The Group’s investment in Taiwan IC Packaging Corporation has quoted market price. The fairvalue of Taiwan IC Packaging Corporation was $242,305 and $446,724 as of December 31,
2022 and 2021, respectively.

~151~

(9)Property, plant and equipment

Land
At January 1
Cost
Accumulated depreciation$$

At January 1
Additions (including transfers)
Disposals
Transfers to non-current assets held forsale
Depreciation charge
Net exchange differences$(

Buildings and Machinery andstructures
equipment

2022
Transportationequipment

Officeequipment

OthersTotal

712,136 $ 2,227,274 $- ( 1,146,125) (712,136 $ 1,081,149 $383,459 $268,788) (114,671 $

27,859 $16,915) (10,944 $32,077 $21,226) (10,851 $48,096 $ 3,430,901
35,834) ( 1,488,888)
12,262 $ 1,942,013

712,136-

114,671 $
41,205
121)

10,944 $- (10,851 $
1,477
6) (

12,262 $ 1,942,013
800
50,741483) (
610)

285,968) (54,674) (6,322
754,088 $2,182) (58,517) (104
95,160 $18) (4,525) (29
6,430 $

235) (
4,020) (156
8,223 $

2,023) (290,426)
5,697) (127,433)
40
6,087
4,899 $ 1,580,372$ 1,081,149 $
7,259
- (

- (
- (
564)
711,572 $At December 31$

At December 31
Cost
Accumulated depreciation$

711,572 $ 1,204,122 $- (450,034) (345,956 $
250,796) (28,079 $21,649) (30,619 $22,396) (20,663 $ 2,341,011
15,764) (760,639)$

711,572

95,160

6,430

8,223

4,899

$

754,088

~152~

$

$

$

$

$ 1,580,372

2021
Buildings and Machinery and Transportation
structures
equipment
equipment

Land
At January 1
Cost
Accumulated depreciation$$

At January 1
Additions (including transfers)
Disposals
Transfers to non-current assets held forsale
Depreciation charge
Net exchange differences$

At December 31$

At December 31
Cost
Accumulated depreciation$$

OthersTotal

725,983 $ 2,601,967 $- ( 1,257,196) (725,983 $ 1,344,771 $

418,357 $
243,085) (175,272 $

26,892 $12,767) (14,125 $28,116 $21,134) (6,982 $

52,518 $ 3,853,833
37,327) ( 1,571,509)
15,191 $ 2,282,324

725,983-

175,2722,710-

14,125 $1,216- (6,982 $
7,731
8)

15,191 $ 2,282,324
3,177
15,334
- (
8)

-

-

-

- (
106,069) (13,847) (14,457) (712,136 $ 1,081,149 $63,254) (57) (114,671 $4,328) (69) (10,944 $3,490) (364) (
10,851 $6,085) (183,226)21) (28,815)
12,262 $ 1,942,013

712,136 $ 2,227,274 $- ( 1,146,125) (712,136 $ 1,081,149 $383,459 $268,788) (114,671 $

27,859 $16,915) (10,944 $32,077 $21,226) (10,851 $48,096 $ 3,430,901
35,834) ( 1,488,888)
12,262 $ 1,942,013- ((Officeequipment$ 1,344,771
500
-

$

143,596)$

A. The relevant assets of the Group recognized as property, plant and equipment are all for self-use.
B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

~153~

- (

143,596)(10)Leasing arrangements - lessee
A. The Group leases various assets including land, buildings, and business vehicles. Rental
contracts are typically made for periods of 1 to 11 years. Lease terms are negotiated on an
individual basis and contain a wide range of different terms and conditions. The leaseagreements do not impose covenants, but leased assets may not be used as security forborrowing purposes.
B. The carrying amounts of right-of-use assets and the depreciation charge are as follows:
December 31, 2022
Carrying amount$
165,858
28,506
1,826$
196,190Land
Buildings
Transportation equipment (business vehicles)

December 31, 2021
Carrying amount$
82,013
41,158883$
124,054

For the years ended December31,
2022
2021
Depreciation charge Depreciation charge$
37,689 $39,117
15,962
18,238670
845$
54,321 $
58,200Land
Buildings
Transportation equipment (business vehicles)

C. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were$196,118 and $15,494, respectively. Refer to Note 7(2)E. for details.
D. Information on profit or loss in relation to lease contracts is as follows:

For the years ended December 31,
2022
Items affecting profit or loss
Interest expense on lease liabilities
Expense on short-term lease contracts
Expense on leases of low-value assets

$

2021
1,973
8,052
1,472

$

1,248
8,534
1,455

E. For the years ended December 31, 2022 and 2021, the Group’s total cash outflow for leases
were $64,813 and $66,094, respectively.
F. On February 18, 2022 and November 26, 2021, the Board of Directors of the overseas
second-tier subsidiary, Transcend Information (Shanghai), Ltd., approved a resolution for a saletransaction. Refer to Note 6(6) for details of right-of-use assets transferred to non-current assets
held for sale.
-154-

(11)Leasing arrangements - lessor
A. The Group leases various assets including land and buildings. Rental contracts are typicallymade for periods of 1 to 5 years. Lease terms are negotiated on an individual basis and containa wide range of different terms and conditions. To protect the lessor’s ownership rights on theleased assets, leased assets may not be used as security for borrowing purposes, or a residual
value guarantee was required.
B. For the years ended December 31, 2022 and 2021, the Group recognized rent income in theamount of $46,891 and $37,253, respectively, based on the operating lease agreement, which
does not include variable lease payments.
C. The maturity analysis of the lease receivables under the operating leases is as follows:

2023
2024
2025
2026
2027

December 31, 2022$
58,97037,94322,30912,664815$
132,701

2022
2023
2024
2025
2026

December 31, 2021$
38,92526,757
16,806
9,406
9,406
$
101,300(12)Investment property

2022
Buildings andstructuresLand
At January 1
Cost
Accumulated depreciation$$

At January 1
Additions
Depreciation charge
Net exchange differences$

At December 31$

At December 31
Cost
Accumulated depreciation

$
$

Total

2,268,726 $- (2,268,726 $

461,381 $128,019) (333,362 $2,730,107
128,019)2,602,088

2,268,726 $- (333,362 $
4,082
12,870) (2,602,088
4,082
12,870)2,268,726

631
325,205$631
2,593,931

466,845 $
141,640) (325,205 $2,735,571
141,640)
2,593,931$

2,268,726 $- (2,268,726 $
-155-

2021
Buildings andstructuresLand
At January 1
Cost
Accumulated depreciation

$

Total

2,268,726 $- (2,268,726 $

459,716 $116,016) (343,700 $2,728,442
116,016)
2,612,426$

2,268,726 $- (- (343,700 $2,409
12,380) (367) (

2,612,426
2,409
12,380)367)

At December 31$

2,268,726

333,362$

2,602,088

At December 31
Cost
Accumulated depreciation$

2,268,726 $- (2,268,726 $

461,381 $128,019) (333,362 $2,730,107
128,019)2,602,088$
At January 1
Additions
Depreciation charge
Net exchange differences$$

A. Rental income from the investment property and direct operating expenses arising frominvestment property are shown below:

Rental income from investment property
Direct operating expenses arising frominvestment property that generated rental
incomeDirect operating expenses arising frominvestment property that did not generaterental income$

For the years ended December 31,
2022
2021
46,891 $37,253$

12,169$11,679

$

701

$

701

B. The fair value of the investment property held by the Group were $5,047,960 and $5,702,362
as of December 31, 2022 and 2021, respectively, which were based on the transaction prices ofsimilar properties in the same area.
C. No investment property was pledged to others.

-156-

(13)Other non-current assets

Guarantee deposits paid

December 31, 2022

December 31, 2021$$

Prepayment for business facilities
Others$34,8882,912
14,391
52,191$

31,414
12,416
15,51559,345(14)Pensions
A. Defined benefit plan(a) The Company has a defined benefit pension plan in accordance with the Labor Standards
Act, covering all regular employees’ service years prior to the enforcement of the Labor
Pension Act on July 1, 2005 and service years thereafter of employees who chose tocontinue to be subject to the pension mechanism under the Act. Under the defined benefit
plan, two units are accrued for each year of service for the first 15 years and one unit foreach additional year thereafter, subject to a maximum of 45 units. Pension benefits are
based on the number of units accrued and the average monthly salaries and wages of thelast 6 months prior to retirement. The Company contributes monthly an amount equal to 2%of the employees’ monthly salaries and wages to the retirement fund deposited with the
Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.
Also, the Company would assess the balance in the aforementioned labor pension reserve
account by December 31, every year. If the account balance is insufficient to pay thepension calculated by the aforementioned method to the employees expected to qualify for
retirement in the following year, the Company will make contributions to cover the deficit
by next March.
(b) The amounts recognized in the balance sheet are as follows:

December 31, 2022
December 31, 2021
Present value of defined benefit obligations $36,584 $38,857(
29,193) (25,454)
Fair value of plan assets$
7,391 $
13,403Net defined benefit liability-157-

(c) Movements in net defined benefit liabilities are as follows:
Present value of
defined benefit
obligations
2022
Balance at January 1
Current service cost
Interest expense (income)Remeasurements:
Return on plan assets(excluding amounts included
in interest income or expense)
Change in financial
assumptions
Experience adjustments
Pension fund contribution
Balance at December 31$

Fair value ofplan assets

38,857 ($550
291 (39,698 (25,454) $196)
25,650)13,403550
95
14,048- (2,071) (2,071)(

2,630)- (2,630)((

484)
3,114) (- (36,584 ($- (2,071) (1,472) (29,193) $484)
5,185)
1,472)
7,391$

Present value of
defined benefit
obligations
2021
Balance at January 1
Current service cost
Interest expense (income)Remeasurements:
Return on plan assets(excluding amounts included
in interest income or expense)
Change in demographic
assumptions
Change in financial
assumptions
Experience adjustments
Pension fund contribution
Pension payment
Balance at December 31

Net defined
benefitliability$

Net defined
benefitliability

Fair value ofplan assets

43,239 ($608
151 (43,998 (26,678) $96)
26,774)

16,561608
55
17,224- (369) (

369)

1,941

-

1,941

(

1,836)- (1,836)((

2,080)
1,975) (- (3,166)
38,857 ($- (369) (
1,477) (3,166
25,454) $2,080)
2,344)
1,477)
13,403($(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined
benefit pension plan in accordance with the Fund’s annual investment and utilisation plan-158-

and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor
Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit indomestic or foreign financial institutions, investment in domestic or foreign listed,over-the-counter, or private placement equity securities, investment in domestic or foreign
real estate securitisation products, etc.). With regard to the utilisation of the Fund, its
minimum earnings in the annual distributions on the final financial statements shall be noless than the earnings attainable from the amounts accrued from two-year time deposits
with the interest rates offered by local banks. If the earnings is less than aforementioned
rates, government shall make payment for the deficit after being authorised by theRegulator. The Company has no right to participate in managing and operating that fundand hence the Company is unable to disclose the classification of plan assets fair value inaccordance with IAS 19 paragraph 142. The composition of fair value of plan assets as ofDecember 31, 2022 and 2021 is given in the Annual Labor Retirement Fund Utilisation
Report announced by the government.
(e) The principal actuarial assumptions used were as follows:
For the years ended December 31,
Discount rate2022
1.400%

2021
0.750%

Future salary increases rate

1.625%

1.625%

Future mortality rate was estimated based on the 6th Taiwan Standard Ordinary Experience
Mortality Table.
Because the main actuarial assumption changed, the present value of defined benefit
obligation is affected. The analysis was as follows:
Discount rate
Increase
Decrease
0.25%
0.25%
December 31, 2022
Effect on present value of
defined benefit obligation
December 31, 2021
Effect on present value of
defined benefit obligation

Future salary increases
Increase
Decrease
0.25%
0.25%

($

1,023) $1,065$

1,038 ($

1,002)($

1,158) $1,208$

1,170 ($

1,127)The sensitivity analysis above is based on one assumption which changed while the otherconditions remain unchanged. In practice, more than one assumption may change all at
once. The method of analysing sensitivity and the method of calculating net pension
liability in the balance sheet are the same.
-159-

The methods and types of assumptions used in preparing the sensitivity analysis did notchange compared to the previous period.
(f) Expected contributions to the defined benefit pension plan of the Company for the year
ending December 31, 2023 amount to $1,476.
(g) As of December 31, 2022, the weighted average duration of the retirement plan is 11.73
years.
B. Defined contribution plans(a) Effective July 1, 2005, the Company has established a defined contribution pension plan(the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employeeswith R.O.C. nationality. Under the New Plan, the Company contributes monthly an amountbased on 6% of the employees’ monthly salaries and wages to the employees’ individual
pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly
or in lump sum upon termination of employment.
(b) Transcend Shanghai, Transtech Shanghai and Transcend Hong Kong have defined
contribution plans. Monthly contributions to an independent fund administered by thegovernment in accordance with the pension regulations in the People’s Republic of China(PRC) are based on a certain percentage of employees' monthly salaries and wages, ranging
from 12.5% to 20%. Other than the monthly contributions, the Group has no further
obligations.
(c) Transcend Japan, Transcend Korea, Transcend USA, Transcend Europe and Transcend
Germany have defined contribution plans. Monthly contributions are based on a certain
percentage of employees’ monthly salaries and wages and are recognized as pension costs
accordingly. Other than the monthly contributions, the Group has no further obligations.
(d) The pension costs under the defined contribution pension plans of the Group for the years
ended December 31, 2022 and 2021 were $40,500 and $41,055, respectively.
(15)Share capital
As of December 31, 2022, the Company’s authorized capital was $5,000,000, consisting of 500
million shares of ordinary stock (including 25 million shares reserved for employee stock options),
and the paid-in capital was $4,290,617 with par value of $10 per share. All proceeds from sharesissued have been collected. The Company’s ordinary shares outstanding at the beginning and at theend of the year were 429,062 thousand shares for the years ended December 31, 2022 and 2021.
(16)Capital surplus
Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of parvalue on issuance of common stocks and donations can be used to cover accumulated deficit or toissue new stocks or cash to shareholders in proportion to their share ownership, provided that the-160-Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requiresthat the amount of capital surplus to be capitalized mentioned above should not exceed 10% of thepaid-in capital each year. Capital surplus shall not be used to cover accumulated deficit unless thelegal reserve is insufficient.
(17)Retained earnings
A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any,
shall first be used to pay all taxes and to offset prior years’ operating losses and then 10% of
the remaining amount shall be set aside as legal reserve. The Company shall also set aside
special reserve in accordance with the regulations. On the premise that there is no effect on the
Company’s normal operations and no violation of regulations, the Company shall reserve
certain amount for maintaining stability of dividends. The remainder, if any, is the distributableearnings to be appropriated as resolved by stockholders at the stockholders’ meeting. The
Board of Directors is authorized by the shareholders to resolve the appropriation of cash
dividends and cash payment from capital surplus by a resolution adopted by a majority vote atits meeting attended by two-thirds of the total number of directors, which will then be reported
to the shareholders.
B. The Company distributes dividends taking into consideration the Company’s economic
environment, growth phases, future demands for funds, long-term financial planning and the
cash flow needs of shareholders. Cash dividends shall account for at least 5% of the total
dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders inproportion to their share ownership, the legal reserve shall not be used for any other purpose.
The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to theirshare ownership is permitted, provided that the distribution of the reserve is limited to the
portion in excess of 25% of the Company’s paid-in capital.
D. In accordance with the regulations, the Company shall set aside special reserve from the debit
balance on other equity items at the balance sheet date before distributing earnings. When debit
balance on other equity items is reversed subsequently, the reversed amount could be includedin the distributable earnings.
E.(a) The appropriations of earnings and cash payment from capital surplus for the years ended
December 31, 2021 and 2020 have been resolved at the shareholders’ meeting on June 17,2022 and August 26, 2021, respectively. Details are summarized below:-161-

Legal reserve
Appropriation for(reversal of) special
reserve

For the year ended
December 31, 2021
Dividends per
Amountshare (in dollars)$
254,464

Cash dividends$

73,2702,231,121
2,558,855

(
$

$

5.20
$
Cash payment
per share(in dollars)

AmountCash payment from
capital surplus

For the year ended
December 31, 2020
Dividends per
Amountshare (in dollars)$
119,625

343,249$

0.80

13,658)1,094,107 $
1,200,074

Cash payment
per share(in dollars)

Amount$214,531

2.55

$

0.50

Actual distribution of retained earnings for 2021 and 2020 was in agreement with theamounts resolved by the Board of Directors and shareholders.
(b) The appropriations of earnings and cash payment from capital surplus for the year ended
December 31, 2022 as proposed by the Board of Directors on March 2, 2023 are as follows:
For the year ended December 31, 2022
Dividends per share
Amount(in dollars)$
245,726
167,3032,059,496 $
4.80$
2,472,525

Legal reserve
Special reserve
Cash dividends$

Cash payment from capital surplus

Amount343,249

Cash payment
per share (in dollars)$

0.80

As of March 2, 2023, the above appropriations of 2022 earnings have not yet been resolvedby the shareholders.

-162-

(18)Other equity items

At January 1
Revaluation adjustment
Revaluation transferred
to retained earnings
Currency translationdifferences
Effect from income tax
At December 31

At January 1
Revaluation adjustment
Revaluation transferred
to retained earnings
Currency translationdifferences
Effect from income tax
At December 31

$
(

($

$
(

2022
Exchangedifferences
Unrealized
on translation ofgain or loss
foreign financial
on valuation
statements
7,417 ($
197,932) ($170,069)
- (
2,053

-

2,053

- (
160,599) ($892
178) (
197,218) ($

892
178)
357,817)

2021
Exchangedifferences
Unrealized
on translation ofgain or loss
foreign financial
on valuation
statements
4,395 ($
121,639) ($11,826-

Total
117,244)
11,8268,804)$

Total
190,515)
170,069)- (7,417 ($

- (8,804)

95,365) (19,072
197,932) ($95,365)
19,072
190,515)(19)Operating revenue$

Sales revenue-163-

For the years ended December 31,
2022
2021
12,122,350 $
14,314,815

A. Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods at a point in time in the following
geographical regions:
For the year ended
December 31, 2022
Revenue from externalcustomer contracts

Electronic products
America
EuropeTaiwanAsia$ 2,803,950$ 3,805,341$ 2,038,051$ 2,741,912

Others$733,096

Total$ 12,122,350

Electronic products
For the year ended
December 31, 2021
Revenue from externalcustomer contracts

TaiwanAsia

America

Europe$ 3,400,049$ 5,221,283$ 1,759,042$ 3,155,301

Others$779,140

Total$ 14,314,815

B. Contract assets and liabilities
The Group has no revenue-related contract assets and liabilities.
(20)Interest income

Interest income from bank deposits
Interest income from financial assets measured
at amortised cost
Other interest income$$

For the years ended December 31,
2022
2021
23,550 $1,467
87,9293,447
114,926$

24,813
52,837
79,117(21)Other income

Rental income
Dividend income

$
$

-164-

For the years ended December 31,
2022
2021
46,891 $37,25335,592
6,787
82,483 $44,040(22)Other gains and losses(Loss) gain on disposal of property, plant andequipment
Net currency exchange gain (loss)
Net (loss) gain on financial assets and liabilities atfair value through profit or loss
Gain on disposal of non-current assets held for
sale
Others($($For the years ended December 31,
2022
2021
448) $

12

320,239 (

14,506)

8,271)

84,872

1,324,180
8,136 (
1,643,836 $

8,017)
62,361(23)Expenses by nature

Wages and salaries
Labor and health insurance fees
Pension costs
Other personnel expenses
Depreciation charges (including investment
property and right-of-use assets)$

For the years ended December 31,
2022
2021
1,127,443 $
1,167,733
120,044
122,00241,14541,71854,91453,910
194,624

253,806

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profitof the current year, after covering accumulated losses, shall be distributed as employees’
compensation and directors’ remuneration. The ratio shall not be lower than 1% for employees’
compensation and shall not be higher than 0.2% for directors’ remuneration.
B. For the years ended December 31, 2022 and 2021, employees’ compensation were accrued at$31,729 and $32,691, respectively; while directors’ remuneration were accrued at $0 and$4,577, respectively. The aforementioned amounts were recognized in salary expenses.
C. The employees’ compensation and directors’ remuneration were estimated and accrued basedon 1% and 0% of distributable profit of current period for the year ended December 31, 2022.
The employees’ compensation and directors’ remuneration resolved by the Board of Directors
were $30,987 and $2,300, respectively, and the employees’ compensation will be distributed in
the form of cash.
D. The difference between employees’ compensation and directors’ remuneration as resolved by
the Board of Directors and the amounts recognized in the 2021 financial statements by $1,149
and $1,377, respectively, have been adjusted in profit or loss for 2022.
-165-

E. Information about employees’ compensation and directors’ remuneration of the Company asapproved at the meeting of Board of Directors and resolved by the stockholders at their meeting
will be posted in the “Market Observation Post System” at the website of the Taiwan Stock
Exchange.
(24)Income tax
A. Income tax expense(a) Components of income tax expense:

For the years ended December 31,
2022
2021

A
Current income tax:
Current tax on profits for the year
Prior year income tax overestimation
Total current income tax
Deferred income tax:
Origination and reversal of temporary
differences
Total deferred income tax$($

Income tax expense

758,410 $13,543) (744,867

603,473
10,386)
593,087

157,066
157,066
901,933

2,273
2,273
595,360$(b) The income tax relating to components of other comprehensive income is as follows:

For the years ended December 31,
2022
2021
Financial statements translationdifferences of foreign operations$

178 ($

19,072)

B. Reconciliation between income tax expense and accounting profit

Income tax calculated by applying statutory
rate to the profit before tax
Effects from tax exemption and items
disallowed by tax regulation
Changes in assessment of realizability ofdeferred income tax assets
Prior year income tax overestimation
Effect from investment tax credits
Withholding tax in other countries$(

6,458) (33,620)(((64,893)
13,543) (1,990) (7,675
901,933 $10,386)659)
595,360$

Income tax expense-166-

For the years ended December 31,
2022
2021
981,142 $
640,025

C. Amounts of deferred income tax assets or liabilities as a result of temporary differences are as
follows:
2022

At January 1
Deferred income tax assets$
Amount of allowance for bad debts
that exceed the limit for tax purpose
Pension provision amount in excess
of appropriation amountRoyalty fees
Accrued hard drive recycling fees
Unused compensated absences
Unrealized sales discounts andallowances
Unrealized gross profit from sales
Unrealized loss on market value
decline and obsolete andslow-moving inventories
Financial statements translationdifferences of foreign operations
Others$
Total
Deferred income tax liabilities
Unrealized exchange gain($
Net gain on investment accounted forusing equity method((
Others($
Total

Recognized in
profit or loss

350 ($

Recognized inothercomprehensive
income68) $-At December 31$

282

4,974 (
2,171 (
1,794 (
1,165

165)
2,171)
1,093)
581

-

4,809
701
1,746

9,536
2,152 (

6,507
1,165)-

16,043987

10,562

86,913-

97,475

11,065
3,586
47,355

$

- (
1,258
90,597 ($178)
178) $

10,887
4,844
137,774929) ($

22,098) $- ($23,027)

127,762) (93)
128,784) ($225,570)5
247,663) $

- (
- (
- ($

353,332)
88)
376,447)

-167-

2021

At January 1
Deferred income tax assets$
Amount of allowance for bad debts
that exceed the limit for tax purpose
Pension provision amount in excess
of appropriation amountRoyalty fees
Accrued hard drive recycling fees
Unused compensated absences
Unrealized sales discounts andallowances
Unrealized gross profit from sales
Unrealized loss on market value
decline and obsolete andslow-moving inventories
Financial statements translationdifferences of foreign operations
Others$
Total
Deferred income tax liabilities
Unrealized exchange gain($
Financial statements translationdifferences of foreign operations(
Net gain on investment accounted forusing equity method((
Others($
Total

Recognized inothercomprehensive
incomeRecognized in
profit or loss

At December 31

2,282 ($

1,932) $-5,137 (
4,342 (
1,336 (

163)
2,171)
1,794
171)

-

4,974
2,171
1,794
1,165

16,108 (2,692 (

6,572)
540)

-

9,536
2,152

7,092

3,470

-

10,562

2,483
41,472 ($

1,103
5,182) $11,065
11,065$

11,065
3,586
47,3552,774) $

1,845

- ($

929)

8,007)
128,821)98)
139,700) $

$

1,059
5
2,909

$

8,007

$

- (
- (
8,007 ($

350

127,762)93)
128,784)

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

-168-

(25)Earnings per share
For the year ended December 31, 2022
Weighted-averagecommon shares
Earnings
outstanding
per share
Profit after tax(in thousands)(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
Assumed conversion of all
dilutive potential ordinary
sharesEmployees’ compensation
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary
shares$2,454,344

429,062$2,454,344

429,062-554

2,454,344

429,616

$

$

5.72

$

5.71

For the year ended December 31, 2021
Weighted-averagecommon shares
Earnings
outstanding
per share
Profit after tax(in thousands)(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
Assumed conversion of all
dilutive potential ordinary
sharesEmployees’ compensation
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary
shares$2,533,294

429,062$2,533,294

429,062-485

2,533,294

429,547

$

-169-

$

5.90

$

5.90

(26)Supplemental cash flow information
Investing activities with partial cash payments

Purchase of property, plant and equipment
Less: Transfers from prepayment for businessfacilities$($

Cash paid during the year

For the years ended December 31,
2022
2021
50,741 $
15,334
12,416)38,325 $15,334

7. RELATED PARTY TRANSACTIONS(1)Names of related parties and relationshipNames of related parties

Relationship with the Group

Taiwan IC Packaging Corporation
Won Chin Investment Inc. (Won Chin)
Cheng Chuan Technology Development Inc.
(Cheng Chuan)

Associate accounted for using equity method
Other related party
Other related party(2)Significant transactions and balances with related parties
A. Operating revenue

For the years ended December 31,
2022
2021
Sales of goods
Associates accounted for using the equity
method

$

1,309

$

1,393

The sales prices charged to related parties are approximate to those charged to third parties. The
credit term to Taiwan IC Packaging Corporation is 30 days after receipt of goods. The credit
term to third parties is 30 to 60 days after monthly billings.
B. Purchases

For the years ended December 31,
2022
2021
Purchases of goods
Associates accounted for using the equity
method$221,258$

235,161

The purchase prices charged by related parties are approximate to those charged by third parties.
The payment term from Taiwan IC Packaging Corporation is 30 days after monthly billings. The
payment term from third parties is 30 to 45 days after monthly billings.
-170-

C. Payables to related parties

Accounts payable:
Associates accounted for using equity method

December 31, 2022

December 31, 2021$$

27,442

52,241The payables to related parties arise mainly from purchase transactions and are due 30 days after
the date of purchase. The payables bear no interest.
D. Other payables
Other payables:
Associates accounted forusing equity method

December 31, 2022

December 31, 2021

$

$

4

-

Other payables to related parties arise mainly from miscellaneous purchases. The payables bearno interest.
E. Leasing arrangements - lessee
The Company renewed a land lease contract with its related party, Won Chin and Cheng Chuan,with a lease term of 5 years from June 12, 2022 to June 11, 2027. The annual rental payment is$38,484 (excluding tax), which was determined based on the appraisal results of YungchengReal Estate Appraisers Firm and CCIS Real Estate Joint Appraisers Firm and renewed at $1,350
in dollar per square feet/month (tax included) after having a three-party negotiation. Rent is paidon the contract date and becomes payable on the same date each following year until the end of
the lease. As of December 31, 2022 and 2021, the balance of related right-of-use assets
amounted to $165,858 and $15,263 while lease liabilities amounted to $149,825 and $0,
respectively.
(3)Key management compensation
For the years ended December 31,
2022$

Salaries and other employee benefits

2021
68,967$44,3008. PLEDGED ASSETSThe Group’s assets pledged as collateral are as follows:Book value
Pledged assets
Property, plant andequipment

December 31, 2022$
121,700

December 31, 2021
Pledge purpose$
127,675 Collateral for general credit
limit granted by financial
institutions-171-

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACTCOMMITMENTS
As of December 31, 2022, except for the provision of endorsements and guarantees mentioned in Note13(1) B, there are no other significant commitments.
10. SIGNIFICANT DISASTER LOSS
None.
11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
Information on distribution of 2022 earnings and cash dividends from capital surplus is provided in
Note 6(17) E(b).
12. OTHERS(1)Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue asa going concern in order to provide returns for shareholders and to maintain an optimal capital
structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue newshares or sell assets to reduce debt. The Group’s own funds are currently sufficient, daily
operations can create stable cash inflows, and there are no significant capital expenditure plans inthe short term. Except for obtaining loans to reduce the exchange rate exposure, the Group has
sufficient funds to cover its own needs. Debt financing is not necessary.
(2)Financial instruments
A. Financial instruments by category-172-

Financial assets
Financial assets mandatorily measured atfair value through profit or loss
Financial assets at fair value through othercomprehensive income
Financial assets at amortised cost
Cash and cash equivalents
Financial assets at amortised cost
Notes receivable
Accounts receivable
Other receivables
Refundable deposits

December 31, 2022

December 31, 2021$$$
Financial liabilities
Financial liabilities at amortised costAccounts payable (including related parties)
Other payables$$$

Lease liabilities

51,463

1,618,194

524,939

629,576

3,187,312
8,611,357
867
1,217,936
77,62634,88813,706,388

2,018,106
5,567,177
2,499
1,622,484
108,850
31,414
11,598,300

500,119
271,948
772,067
180,768$$$$

1,417,076
286,168
1,703,244
42,950

B. Financial risk management policies
Risk management is carried out by a central treasury department (Group treasury) underpolicies approved by the Board of Directors. Group treasury identifies, evaluates and hedges
financial risks in close cooperation with the Group’s operating units. The Board provides
written principles for overall risk management, as well as written policies covering specificareas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative
financial instruments and non-derivative financial instruments, and investment of excess
liquidity.
C. Significant financial risks and degrees of financial risks(a) Market risk
Foreign exchange riski.

The Group operates internationally and is exposed to exchange rate risk arising fromthe transactions of the Company and its subsidiaries used in various functional
currency, primarily with respect to the USD. Exchange rate risk arises from futurecommercial transactions and recognized assets and liabilities.

ii.

The Group’s businesses involve some non-functional currency operations (theCompany’s functional currency: NTD; the subsidiaries’ functional currencies: JPY,
KRW, USD, EUR, GBP and RMB, etc.). The information on assets and liabilities-173-denominated in foreign currencies whose values would be materially affected by theexchange rate fluctuations is as follows:

Financial assets

Financial liabilities

Financial assets

Financial liabilities

Foreigncurrency
USD：NTDRMB：NTD
EUR：NTD
JPY：NTD
KRW：NTD
USD：EUR
GBP：EUR
USD：NTDRMB：NTD
Foreigncurrency
USD：NTDRMB：NTD
EUR：NTD
JPY：NTD
GBP：EUR
USD：EUR
USD：NTD

December 31, 2022
Foreign currency
amountExchange rate$
254,448
30.71
23,994
4.408
5,372
32.72
474,455
0.2324
1,728,885
0.0246
5,905
0.93851,950
1.13$
13,05230.71
97,981
4.4080December 31, 2021
Foreign currency
amountExchange rate$
104,11227.68
28,260
4.344
1,492
31.32
90,3340.241
1,887
1.19091,712
0.8838$41,90027.68

Book value$ 7,814,098
105,766
175,772
110,263
42,531
181,343
72,326$400,827
431,900

Book value$ 2,881,820
122,761
46,72921,72570,38547,388$ 1,159,792

iii.

The information on total exchange (loss) gain, including realized and unrealized,
arising from significant foreign exchange variation on the monetary items held by theGroup for the years ended December 31, 2022 and 2021 is provided in Note 6(22).

iv.

Sensitivity analysis relating to foreign exchange rate risks is primarily for financial
reporting period-end date of foreign currency monetary item. If the New Taiwan dollar
exchange rate to the U.S. dollar increases or decreases by 1%, the Group’s net income
will decrease or increase by $74,133 and $17,220 for the years ended December 31,
2022 and 2021, respectively.

Price riski.

The Group is exposed to equity securities price risk because of investments held by theGroup and classified on the balance sheet as financial assets at fair value through profit
or loss and other comprehensive income. The Group is not exposed to commodity pricerisk. To manage its price risk arising from investments in equity securities, the Group
diversifies its portfolio.
-174-

ii.

The Group’s investments in listed and unlisted equity securities and financial
instruments by the domestic companies. The prices of equity securities would change
due to the change of the future value of investee companies. If the prices of theseequity securities had increased/decreased by 1% with all other variables held constant,post-tax profit for the years ended December 31, 2022 and 2021 would haveincreased/decreased by $515 and $16,182, respectively, as a result of gains/losses on
equity securities classified as at fair value through profit or loss. Other components ofequity would have increased/decreased by $5,249 and $6,296, respectively, as a resultof other comprehensive income classified as equity investment at fair value throughother comprehensive income.

Cash flow and fair value interest rate riski.

The Group’s principal interest-bearing assets are cash and cash equivalents andfinancial assets at amortised cost. Cash and cash equivalents are due within twelve
months. Financial assets at amortised cost are maintained at fixed rates. Therefore, it isassessed that there is no significant cash flow interest rate risk.

ii.

The Group has not used any financial instruments to hedge its interest rate risk.

(b) Credit riski.

Credit risk refers to the risk of financial loss to the Group arising from default by theclients or counterparties of financial instruments on the contract obligations. The main
factor is that counterparties could not repay in full the receivables based on the agreed
terms.

ii.

The Group manages its credit risk taking into consideration the entire group’s concern.
According to the Group’s credit policy, each local entity in the Group is responsible formanaging and analyzing the credit risk for each of their new clients before standard
payment and delivery terms and conditions are offered. To control internal risk, theGroup assesses the credit quality of the customers, taking into account their financial
position, past experience and other factors. Individual risk limits are set based oninternal or external ratings in accordance with limits set by the Board of Directors. The
utilisation of credit limits is regularly monitored.

iii. The Group determines that the default occurs when the contract payments are past due
over 180 days.
iv. If the contract payments were past due over 30 days based on the terms, there has beena significant increase in credit risk on that instrument since initial recognition.
v.

For details of credit risk in relation to accounts receivable and notes receivable, refer toNote 6(4).

-175-

(c) Liquidity riski.

Cash flow forecasting is performed in the operating entities of the Group andaggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s
liquidity requirements to ensure it has sufficient cash to meet operational needs.

ii.

Surplus cash held by the operating entities over and above balance required forworking capital management are transferred to the Group treasury. Group treasury
invests surplus cash in interest bearing current accounts, time deposits and monetaryfunds, choosing instruments with appropriate maturities or sufficient liquidity toprovide sufficient headroom as determined by the abovementioned forecasts. As at
December 31, 2022 and 2021, the Group held money market position of $11,798,669
and $9,091,878, respectively, that are expected to readily generate cash inflows for
managing liquidity risk.

iii. The Group’s non-derivative financial liabilities are analysed based on the remaining
period at the balance sheet date to the contractual maturity date and all the Group’s
financial liabilities expire within one year.
(3)Fair value information
A. The different levels that the inputs to valuation techniques are used to measure fair value offinancial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that theentity can access at the measurement date. A market is regarded as active where amarket in which transactions for the asset or liability take place with sufficientfrequency and volume to provide pricing information on an ongoing basis. The fairvalue of the Group’s investment in listed stocks and beneficiary certificates is
included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for theasset or liability, either directly or indirectly. The fair value of the Group’s
investment in non-hedging derivatives is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s
investment in equity investment without active market, financial products andinvestment property is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(12).
C. Financial instruments not measured at fair value
Except for those listed in the table below, the carrying amounts of cash and cash equivalents, financial
assets at amortised cost, notes receivable, accounts receivable, other receivables, accounts payable(including related parties) and other payables are approximate to their fair values.
-176-

D. The related information on financial and non-financial instruments measured at fair value by
level on the basis of the nature, characteristics and risks of the assets and liabilities are as
follows:

December 31, 2022
AssetsRecurring fair value measurements
Financial assets at fair value throughprofit or loss
Beneficiary certificates
Financial assets at fair value throughother comprehensive income
Equity securities
December 31, 2021
AssetsRecurring fair value measurements
Financial assets at fair value throughprofit or loss
Beneficiary certificates
Financial assets at fair value throughother comprehensive income
Equity securities

Level 1$

51,463$523,814575,277

Level 2

$

-

$

-

Level 1

$ 1,618,194

628,451$ 2,246,645

Level 3

Total

$

-

$

1,125
1,125

Level 2

Level 3

$

-

$

-

$

51,463$524,939
576,402
Total

$

-

$ 1,618,194

$

1,125
1,125

629,576$ 2,247,770

E. The fair value of financial instruments traded in active markets is based on quoted market
prices at the balance sheet date. A market is regarded as active if quoted prices are readily andregularly available from an exchange, dealer, broker, industry group, pricing service, or
regulatory agency, and those prices represent actual and regularly occurring market transactions
on an arm’s length basis. The quoted market price used for financial assets held by the Group is
the closing price. These instruments are included in Level 1. Instruments included in Level 1
comprise primarily listed stocks classified as financial assets at fair value through othercomprehensive income and beneficiary certificates classified as financial assets at fair value
through profit or loss.
F. For the years ended December 31, 2022 and 2021, there were no transfers between Level 1 andLevel 2.
G. If one or more of the significant inputs is not based on observable market data, the instrument
is included in level 3.
H. The financial products purchased for the years ended December 31, 2022 and 2021 werecategorised as Level 3.
I. Finance segment is in charge of valuation procedures for fair value measurements being-177-categorised within Level 3, which is to verify independent fair value of financial instruments.
Such assessment is to ensure the valuation results are reasonable by applying independent
information to make results close to current market conditions and frequently review the fairvalue.
J. The qualitative information of significant unobservable inputs to valuation model used in Level
3 fair value measurement is as follows: financial products are income investments, and thejudgements of their valuation technique and significant unobservable inputs are based on the
cash flow of individual contract.
13. SUPPLEMENTARY DISCLOSURES(1)Significant transactions information
A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates
and joint ventures): Refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million
or 20% of the Company’s paid-in capital: Refer to table 3.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Refer totable 4.
G. Purchases or sales of goods from or to relate parties reaching NT$100 million or 20% of theCompany’s paid-in capital or more: Refer to table 5.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more:
Refer to table 6.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Refer to table 7.
(2)Information on investees
Names, locations and other information of investee companies (not including investees in
Mainland China):Refer to table 8.
(3)Information on investments in Mainland China
A. Basic information: Refer to table 9.
B. Significant transactions, either directly or indirectly through a third area, with investee
companies in the Mainland Area: Refer to table 7.
(4)Major shareholders information
Major shareholders information: Refer to table 10.
-178-14. SEGMENT INFORMATION(1)General information
The Group operates business only in a single industry. The Chairman of the Board of Directors
who allocates resources and assesses performance of the Group as a whole, has identified that theGroup has only one reportable operating segment.
(2)Segment information
The segment information provided to the Chief Operating Decision-Maker for the reportablesegments is as follows:$

Segment revenue
Segment income$

For the years ended December 31,
2022
2021
12,122,350 $
14,314,815
2,454,344$

2,533,294(3)Reconciliation for segment income (loss)
Sales between segments are carried out at arm’s length. The revenue from external customers
reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in
the statement of comprehensive income.
(4)Information on products and services
All external customer revenue comes from sale of electronic products. Refer to Note 6(19)A for
details.
(5)Geographical information
For details of geographical information of the Group’s revenue, refer to Note 6(19)A. The
information on the Group’s non-current assets is as follows:

December 31, 2022
Non-current assets$
4,127,633
190,780
59,82844,443$
4,422,684

TaiwanAsia
America
Europe
Total(6)Major customer information
None.

-179-

December 31, 2021
Non-current assets$
4,052,455
726,026
64,56644,429$4,887,476

T ranscend Information, Inc. and Subsidiaries
Provision of endorsements and guarantees to others
For the year ended December 31, 2022
T able 1

Expressed in thousands of NT D
(Except as otherwise indicated)
Maximum

Ratio of

Party being

Limit onoutstanding

Outstanding

endorsed/guaranteed

endorsements/

endorsement/

endorsement/

Amount ofRelationship withguarantees

guarantee

guarantee

Actualthe endorser/

provided for aamount as ofamount at

amount drawn

guarantees

Endorser/Company

guarantor

single party

December 31,

December 31,

down

secured withguarantor

name(Note 2)

(Note 3)2022 (Note 4)2022 (Note 5)(Note 6)collateral0

T ranscend
T aiwan

T ranscend
Japan Inc.

2

$ 3,910,107(JPY2,000,000)(In thousands)$

464,800$

Ceiling on total

endorsements/ guarantee amount to

Number486,400

endorsements/ Provision ofendorsement/(Note 1)$

Provision of

accumulated-

amount ofparentguarantees by

guarantees to

net asset value ofendorsements

company tosubsidiary to

the party inthe endorser//guarantees

subsidiaryparentMainlandguarantor company provided (Note 7)(Note 8)company

China

Footnote

2

Y

-

-

-

-

$

7,820,214(JPY2,000,000)(In thousands)

Note 1: T he numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:(a) T he Company is ‘0’.
(b) T he subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:(a) Having business relationship(b) T he endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(c) T he endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
(d) T he endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.
(e) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(f) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(g) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.
Note 3: Not exceeding 20% of the Company’s net asset value. ($19,550,536*20%=$3,910,107)
Note 4: T he maximum outstanding endorsement/guarantee amount during and as of December 31, 2022 is JPY$2,000,000 (In thousands).
Note 5: T he amount was approved by the Board of Directors.
Note 6: T he actual amount of endorsement drawn down is $0.
Note 7: Not exceeding 40% of the Company’s net asset value. ($19,550,536*40%=$7,820,214)
Note 8: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary.

-180-

Provision ofguarantees by endorsements/ endorsements/

T ranscend Information, Inc. and Subsidiaries
Holding of marketable securities at the end of t he period (not including subsidiaries, associat es and joint vent ures)
December 31, 2022
T able 2

Expressed in t housands of NT D
(Except as otherwise indicated)
As of December 31, 2022
Market able securit ies

Relationship with the

General

Number ofBook value

Ownership(Not e 1)

securities issuer (Note 2)

ledger accountshares(Note 3)(%)

T rendForce Corporat ion-

Financial assets at fair value
through other comprehensive
income - non-current

Fubon Financial Holding Co., Ltd.
Preferred Shares B-"

T aiwan Semiconductor
Manufacturing Co., Ltd.

-"MediaT ek Inc.

-

Fubon Financial Holding Co., Ltd.

-

Securit ies held by
T ranscend T aiwan

Footnot e
Fair value(Note 4)

StocksCathay Financial Holding Co. Ltd.

-

Yuanta Financial Holding Co., Ltd.

-60,816

$

1,125

1

1,758,000

101,085

420,000

$

1,125

-

-

101,085-

188,370-

188,370-

40,00025,000-25,000-1,120,366

63,077-

63,077-

216,323

8,653

-

8,653

-

119,480

2,593

-

2,593

-

100,000

2,210

-

2,210

262,000

22,741-

22,741-110,085-

110,085-

51,463

-

"
"
"
"
"

CT BC Financial Holding Co., Ltd
Formosa Plastics Corporat ion-

ASUST ek Computer Inc.

-""

410,000$

524,939$

51,463

Beneficiary certificates
Yuanta T aiwan T op 50 ET F-

Financial assets at fair value
through profit or loss
- non-current

467,000-$

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’.
Note 2: Leave the column blank if the issuer of marketable securities is non-related party.
Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for themarketable securities not measured at fair value.
Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

-181-

T ranscend Informat ion, Inc. and Subsidiaries
Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital
For the year ended December 31, 2022
Table 3

Expressed in thousands of NT D
(Except as otherwise indicated)

Marketable
Investor

GeneralRelationship

Balance as at

Addition

Disposal

Balance as atwithJanuary 1, 2022

（ Note 3 ）（ Note 3 ）December 31, 2022

securities

ledgerCounterparty

the investor

Number（ Not e 1 ）account（ Not e 2 ）（ Not e 2 ）of shares

Amount110,142,508$ 1,501,948

Transcend
T aishin 1699
Financial
Information, Inc. Money Market assets at fair
Fundvalue t hroughprofit or loss current--

NumberNumberof shares

Amount-$-of shares

Selling priceBook value

110,142,508$ 1,508,314$ 1,501,948$

Gain onNumberdisposalof shares

6,366

Amount-$-Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificat es and other related derivative securities.
Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.
Note 3: Aggregate purchases and sales amount s should be calculated separately at their market values to verify whether they individually reach NT $300 million or 20% of paid-in capital or more.
Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT $10 per share, t he 20 % of paid-in capit al shall be replaced by 10% of
equity attributable to owners of the parent in the calculation.

-182-

T ranscend Information, Inc. and Subsidiaries
Disposal of real estate reaching NT $300 million or 20% of paid-in capital or more
For the year ended December 31, 2022
T able 4

Expressed in thousands of NT D
(Except as otherwise indicated)

Real estate
disposed by

Real estate

Date of theevent

Date ofacquisition

T ranscend
Information(Shanghai),Ltd.

Land use rights, buildings
and accessories of 106/17
Hill, 2nd Neighborhood,
Xidu T own, Fengxian,
Shanghai

2021/11/26

May 2005 to
December
2010"

Land use rights, buildings
and accessories of No. 300,
Lane 3111, HuanchengWest Road, Shanghai
Industrial Development
Zone, 25/6 Hill, 2Neighborhood, Xidu T own,
Fengxian District, and 25/7
Hill, 2 Neighborhood, Xidu

2022/2/18

May 2005 to
January 2014

Book value

Net transaction
amountStatus ofcollection

Gain (loss)
on disposal$

159,976$

Note 2$358,772

1,342,344

508,726

1,342,344

Counterparty

Relationship

Purpose of
disposal

Basis or reference usedin setting the price

Othercommitments

345,801 Shanghai Fengpu
Industrial Park
FengxianComprehensive
Bonded Zone
(Shanghai Minhang
Export Processing
Zone Development
Co., Ltd.)-T o cooperatewith thegovernment’s
expropriation
policyIn accordance with the
Shanghai Fengpu
Industrial Park
expropriation policy andexpropriationcompensation agreement-982,255 Shanghai Fengpu
Construction
Development Co.,Ltd.

-

Activate assets
and enhance
working capital

Note 3-Note 1: Date of the event refers to the date of the Board of Directors’ resolution.
Note 2: As of December 31, 2022, $457,854 had been collected.
Note 3: T he prices were determined in accordance with two valuation reports, amounting to RMB 391,970 thousand and RMB 385,610 thousand, respectively.

-183-

T ranscend Information, Inc. and Subsidiaries
Purchases or sales of goods from or t o related parties reaching NT $100 million or 20% of paid-in capital or more
For the year ended December 31, 2022
Table 5

Expressed in thousands of NT D
(Except as otherwise indicated)
Differences in transaction terms compared t oTransact ion
Relationship with theSalescounterparty(purchases)

Purchaser/seller

Counterpart yTranscend
Information, Inc.

T ranstech T rading(Shanghai) Co., Ltd.

Subsidiary of Memhiro"

T ranscend Japan Inc.

T he Company’s
subsidiary"

T ranscend Information
Europe B.V.

"

Sales

Amount$third party transact ions (Note)

Notes/accounts receivable (payable)

Percentage

Percentage ofof total sales

total notes/accounts(purchases)

Credit term

Unit price672,5686"

464,600

4""

Subsidiary of Memhiro"

412,950

3"

T ranscend Information
Inc.

T he Company’s
subsidiary"466,470

4"

T ranscend Korea Inc.

T he Company’s
subsidiary"309,457"

T ranscend Information
T rading GmbH

Subsidiary of Memhiro""

T ranscend Information(H.K) Ltd.

Subsidiary of Memhiro

Transcend
Information
Europe B.V.
Transcend
Information, Inc.

T ranscend Information
T rading GmbHT aiwan IC Packaging
Corporation

Credit term$

receivable (payable)

Footnote

103,7039-"

105,212

9

-

"

"

74,512

7

-

"

"

"

56,737

5

-

3

"

"

"

42,531

4-

387,584

3

"

"

"

36,0403-"

159,283

1

"

"

"

5,112

-

-

Cont rolled by the same
ultimate parent company"

100,4901830 days after
delivery"

7 to 60 days after delivery t othird parties

6,595

14

-

Associat e accounted forusing equity method(Purchase)

221,258)(4)30 days aftermonthly billings"

30 to 45 days after monthly (billings to third parties

27,442)(3)-(

120 days after No significant 30 to 60 days after monthly
monthly billings
difference billings to third parties

Balance

Note: T he Company’s sales to subsidiaries were equivalent to subsidiaries’ purchases from the Company; accordingly, the Company did not disclose t he information on subsidiaries’ purchases from the Company.

-184-

T ranscend Informat ion, Inc. and Subsidiaries
Receivables from related parties reaching NT $100 million or 20% of paid-in capital or more
For the year ended December 31, 2022
T able 6

Expressed in thousands of NT D
(Except as otherwise indicated)

Overdue receivables

Balance as at
Creditor

Counterparty

T ranscend Information, Inc. T ranscend Japan Inc.
"
T ranscend Information(Shanghai), Lt d.

Relationship

December 31,

with the counterparty

2022

T he Company’s subsidiary$

T urnover rate

Amount105,212

5.05$

Amount collected

Act ion taken--$

subsequent t o the

Allowance forbalance sheet date

doubtful accounts

4,545

-

T ranstech T rading (Shanghai) Co., Ltd.

Subsidiary of Memhiro

103,703

5.70

-

-

69,646-

T ranscend Information, Inc.

Ultimate parent company

414,212-414,212

-

-

-

-185-

T ranscend Information, Inc. and Subsidiaries
Significant inter-company transact ions during the period
For the year ended December 31, 2022
Table 7

Expressed in t housands of NT D
(Except as otherwise indicated)
T ransaction
Relationship

General ledger(Note 1)

NumberCompany nameCounterparty(Note 2)

account0

T ranscend Information, Inc.

T ranstech T rading (Shanghai) Co., Ltd.

1

Sales

"

"

T ranscend Japan Inc.

"

"

"

T ranscend Information Europe B.V.

"

"

"

Percentage of consolidated total operat ing
Amountrevenues or t otal assets (Note 3)

672,568

There is no significant
difference in unit pricefrom those to third parties.

6"464,600

"

4

"

"

412,950"

3

T ranscend Information Inc.

""

466,470"

4"

T ranscend Information T rading GmbH""387,584

"

3

"

"

T ranscend Korea Inc.

""

309,457

"

3

"

"

T ranscend Information (H.K) Ltd.

""

159,283

"

1

"

"

T ranscend Information (Shanghai), Lt d.

"

Accounts Payable

414,212)120 days aft er monthly billings

T ranscend Information Europe B.V. T ranscend Information T rading GmbH

3

Sales

100,490

T here is no significant
difference in unit pricefrom those to third parties.

1$

T ransaction t erms((

(Individual transactions not exceeding 1% of the consolidat ed total revenue and t otal assets are not disclosed.)
Note 1: T he numbers filled in for the transaction company in respect of inter-company transactions are as follows:(a) Parent company is "0".
(b) Subsidiaries were numbered from 1.
Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If t ransactions between parent company and subsidiaries
or between subsidiaries refer t o t he same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction wit h a subsidiary, then the subsidiary is not required todisclose the t ransaction; for t ransactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):(a) Parent company to subsidiary.
(b) Subsidiary t o parent company.
(c) Subsidiary t o subsidiaries.
Note 3: Regarding percentage of transaction amount to consolidated tot al operating revenues or total assets, it is computed based on period-end balance of transaction t o consolidated total assets for balance sheet accounts
and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

-186-

2)
1

T ranscend Information, Inc. and Subsidiaries
Information on investees
For t he year ended December 31, 2022
T able 8

Expressed in t housands of NT D
(Except as otherwise indicated)

Initial investment amount

Shares held as at December 31, 2022
Net profit (loss) Investment incomeof the investee

Balance as at
Investee

Location

Main business activities

for the year ended

31, 2022

December 31, 2022(%)

Book value$ 1,202,418

6,600,000

100$ 1,676,847

Wholesale of computer memory
modules and peripheral product s

89,103

89,103

6,400

100

222,111

4,004

4,004

T ranscend Information
Inc.

United States Wholesale of comput er memoryof America
modules and peripheral product s

38,592

38,592625,000100

153,808

21,452

21,452T ranscend Korea Inc.

Korea

Wholesale of computer memory
modules and peripheral product s

6,132

6,132

40,000100

62,902

4,275

4,275

T aiwan IC Packaging
Corporat ion

T aiwanPackaging of Semi-conductors

354,666

354,666

21,928,036

12.50

136,710

84,12810,300

Saffire Investment
Ltd.

Memhiro Pte Lt d.

Singapore

Investment holdings

173,702

1,156,920

8,277,609

100

1,632,726

1,174,490

1,174,490

Memhiro Pt e Ltd.

T ranscend Information
Europe B.V.

Netherlands

Wholesale of computer memory
modules and peripheral product s

1,693

1,693

100

100

234,933

4,143

4,143

T ranscend Information
T rading GmbHGermany

Wholesale of computer memory
modules and peripheral product s

2,288

2,288

-

100

122,747

5,068

5,068

T ranscend Information(H.K.) Ltd.

Hong Kong

Wholesale of computer memory
modules and peripheral product s

7,636

7,636

2,000,000

100

35,697

2,474

2,474

Saffire Investment Ltd.

B.V.I.

Investment holdings

T ranscend Japan Inc.

Japan

$

2021

Ownership

216,829

T ranscend
Information, Inc.

2022

by t he Company

ended December

Balance as at

December 31, December 31,
Investor-187-

Number of shares(loss) recognized

for the year$

1,174,872$

1,174,872

Footnote

T able 9

T ranscend Informat ion, Inc. and Subsidiaries

Expressed in t housands of NT D

Information on investments in Mainland China(Except as otherwise indicated)Year ended December 31, 2022
Amount remitted fromT aiwan to Mainland
Accumulated

China/Amount remitted

Accumulated

amountback to T aiwan for

amount of

Net incomeof remittance fromthe year ended

remitt ance(loss)

Ownership

recognizedBook value ofDecember 31, 2022

from T aiwan toof investee forheld byby the Company

investment s in

T aiwan toMain business activities

T ranscend
Manufacture and sales ofInformation
computer memory modules,(Shanghai), Ltd. storage products and disks,and lease of self-ownedbuildings
T ranstech
T rading(Shanghai) Co.,
Lt d.

Paid-in capital$

Wholesale, agent, importand export and retail ofcomputer memory modules,
storage products andcomputer components

Accumulated
amountInvestment

Mainland China

Remitted t oRemitted Mainland China as of the year ended the Company for the year ended Mainland China

methodas of January 1,

Mainlandback toDecember 31,

December 31,(direct orDecember 31,

as of December（ Note 1 ）

2022

China

T aiwan

2022

2022

indirect)2022 (Note 2)

31, 2022

Investee in
Mainland China

Investment
income (loss)

150,7872

16,3102

Investment

Ceiling onamount approved

invest ment s in$

1,134,178-(983,391) $150,787$ 1,128,705

100

16,310--16,31011,599100$

1,128,705$

11,599by the Investment Mainland China
Accumulated amount ofCommission ofremitt ance from T aiwan to

the Ministry of

Investment

Mainland China as of

Economic Affairs

Commission of

December 31, 2022$

167,097

imposed by the(MOEA)$

1,150,488

MOEA$

11,730,322

Note 1: Investment methods are classified into the following three categories; fill in t he number of category each case belongs to:(1) Direct ly invest in a company in Mainland China.
(2) T hrough investing in an existing company in the third area (Memhiro Pte Ltd.), which then invested in Mainland China.
(3) Others.
Note 2: T he gain and loss on investment recognized for the year was based on the financial st atements that were audited by R.O.C. parent company’s CPA.
Note 3: T he numbers in this table are expressed in New T aiwan Dollars.
Note 4: In June 2022, the shareholders of T ranscend Information (Shanghai), Ltd. resolved to reduce its capital from US$34.6 million to US$4.6 million, and the proceeds from capital reduction was returned to
Memhiro Pt e Ltd., Saffire Investment Ltd., and the ultimate parent company, i.e. T ranscend Information, Inc.

-188-

1,152,072

58,599of investment
incomeremitted back to
T aiwan as ofDecember 31, 2022 Footnote$

1,464,028-

Not e 4-

T ranscend Information, Inc. and Subsidiaries
Major shareholders information
December 31, 2022
Table 10

SharesName of major shareholders

Number of shares held

Shareholding ratio

Won Chin Investment Inc.

74,783,600

17.42

Wan An Technology Inc.

34,142,854

7.95

Cheng Chuan Technology Development Inc.

32,971,701

7.68

Wan Min Invest ment Inc.

29,726,397

6.92

Wan Chuan Investment Inc.

29,505,896

6.87

-189-

6.5. Financial Statements of Parent Company Only for the Years Ended December 31, 2022 and 2021,
and Independent Auditors’ Report
INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE
PWCR 22000435
To the Board of Directors and Shareholders of Transcend Information, Inc.
OpinionWe have audited the accompanying parent company only balance sheets of Transcend Information, Inc.
(the “Company”) as at December 31, 2022 and 2021, and the related parent company only statementsof comprehensive income, of changes in equity and of cash flows for the years then ended, and notes
to the parent company only financial statements, including a summary of significant accounting
policies.
In our opinion, the accompanying parent company only financial statements present fairly, in allmaterial respects, the financial position of the Company as at December 31, 2022 and 2021, and its
financial performance and its cash flows for the years then ended in accordance with the Regulations
Governing the Preparation of Financial Reports by Securities Issuers.
Basis for opinion
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of
Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic ofChina. Our responsibilities under those standards are further described in the Independent Auditors’
responsibilities for the audit of the parent company only financial statements section of our report. We
are independent of the Company in accordance with the Norm of Professional Ethics for Certified
Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities inaccordance with these requirements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the Company’s 2022 parent company only financial statements. These matters wereaddressed in the context of our audit of the parent company only financial statements as a whole and,in forming our opinion thereon, we do not provide a separate opinion on these matters.

-190-

Key audit matters for the Company’s 2022 parent company only financial statements are stated asfollows:
Valuation of inventories
Description
Refer to Notes 4(12), 5(2) and 6(5) to the parent company only financial statements for the informationon the Company’s inventory accounting policy, estimates and assumptions and allowance for inventory
valuation losses.
The percentage of the Company’s inventories to total assets is material and the Company applies
judgements and estimates in determining the net realizable value of inventories at the balance sheet
date. The Company mainly produces DRAM and flash memory. As these products have a short life
cycle and belong to a highly competitive industry, the market prices change frequently. Since theCompany’s inventories and the allowance for inventory valuation losses are material to the financial
statements, the valuation of inventories has been identified as a key audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
A. Obtained an understanding of the Company’s operations and industry. Assessed thereasonableness of the policy and procedures to recognize allowance for inventory valuation losses.
B. Obtained an understanding of the Company’s inventory control procedures. Reviewed annual
inventory count plan and observed the annual physical count of material inventory storage
location in order to assess the effectiveness of internal controls over inventory.
C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information
to assess the reasonableness of allowance for inventory valuation losses.

-191-

Estimation of allowance for sales discounts
Description
In consideration of business volume, the Company provides a variety of business incentives to specificcustomers or products, and based on that, the Company can estimate the allowance for sales discounts
monthly. Refer to Notes 4(24) and 6(4) to the parent company only financial statements for the
information on the estimation of allowance for sales discounts.
Since the contracts are numerous and the result could affect the net revenue in the parent company
only financial statements, the estimation of allowance for sales discounts has been identified as a key
audit matter.
How our audit addressed the matter
We performed the following audit procedures in respect of the above key audit matter:
A. Obtained an understanding of the Company’s operations, industry and the procedures to recognize
allowance for sales discounts.
B. Obtained an understanding of the Company’s sales procedures and interviewed management toassess the appropriateness of sales allowance contracts and internal control over estimation ofallowance.
C. Obtained the evaluation list of allowance for sales discounts, and tested material sales allowance
contracts and recalculated it to assess the reasonableness of allowance determined by theCompany.
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 Regulations Governing the Preparation of Financial
Reports by Securities Issuers and for such internal control as management determines is necessary toenable 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 Company’s ability to continue as a going concern, disclosing, as applicable, matters related togoing concern and using the going concern basis of accounting unless management either intends toliquidate the Company 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 theCompany’s financial reporting process.
-192-

Independent auditors’ 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 auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republicof 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 the Standards on Auditing of the Republic of China, we exercise
professional judgement and professional skepticism throughout the audit. We also:
A. 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 thoserisks, 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.
B. 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 Company’s internal control.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
D. 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 Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditors’ report to the related disclosures in the 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 auditors’ report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
E. Evaluate the overall presentation, structure and content of the parent company only financial
statements, including the disclosures, and whether the parent company only financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.

-193-

F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the parent company only
financial statements. We are responsible for the direction, supervision and performance of theaudit. We remain solely responsible for our audit opinion of parent company only financial
statements.
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 ininternal 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 andother 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 thatwere of most significance in the audit of the parent company only financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditors’ report unlesslaw 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 theadverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

Chen, Chin-Chang

Lin, Yi-Fan

For and on behalf of PricewaterhouseCoopers, Taiwan
March 2, 2023------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and resultsof operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions
other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit ofsuch financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic ofChina. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are notintended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic ofChina, and their applications in practice.
As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability
for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from thetranslation.
-194-

TRANSCEND INFORMATION, INC.
PARENT COMPANY ONLY BALANCE SHEETSDECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars)
Assets

December 31, 2022
AMOUNT%

Notes

December 31, 2021
AMOUNT%

Current assets
Cash and cash equivalents

6(1)Financial assets at fair value through profit or

6(2)

$

loss - current

1,812,082

9-$

1,659,848

7-

1,506,595

7

Financial assets at amortised cost - current

6(3)8,527,800

39

5,480,400

24

Notes receivable, net

6(4)

867

-

2,499

-

Accounts receivable, net

6(4)720,9733

1,137,589

5

Accounts receivable due from related parties,

7

net

423,8472

275,729

1

Other receivables

21,627-105,235-

3,069,913

14

5,614,563

25

1,270

-

1,160

-

14,578,379

67

15,783,618

69

51,463-

111,5991

524,9393

629,576

3

Investments accounted for using equity method 6(7)2,252,378

10

2,114,375

9Property, plant and equipment

6(8)1,374,912

6

1,435,144

7

Right-of-use assets

6(9) and 7

165,858

1

15,263-

Investment property, net

6(11)2,555,793

12

2,560,275

11

Deferred income tax assets

6(23)126,380

1

38,943-

Other non-current assets

6(12)31,070-41,774-

7,082,793

33

6,946,949

31

21,661,172

100

22,730,567

100

Inventories

6(5)Other current assets
Total current assets
Non-current assets
Financial assets at fair value through profit or6(2)loss - non-current
Financial assets at fair value through other6(6)comprehensive income - non-current

Total non-current assets
Total assets$(Continued)

-195-

$

TRANSCEND INFORMATION, INC.
PARENT COMPANY ONLY BALANCE SHEETSDECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars)
Liabilities and equity

December 31, 2022
AMOUNT%

Notes

December 31, 2021
AMOUNT%

Current liabilities
Accounts payable$

Accounts payable - related parties

7

Other payables
Other payables - related parties

7

Current income tax liabilities
Lease liabilities - current

7

Other current liabilities
Total current liabilities

471,7133

443,591$

1,363,844

6

2

460,5312

209,400

1

252,367

1

17,692-

17,431-

422,7742583,7143

36,662

-

-

-

3,086

-

68,268-1,604,918

8

2,746,15512

Non-current liabilities
Deferred income tax liabilities

6(23)376,4452

128,777

1

Lease liabilities - non-current

7113,163---

Other non-current liabilities

6(13)16,110-20,800-505,718

2

149,577

12,110,636

10

2,895,732

13

4,290,617

20

4,290,617

19

3,387,781

16

3,730,914

16

Legal reserve

5,057,967

23

4,803,503

21

Special reserve

190,5141

117,2441

6,981,474

32

7,083,072

31

Total non-current liabilities
Total liabilities
EquityShare capital6(14)Common stock
Capital surplus

6(15)Capital surplus
Retained earnings

6(16)Unappropriated retained earnings
Other equity interest6(17)Other equity interest(

357,817) (Total equity
Significant contingent liabilities and2) (19,550,536

90

21,661,172

100

190,515) (1)

19,834,835

87

22,730,567

100

9unrecognized contract commitments
Significant events after the balance sheet date
Total liabilities and equity

11
$

$

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

-196-

TRANSCEND INFORMATION, INC.
PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items
Notes
Operating revenue
6(18) and 7
Operating costs
6(5)(22) and 7
Gross profit
Unrealized profit from sales
Realized profit from sales
Realized gross profit
Operating expenses
6(22)Sales and marketing expenses
Administrative expenses
Research and development expenses
Expected credit impairment loss
6(4)Total operating expenses
Operating profit
Non-operating income and expenses
Interest income
6(3)(19)
Other income
6(20)Other gains and losses
6(2)(21) and 7
Finance costs
6(9)Share of profit of subsidiaries, associates 6(7)and joint ventures accounted for using theequity method
Total non-operating income andexpensesProfit before income tax
Income tax expense
6(23)Profit for the year
Other comprehensive income (loss)
Components of other comprehensive
income (loss) that will not bereclassified to profit or loss
Gains on remeasurements of defined6(13)benefit plans
Unrealized (loss) gain on financial assets 6(6)(17)
at fair value through other comprehensive
incomeShare of other comprehensive (loss)
6(7)income of associates and joint ventures
accounted for using equity method
Components of other comprehensive
income (loss) that will be reclassified to
profit or loss
Financial statements translation
6(7)(17)differences of foreign operations
Income tax related to components of other 6(17)(23)
comprehensive income that will bereclassified to profit or loss
Other comprehensive loss for the year
Total comprehensive income
Earnings per share (in dollars)
Basic earnings per share
Diluted earnings per share

6(24)

(

$

(

(
(
(

For the years ended December 31
2022
2021
AMOUNT%AMOUNT
11,386,995
100 $
13,747,158
9,278,593) (81) (10,166,903) (2,108,402
19
3,580,255
3,455)- (10,106)
10,106
16,106
2,115,053
19
3,586,255

%
100
74)
26
26

314,858) (207,177) (137,105) (659,140) (1,455,913

3) (
2) (
1) (
- (
6) (
13

340,797) (209,337) (151,458) (1,382)
702,974) (2,883,281

2)
2)
1)
5)
21

96,934
82,483217,979
1,239)

1
1
2- (77,31844,04065,281243)

1-1,214,903

10

47,282-$

1,611,060
3,066,973
612,629) (2,454,344

14
27
6) (
21 $

233,678
3,116,959
583,665) (2,533,294

1
22
4)
18

$

5,185

-

2,344

-

(

170,069) (1)

11,826

-

(

219)

-

200

-

892

- (

95,365)-

178)
164,389) (2,289,955

1) ($
20 $

19,072
61,923)2,471,371

18

(

(

(

(
($
$
$
$

5.72
5.71

$

$
$

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

-197-

5.90
5.90

TRANSCEND INFORMATION, INC.
PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITYYEARS ENDED DECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)
Capital Reserves

Common stock

Additional paid-in
capitalDonated assets
received

Net assets frommergerLegal reserve

Special reserve

Unappropriatedretained earnings

Other Equity Interest
Unrealised gains(losses) on
Financialfinancial assets atstatements
fair value throughtranslation
other
differences ofcomprehensive
foreign operations
incomeBalance at January 1, 2021

$ 4,290,617

$

$

$

$

$

$

($

Net income for the year

-

-

-

-

-

-

2,533,294

-

-

-

-

-

-

2,544

(

76,293 )11,826

-

-

-

-

-

-

2,535,838(

76,293 )11,826

Legal reserve

-

-

-

-

119,625-(

119,625 )--Cash dividends

-

-

-

-

-

-

(

1,094,107 )

-

-

-

-

-

-

13,658

-

-

-

-

-

-

-

-

-

Notes

Retained Earnings

Total equity

For the year ended December 31, 2021

Other comprehensive income (loss)

6(6)(17)

Total comprehensive income (loss)
Appropriations and distribution of 2020 earnings

3,905,963

4,278

35,1284,683,878

130,902

5,738,504

121,639 )

$

-

4,395

$ 18,672,026-

2,533,294(

61,923 )2,471,371

6(16)Reversal of special reserve-

Cash payment from capital surplus

6(16)Net loss on disposal of financial assets at fair value throughother comprehensive income

6(6)(17)

Expired unclaimed dividends recognized as capital surplus
Balance at December 31, 2021-(

214,531 )(

13,658 )

-

-

-

-

-

-

8,804

-

-

-

76

-

-

-

-

-

(

(

1,094,107 )(

214,531 )-

8,804 )--

76

$ 4,290,617$

3,691,432

$

4,354

$

35,128$4,803,503$

117,244$

7,083,072($

197,932 )

$

7,417

$ 19,834,835

Balance at January 1, 2022

$ 4,290,617$

3,691,432

$

4,354

$

35,128$4,803,503$

117,244$

7,083,072($

197,932 )

$

7,417

$ 19,834,835

Net income for the year

-

-

-

-

-

-

2,454,344

-

-

-

-

-

-

-

4,966

714

(

170,069 )

-

-

-

-

-

-

2,459,310

714(

170,069 )Legal reserve

-

-

-

-

254,464-(

254,464 )--Cash dividends

-

-

-

-

-

-

(

2,231,121 )

-

-

-

-

-

-

73,270(73,270 )

-

-

-

-

For the year ended December 31, 2022

Other comprehensive income (loss)

6(6)(17)

Total comprehensive income (loss)
Appropriations and distribution of 2021 earnings

Special reserve

6(16)Net gain on disposal of financial assets at fair value throughother comprehensive income

6(6)(17)

Balance at December 31, 2022

2,454,344(

164,389 )2,289,955

6(16)Cash payment from capital surplus

Expired unclaimed dividends recognized as capital surplus

-

-

(

343,249 )

-

-

-

-

-

-

-

-

116

-

-

-

$ 4,290,617$

3,348,183

$

4,470

$

35,128$5,057,967$

190,514

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

-198-

$

2,231,121 )(

343,249 )

-

-

-

-

2,053 )

-

2,053

-

-

-

-

116

(

(

6,981,474($

197,218 )($

160,599 )-$ 19,550,536

TRANSCEND INFORMATION, INC.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars)Year ended December 31
Notes

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax
Adjustments
Adjustments to reconcile profit (loss)
Unrealized profit from sales
Realized profit from sales
Net loss (gain) on financial assets at fair value through profit or loss
Share of profit or loss of associates and joint ventures accounted forusing the equity method
Expected credit loss
Depreciation
Interest income
Interest expense
Dividend income
Changes in assets and liabilities relating to operating activities
Changes in assets relating to operating activities
Financial assets mandatorily measured at fair value through profit orloss
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets
Changes in liabilities relating to operating activities
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Dividends received
Interest received
Income tax paid
Net cash flows provided by operating activities

$

3,455
10,106 )17,262(6(2)(21)
6(7)
(
6(4)
6(22)
6(19)
6(9)
6(6)(20)

3,066,973

1,214,903 )
154,169
96,934 )1,239
35,592 )((1,508,314
1,632
416,616
148,118 )
94,7582,544,650
110 )

(
(
(
(
(

892,131 )
16,940 )42,967 )261
65,182 )495
5,286,841
35,59285,784
613,516 )
4,794,701(($

3,116,959
10,106
16,106 )84,375 )(((47,282 )
1,382
164,70277,318 )243
6,787 )((

2,011,865
1,740 )
328,323 )
128,631
39,148 )2,539,140 )
244 )

(
(
(
(
(

231,828
9,825
45,403133 )43,696298 )
2,623,746
6,787
81,366
247,493 )2,464,406(((

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of non-current financial assets at fair value throughprofit or loss - non-current
Acquisition of financial assets at fair value through profit or loss non-current
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at amortised cost
Proceeds from disposal of non-current financial assets at fair value throughother comprehensive income
Acquisition of non-current financial assets at fair value through othercomprehensive income
Capital reduction and return of shares of investment accounted for using theequity method
Acquisition of property, plant and equipment
Acquisition of right-of-use assets
Acquisition of investment property
Increase in other non-current assets
Dividends received
Net cash flows (used in) from investing activities

41,1553,100,000
6,147,400 )(

841,021(130,785 )2,500,000
2,530,400 )

(

6(6)
6,179
(

71,611 )54,426(561,176 )6(7)6(8)(25)6(11)985,589
35,790 )692 )4,082 )
1,712 )
98,6352,029,729 )

(
(
(
(

6(7)
(

14,888 )2,409 )
14,301 )
141,488(((

CASH FLOWS FROM FINANCING ACTIVITIESCash dividends paid (including cash payment from capital surplus)
Payment of lease liabilities
Expired unclaimed dividends recognized as capital surplus
Net cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

6(16)

(
(
(
$

2,574,370 )
38,484 )116
2,612,738 )
152,234
1,659,848
1,812,082

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

-199-

(
(
(
$

1,308,638 )
37,058 )76
1,345,620 )
1,260,274
399,574
1,659,848

TRANSCEND INFORMAT ION, INC.
NOTES TO THE PARENT COMPANY ONLY FINANC IAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION
Transcend Information, Inc. (the “Company”) was incorporated under the provisions of the Company
Law of the Republic of China (R.O.C.) in August 1989. The main activities of the Company are
manufacturing, processing and sales of computer software and hardware, peripheral equipment and othercomputer components. The Securities and Futures Commission of the Republic of China had approved
the Company’s shares to be listed on the Taiwan Stock Exchange and the shares started trading on May 3,
2001.
2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND
PROCEDURES FOR AUTHORIZATION
These parent company only financial statements were authorized for issuance by the Board of Directors
on March 2, 2023.
3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS(1) Effect of the adoption of new issuances of or amendments to International Financial ReportingStandards (“IFRS”) that came into effect as endorsed by the Financial Supervisory Commission(“FSC”)New standards, interpretations and amendments endorsed by the FSC and became effective from2022 are as follows:

New Standards, Interpretations and Amendments
Amendments to IFRS 3, ‘Reference to the conceptual framework’
Amendments to IAS 16, ‘Property, plant and equipment: proceeds before
intended use’
Amendments to IAS 37, ‘Onerous contracts - cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018 - 2020

Effective date byInternational
AccountingStandards Board
January 1, 2022
January 1, 2022
January 1, 2022
January 1, 2022

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

~200~

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by
the Company
New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as
follows:

New Standards, Interpretations and Amendments
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arisingfrom a single transaction’

Effective date byInternational
AccountingStandards Board
January 1, 2023
January 1, 2023
January 1, 2023

The above standards and interpretations have no significant impact to the Company’s financial
condition and financial performance based on the Company’s assessment.
(3) IFRSs issued by IASB but not yet endorsed by the FSC
New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as
endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between
an investor and its associate or joint venture’

Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 comparative information’
Amendments to IAS 1, ‘Classification of liabilities as current or non-current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’

Effective date byInternational
AccountingStandards Board
To be determinedby International
AccountingStandards Board
January 1, 2024
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2024
January 1, 2024

The above standards and interpretations have no significant impact to the Company’s financial
condition and financial performance based on the Company’s assessment.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies applied in the preparation of these parent company only financial
statements are set out below. These policies have been consistently applied to all the periods presented,
unless otherwise stated.
~201~

(1) Compliance statement
The parent company only financial statements of the Company have been prepared in accordancewith the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
(2) Basis of preparation
A. Except for the following items, the parent company only financial statements have been prepared
under the historical cost convention:(a) Financial assets at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets lesspresent value of defined benefit obligations.
B. The preparation of financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Company’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to these parent company only financial
statements are disclosed in Note 5.
(3) Foreign currency translation
These parent company only financial statements are presented in New Taiwan dollars, which is theCompany’s functional and presentation currency.
A. Foreign currency transactions and balances(a) Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of such transactions arerecognized in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are
retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences
arising upon re-translation at the balance sheet date are recognized in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value
through profit or loss are re-translated at the exchange rates prevailing at the balance sheet
date; their translation differences are recognized in profit or loss. Non-monetary assets andliabilities denominated in foreign currencies held at fair value through other comprehensive
income are re-translated at the exchange rates prevailing at the balance sheet date; theirtranslation differences are recognized in other comprehensive income. However,non-monetary assets and liabilities denominated in foreign currencies that are not measured atfair value are translated using the historical exchange rates at the dates of the initialtransactions.
~202~

(d) All foreign exchange gains and losses are presented in the statement of comprehensive income
within ‘other gains and losses’.
B. Translation of foreign operations
The operating results and financial position of all the group entities that have a functional
currency different from the presentation currency are translated into the presentation currency as
follows:(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange
rate at the date of that balance sheet;(b) Income and expenses for each statement of comprehensive income are translated at averageexchange rates of that period; and(c) All resulting exchange differences are recognized in other comprehensive income.
(4) Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets:(a) Assets arising from operating activities that are expected to be realized, or are intended to be
sold or consumed within the normal operating cycle;(b) Assets held mainly for trading purposes;(c) Assets that are expected to be realized within twelve months from the balance sheet date;(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to
be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
Otherwise they are classified as non-current assets.
B. Liabilities that meet one of the following criteria are classified as current liabilities:(a) Liabilities that are expected to be settled within the normal operating cycle;(b) Liabilities arising mainly from trading activities;(c) Liabilities that are to be settled within twelve months from the balance sheet date;(d) Liabilities for which the repayment date cannot be extended unconditionally to more thantwelve months after the balance sheet date. Terms of a liability that could, at the option of thecounterparty, result in its settlement by the issue of equity instruments do not affect its
classification.
Otherwise they are classified as non-current liabilities.
(5) Cash equivalents
Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits thatmeet the above definition and are held for the purpose of meeting short-term cash commitments in~203~

operations are classified as cash equivalents.
(6) Financial assets at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured atamortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss arerecognized and derecognized using trade date accounting.
C. At initial recognition, the Company measures the financial liabilities at fair value. All relatedtransaction costs are recognized in profit or loss. The Company subsequently measures thesefinancial liabilities at fair value with any gain or loss recognized in profit or loss.
(7) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities
which are not held for trading, and for which the Company has made an irrevocable election at
initial recognition to recognize changes in fair value in other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through othercomprehensive income are recognized and derecognized using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value plus transaction
costs. The Company subsequently measures the financial assets at fair value:
The changes in fair value of equity investments that were recognized in other comprehensive
income are reclassified to retained earnings and are not reclassified to profit or loss following thederecognition of the investment. Dividends are recognized as revenue when the right to receive
payment is established, future economic benefits associated with the dividend will flow to theCompany and the amount of the dividend can be measured reliably.
(8) Financial assets at amortised cost
The Company’s time deposits which do not fall under cash equivalents are those with a shortmaturity period and are measured at initial investment amount as the effect of discounting isimmaterial.
(9) Accounts and notes receivable
A. Accounts and notes receivable entitle the Company a legal right to receive consideration in
exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
(10) Financial assets impairment
For financial assets at amortised cost and accounts receivable that have a significant financing~204~

component, at each reporting date, the Company recognizes the impairment provision for 12 months
expected credit losses if there has not been a significant increase in credit risk since initialrecognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if
such credit risk has increased since initial recognition after taking into consideration all reasonable
and verifiable information that includes forecasts. On the other hand, for accounts receivable orcontract assets that do not contain a significant financing component, the Company recognizes theimpairment provision for lifetime ECLs.
(11) Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to receive the cash flows
from the financial asset expire.
(12) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using theweighted-average method. The cost of finished goods and work in progress comprises raw materials,
direct labour, other direct costs and related production overheads (allocated based on actual operating
capacity). It excludes borrowing costs. The item by item approach is used in applying the lower ofcost and net realizable value. Net realizable value is the estimated selling price in the ordinary courseof business, less the estimated cost of completion and the estimated costs necessary to make the sale.
(13) Investments accounted for using equity method - subsidiaries and associates
A. Subsidiaries are all entities (including structured entities) controlled by the Company. The
Company controls an entity when the Company is exposed, or has rights, to variable returns fromits involvement with the entity and has the ability to affect those returns through its power overthe entity.
B. Unrealized gains on transactions between the Company and its subsidiaries are eliminated.
Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency
with the policies adopted by the Company.
C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit
or loss, and its share of post-acquisition movements in other comprehensive income is recognizedin other comprehensive income. When the Company’s share of losses in a subsidiary equals or
exceeds its interest in the subsidiary, the Company continues to recognize losses proportionate toits ownership.
D. Associates are all entities over which the Company has significant influence but not control. In
general, it is presumed that the investor has significant influence, if an investor holds, directly or
indirectly 20% or more of the voting power of the investee. Investments in associates areaccounted for using the equity method and are initially recognized at cost.
E. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or~205~

loss, and its share of post-acquisition movements in other comprehensive income is recognized inother comprehensive income. When the Company’s share of losses in an associate equals or
exceeds its interest in the associate, including any other unsecured receivables, the Company does
not recognize further losses, unless it has incurred legal or constructive obligations or madepayments on behalf of the associate.
F. When changes in an associate’s equity do not arise from profit or loss or other comprehensive
income of the associate and such changes do not affect the Company’s ownership percentage ofthe associate, the Company recognizes change in ownership interests in the associate in ‘capitalsurplus’ in proportion to its ownership.
G. Unrealized gains on transactions between the Company and its associates are eliminated to theextent of the Company’s interest in the associates. Unrealized losses are also eliminated unless thetransaction provides evidence of an impairment of the asset transferred. Accounting policies ofassociates have been adjusted where necessary to ensure consistency with the policies adopted by
the Company.
H. In the case that an associate issues new shares and the Company does not subscribe or acquire
new shares proportionately, which results in a change in the Company’s ownership percentage ofthe associate but maintains significant influence on the associate, then ‘capital surplus’ and‘investments accounted for using equity method’ shall be adjusted for the increase or decrease of
its share of equity interest. If the above condition causes a decrease in the Company’s ownership
percentage of the associate, in addition to the above adjustment, the amounts previously
recognized in other comprehensive income in relation to the associate are reclassified to profit orloss proportionately on the same basis as would be required if the relevant assets or liabilities
were disposed of.
I. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers,
profit (loss) of the current period and other comprehensive income in the parent company only
financial statements shall equal to the amount attributable to owners of the parent in the financial
statements prepared with basis for consolidation. Owners’ equity in the parent company only
financial statements shall equal to equity attributable to owners of the parent in the financial
statements prepared with basis for consolidation.
(14) Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during theconstruction period are capitalized.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item willflow to the Company and the cost of the item can be measured reliably. The carrying amount of~206~

the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss
during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciatedusing the straight-line method to allocate their cost over their estimated useful lives. Each part ofan item of property, plant, and equipment with a cost that is significant in relation to the total costof the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each financial year-end. If expectations for the assets’ residual values and useful
lives differ from previous estimates or the patterns of consumption of the assets’ future economic
benefits embodied in the assets have changed significantly, any change is accounted for as achange in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates andErrors’, from the date of the change. The estimated useful lives of property, plant and equipment
are as follows:

Buildings and structures
Machinery and equipment
Transportation equipment
Office equipment and others

8 ~ 50 years
2 ~ 10 years
3 ~ 5 years
2 ~ 5 years(15) Leasing arrangements (lessee) - right-of-use assets / lease liabilities
A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at
which the leased asset is available for use by the Company. For short-term leases or leases of
low-value assets, lease payments are recognized as an expense on a straight-line basis over thelease term.
B. Lease liabilities include the net present value of the remaining lease payments at thecommencement date, discounted using the incremental borrowing interest rate. Lease payments
are comprised of the following:(a) Fixed payments, less any lease incentives receivable; and(b) Variable lease payments that depend on an index or a rate.
The Company subsequently measures the lease liability at amortized cost using the interest
method and recognizes interest expense over the lease term. The lease liability is remeasured andthe amount of remeasurement is recognized as an adjustment to the right-of-use asset when there
are changes in the lease term or lease payments and such changes do not arise from contract
modifications.
C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of theinitial measurement of lease liability.

~207~

The right-of-use asset is measured subsequently using the cost model and is depreciated from thecommencement date to the earlier of the end of the asset’s useful life or the end of the lease term.
When the lease liability is remeasured, the amount of remeasurement is recognized as an
adjustment to the right-of-use asset.
(16) Investment property
An investment property is stated initially at its cost and measured subsequently using the cost model.
Except for land, investment property is depreciated on a straight-line basis over its estimated usefullife of 10 ~ 55 years.
(17) Impairment of non-financial assets
The Company assesses at each balance sheet date the recoverable amounts of those assets where
there is an indication that they are impaired. An impairment loss is recognized for the amount bywhich the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is thehigher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons forrecognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment
loss is reversed. The increased carrying amount due to reversal should not be more than what the
depreciated or amortised historical cost would have been if the impairment had not been recognized.
(18) Notes and accounts payable
Notes and accounts payable are obligations to pay for goods or services that have been acquired in
the ordinary course of business from suppliers. They are recognized initially at fair value andsubsequently measured at amortised cost using the effective interest method. However, short-term
accounts payable without bearing interest are subsequently measured at initial invoice amount as theeffect of discounting is immaterial.
(19) Offsetting financial assets and liabilities
Financial assets and liabilities are offset and reported in the net amount in the balance sheet when
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle
on a net basis or realize the asset and settle the liability simultaneously.
(20) Employee benefits
A. Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits expected tobe paid in respect of service rendered by employees in a period and should be recognized as
expense in that period when the employees render service.
B. Pensions(a) Defined contribution plan
For the defined contribution plan, the contributions are recognized as pension expenses when
they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent~208~

of a cash refund or a reduction in the future payments.
(b) Defined benefit plani. Net obligation under a defined benefit plan is defined as the present value of an amount ofpension benefits that employees will receive on retirement for their services with theCompany in current period or prior periods. The liability recognized in the balance sheet inrespect of defined benefit pension plans is the present value of the defined benefit
obligation at the balance sheet date less the fair value of plan assets. The net defined
benefit obligation is calculated annually by independent actuaries using the projected unit
credit method. The rate used to discount is determined by using interest rates ofgovernment bonds (at the balance sheet date) of a currency and term consistent with thecurrency and term of the employment benefit obligations.
ii. Remeasurements arising on defined benefit plan are recognized in other comprehensive
income in the period in which they arise and are recorded as retained earnings.
iii. Past service costs are recognized immediately in profit or loss.
C. Employees’ compensation and directors’ remuneration
Employees’ compensation and directors’ remuneration are recognized as expense and liability,
provided that such recognition is required under legal or constructive obligation and thoseamounts can be reliably estimated. Any difference between the resolved amounts and thesubsequently actual distributed amounts is accounted for as changes in estimates.
(21) Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit orloss, except to the extent that it relates to items recognized in other comprehensive income oritems recognized directly in equity, in which cases the tax is recognized in other comprehensive
income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the Company and its subsidiaries operate
and generate taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in accordance with applicable tax regulations. It establishes provisions
where appropriate based on the amounts expected to be paid to the tax authorities. An additionaltax is levied on the unappropriated retained earnings and is recorded as income tax expense in theyear the stockholders resolve to retain the earnings.
C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
consolidated balance sheet. Deferred tax is determined using tax rates (and laws) that have beenenacted or substantially enacted by the balance sheet date and are expected to apply when the~209~related deferred tax asset is realized or the deferred tax liability is settled.
D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilized. At each balance sheet
date, unrecognized and recognized deferred tax assets are reassessed.
(22) Share capital
A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of newshares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s shares that have been issued, the consideration
paid, excluding any directly attributable incremental costs (net of income taxes) is deducted fromequity attributable to the Company’s equity holders.
(23) Dividends
Dividends are recorded in the Company’s financial statements in the period in which they are
resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends
are recorded as stock dividends to be distributed and are reclassified to ordinary shares on theeffective date of new shares issuance.
(24) Revenue recognition
A. Sales of goods(a) The Company manufactures and sells computer software and hardware, computer peripheral
equipment, and computer component products. When the right of control is transferred to thecustomer, sales revenue is recognized. Delivery occurs when the products have been shipped tothe specific location, the risks of obsolescence and loss have been transferred to the customer,
and either the customer has accepted the products in accordance with the sales contract, or theCompany has objective evidence that all criteria for acceptance have been satisfied.
(b)Sales revenue is recognized based on the contract price, net of sales returns, volume discounts
and estimated sales discount. The goods are often sold with volume discounts based on
aggregate sales over a one-month period. Sales discounts and allowances are estimated andprovided for based on customer contracts, and revenue is only recognized to the extent that it ishighly probable that a significant reversal will not occur. The estimation is subject to anassessment at each reporting date and recognized as allowance for sales discounts. No elementof financing is deemed present as the sales are made with a credit term of 30-60 days aftermonthly billing, which is consistent with market practice.
(c) A receivable is recognized when the goods are delivered as this is the point in time that theconsideration is unconditional because only the passage of time is required before the payment
is due.

~210~

B. Incremental costs of obtaining a contract
Given that the contractual period lasts less than one year, the Company recognizes the incremental
costs of obtaining a contract as an expense when incurred although the Company expects torecover those costs.
5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTIONUNCERTAINTY
The preparation of these parent company only financial statements requires management to make criticaljudgements in applying the Company’s accounting policies and make critical assumptions and estimatesconcerning future events. Assumptions and estimates may differ from the actual results and arecontinually evaluated and adjusted based on historical experience and other factors. Such assumptions
and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year; and the related information is addressed below:(1) Critical judgements in applying the Company’s accounting policies
Investment property
The Company uses a portion of the property for its own use and another portion to earn rentals or forcapital appreciation. When these portions cannot be sold separately and cannot be leased out
separately under a finance lease, the property is classified as investment property only if the own use
portion accounts for an insignificant portion of the property.
(2) Critical accounting estimates and assumptions
Valuation of inventories
As inventories are stated at the lower of cost and net realizable value, the Company must determine
the net realizable value of inventories on balance sheet date using judgements and estimates. Due tothe rapid technology innovation, the Company evaluates the amounts of normal inventory
consumption, obsolete inventories or inventories without market selling value on balance sheet date,
and writes down the cost of inventories to the net realizable value. The valuation of inventories isbased on recent market price and demand of products in the future specific period, thus there might
be significant changes in the valuation.
As of December 31, 2022, the carrying amount of inventories was $3,069,913.

~211~

6. DETAILS OF SIGNIFICANT ACCOUNTS(1) Cash and cash equivalents

Cash on hand and petty cash
Checking accounts and demand deposits
Time deposits

December 31, 2022

December 31, 2021$

42
1,504,940
307,100$

68
1,572,900
86,880$1,812,082$

1,659,848

A. The aforementioned time deposits pertain to high liquidity investments with maturity within threemonths.
B. The Company transacts with a variety of financial institutions all with high credit quality todisperse credit risk, so it expects that the probability of counterparty default is remote.
C. The Company has no cash and cash equivalents pledged to others.
(2) Financial assets at fair value through profit or loss
Items
Current items:
Financial assets mandatorily measured
at fair value through profit or loss
Beneficiary certificates
Valuation adjustments
Non-current items:
Financial assets mandatorily measured
at fair value through profit or loss
Beneficiary certificates
Valuation adjustments

December 31, 2022

December 31, 2021

$

-

$

1,501,948
4,647

$

-

$

1,506,595$

61,481 $10,018)100,976
10,623$51,463

111,599($

A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit orloss are listed below:

For the years ended December 31,
2022
2021
($

Beneficiary certificates

17,262) $84,375

B. The Company has no financial assets at fair value through profit or loss pledged to others.

~212~

(3) Financial assets at amortised cost

Items
Current items:
Time deposits with original maturity of morethan three months

December 31, 2022

December 31, 2021$$

8,527,800

5,480,400

A. Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed
below:For the years ended December 31,
2022
2021
$

Interest income

80,156$23,379

B. The Company has no financial assets at amortised cost pledged to others as collateral.
C. The Company used the forecastability of Taiwan Institute of Economic Research boom
observation report to adjust historical and timely information to assess the default possibility ofdebt instruments on December 31, 2022 and 2021, and considered guarantee for repurchaseagreement held by the Company to estimate expected credit loss. The Company does not expect
material credit loss after assessment.
D. The Company transacts time deposits with reputable domestic and foreign banks. The Company’s
counterparties have good credit quality, and the impairment loss is assessed using a 12-month
expected credit loss approach.
(4) Notes and accounts receivable
December 31, 2022

December 31, 2021

Notes receivable$$

Accounts receivable
Less: Loss allowance

December 31, 2022$
720,973-

December 31, 2021$
1,137,589
-

$

$

867

720,973

2,499

1,137,589

A. As of December 31, 2022 and 2021, the estimated sales discounts and allowances were $57,603
and $31,410, respectively. Since the sales discounts and allowances met the requirements foroffset of financial liabilities and financial assets, the net amounts were shown under accounts
receivable.

~213~

B. The ageing analysis of accounts receivable and notes receivable is as follows:

Not past due
Up to 30 days
31 to 90 days

December 31, 2022
Accounts
Notes
receivable
receivable$
546,702 $867
174,271-

December 31, 2021
Accounts
Notes
receivable
receivable$
943,522 $2,499
193,249
818
-

$

$

720,973$867

1,137,589

$

2,499

The above ageing analysis was based on past due date.
C. The Company has credit insurance that covers accounts receivable from major customers. Should
bad debts occur, the Company will receive 90% of the losses resulting from non-payment.
D. As of December 31, 2022 and 2021, notes receivable and accounts receivable were all fromcontracts with customers. As of January 1, 2021, the balance of notes receivable and accounts
receivable from contracts with customers amounted to $813,157.
E. As at December 31, 2022 and 2021, without taking into account any collateral held or other credit
enhancements, the maximum exposure to credit risk in respect of the amount that best represents
the Company’s notes receivable were $867 and $2,499, respectively; the maximum exposure tocredit risk in respect of the amount that best represents the Company’s accounts receivable were
$720,973 and $1,137,589, respectively.
F. The Company classifies customers’ accounts receivable in accordance with the credit rating of thecustomer. The Company applies the simplified approach to estimate expected credit loss under theprovision matrix basis.
G. The Company wrote-off the financial assets, which cannot reasonably be expected to be recovered,after initiating recourse procedures. However, the Company will continue executing the recourse
procedures to secure their rights. On December 31, 2022 and 2021, the Company has no
written-off financial assets that are still under recourse procedures.
H. The Company used forecastability, historical and timely information to assess the loss rate ofaccounts receivable. On December 31, 2022 and 2021, the provision matrix is as follows:Notpast due
December 31, 2022
Expected loss rate
Total book value$

0.007%
546,7021-180 days
past dueOver 180 days
past due

0.04%~18.16%$
174,271

25%~100%

~214~

$

-

Total

$

720,973Not
past due
December 31, 2021
Expected loss rate
Total book value$

1-180 days
past due

0.006%
943,522

Over 180 days
past due

0.03%~12.93%$
194,067

Total

25%~100%$-$

1,137,589

I. The balance of allowance for loss and movements are as follows:

At January 1
Provision for impairment
Reclassified to overdue receivables
Effect of exchange rate changes

2021
Accounts receivable
Notes receivable$
1,750 $
1,246(
3,132)
136-

At December 31

$

-

$

-

December 31, 2022
Allowance for
Costvaluation loss
2,743,592 ($446,816) $285,227 (6,256)
528,468 (
34,302)
3,557,287 ($487,374) $Book value
2,296,776
278,971494,166
3,069,913

December 31, 2021
Allowance for
Costvaluation loss
4,555,175 ($
48,311) $604,979 (438)
506,929 (3,771)

Book value
4,506,864
604,541
503,158

J. The Company does not hold any collateral as security.
(5) Inventories

Raw materials
Work in progress
Finished goods$$

Raw materials
Work in progress
Finished goods$$

5,667,083 ($

52,520) $5,614,563

A. The cost of inventories recognized as expense for the year:

Cost of goods sold
Loss on decline in market value of inventory$$

B. No inventories were pledged to others.
~215~

For the years ended December 31,
2022
2021
8,843,739 $
10,149,545
434,854
17,3589,278,593 $
10,166,903

(6) Financial assets at fair value through other comprehensive income - non-current
Items

December 31, 2022

Non-current items:
Equity instruments
Listed stocks
Others$Valuation adjustments($

December 31, 2021

684,413 $
1,125
685,538
160,599)524,939 $621,034
1,125
622,159
7,417
629,576

A. The Company has elected to classify equity investments that are considered to be strategic
investments as financial assets at fair value through other comprehensive income. The fair valueof such investments amounted to $524,939 and $629,576 as at December 31, 2022 and 2021,
respectively.
B. For the years ended December 31, 2022 and 2021, the Company disposed equity investments
whose fair value were $6,179 and $54,426, respectively and the cumulative gain on disposal wastransferred to retained earnings in the amount of ($2,053) and $8,804, respectively.
C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial
assets at fair value through other comprehensive income are listed below:
For the years ended December 31,
2022
Equity instruments at fair value throughother comprehensive income
Fair value change recognized in othercomprehensive (loss) income
Cumulative (losses) gains reclassified toretained earnings due to derecognition
Dividend income recognized in profit or loss
Held at end of year
Derecognized during the year

2021

($

170,069) $11,826($

2,053) $8,804$

35,59235,592

6,787
6,787

$

$
$

D. The Company has no financial assets at fair value through other comprehensive income pledged
to others as collateral.

~216~

(7) Investments accounted for using equity method

At January 1
Share of profit or loss of investments accounted
for using equity method
Dividends received from investments accounted
for using equity method
Capital reduction and return of shares for using
equity method
Decrease in unrealised profit from sales
Other comprehensive (loss) income
Changes in other equity items
At December 31
Investees
Subsidiaries:
Saffire Investment Ltd.
Transcend Japan Inc.
Transcend Information Inc.
Transcend Korea Inc.
Associates:
Taiwan IC Packaging Corporation$

2022
2,114,375
1,214,903$(

98,635)(985,589)
6,651
219)
892 (
2,252,378 $

(
$

2021
2,156,258
47,2826,000
200
95,365)
2,114,375

December 31, 2022

December 31, 2021

$

$

$

1,676,847
222,111
153,808
62,902
136,7102,252,378$

1,496,302
229,616
184,082
55,861
148,514
2,114,375

A. Subsidiaries
Refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2022
for the information regarding the Company’s subsidiaries.
B. Associates(a) The basic information of the associate that is material to the Company is as follows:

AssociatenameTaiwan IC
Packaging
Corporation

Principal
place ofbusiness
TaiwanShareholding ratio
December December
31, 2022
31, 2021
12.50%
12.52%Nature ofrelationship
Note

Method ofmeasurement
Equity method

Note: Taiwan IC Packaging Corporation is engaged in IC packaging and testing and is the
upstream supplier in the IT and semiconductor industries. In order to reach synergy ofvertical integration, Taiwan IC Packaging Corporation processes the raw materials
provided by the Company into relevant semi-finished goods.
~217~

(b) The Company held a 12.5% equity interest in Taiwan IC Packaging Corporation, and is thecompany’s largest single shareholder. However, the Company does not hold the majority ofthe voting power during the shareholders’ meeting of Taiwan IC Packaging Corporation and
the Company has no seat in the Board of Directors of Taiwan IC Packaging Corporation,
which indicate that the Company has no control ability to direct the relevant activities of
Taiwan IC Packaging Corporation. In addition, the Company’s chairman is the same with
Taiwan IC Packaging Corporation; hence, the Company has significant influence over Taiwan
IC Packaging Corporation.
(c) The summarized financial information of the associate that is material to the Company is asfollows:
Balance sheet

Taiwan IC Packaging Corporation
December 31, 2022
December 31, 2021$
1,218,268 $
1,408,762
1,151,953
1,219,160(
167,786) (374,580)(
75,327) (83,523)$
2,127,108 $
2,169,819

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets
Share in associate’s net assets
Net equity differences$

265,889 $
129,179) (271,661
123,147)$

136,710

148,514($

Statement of comprehensive income

A
Revenue
Profit for the year from continuing
operations
Total comprehensive income
Dividends received from associates$

Taiwan IC Packaging Corporation
For the years ended December 31,
2022
2021
1,223,212 $
1,944,950$$$

84,12896,327
21,885$$$

411,645409,917-(d) Share of profit (loss) of associates accounted for using the equity method is as follows:
For the years ended December 31,

Investee Company
Taiwan IC Packaging Corporation

2022
$

2021
10,081$

52,790(e) The Company’s investment in Taiwan IC Packaging Corporation has quoted market price. The
fair value of Taiwan IC Packaging Corporation was $242,305 and $446,724 as of December
31, 2022 and 2021, respectively.
~218~

(8) Property, plant and equipment

Buildings andstructuresLand
At January 1
Cost
Accumulated depreciation$$$
At January 1
Additions (including transfers)
Depreciation charge
At December 31$
At December 31
Cost
Accumulated depreciation

$
$

2022
Transportationequipment

Machinery andequipment

Officeequipment

OthersTotal

601,268 $- (601,268 $

1,207,917 $
512,918) (694,999 $355,091 $
243,493) (111,598 $23,325 $13,051) (10,274 $10,485 $3,234) (7,251 $

24,252 $ 2,222,338
14,498) (787,194)
9,754 $ 1,435,144

601,268 $- (694,999 $
5,607
37,988) (111,598 $41,20557,910) (10,274 $3,929) (7,251 $
594
2,943) (9,754 $ 1,435,144
800
48,206
5,668) (108,438)

601,268

662,618

94,893

6,345

4,902

4,886

$

601,268 $- (601,268 $$

981,527 $
318,909) (662,618 $$

339,523 $
244,630) (94,893 $~219~$

23,325 $16,980) (6,345 $$

10,412 $5,510) (4,902 $

$ 1,374,912

20,422 $ 1,976,477
15,536) (601,565)
4,886 $ 1,374,912

Land
At January 1
Cost
Accumulated depreciation

Machinery andequipment

Officeequipment

OthersTotal$

601,268 $- (601,268 $

1,207,688 $
467,122) (740,566 $389,642 $
218,558) (171,084 $

22,109 $9,315) (12,794 $4,691 $
2,812) (1,879 $

28,476 $ 2,253,874
15,892) (713,699)
12,584 $ 1,540,175$
At January 1
Additions (including transfers)
Depreciation charge
At December 31$

601,268 $- (601,268 $

740,566 $229
45,796) (694,999 $

171,084 $
2,710
62,196) (111,598 $

12,794 $
1,216
3,736) (10,274 $1,879 $
7,556
2,184) (7,251 $

12,584 $ 1,540,175
3,177
14,8886,007) (119,919)9,754 $ 1,435,144

601,268 $- (601,268 $

1,207,917 $
512,918) (694,999 $355,091 $
243,493) (111,598 $23,325 $13,051) (10,274 $10,485 $3,234) (7,251 $

24,252 $ 2,222,338
14,498) (787,194)
9,754 $ 1,435,144

At December 31
Cost
Accumulated depreciation$

Buildings andstructures

2021
Transportationequipment$$

The relevant assets of the Company recognized as property, plant and equipment are all for self-use.

~220~

(9) Leasing arrangements - lessee
A. The Company’s leased asset is land. Rental contracts are typically made for 5 years. Lease terms
are negotiated on an individual basis and contain a wide range of different terms and conditions.
The lease agreements do not impose covenants, but leased assets may not be used as security forborrowing purposes.
B. The carrying amounts of right-of-use assets and the depreciation charge are as follows:
December 31, 2022

December 31, 2021

Carrying amount

Carrying amount

$

Land

165,858$

15,263For the years ended December 31,
2022
2021
Depreciation charge Depreciation charge$Land37,167$

36,630C. For the year ended December 31, 2022, the additions to right-of-use assets were $187,762. Refer
to Note 7(2)E. for details. For the year ended December 31, 2021, there were no additions toright-of-use assets.
D. Information on profit or loss in relation to lease contracts is as follows:
For the years ended December 31,
2022
2021
Items affecting profit or loss
Interest expense on lease liabilities
Expense on short-term lease contracts
Expense on leases of low-value assets

$

1,239
2,970
428

$

243
4,984
770

E. For the years ended December 31, 2022 and 2021, the Company’s total cash outflow for leases
were $41,882 and $42,812, respectively.
(10) Leasing arrangements - lessor
A. The Company leases various assets including land and buildings. Rental contracts are typicallymade for periods of 1 to 5 years. Lease terms are negotiated on an individual basis and contain awide range of different terms and conditions. To protect the lessor’s ownership rights on theleased assets, leased assets may not be used as security for borrowing purposes, or a residual
value guarantee was required.
B. For the years ended December 31, 2022 and 2021, the Company recognized rent income in theamount of $46,891 and $37,253, respectively, based on the operating lease agreement, which
does not include variable lease payments.
~221~

C. The maturity analysis of the lease payments under the operating leases is as follows:
December 31, 2022

December 31, 2021

2023 $
2024
2025
2026
2027

58,97037,94322,30912,664815

2022 $
2023
2024
2025
2026

38,92526,757
16,806
9,406
9,406

$

132,701$

101,300(11) Investment property

2022
Buildings andstructuresLand
At January 1
Cost
Accumulated depreciation

$
$

Total

2,268,726 $- (2,268,726 $

367,418 $
75,869) (291,549 $2,636,144
75,869)2,560,275

At January 1
Additions
Depreciation charge$

2,268,726 $- (291,549 $
4,082
8,564) (2,560,275
4,082
8,564)At December 31$

2,268,726

287,067$

2,555,793

At December 31
Cost
Accumulated depreciation$

2,268,726 $- (2,268,726 $

371,500 $84,433) (287,067 $2,640,226
84,433)2,555,793

$

~222~

$

2021
Buildings andstructuresLand
At January 1
Cost
Accumulated depreciation

Total

$

2,268,726 $- (365,009 $67,716) (2,633,735
67,716)$2,268,726

297,293$2,566,019

At January 1
Additions
Depreciation charge$

2,268,726 $- (297,293 $
2,409
8,153) (2,566,019
2,409
8,153)At December 31$

2,268,726

291,549$

2,560,275

At December 31
Cost
Accumulated depreciation$

2,268,726 $- (367,418 $
75,869) (2,636,144
75,869)$2,268,726

291,549

2,560,275

$

$

$

$

A. Rental income from the investment property and direct operating expenses arising frominvestment property are shown below:

Rental income from investment property
Direct operating expenses arising frominvestment property that generated
rental income
Direct operating expenses arising frominvestment property that did not
generate rental income$

For the years ended December 31,
2022
2021
46,891 $37,253

$

7,863

$

7,453

$

701

$

701

B. The fair value of the investment property held by the Company was $4,829,337 and $5,505,217
as of December 31, 2022 and 2021, respectively, which was based on the transaction prices ofsimilar properties in the same area.
C. No investment property was pledged to others.
(12) Other non-current assets

Guarantee deposits paid
Prepayments for business facilities
Others~223~

December 31, 2022$
14,404
2,912
13,754

December 31, 2021$
14,86812,416
14,490$$31,07041,774

(13) Pensions
A. Defined benefit plan(a) The Company has a defined benefit pension plan in accordance with the Labor Standards
Act, covering all regular employees’ service years prior to the enforcement of the Labor
Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue
to be subject to the pension mechanism under the Act. Under the defined benefit plan, twounits are accrued for each year of service for the first 15 years and one unit for each
additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on
the number of units accrued and the average monthly salaries and wages of the last 6 months
prior to retirement. The Company contributes monthly an amount equal to 2% of theemployees’ monthly salaries and wages to the retirement fund deposited with the Bank of
Taiwan, the trustee, under the name of the independent retirement fund committee. Also, theCompany would assess the balance in the aforementioned labor pension reserve account by
December 31, every year. If the account balance is insufficient to pay the pension calculatedby the aforementioned method to the employees expected to qualify for retirement in thefollowing year, the Company will make contributions to cover the deficit by next March.
(b) The amounts recognized in the balance sheet are as follows:

December 31, 2022
December 31, 2021
Present value of defined benefit obligations $36,584 $38,857(
29,193) (25,454)
Fair value of plan assets$
7,391 $
13,403Net defined benefit liability(c) Movements in net defined benefit liabilities are as follows:
Present value of
defined benefit
obligations
2022
Balance at January 1
Current service cost
Interest expense (income)Remeasurements:
Return on plan assets(excluding amounts included
in interest income or expense)
Change in financial assumptions
Experience adjustments
Pension fund contribution
Balance at December 31

$

(
(
(
$

~224~

Fair value ofplan assets

Net defined
benefit liability

38,857 ($550
291 (39,698 (25,454) $196)
25,650)13,403550
95
14,048- (2,071) (2,071)

2,630)
484)
3,114) (- (36,584 ($- (- (2,071) (1,472) (29,193) $2,630)
484)
5,185)
1,472)
7,391

Present value of
defined benefit
obligations
2021
Balance at January 1
Current service cost
Interest expense (income)Remeasurements:
Return on plan assets(excluding amounts included
in interest income or expense)
Change in demographic
assumptions
Change in financial assumptions
Experience adjustments
Pension fund contribution
Pension payment
Balance at December 31

$

(
(
(
(
$

Fair value ofplan assets

Net defined
benefit liability

43,239 ($608
151 (43,998 (26,678) $96)
26,774)

16,561608
55
17,224- (369) (

369)

1,941

-

1,941

1,836)
2,080)
1,975) (- (3,166)
38,857 ($- (- (369) (
1,477) (3,166
25,454) $1,836)
2,080)
2,344)
1,477)
13,403(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined
benefit pension plan in accordance with the Fund’s annual investment and utilisation planand the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor
Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit indomestic or foreign financial institutions, investment in domestic or foreign listed,over-the-counter, or private placement equity securities, investment in domestic or foreign
real estate securitisation products, etc.). With regard to the utilisation of the Fund, its
minimum earnings in the annual distributions on the final financial statements shall be noless than the earnings attainable from the amounts accrued from two-year time deposits with
the interest rates offered by local banks. If the earnings is less than aforementioned rates,
government shall make payment for the deficit after being authorised by the Regulator. The
Company has no right to participate in managing and operating that fund and hence theCompany is unable to disclose the classification of plan assets fair value in accordance with
IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2022
and 2021 is given in the Annual Labor Retirement Fund Utilisation Report announced by thegovernment.
(e) The principal actuarial assumptions used were as follows:

For the years ended December 31,
2022
2021
1.400%
0.750%
1.625%
1.625%

Discount rate
Future salary increase rate
~225~

Future mortality rate was estimated based on the 6th Taiwan Standard Ordinary Experience
Mortality Table.
Because the main actuarial assumption changed, the present value of defined benefit
obligation is affected. The analysis was as follows:
Discount rate
Increase
Decrease
0.25%
0.25%

Future salary increases
Increase
Decrease
0.25%
0.25%

December 31, 2022
Effect on present value of
defined benefit obligation
December 31, 2021
Effect on present value of($

1,023) $1,065$

1,038 ($

1,002)

defined benefit obligation($

1,158) $1,208$

1,170 ($

1,127)The sensitivity analysis above is based on one assumption which changed while the otherconditions remain unchanged. In practice, more than one assumption may change all at once.
The method of analysing sensitivity and the method of calculating net pension liability in thebalance sheet are the same.
The methods and types of assumptions used in preparing the sensitivity analysis did notchange compared to the previous period.
(f) Expected contributions to the defined benefit pension plan of the Company for the year
ending December 31, 2023 amount to $1,476.
(g) As of December 31, 2022, the weighted average duration of the retirement plan is 11.73
years.
B. Defined contribution plan
Effective July 1, 2005, the Company has established a defined contribution pension plan (the“New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with
R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on
6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts
at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon
termination of employment.
The pension costs under the defined contribution pension plan of the Company for the years
ended December 31, 2022 and 2021 were $33,234 and $34,271, respectively.
(14) Share capital
As of December 31, 2022, the Company’s authorized capital was $5,000,000, consisting of 500
million shares of ordinary stock (including 25 million shares reserved for employee stock options),
and the paid-in capital was $4,290,617 with par value of $10 per share. All proceeds from shares~226~

issued have been collected. The Company’s ordinary shares outstanding at the beginning and at theend of the period were 429,062 thousand shares for the years ended December 31, 2022 and 2021.
(15) Capital surplus
Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of parvalue on issuance of common stocks and donations can be used to cover accumulated deficit or toissue new stocks or cash to shareholders in proportion to their share ownership, provided that theCompany has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires thatthe amount of capital surplus to be capitalized mentioned above should not exceed 10% of thepaid-in capital each year. Capital surplus shall not be used to cover accumulated deficit unless thelegal reserve is insufficient.
(16) Retained earnings
A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any,
shall first be used to pay all taxes and to offset prior years’ operating losses and then 10% of theremaining amount shall be set aside as legal reserve. The Company shall also set aside special
reserve in accordance with the regulations. On the premise that there is no effect on the
Company’s normal operations and no violation of regulations, the Company shall reserve certain
amount for maintaining stability of dividends. The remainder, if any, is the distributable earnings
to be appropriated as resolved by shareholders at the stockholders’ meeting. The Board of
Directors is authorized by the shareholders to resolve the appropriation of cash dividends andcash payment from capital surplus by a resolution adopted by a majority vote at its meeting
attended by two-thirds of the total number of directors, which will then be reported to theshareholders.
B. The Company distributes dividends taking into consideration the Company’s economic
environment, growth phases, future demands for funds, long-term financial planning and the
cash flow needs of shareholders. Cash dividends shall account for at least 5% of the total
dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders inproportion to their share ownership, the legal reserve shall not be used for any other purpose. The
use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their shareownership is permitted, provided that the distribution of the reserve is limited to the portion inexcess of 25% of the Company’s paid-in capital.
D. In accordance with the regulations, the Company shall set aside special reserve from the debit
balance on other equity items at the balance sheet date before distributing earnings. When debit
balance on other equity items is reversed subsequently, the reversed amount could be included in
the distributable earnings.

~227~

E. (a) The appropriations of earnings and cash payment from capital surplus for the years ended
December 31, 2021 and 2020 have been resolved at the shareholders’ meeting on June 17,2022 and August 26, 2021, respectively. Details are summarized below:
For the year ended
December 31, 2021
Dividends per
Amountshare (in dollars)
Legal reserve$
Appropriationfor (reversalof) special
reserve
Cash dividends$

254,464

73,2702,231,121
2,558,855$

343,249$

119,625$

13,658)1,094,107 $
1,200,074

(
$

5.20
Cash payment
per share(in dollars)

AmountCash payment
from capitalsurplus

For the year ended
December 31, 2020
Dividends per
Amountshare (in dollars)

$

0.80

Cash payment
per share(in dollars)

Amount$214,531

2.55

$

0.50

Actual distribution of retained earnings for 2021 and 2020 is in agreement with the amounts
resolved at the shareholders’ meeting.
(b)The appropriations of earnings and cash payment from capital surplus for the year ended
December 31, 2022 as proposed by the Board of Directors on March 2, 2023 are as follows:
For the year ended December 31, 2022
Dividends per share
Amount(in dollars)$
245,726
167,3032,059,496 $
4.80$
2,472,525

Legal reserve
Special reserve
Cash dividends
Total

$

Cash payment from capital surplus

Amount343,249

Cash payment
per share (in dollars)$
0.80

As of March 2, 2023, the above appropriations of 2022 earnings have not yet been resolvedby the shareholders.

~228~

(17) Other equity items
2022
Exchangedifferences
Unrealized
on translation ofgain or loss
foreign financial
on valuation
statements$
7,417 ($
197,932) ($(170,069)- (At January 1
Revaluation adjustment
Revaluation transferred toretained earnings
Currency translation differences
Effect from income tax
At December 31
($

Total
190,515)
170,069)

2,053

-

2,053

- (
160,599) ($892
178) (
197,218) ($

892
178)
357,817)

2021
Exchangedifferences
Unrealized
on translation ofgain or loss
foreign financial
on valuation
statements$
4,395 ($
121,639) ($11,826-

Total
117,244)
11,826

At January 1
Revaluation adjustment
Revaluation transferred to(retained earnings - grossCurrency translation differences
Effect from income tax
At December 31$

8,804)- (7,417 ($

- (8,804)

95,365) (19,072
197,932) ($95,365)
19,072
190,515)(18) Operating revenue$

Sales revenue

For the years ended December 31,
2022
2021
11,386,995 $
13,747,158

A. Disaggregation of revenue from contracts with customers
The Company derives revenue from the transfer of goods at a point in time in the following
geographical regions:
For the year ended
December 31, 2022
Revenue from externalcustomer contracts

Electronic products
America
EuropeTaiwanAsia$ 2,803,949$ 3,528,324~229~$ 1,798,453$ 2,523,173

OthersTotal$ 733,096$11,386,995

For the year ended
December 31, 2021
Revenue from externalcustomer contracts

Electronic products
America
EuropeTaiwanAsia$ 3,400,049$ 4,982,120$ 1,607,361$ 2,978,488

OthersTotal$ 779,140$13,747,158

B. Contract assets and liabilities
The Company has no revenue-related contract assets and liabilities.
(19) Interest income

Interest income from bank deposits
Interest income from financial assets measured
at amortised cost
Other interest income$$

For the years ended December 31,
2022
2021
13,331 $
1,102
80,156
3,447
96,934$23,37952,83777,318(20) Other income$

For the years ended December 31,
2022
2021
46,891 $37,25335,592
6,787
82,483 $44,040$For the years ended December 31,
2022
2021
226,573 ($
26,684)$

Rental income
Dividend income(21) Other gains and losses0
Net currency exchange gain (loss)
Net (loss) gain on financial assets and liabilities
at fair value through profit or loss
Others($17,262)

84,3758,668
217,979

7,590
65,281$(22) Expenses by nature

Wages and salaries
Labor and health insurance fees
Pension costs
Other personnel expenses
Directors’ remuneration
Depreciation charges(including investment property)$

For the years ended December 31,
2022
2021
761,434 $
808,487
70,724
72,57333,87934,93439,79740,766
1,993
9,755
154,169~230~

164,702

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of
the current year, after covering accumulated losses, shall be distributed as employees’
compensation and directors’ remuneration. The ratio shall not be lower than 1% for employees’
compensation and shall not be higher than 0.2% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2022 and 2021, employees’ compensation was accrued at$31,729 and $32,691, respectively; while directors’ remuneration was accrued at $0 and $4,577,
respectively. The aforementioned amounts were recognized in salary expenses.
C. The employees’ compensation and directors’ remuneration were estimated and accrued based on
1% and 0% of distributable profit of current period for the year ended December 31, 2022. The
employees’ compensation and directors’ remuneration resolved by the Board of Directors were$30,987 and $2,300, respectively, and the employees’ compensation will be distributed in theform of cash.
D. The difference between employees’ compensation and directors’ remuneration as resolved by the
Board of Directors and the amounts recognized in the 2021 financial statements by $1,149 and$1,377, respectively, has been adjusted in profit or loss for 2022.
E. Information about employees’ compensation and directors’ remuneration of the Company asapproved at the meeting of Board of Directors and resolved by the stockholders at their meeting
will be posted in the “Market Observation Post System” at the website of the Taiwan Stock
Exchange.
(23) Income tax
A. Income tax expense(a) Components of income tax expense:
For the years ended December 31,
2022
2021
Current income tax:
Current income tax on profits for the year
Prior year income tax overestimation
Total current income tax
Deferred income tax:
Origination and reversal of temporary
differences
Total deferred income tax
Income tax expense$($

452,853 $277) (
452,576

586,853
1,530)
585,323

160,053 (
160,053 (612,629 $1,658)
1,658)
583,665(b) The income tax relating to components of other comprehensive income is as follows:

For the years ended December 31,
2022
2021
Financial statements translationdifferences of foreign operations

$

~231~

178 ($

19,072)

B. Reconciliation between income tax expense and accounting profit

For the years ended December 31,
2022
2021
Income tax calculated by applying statutory
rate to the profit before tax
Effects from tax exemption and items
disallowed by tax regulation
Prior year income tax overestimation
Effect from investment tax credits
Withholding tax in other countries
Income tax expense$

613,395$

623,392$

6,174) (277) (
1,990) (7,675
612,629 $

37,538)1,530)
659)
583,665(((

C. Amounts of deferred income tax assets or liabilities as a result of temporary differences are as
follows:

At January 1

2022
Recognized inothercomprehensive
Recognized in
profit or loss
incomeAt December 31

Deferred income tax assets$

Pension provision amount in excess
of appropriation amount

4,975 ($

166) $

-

$

4,809

Royalty fees

2,171 (

2,171)--

Accrued hard drive recycling fees

1,794 (

1,093)-

701

Unrealized sales discounts andallowances

6,282

5,239

-

11,521

Unrealized gross profit from sales
Unrealized loss on market value
decline and obsolete andslow-moving inventories
Financial statements translationdifferences of foreign operations

2,152 (

1,165)-

987

10,504

86,971-

97,475

11,06538,943$- (87,615 ($178)178) $

10,887
126,380

22,098) $- ($23,027)

225,570)- (353,332)$

Total
Deferred income tax liabilities
Unrealized exchange gain($929) ($Net gain on investment accounted
for using equity method(

127,762) (Others

(

86)

-

- (

86)

Total

($

128,777) ($247,668) $- ($376,445)~232~

At January 1
Deferred income tax assets
Amount of allowance for bad debts
that exceed the limit for tax
purposePension provision amount in excess
of appropriation amount$2021
Recognized inothercomprehensive
Recognized in
profit or loss
incomeAt December 31

1,609 ($

1,609) $-5,137 (

162)

-

4,975

4,342 (

2,171)-

2,171

Accrued hard drive recycling fees

-

1,794

-

1,794

Unrealized sales discounts andallowances

8,313 (

2,031)-

6,282

Unrealized gross profit from sales
Unrealized loss on market value
decline and obsolete andslow-moving inventories
Financial statements translationdifferences of foreign operations

2,692 (

540)

-

2,152

7,032

3,472

-

10,504$

29,125 ($1,247) $11,065
11,065$

11,06538,943

Unrealized exchange gain($

2,774) $

1,845

- ($

929)

Financial statements translationdifferences of foreign operations
Net gain on investment accounted
for using equity method(

8,007)-(

128,822)

1,060

- (

127,762)

Others

(

86)

-

- (

86)

Total

($

139,689) $8,007 ($

128,777)

Royalty fees

Total

$

-

Deferred income tax liabilities

2,905

$

8,007

$

-

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

~233~

(24) Earnings per share

For the year ended December 31, 2022
Weighted-averagecommon shares
Earnings
outstanding
per share
Profit after tax(in thousands)(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
Assumed conversion of all
dilutive potential ordinary
sharesEmployees’ compensation
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary
shares$2,454,344

429,062$2,454,344

429,062-554

2,454,344

429,616

$

$

5.72

$

5.71

For the year ended December 31, 2021
Weighted-averagecommon shares
Earnings
outstanding
per share
Profit after tax(in thousands)(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
Assumed conversion of all
dilutive potential ordinary
sharesEmployees’ compensation
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary
shares$2,533,294

429,062$2,533,294

429,062-485

2,533,294

429,547

$

~234~

$

5.90

$

5.90

(25) Supplemental cash flow information
Investing activities with partial cash payments

Purchase of property, plant and equipment
Less: Transfer from prepayment for businessfacilities
Cash paid during the year$

For the years ended December 31,
2022
2021
48,206 $14,888(12,416)$35,790$14,888

7. RELATED PARTY TRANSACTIONS(1)Names of related parties and relationshipNames of related parties

Relationship with the Group

Transcend Japan Inc.
Transcend Information Inc.
Transcend Korea Inc.
Transcend Information Europe B.V.
Transcend Information Trading GmbH
Transcend Information (H.K.) Ltd.
Transcend Information (Shanghai), Ltd.
(Transcend Shanghai)Transtech Trading (Shanghai) Co., Ltd.
Transcend Information (Hong Kong), Ltd.
Taiwan IC Packaging Corporation
Won Chin Investment Inc. (Won Chin)
Cheng Chuan Technology Development Inc.
(Cheng Chuan)

Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Associate accounted for using equity method
Other related party
Other related party(2)Significant transactions and balances with related parties
A. Operating revenue

For the years ended December 31,
2022
Sales of goods－Subsidiary－Associates accounted for using the equity
method$2,872,912$

1,309
2,874,221

2021$

4,194,478$

1,393
4,195,871

The sales prices charged to related parties are approximate to those charged to third parties. The
credit term to related parties was 120 days after monthly billings, excluding the credit term of 30days after delivery to Taiwan IC Packaging Corporation, and the credit term to generalcustomers was 30 to 60 days after monthly billings.
~235~

B. Purchases

For the years ended December 31,
2022
2021
Purchases of goods－Associates accounted for using the equity
method$221,258$

235,161

The purchase prices charged by related parties are approximate to those charged by third parties.
The payment term from Taiwan IC Packaging Corporation is 30 days after monthly billings. The
payment term from third parties is 30 to 45 days after monthly billings.
C. Accounts receivable

Receivables from related parties－Subsidiary - Transcend Japan Inc.
－Subsidiary - Others

December 31, 2022

December 31, 2021

$

$

$

105,212318,635
423,847$

78,741
196,988
275,729

The receivables from related parties arise mainly from sale transactions. The credit term to theCompany’s associate accounted for using equity method, Taiwan IC Packaging Corporation, is
30 days after delivery. The credit term to subsidiaries is 120 days after monthly billings. The
receivables are unsecured in nature and bear no interest. There are no allowances foruncollectible accounts held against receivables from related parties.
D. Accounts payable

Payables to related parties－Subsidiary - Transcend Shanghai－Subsidiary - Others－Associates accounted for using the equity
methodDecember 31, 2022

December 31, 2021

$

$

$

414,212
1,937
27,442443,591$

408,19892
52,241
460,531

The payables to related parties arise mainly from purchase transactions, and information on thepayment term is provided in Note 7(2) B. The payables bear no interest.

~236~

E. Other payables
Other payables－Subsidiary－Associates accounted for using the equity
methodDecember 31, 2022

December 31, 2021$

17,688$17,431$

4
17,692$

17,431Other payables to related parties arise mainly from purchase of fixed assets and miscellaneoustransactions. The other payables bear no interest.
F. Miscellaneous income
For the years ended December 31, 2022 and 2021, the expendables sold to related parties, whichwere recognized in non-operating income, amounted to $1,131 and $963, respectively.
G. Leasing arrangements - lessee
The Company signed a land lease contract with its related party, Won Chin and Cheng Chuan,with a lease term of 5 years from June 12, 2022 to June 11, 2027. The annual rental payment is$38,484 (in dollars) (excluding tax), which was determined based on the appraisal results ofYungcheng Real Estate Appraisers Firm and CCIS Real Estate Joint Appraisers Firm andrenewed at $1,350 in dollar per square feet/month (tax included) after having a three-party
negotiation. Rent was paid on the contract date and becomes payable on the same date eachfollowing year until the end of the lease. As of December 31, 2022 and 2021, the balance ofrelated right-of-use assets amounted to $165,858 and $15,263 while lease liabilities amounted to$149,825 and $0, respectively.
H. Endorsements and guarantees:
As of December 31, 2022 and 2021, information on the Company providing endorsements andguarantees to associates is provided in Note 13(1) B.
(3)Key management compensation
For the years ended December 31,
2022
2021
$

Salaries and other employee benefits

68,967$44,3008. PLEDGED ASSETS
None.
9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS
As of December 31, 2022, except for the provision of endorsements and guarantees mentioned in Note
7 and 13(1) B, there are no other significant commitments.

~237~

10. SIGNIFICANT DISASTER LOSS
None.
11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
Information on distribution of 2022 earnings and cash dividends from capital surplus is provided in
Note 6(16) E(b).
12. OTHERS(1)Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability tocontinue as a going concern in order to provide returns for shareholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure,
the Company may adjust the amount of dividends paid to shareholders, return capital toshareholders, issue new shares or sell assets to reduce debt. The Company’s own funds are
currently sufficient, daily operations can create stable cash inflows, and there are no significant
capital expenditure plans in the short term. Except for obtaining loans to reduce the exchange rate
exposure, the Company has sufficient funds to cover its own needs. Debt financing is notnecessary.
(2)Financial instruments
A. Financial instruments by category

Financial assets
Financial assets mandatorily measured
at fair value through profit or loss
Financial assets at fair value throughother comprehensive income
Financial assets at amortised cost
Cash and cash equivalents
Financial assets at amortised cost
Notes receivable
Accounts receivable (including relatedparties)
Other receivables
Refundable deposits

December 31, 2022

December 31, 2021

$

$

$

~238~

51,463

1,618,194

524,939

629,576

1,812,082
8,527,800
867

1,659,848
5,480,400
2,499

1,144,820
21,627
14,404
12,098,002

1,413,318
105,235
14,868
10,923,938$

Financial liabilities
Financial liabilities at amortised costAccounts payable (including relatedparties)
Other payables (including relatedparties)
Lease liabilities

December 31, 2022

December 31, 2021$

915,304$

1,824,375$$

227,092
1,142,396
149,825$$

269,798
2,094,173-

B. Financial risk management policies(a) The objective of the Company’s risk management is to identify and analyse all the risks(including market risk, credit risk, liquidity risk and cash flow risk) by examining theimpact of the macroeconomics, industrial developments, market competition and theCompany’s business development so as to achieve the optimized risk position, to maintainadequate liquidity position and to centralize the management of all market risks.
(b) To manage the Company’s assets, liabilities and expenditures efficiently and reach the risk
management target in relation to decreasing the risk of exchange rate changes, theCompany’s hedging strategy is using forward foreign currency transaction or foreign
currency options. The Company operates hedging transaction based on the Company’s net
position of assets, liabilities and future cash flows estimations in order to efficiently
decrease the market price risk arising from foreign currency fluctuation.
C. Significant financial risks and degrees of financial risks(a) Market risk
Foreign exchange riski.

ii.

The Company operates internationally and is exposed to exchange rate risk arisingfrom the transactions of the Company used in various functional currency, primarily
with respect to the USD. Exchange rate risk arises from future commercial transactions
and recognized assets and liabilities.
The Company’s businesses involve some non-functional currency operations. The
information on assets and liabilities denominated in foreign currencies whose values
would be materially affected by the exchange rate fluctuations is as follows:~239~

December 31, 2022
Foreign Currency
AmountExchange rate
Financial assets
Monetary items
USD：NTDRMB：NTD
JPY：NTD
EUR：NTD
KRW：NTD
Long-term equity investment
accounted for using theequity method
USD：NTD
JPY：NTD
KRW：NTD
Financial liabilities
Monetary items
USD：NTDRMB：NTD

Book value
(NTD)

$

254,448
23,994474,455
5,372
1,728,885

30.71
4.408
0.232432.72
0.0246$

7,814,098
105,766
110,263
175,772
42,531$

59,611
955,727
2,556,992

30.71
0.23240.0246$

1,830,655
222,11162,902$

13,052
97,981

30.71
4.408

$

400,827
431,900

December 31, 2021
Foreign Currency
AmountExchange rate
Financial assets
Monetary items
USD：NTDRMB：NTD
JPY：NTD
EUR：NTD
Long-term equity investment
accounted for using theequity method
USD：NTD
JPY：NTD
KRW：NTD
Financial liabilities
Monetary items
USD：NTDRMB：NTD

Book value
(NTD)

$

104,786
58,710417,739
2,617

27.68
4.344
0.240531.32$

2,900,476
255,036
100,466
81,964$60,708954,7442,377,021

27.68
0.24050.0235$

1,680,385
229,616
55,860$41,90097,981

27.68
4.344

$

1,159,792
425,629iii. The information on total exchange (loss) gain, including realized and unrealized arisingfrom significant foreign exchange variation on the monetary items held by theCompany for the years ended December 31, 2022 and 2021 is provided in Note 6(21).
~240~

iv. Sensitivity analysis relating to foreign exchange rate risks is primarily for financial
reporting period-end date of foreign currency monetary item. If the New Taiwan dollar
exchange rate to the U.S. dollar increases or decreases by 1%, the Company’s net
income will decrease or increase by $74,133 and $17,407 for the years ended
December 31, 2022 and 2021, respectively.
Price riski.

The Company is exposed to equity securities price risk because of investments held by
the Company and classified on the balance sheet as financial assets at fair value
through profit or loss and other comprehensive income. The Company is not exposed
to commodity price risk. To manage its price risk arising from investments in equity
securities, the Company diversifies its portfolio.

ii.

The Company’s investments in listed and unlisted equity securities by the domestic
companies. The prices of equity securities would change due to the change of the
future value of investee companies. If the prices of these equity securities had
increased/decreased by 1% with all other variables held constant, post-tax profit for theyears ended December 31, 2022 and 2021 would have increased/decreased by $515
and $16,182, respectively, as a result of gains/losses on equity securities classified as atfair value through profit or loss. Other components of equity would haveincreased/decreased by $5,249 and $6,296, respectively, as a result of othercomprehensive income classified as equity investment at fair value through othercomprehensive income.

Cash flow and fair value interest rate riski.

The Company’s principal interest-bearing assets are cash and cash equivalents andfinancial assets at amortised cost. Cash and cash equivalents are due within twelve
months. Financial assets at amortised cost are maintained at fixed rates. Therefore, it isassessed that there is no significant cash flow interest rate risk.

ii.

The Company has not used any financial instruments to hedge its interest rate risk.

(b) Credit riski.

Credit risk refers to the risk of financial loss to the Company arising from default by
the clients or counterparties of financial instruments on the contract obligations. The
main factor is that counterparties could not repay in full the receivables based on theagreed terms, and the contract cash flows of debt instruments stated at amortised cost.

ii.

The Company manages its credit risk taking into consideration the entire group’s
concern. According to the Company’s credit policy, each local entity in the Company is
responsible for managing and analyzing the credit risk for each of their new clients
before standard payment and delivery terms and conditions are offered. To control~241~internal risk, the Company assesses the credit quality of the customers, taking into
account their financial position, past experience and other factors. Individual risk limits
are set based on internal or external ratings in accordance with limits set by the Boardof Directors. The utilisation of credit limits is regularly monitored.
iii. The Company determines that the default occurs when the contract payments are pastdue over 180 days.
iv. If the contract payments were past due over 30 days based on the terms, there has beena significant increase in credit risk on that instrument since initial recognition.
v.

For details of credit risk in relation to accounts receivable and notes receivable, pleaserefer to Note 6(4).

(c) Liquidity riski.

Cash flow forecasting is performed in the operating entities of the Company andaggregated by Company treasury. Company treasury monitors rolling forecasts of theCompany’s liquidity requirements to ensure it has sufficient cash to meet operational
needs.

ii.

Surplus cash held by the operating entities over and above balance required forworking capital management are transferred to the Company treasury. Company
treasury invests surplus cash in interest bearing current accounts, time deposits andmonetary funds, choosing instruments with appropriate maturities or sufficientliquidity to provide sufficient headroom as determined by the abovementioned
forecasts. As at December 31, 2022 and 2021, the Company held money market
position of $10,339,882 and $8,646,843, respectively, that are expected to readily
generate cash inflows for managing liquidity risk.

iii. The Company’s non-derivative financial liabilities are analysed based on the remaining
period at the balance sheet date to the contractual maturity date and all the Company’s
financial liabilities expire within one year.
(3)Fair value information
A. The different levels that the inputs to valuation techniques are used to measure fair value offinancial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that theentity can access at the measurement date. A market is regarded as active where amarket in which transactions for the asset or liability take place with sufficientfrequency and volume to provide pricing information on an ongoing basis. The fairvalue of the Company’s investment in listed stocks and beneficiary certificates is
included in Level 1.

~242~

Level 2: Inputs other than quoted prices included within Level 1 that are observable for theasset or liability, either directly or indirectly. The fair value of the Company’s
investment in non-hedging derivatives is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s
investment in equity investment without active market, financial products andinvestment property is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(11).
C. Financial instruments not measured at fair value
Except for those listed in the table below, the carrying amounts of cash and cash equivalents,
financial assets at amortised cost, notes receivable, accounts receivable (including relatedparties), other receivables, accounts payable (including related parties) and other payables(including related parties) are approximate to their fair values.
D. The related information on financial and non-financial instruments measured at fair value by
level on the basis of the nature, characteristics and risks of the assets and liabilities are as
follows:
Level 1

December 31, 2022
AssetsRecurring fair value measurements
Financial assets at fair value throughprofit or loss
Beneficiary certificates$

Level 2

Level 3

Total

51,463 $- $- $523,814-1,125

575,277 $

- $

1,125

51,463Financial assets at fair value throughother comprehensive income
Equity securities$
December 31, 2021
AssetsRecurring fair value measurements
Financial assets at fair value throughprofit or loss
Beneficiary certificates

Level 1

$ 1,618,194 $Level 2

Level 3

- $524,939$

576,402
Total- $ 1,618,194

Financial assets at fair value throughother comprehensive income
628,451

Equity securities$ 2,246,645 $

-

1,125

629,576

- $

1,125

$ 2,247,770

E. The fair value of financial instruments traded in active markets is based on quoted market
prices at the balance sheet date. A market is regarded as active if quoted prices are readily and~243~regularly available from an exchange, dealer, broker, industry group, pricing service, or
regulatory agency, and those prices represent actual and regularly occurring market transactions
on an arm’s length basis. The quoted market price used for financial assets held by theCompany is the closing price. These instruments are included in Level 1. Instruments includedin Level 1 comprise primarily listed stocks classified as financial assets at fair value throughother comprehensive income and beneficiary certificates classified as financial assets at fairvalue through profit or loss.
F. For the years ended December 31, 2022 and 2021, there were no transfers between Level 1 andLevel 2.
G. If one or more of the significant inputs is not based on observable market data, the instrument
is included in level 3.
H. There was no change in Level 3 financial instruments for the years ended December 31, 2022
and 2021.
I. Financial segment is in charge of valuation procedures for fair value measurements being
categorized within Level 3, which is to verify independent fair value of financial instruments.
Such assessment is to ensure the valuation results are reasonable by applying independent
information to make results close to current market conditions and frequently review the fairvalue.
13. SUPPLEMENTARY DISCLOSURES(1)Significant transactions information
A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates
and joint ventures): Refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million
or 20% of the Company’s paid-in capital: Refer to table 3.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Refer totable 4.
G. Purchases or sales of goods from or to relate parties reaching NT$100 million or 20% of theCompany’s paid-in capital or more: Refer to table 5.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more:
Refer to table 6.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Refer to table 7.
~244~

(2)Information on investees
Names, locations and other information of investee companies (not including investees in
Mainland China): Refer to table 8.
(3)Information on investments in Mainland China
A. Basic information: Refer to table 9.
B. Significant transactions, either directly or indirectly through a third area, with investee
companies in the Mainland Area: Refer to table 7.
(4)Major shareholders information
Major shareholders information: Refer to table 10.
14. SEGMENT INFORMATION
None.

~245~

T ranscend Information, Inc.
Provision of endorsements and guarantees to others
For the year ended December 31, 2022
T able 1

Expressed in thousands of NT D
(Except as otherwise indicated)
Maximum

Ratio of

Party being

Limit onoutstanding

Outstanding

endorsed/guaranteed

endorsements/

endorsement/

endorsement/

Provision of

accumulated
Amount ofendorsements/ Provision ofendorsement/

Ceiling on total

endorsements/ guarantee amount toProvision ofguarantees by endorsements/ endorsements/

Relationship withguarantees

guarantee

guarantee

Actualamount ofparentguarantees by

guarantees tothe endorser/

provided for aamount as ofamount at

amount drawn

guarantees

net asset value ofendorsements

company tosubsidiary to

the party inthe endorser//guarantees

subsidiaryparentMainlandguarantor company provided (Note 7)(Note 8)company

China

Footnote

2

Y

-

-

-

NumberEndorser/Company

guarantor

single party

December 31,

December 31,

down

secured with(Note 1)guarantor

name(Note 2)

(Note 3)2022 (Note 4)2022 (Note 5)(Note 6)collateral0

T ranscend
Information,Inc.

T ranscend
Japan Inc.

2

$ 3,910,107$
486,400 $464,800(JPY $2,000,000) (JPY $2,000,000)(In thousands)(In thousands)

$

-

-

$

7,820,214

Note 1: T he numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:(a) T he Company is ‘0’.
(b) T he subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:(a) Having business relationship(b) T he endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(c) T he endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
(d) T he endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.
(e) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(f) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(g) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.
Note 3: Not exceeding 20% of the Company’s net asset value. ($19,550,536*20%=$3,910,107)
Note 4: T he maximum outstanding endorsement/guarantee amount during and as of December 31, 2022 is JPY$2,000,000 (In thousands).
Note 5: T he amount was approved by the Board of Directors.
Note 6: T he actual amount of endorsement drawn down is $0.
Note 7: Not exceeding 40% of the Company’s net asset value.( $19,550,536*40%=$7,820,214)
Note 8: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary.

~246~

T ranscend Information, Inc.
Holding of marketable securities at the end of the period (not including subsidiaries, associat es and joint ventures)
December 31, 2022
T able 2

Expressed in t housands of NT D
(Except as otherwise indicated)
As of December 31, 2022
Market able securit ies

Relationship with t he

General

Number ofBook value

Ownership(Not e 1)

securities issuer (Not e 2)

ledger accountshares(Not e 3)(%)

T rendForce Corporat ion-

Financial assets at fairvalue through ot her
comprehensive income- non-current

Fubon Financial Holding Co., Ltd.
Preferred Shares B-"

T aiwan Semiconductor
Manufacturing Co., Ltd.

-"MediaT ek Inc.

-

Securit ies held by
T ranscend Information, Inc.

Footnot e
Fair value(Note 4)

StocksFubon Financial Holding Co., Ltd.
Cathay Financial Holding Co. Lt d.
Yuanta Financial Holding Co., Ltd.
CT BC Financial Holding Co., Ltd.
Formosa Plastics Corporat ion
ASUST ek Computer Inc.

-

60,816

$

1,125

1

1,758,000

101,085

420,000

$

1,125

-

-

101,085-

188,370-

188,370-

40,00025,000-25,000-1,120,366

63,077-

63,077-

216,323

8,653

-

8,653

-

119,480

2,593

-

2,593

-

100,000

2,210

-

2,210

-

262,000

22,741-

22,741-110,085-

110,085-

51,463

-

"
"
"
"
"
"
"
410,000$

524,939$

51,463

Beneficiary certificates
Yuanta T aiwan T op 50 ET F-

Financial assets at fairvalue t hrough profit orloss - non-current

467,000-$

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’.
Note 2: Leave the column blank if the issuer of marketable securities is non-related party.
Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for themarketable securities not measured at fair value.
Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

~247~

T ranscend Information, Inc.
Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital
For the year ended December 31, 2022
Table 3

Expressed in thousands of NT D
(Except as otherwise indicated)

Marketable

GeneralRelationship

Balance as at

Addition

Disposal

Balance as atwithJanuary 1, 2022

（ Note 3 ）（ Note 3 ）December 31, 2022

securities

ledgerCounterparty

the investor

NumberInvestor（ Note 1 ）account（ Not e 2 ）（ Not e 2 ）of shares

AmountTranscend
Information,Inc.

T aishin 1699
Money Market
Fund

110,142,508$ 1,501,948

Financial asset s atfair value throughprofit or loss current--

NumberNumberof shares

Amount-$-of shares

Selling priceBook value

110,142,508$ 1,508,314$ 1,501,948$

Gain onNumberdisposalof shares

6,366

Amount-$Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificat es and ot her related derivative securities.
Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.
Note 3: Aggregate purchases and sales amount s should be calculated separately at their market values to verify whether they individually reach NT $300 million or 20% of paid-in capital or more.
Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In t he case that shares were issued wit h no par value or a par value other than NT $10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity
at tributable t o owners of the parent in the calculation.

~248~

-

T ranscend Informat ion, Inc.
Disposal of real estate reaching NT $300 million or 20% of paid-in capital or more
For the year ended December 31, 2022
T able 4

Expressed in thousands of NT D
(Except as otherwise indicated)
T ransaction

Real estate
disposed by
T ranscend
Information(Shanghai), Ltd.

"

Status ofdate or date ofDate ofthe eventacquisition

Land use rights, buildings andaccessories of 106/17 Hill, 2nd
Neighborhood, Xidu T own,
Fengxian, Shanghai

2021/11/26

May 2005 to
December 2010Land use rights, buildings andaccessories of No. 300, Lane 3111,
Huancheng West Road, Shanghai
Industrial Development Zone, 25/6
Hill, 2 Neighborhood, Xidu T own,
Fengxian District, and 25/7 Hill, 2Neighborhood, Xidu T own,
Fengxian District

2022/2/18

May 2005 to
January 2014

Real estateBook value$

159,976

358,772$

Disposalcollect ion ofGain (loss)

amountproceeds

on disposal

508,726

Not e 2$

1,342,344

1,342,344

RelationshipCounterparty

Basis or reference used in

Othersetting the pricecommitments

345,801 Shanghai Fengpu
Industrial Park
FengxianComprehensive
Bonded Zone
(Shanghai Minhang
Export Processing
Zone Development
Co., Ltd.)-T o cooperate wit ht he government’s
expropriation
policyIn accordance with the
Shanghai Fengpu Industrial
Park expropriation policy
and expropriationcompensation agreement-982,255 Shanghai Fengpu
Construction
Development Co.,Ltd.

-

Activate assets andenhance working
capit alNote 3-Note 1: Dat e of the event refers to the date of the Board of Directors’ resolution.
Note 2: As of December 31, 2022, $457,854 had been collected.
Note 3: T he prices were determined in accordance with two valuation reports, amounting to RMB 391,970 thousand and RMB 385,610 thousand, respectively.

~249~with the seller Reason for disposal

T ranscend Information, Inc.
Purchases or sales of goods from or t o related parties reaching NT $100 million or 20% of paid-in capital or more
For the year ended December 31, 2022
Table 5

Expressed in thousands of NT D
(Except as otherwise indicated)
Differences in transaction terms compared t oTransact ion

Relationship with theSalescounterparty(purchases)

Purchaser/seller

Counterpart yTranscend
Information, Inc.

T ranstech T rading(Shanghai) Co., Ltd.

Subsidiary of Memhiro"

T ranscend Japan Inc.

T he Company’s
subsidiary"

T ranscend Information
Europe B.V.

"

Sales

Amount$third party transact ions (Note)

Notes/accounts receivable (payable)

Percentage

Percentage ofof total sales

total notes/accounts(purchases)

Credit term

Unit price672,5686"

464,600

4""

Subsidiary of Memhiro"

412,950

3"

T ranscend Information
Inc.

T he Company’s
subsidiary"466,470

4"

T ranscend Korea Inc.

T he Company’s
subsidiary"309,457"

T ranscend Information
T rading GmbH

Subsidiary of Memhiro""

T ranscend Information(H.K) Ltd.

Subsidiary of Memhiro

T ranscend
Information
Europe B.V.

T ranscend Information
T rading GmbH

Transcend
Information, Inc.

T aiwan IC Packaging
Corporation

Credit term

Balance$receivable (payable)

Footnote

103,7039-"

105,212

9

-

"

"

74,512

7

-

"

"

"

56,737

5

-

3

"

"

"

42,531

4-

387,584

3

"

"

"

36,0403-"

159,283

1

"

"

"

5,112

-

-

Cont rolled by the same
ultimate parent company"

100,4901830 days after
delivery"

7 to 60 days after delivery t othird parties

6,595

14

-

Associat e accounted forusing equity method(Purchase)

221,258)(4)30 days aftermonthly billings"

30 to 45 days after monthly (billings to third parties

27,442)(3)-(

120 days after No significant 30 to 60 days after monthly
monthly billings
difference billings to third parties

Note: T he Company’s sales to subsidiaries were equivalent to subsidiaries' purchases from the Company; accordingly, t he Company did not disclose the information on subsidiaries’ purchases from the Company.

~250~

T ranscend Information, Inc.
Receivables from related parties reaching NT $100 million or 20% of paid-in capital or more
For the year ended December 31, 2022
T able 6

Expressed in thousands of NT D
(Except as otherwise indicated)

Overdue receivables

Balance as at
Relationship
Creditor

Counterparty

T ranscend Information, Inc. T ranscend Japan Inc.
"
T ranscend Information(Shanghai), Lt d.

with the counterparty
T he Company’s subsidiary

Amount collected

December 31,
2022$

T urnover rate

Amount105,2125.05$

Act ion taken--$

subsequent t o the

Allowance forbalance sheet date

doubtful accounts

4,545

-

T ranstech T rading (Shanghai) Co., Ltd.

Subsidiary of Memhiro

103,703

5.70

-

-

69,646-

T ranscend Information, Inc.

Ultimate parent company

414,212-414,212

-

-

-

~251~

T ranscend Information, Inc.
Significant int er-company t ransactions during the report ing year
For the year ended December 31, 2022
Table 7

Expressed in t housands of NT D
(Except as otherwise indicated)
T ransaction

NumberRelationship

General ledger(Note 1)Company nameCounterparty(Note 2)

account0

T ranscend Information, Inc.

T ranstech T rading (Shanghai) Co., Ltd.

1

Sales

"

"

T ranscend Japan Inc.

"

"

"

"

T ranscend Information Europe B.V.

"

"

"

T ranscend Information Inc.

"

"

"
"
"
1

Percentage of consolidated total operat ing
Amount$T ransaction t erms

revenues or t otal assets (Note 3)

464,600

There is no significant
difference in unit pricefrom those to third parties.
"

4"412,950

"

3

"

"

466,470"

4

T ranscend Information T rading GmbH""387,584"3"

T ranscend Korea Inc.

""

309,457"

3"

T ranscend Information (H.K) Ltd.

""

159,283"1"

T ranscend Information (Shanghai), Lt d.

"

Accounts Payable

414,212)120 days aft er monthly billings

T ranscend Informat ion Europe B.V. T ranscend Information T rading GmbH

3

Sales

100,490

T here is no significant
difference in unit pricefrom those to third parties.

(

672,568

6((Individual transactions not exceeding 1% of the consolidat ed total revenue and t otal assets are not disclosed.)
Note 1: T he numbers filled in for the transaction company in respect of inter-company transactions are as follows:(a) Parent company is "0".
(b) Subsidiaries were numbered from 1.
Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If t ransactions between parent company and subsidiaries
or between subsidiaries refer t o the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction wit h a subsidiary, then the subsidiary is not required todisclose the t ransaction; for t ransactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):(a) Parent company to subsidiary.
(b) Subsidiary t o parent company.
(c) Subsidiary t o subsidiaries.
Note 3: Regarding percentage of transaction amount to consolidated tot al operating revenues or total assets, it is computed based on period-end balance of transaction t o consolidated total assets for balance sheet accounts
and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

~252~

2)
1

T ranscend Information, Inc.
Information on investees
For the year ended December 31, 2022
T able 8

Expressed in t housands of NT D
(Except as otherwise indicated)

Initial investment amount

Shares held as at December 31, 2022
Net profit (loss) Investment incomeof the investee

Balance as at

December 31, December 31,
Investor

Investee

Location

Main business activities

by the Company

ended December

for the year ended

31, 2022

December 31, 2022

Ownership (%)

Book value

216,829$ 1,202,418

6,600,000

100$ 1,676,847

Wholesale of computer memory
modules and peripheral products

89,103

89,103

6,400

100

222,111

4,004

4,004

T ranscend Information
Inc.

United States Wholesale of computer memoryof America
modules and peripheral products

38,592

38,592625,000100

153,808

21,452

21,452T ranscend Korea Inc.

Korea

Wholesale of computer memory
modules and peripheral products

6,132

6,132

40,000100

62,902

4,275

4,275

T aiwan IC Packaging
Corporat ion

T aiwanPackaging of Semi-conductors

354,666

354,666

21,928,036

12.50

136,710

84,12810,300

Saffire Investment
Ltd.

Memhiro Pte Lt d.

Singapore

Investment holdings

173,702

1,156,920

8,277,609

100

1,632,726

1,174,490

1,174,490

Memhiro Pt e Ltd.

T ranscend Information
Europe B.V.

Netherlands

Wholesale of computer memory
modules and peripheral products

1,693

1,693

100

100

234,933

4,143

4,143

T ranscend Information
T rading GmbHGermany

Wholesale of computer memory
modules and peripheral products

2,288

2,288

-

100

122,747

5,068

5,068

T ranscend Information(H.K.) Ltd.

Hong Kong

Wholesale of computer memory
modules and peripheral products

7,636

7,636

2,000,000

100

35,697

2,474

2,474

T ranscend
Information, Inc.

Saffire Investment Ltd.

B.V.I.

Investment holdings

T ranscend Japan Inc.

Japan

2022
$

2021

~253~

Number of shares(loss) recognized

for the year

Balance as at$

1,174,872$

1,174,872

Footnote

T able 9

T ranscend Informat ion, Inc.
Information on investments in Mainland China
For the year ended December 31, 2022
Expressed in t housands of NT D
(Except as otherwise indicated)
Amount remitted fromT aiwan to Mainland
Accumulated

China/Amount remitted

Accumulated

amountback to T aiwan for

amount of

Net incomeof remittance fromthe year ended

remitt ance(loss)

Ownership

recognizedBook value ofDecember 31, 2022

from T aiwan toof investee forheld byby the Company

investment s in

T aiwan toMain business activities

T ranscend
Manufacture and sales ofInformation
computer memory modules,(Shanghai), Ltd. storage products and disks,and lease of self-ownedbuildings
T ranstech
T rading(Shanghai) Co.,
Lt d.

Paid-in capital$

Wholesale, agent, importand export and retail ofcomputer memory modules,
storage products andcomputer components

Accumulated
amountInvestment

Mainland China

Remitted t oRemitted Mainland China as of the year ended the Company for the year ended Mainland China

methodas of January 1,

Mainlandback toDecember 31,

December 31,(direct orDecember 31,

as of December（ Note 1 ）

2022

China

T aiwan

2022

2022

indirect)2022 (Note 2)

31, 2022

Investee in
Mainland China

Investment
income (loss)

150,7872

16,3102

Investment

Ceiling onamount approved

invest ment s in$

1,134,178-(983,391) $150,787$ 1,128,705

100

16,310--16,31011,599100$

1,128,705$

11,599by the Investment Mainland China
Accumulated amount ofCommission ofremitt ance from T aiwan to

the Ministry of

Investment

Mainland China as of

Economic Affairs

Commission of

December 31, 2022$

167,097

imposed by the(MOEA)$

1,150,488

MOEA$

11,730,322

Note 1: Investment methods are classified into the following three categories; fill in t he number of category each case belongs to:(1) Directly invest in a company in Mainland China.
(2) T hrough investing in an existing company in the t hird area (Memhiro Pte Ltd.), which then invested in Mainland China.
(3) Others.
Note 2: T he gain and loss on investment recognized for the year was based on the financial st atements that were audited by R.O.C. parent company’s CPA.
Note 3: T he numbers in this table are expressed in New T aiwan Dollars.
Note 4: In June 2022, the shareholders of T ranscend Information (Shanghai), Ltd. resolved to reduce its capital from US$34.6 million to US$4.6 million, and the proceeds from capital reduction was returned to
Memhiro Pte Lt d., Saffire Invest ment Ltd., and the ultimat e parent company, i.e. T ranscend Information, Inc.

~254~

1,152,072

58,599of investment
incomeremitted back to
T aiwan as ofDecember 31, 2022 Footnote$

1,464,028-

Not e 4-

T ranscend Information, Inc.
Major shareholders information
December 31, 2022
Table 10

SharesName of major shareholders

Number of shares held

Shareholding ratio

Won Chin Investment Inc.

74,783,600

17.42

Wan An Technology Inc.

34,142,854

7.95

Cheng Chuan Technology Development Inc.

32,971,701

7.68

Wan Min Invest ment Inc.

29,726,397

6.92

Wan Chuan Investment Inc.

29,505,896

6.87

~255~

TRANSCEND INFORMATION, INC.
DETAILS OF CASH AND CASH EQUIVALENTSDECEMBER 31, 2022
(Expressed in thousands of New Taiwan Dollars)Statement 1
Items

Summary

Petty cash and cash on hand

Amount$42

Cash in banks- Checking accounts deposits

3,922- Demand deposits- Foreign currency deposits

173,473
USD 42,960 thousand, at exchange rate of $30.71
Other foreign currency

Time deposits

USD 10,000 thousand, at exchange rate of $30.71

1,319,286
8,259
307,100$ 1,812,082~256~

TRANSCEND INFORMATION, INC.
DETAILS OF ACCOUNTS RECEIVABLEDECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 2
Customer nameSummary

AmountA customer$

64,936

B customer

54,729C customer

54,349D customer
Others52,384552,178
778,576
Less: Allowance for sales discounts(

57,603)-

Loss allowance
$

~257~

720,973

TRANSCEND INFORMATION, INC.
DETAILS OF INVENTORIESDECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 3

Items

Summary$

Raw materials
Work in progress
Finished goods
Less: Allowance for inventory
valuation loss($

AmountNet realizable
Cost
value
2,743,592 $
2,296,776
285,227
309,423
528,468
711,8433,318,042
3,557,287 $
487,374)
3,069,913

Note 1: The net realizable value of raw materials is the replacement cost.
Note 2: The calculation of net realizable value is based on the last selling price, less theestimated cost of completion and the estimated costs necessary to make the sale.

~258~

Note
Note 1
Note 2
Note 2

TRANSCEND INFORMATION, INC.
MOVEMENT SUMMARY OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENTFOR THE YEAR ENDED DECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 4
Name
Stocks:TrendForce Corporation
Fubon Financial Holding Co., Ltd.
Preferred Shares B
Yuanta Financial Holding Co., Ltd
Taiwan Semiconductor
Manufacturing Co., Ltd.
MEDIATEK INC.
ASUSTek Computer Inc.
Fubon Financial Holding Co., Ltd.
Cathay Financial Holding Co. Ltd.
CTBC FINANCIAL HOLDING
CO., LTD.
AU Optronics Corporation
Innolux Corporation
Formosa Plastics Corporation

Changesin fair value
AmountOpening balance
Number of shares
Amount
60,816

$

1,125

$

Additions
Number of shares
Amount--$Reductions
Number of shares Amount--$

Ending balance
Number of shares
AmountAccumulated
impairment

Collateral-

60,816

Not applicable
"

None
"

"
"

"
"

$

1,125

1,758,000

110,930 (9,845)----

1,758,000

101,085

-

- (

349)

119,480

2,942

-

-

119,480

2,593

380,000

233,700 (69,158)40,00023,828--420,000

188,370410,000
1,067,016
200,000- (154,160 (
81,413 (12,500 (16,474)44,075)
18,336)
4,418)

40,00053,35016,323

41,474571--

40,000410,000
1,120,366
216,323

25,000110,085
63,077
8,653

"
"
"
"

"
"
"
"

200,000
200,000
262,000- (4,580 (
3,920 (
27,248 (

586)
129)
139)
4,507)

100,000
-

2,796
- (
- (
-

200,000) (200,000) (-4,451)
3,781)-

100,000
262,000

2,210
22,741

"
"
"
"

"
"
"
"

$ 629,576 ($

168,016)($

8,232)$ 71,611~259~$ 524,939

Note

TRANSCEND INFORMATION, INC.
MOVEMENT SUMMARY OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHODFOR THE YEAR ENDED DECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 5
Opening balance

Additions

Number of shares
AmountReductions

Number of shares

Number of shares(in thousand shares)

Amount (in thousand shares)

Name of investee(in thousand shares)

Saffire Investment Ltd.

36,600$ 1,496,302-

Transcend Japan Inc.

6

229,616

Transcend Information Inc.

625

Transcend Korea Inc.

40

Taiwan IC Packaging
Corporation

21,928- (30,000) ($

-

-

-

184,082--- (55,861---

148,514--- ($ 2,114,375$

Amount$-985,589) $Remeasurement

Accumulated

Investment

of definedtranslation

Unrealised profit

Number of shares

Shareholding

income (loss)

benefit planadjustment

from sales(in thousand shares)

ratio

Amount1,174,872$

Ending balanceMarket price or- ($15,095) $

6,357

6,600

100%

$ 1,676,847

value per share

Collateral$

1,676,139

None

-

4,004

- (

7,754) (3,755)

6100%

222,111229,028"

76,750)21,452-

20,864

4,160

625

100%

153,808

150,442

"

-

4,275

-

2,877 (

111)

40

100%

62,902

63,514"

10,300 (

219)

-

-

21,92812.50%

136,710242,305"

1,214,903 ($219) $

892

21,885)($ 1,084,224) $

~260~

$

6,651

$ 2,252,378

TRANSCEND INFORMATION, INC.
DETAILS OF ACCOUNTS PAYABLEDECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 6

Vendor name
A company

Amount$Note

112,173

B company

96,655

C company

55,934

D company

48,091

E company

36,456

Others122,404$

471,713~261~

The balance of each vendor account has notexceeded 5% of the total accounts payable.

TRANSCEND INFORMATION, INC.
DETAILS OF OPERATING COST
FOR THE YEAR ENDED DECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 7

Items

AmountRaw materials used
Raw materials at beginning
Add: Materials purchased during the year
OthersLess: Raw materials at the end
Cost of raw materials sales
Reclassified as manufacture, selling andadministrative and research and development
expenses
Consumption of materials for the year
Direct labor
Overhead
Manufacturing Cost
Add: Work in progress at the beginning
Transfer from finished goods
Less: Work in progress at the end
OthersFinished goods cost
Add: Finished goods at the beginning
Less: Finished goods at the end
Transfer into work in progress
Reclassified as manufacture, selling andadministrative and research and development
expenses
OthersCost of goods sold - finished goods
Cost of goods sold - materials
Inventory valuation loss
Operating cost

~262~

$
(
(
(
(

4,555,175
6,100,584
1,918)
2,743,592)
13,424)41,752)
7,855,073
372,688337,687
8,565,448
604,979
1,499,880
285,227)
15)
10,385,065
506,929
528,468)
1,499,880)

(
(

(
(

(

$

34,493)
1,162
8,830,315
13,424434,854
9,278,593

Note

TRANSCEND INFORMATION, INC.
DETAILS OF MANUFACTURING EXPENSEFOR THE YEAR ENDED DECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 8

Items
Depreciation

Summary

Amount$Note

121,635

Maintenance fees

46,354

Insurance expense

41,786

Utilities expense

21,127

Package fees

19,750Meal expenses

18,266

Miscellaneous purchase

17,805Pensions

17,606

Other expenses

The balance of each expense accounthas not exceeded 5% of the total
33,358 manufacturing expense.
$

337,687~263~

TRANSCEND INFORMATION, INC.
DETAILS OF OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 9
Selling
expenses

Items
Wages and salaries$

179,265

General andadministrative
expenses

Research anddevelopment
expense$$101,338

110,136

Total$

390,739

Export expense

78,168--78,168Insurance expense

16,962

25,57810,351

52,891

Depreciation

294

31,864376

32,534Tax

33

11,268-11,301Other expenses$

40,136
314,858$

37,129207,177$

16,242
137,105

~264~

$

Note

The balance of each expense
account has not exceeded 5% of
93,507 the total operating expenses.
659,140

TRANSCEND INFORMATION, INC.
DETAILS OF EMPLOYEE BENEFIT AND DEPRECIATION BY FUNCTION
FOR THE YEAR ENDED DECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 10
For the year ended December 31, 2022

Function

Classified as
Operating Costs

NatureClassified as
Operating Expenses

For the year ended December 31, 2021
Classified as
Operating Costs

Total

Classified as
Operating Expenses

Total

Employee benefit expense
Salary expenses
Labour and health insurance fees
Pension costs
Other personnel expenses
Directors’ remuneration
Depreciation$

372,688
36,825
17,606
24,730121,635$

388,746
33,89916,27315,067
1,993
32,534$

761,434
70,72433,87939,797
1,993
154,169$

400,570
37,116
17,96725,310132,562$

407,91735,457
16,96715,456
9,755
32,140

1. As at December 31, 2022 and 2021, the Company had 1,010 and 1,053 employees, respectively, both including 6 non-employee directors.
2. A company whose stock is listed for trading on the stock exchange shall additionally disclose the following information:(1) Average employee benefit expense in current year was $902 thousand (‘total employee benefit expense in current year － total directors’
remuneration’ / ‘the number of employees in current year － the number of non-employee directors’).
Average employee benefit expense in previous year was $914 thousand (‘total employee benefit expense in previous year － total directors’
remuneration’ / ‘the number of employees in previous year － the number of non-employee directors’).
(2) Average employees salaries in current year was $758 thousand (total salaries in current year / ‘the number of employees in current year －the number of non-employee directors’)
Average employees salaries in previous year was $772 thousand (total salaries in previous year / ‘the number of employees in previous year －the number of non-employee directors’)(3) Adjustment of average employees salaries was (1.81%) (‘the average employee salaries in current year － the average employee salaries inprevious year’ / the average employee salaries in previous year).
~265~

$

808,487
72,57334,93440,766
9,755
164,702

TRANSCEND INFORMATION, INC.
DETAILS OF EMPLOYEE BENEFIT AND DEPRECIATION BY FUNCTION
FOR THE YEAR ENDED DECEMBER 31, 2022
(Expressed in thousands of New Taiwan dollars)Statement 10(4) For the years ended December 31, 2022 and 2021, the Company has no supervisors’ remuneration. (Note)(5) Information on the Company’s remuneration policy is as follows: (including directors, supervisors, managers and employees)
Directors’ remuneration is determined based on the Company’s entire operating performance, future operating risk and development trend of industry taking into
consideration individual director’s contribution to the Company’s performance and annual performance assessment result of individual director, and the Company grants
a reasonable renumeration to directors. Under the Company’s Articles of Incorporation, the current year's earnings, if profit, net of accumulated deficits, if any, shall
distribute not higher than 0.2% for directors’ remuneration. Related performance assessment and reasonableness of remuneration shall be reviewed and approved by the
remuneration committee and the Board of Directors, and the remuneration policy will be reviewed and adjusted based on the actual operating condition and related
regulations accordingly. Managers and employees’ remunerations are determined based on the pay level within the same industry and market practice, under the Company's
Articles of Incorporation, the current year's earnings, if profit, net of accumulated deficits, if any, shall distribute not lower than 1% for employees’ remuneration taking
into consideration annually personal working performance in order to determine the distributable amount. Employees’ remuneration and performance assessment andreasonableness of managers’ remuneration shall be reviewed and approved by the remuneration committee and the Board of Directors, which will be reviewed and adjusted
based on the actual operating condition and related regulations accordingly.

Note: The Company has set up the audit committee to substitute supervisors; therefore, the company has no supervisors’ remuneration.

~266~

6.6. The Company should disclose the financial impact to the Company if the Company and its
affiliated companies have incurred any financial or cash flow difficulties in 2022 and as ofthe date of this Annual Report.
None.
7. Review and Analysis of Financial Position, Financial Performance, and Risk Management
7.1. Analysis of Financial Position
Year
Item

Current Assets
Funds and Investments (Note 1)
Property, Plant and Equipment
Intangible Assets
Other Assets (Note 2)

Total Assets
Current Liabilities
Non-current Liabilities
Total Liabilities
Capital Stock
Capital surplus
Retained Earnings
Other Adjustments
Total Stockholders' Equity

2022

2021

16,254,872
713,1121,580,372
2,980,086
21,528,442
1,426,767
551,139
1,977,906
4,290,617
3,387,781
12,229,955(357,817)
19,550,536

16,773,957
889,689
1,942,013
2,832,842
22,438,501
2,401,653
202,0132,603,666
4,290,617
3,730,914
12,003,819(190,515)
19,834,835

Unit: NT$ thousands
Difference
Amount%Analysis(519,085)(3.09)(176,577)(19.85)(361,641)(18.62)
147,244(910,059)(974,886)
349,126(625,760)(343,133)
226,136(167,302)(284,299)

5.20(4.06)(40.59)172.82(24.03)(9.20)
1.88
87.82(1.43)

(1)
(2)

(3)

Analysis of Deviation over 20%:(1) It was mainy due to the reduction of inventory purchase amount, such that accounts payable
decreased at the end of the period.
(2) It was mainly due to the adoption of the book-tax difference for investment income under theequity method in 2022, such that deferred income tax liabilities increased, which leads to thecorresponding increase of lease liabilities from recognized right-of-use land assets.
(3) It was mainy due to the fall of stock price, such that unrealized loss on financial assets at fairvalue through other comprehensive income increased.
Note 1: Including Investments accounted for using equity method, Non-current financial assets at fair value
through profit or loss, and Non-current financial assets at fair value through other comprehensive
income.
Note 2: Including Deferred tax assets, Investment property, Right-of-use assets and Other non-current
assets.

-267-

7.2. Analysis of Financial Performance
7.2.1. Main reasons for any material change in operating revenue, operating income and income
before tax in the most recent two years
Operating Revenue
Operating Costs
Gross profit
Operating Expenses
Operating Profit
Non-operating income(expenses)
Other income
Other gains and losses
Financial cost
Share of loss of associates
and joint ventures accounted
for using the equity method
Total non-operating income(expenses)
Profit before income tax
Income tax expense
Profit for the year

12,122,350(9,399,607)
2,722,743(1,216,038)
1,506,705

14,314,815(10,139,129)
4,175,686(1,283,892)
2,891,794(2,192,465)
739,522(1,452,943)
67,854(1,385,089)(15.32)(7.29)(34.80)(5.29)(47.90)

197,409
1,643,836(1,973)

123,157
62,361(1,248)74,252
1,581,475
(725)

60.29
2,536.00
58.09

(2)
(3)

10,30052,590(42,290)(80.41)(4)

1,849,572

236,860

1,612,712

680.87

3,356,277(901,933)
2,454,344

3,128,654(595,360)
2,533,294

227,623(306,573)(78,950)

7.28
51.49
(3.12)

(1)
(1)

(5)

Analysis of Deviation over 20% and Differnce amounts over NT$ 20,000,000:(1)It was mainly due to the weak end demand of the memory market in 2022, such that operating profit andoperating income decreased.
(2) It was mainly due to the increase of certificate of deposit and increase of interest rates, consequently, theinterest income increased.
(3) It was mainy due to the gain on disposal of non-current assets held for sale, and the appreciation in US
Dollars that the net currency exchange gain was increased; consequently, the other gains and losses in
2022 was higher.
(4) It was mainly due to that the gain of associate, that the investments accounted for using equity method,
Taiwan IC Packaging Corporation, Inc. was reduced in comparion to 2021, such that the Company
recognized related investment gain decreased.
(5) It was mainly due to the gain on the disposal of the right-of-use of lands, buildings, and attachments underTranscend (Shanghai), such that income tax expenses increased.

-268-

7.2.2. Sales Volume Forecast and Basis for 2023
Item
Sales Volume Forecast in 2023/Unit: thousands
FLASH+DRAM products
20,0002,000
OthersThe Company established the forecast for the possible sales volume of each type of productbased on the industry economic condition in 2023, market research and future orders.
In the second half of 2022, countries began to lift the lockdown one by one and embraced
the post-pandemic era. As demand related to personal computers used in working fromhome dropped, customers were faced with excessive inventory due to overbooking last year,
causing contraction in the market. In response to market demands, Transcend will promptly
adjust purchasing and inventory policies in order to flexibly adapt inventory levels. Basedon estimations from different market research institutions, end customers will graduallycomplete their inventory adjustments by the second half of 2023, and the supply anddemand of markets will return to normal. In addition, the rapid growth of applications of AI
and datacenters will keep the industrial application realm as a whole at a high growth speed,
where relevant applications require big data storage so the demands for SSD products are
estimated to continue to grow. In 2023, we will continue to enhance development andmarket expansion for SSDs, industrial flash products, external storage devices, dashcams,
and wearable multimedia devices.

-269-

7.3. Analysis of Cash Flow
7.3.1. Cash Flow Analysis for the Current Year2022
Net cash flows from operating activities 5,110,263
Net cash flows from investing activities (1,286,933)
Net cash flows from financing activities (2,629,543)
1,193,787

Unit:NT$ thousands
2021
Increase (Decrease)
2,445,068
2,665,195
263,187(1,550,120)(1,364,667)(1,264,876)
1,343,588(149,801)

Regarding the change of cash flow from operating activities, the amount in 2022 increased
by approximately NT$ 2.67 billion from the amount in 2021. It was mainly due to the
reduction of inventory purchase amount.
Regarding the change of cash flow from investing activities, the amount in 2022 decreased
by approximately NT$1.55 billion from the amount in 2021, and this was mainly due to theacquisition of financial assets at amortised cost in 2022 which caused higher cash outflow.
7.3.2. Liquidity Analysis for the Coming Year and Remedy for Cash Deficit
1. Operating activities: The overall gross profit is expected to grow continuously and theoperating activities will generate net cash inflow.
2. Investing activities: The Company will continue to perform appropriate investment withidle funds in order to gain stable investment profit, and it is expected to generate net cash
inflow.
3. Financing activities: Net cash outflow primarily from cash dividend payment.
Remedy for Liquidity Shortfall: Not applicable.
7.4. The Effect Upon Financial Operations of Any Major Capital Expenditures During the Most
Recent Fiscal Year
In 2022, the Company had no major capital expenditure. Up to the end of March 2023, theconsolidated cash and short-term investment position were approximately NT$ 12.7 billion.
After the deduction of relevant cash outflow items, the capital was still sufficient; therefore,
there was no risk of capital shortage.
7.5. Reinvestment Policy for the Most Recent Fiscal Year, the Main Reasons for Profits or Losses
Generated Thereby, Improvement Plans, and Investment Plans for the Coming Year
None.

-270-

7.6. Analysis of Risk Management
7.6.1. The Organization Structure of Risk Management
The organizational structure of risk management of the Company is as follows:
Organization nameScope of responsibility
Board of Directors(including the Audit
1. Establish risk management policy, structure and culture
Committee &2. Ensure the effectiveness of risk management mechanism
Remuneration Committee)
1. Execute risk management decision making
2. Cross-department
risk
management
interaction
andcommunication
Senior management level
3. Material risk early warning, assess potential loss, handle
follow-up strategy or report of risk mitigation and summarize
material risk event handling result
1. Monitor and periodically assess whether the risk control of all
departments is performed properly
Audit Office
2. Issue an audit report according to the audit result, and propose
improvement suggestions and follow up improvement progress
All departments ofheadquarters(Note)

1. Execute daily risk management activities
2. Execution of corporate management and risk decision making
3. Perform risk control activity assessment

Note: The authorities and responsibilities of all departments of headquarters are as follows:(1) FAD: Responsible for the Company’s financial analysis, accounting affairs, statements
preparation, difference analysis, fund management, planning of the Company’s taxes, finance,stock affairs and investments as well as monitoring of the cash flow of all subsidiaries, inorder to reduce financial risks.
(2) PUR: Responsible for understanding the quality condition and price trend of raw materials,
component parts, machine equipments and office supplies necessary for the products andoperation of the Company in order to perform price negotiation and purchase. It is also
responsible for maintaining the safety stock of the purchase items and assisting the handling ofslow-moving materials, in order to reduce risks of purchase management and slow-moving
inventory.
(3) PM & Marketing: Responsible for the Company’s reasonable pricing and fair distribution of
products, summarizing and analyzing the product information and pros/cons of each productline, and assisting the management of demands for customization, in order to reduce the riskof product planning management; responsible for matters related to the brand marketing
activities, strengthening of brand image, product and market information collection,
establishment and execution of marketing plans, contact and application of broadcast media,
planning of the Company’s website and assistance to sales activity arrangement and design,etc., in order to reduce risks related to brand marketing.
(4) Sales: Responsible for the establishment of market sales plan, development and maintenanceof customers, business management and promotion, collection and response to new business
opportunities, in order to reduce the market risks of new customer development, etc.
(5) R&D / Tech Support: Responsible for the research, development and design related matters forvarious products, research and development target estimation and management, new productresearch and development, handling and tracking of abnormalities, in order to reduce risks
related to research, development and design.
-271-

(6) Production: Responsible for relevant works of production schedule control, product packaging,repair and shipping operation, etc., in order to reduce risk of production capacity and shipping,etc.; responsible for the manufacturing, testing, repair of products and production technologies,
improvement of manufacturing quality etc., in order to reduce risks related to production andmanufacturing.
(7) ADM: Responsible for the management of corporate legal affairs, contracts, patents andintellectual property rights, human resource management and organization development, etc.,
in order to reduce risks of legal, administration and human resource management.
(8) Information System: Responsible for planning of information system, network establishment
and maintenance and various computer software and hardware installation and configuration
management related matters, in order to reduce risks of information security.
(9) Quality Assurance: Responsible for the establishment of the Company’s quality assurance
system, promotion of ISO system and QA management system, direct internal and external
audit and certifications, in order to reduce quality management related risks.
7.6.2. Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate
Finance, and Future Response Measures
1. Interest rate
Unit: NT$ thousands
2022
2021
Item
Amount%Amount%Interest income
114,926
7.63%
79,117
2.74%
Profit from operations
1,506,705
100.00%2,891,794
100.00%
The Company has a sound financial system. If there is any bank borrowing, theCompany enhances the close contact with the bank with respect to the loan interest ratein order to understand the interest rate trend, thereby obtaining the most preferable loan
and reference for asset allocation. Regarding the short-term idle capital utilization, theCompany mostly uses the USD and NTD time deposits, money market fund andfinancial instruments with low risk as the investment targets.
2. Foreign exchange rates
Item
Exchange Gains (loss)
Profit from operations

2022
Amount320,239
1,506,705%
21.25%
100.00%

Unit: NT$ thousands
2021
Amount%(14,506)(0.50%)
2,891,794
100.00%

There were exchange gains in 2022, which were mainly due to the impact of the sharp
depreciation of NTD to USD.
Due to the impact on the Company’s profit of changes in exchange rate, the Company
establishes the following countermeasures:(1) The export ratio of the Company is approximately 77%, and the main currencies are
USD and EUR. On the other hand, the main currency for purchase is USD. Throughappropriate proportion among these two types of currencies and through the offsets
between accounts receivable and accounts payable, the exchange rate fluctuation
among different currencies could be canceled out, such that the exchange rate change
would then achieve a certain level of natural hedging effect for the Company.
(2) The Company will adjust the foreign exchange position depending on the exchange
rate trend, and use appropriate financial tools to perform reasonable hedging-272-

operation.
(3) The Company also considers the exchange rate factor during the sales order quotationin order to ensure the reasonable profit of the Company.
(4) The Company maintains close contact with the foreign exchange department of thefinancial institution, understands the exchange rate trend and promptly adjusts theforeign exchange position in order to hedge the foreign exchange risk.
(5) The Company complies with the provisions of the “Procedures for Acquisition and
Disposal of Assets” and determines the reasonable hedge ratio and hedging toolaccording to the foreign exchange market trend.
3. Inflation
The main businesses of the Company refer to the manufacturing and sales of computer
peripherals and storage application products, and there have been no material impacts
due to inflation. The Company periodically adjusts the pricing strategy and pays
attention to the market price change in order to prevent possible risks associated with
inflation.
7.6.3. Policies, Main Causes of Gain or Loss and Future Response Measures with Respect toHigh-risk, High-leveraged Investments, Lending or Endorsement Guarantees, andDerivatives Transactions
1. The Company did not engage in any high-risk or high-leveraged investments in 2022.
2. The Company did not engage in any financial derivatives transactions in 2022. In the
future, the Company will perform periodic assessment depending upon the operation
status of the Company and the change of the market trend in order to flexibly adjust
relevant hedging strategies.
3. Status of the Company’s loaning of funds to others in 2022: None.
4. Status of the Company’s endorsements and guarantees in 2022: The Company provides aguarantee for Transcend Japan Inc. amounting to JPY 2,000,000 thousands. Pursuant to
the Company’s ”Procedures for Endorsement and Guarantee,” the maximum limit ofguarantee up to the end of 2022 was NT$ 7,772,199 thousands.
7.6.4. Future Research & Development Projects and Corresponding Budget
1. R&D projects and current status of pending R&D projects in the most recent year
Please refer to “5.1.3. Research and Development Overview.”
2. R&D budget for further investment
Please refer to “5.1.3. Research and Development Overview.”
3. Main factors affecting success of R&D
Since the entrance barrier for consumer products is relatively low, for new productdevelopment, product launch must be made at the right time in order to seize the business
opportunity. Accordingly, for R&D, it is necessary to shorten the schedule, and the
product function must be able to satisfy the fast and diverse demands from end-users at
the same time. The Company will cultivate more senior and specialized R&D talents. In
addition, the embedded products require stable quality, and customization must be
performed according to the customer demands. The Company has established a dedicatedunit for such product lines in order to enhance the R&D strength.

-273-

7.6.5. Effects of and Response to Changes on Important Domestic and Foreign Policies and Laws
Relating to Corporate Finance and Business
During 2021 and as of the date of publication of this annual report, changes in related laws
have not had a significant impact on our finance and operations. The Company consistently
pays close attention to any changes in local and foreign policies and makes appropriate
amendments to our systems when necessary.
7.6.6. Effects of and Response to Changes in Technology (including information security risks)
and the Industry Relating to Corporate Finance and BusinessIn the post-pandemic era, consumer demands will shift from individuals to corporations as aresult of the diminished pandemic dividend from life normalization, while demand formemory is expected to continue to grow due to the development of 5G, AIoT, corporate
servers, and industrial computer applications. Transcend will continue to adopt the productstrategy for both channel and project sales, to strengthen research and development energy,
to improve product integrity and performance, in order to implement reasonable pricing
strategy and outstanding customer service, thereby continuously creating stable profits for
the Company.
To cope with the advancement of digital technology, the Company plans to focus on theinformation security risk and the following measures have been implemented in the current
year:(1) To adapt to the working-from-home model, we will continue to purchase licensed VPN
software, enhance the authentication mechanism, and regularly check for irregularities of
the use of VPN accounts to prevent unauthorized users from accessing our sensitive data;and (2) renew the contract for the network system service for this year, simultaneously
upgrade the information security version, and purchase 2 sets of hardware firewall to
improve the protection level. The Company will continue to improve the information
security measures, to strengthen employees’ information security awareness and toperiodically review relevant policies and future development direction, in order to achieve
the goal of establishing a sound information security environment.
7.6.7. The Impact of Changes on Corporate Image on Corporate Crisis Management, and theCompany’s Response Measures
Under impact of the post-pandemic era and the overall economic change, corporate
development uncertainty is increased. Nevertheless, Transcend continues to strengthen thecompleteness of embedded products, launch new products without comprising productquality, and make product applications more diverse in order to meet the memory
requirements of different industries. Transcend is equipped with complete infrastructure,
production line and sound financial structure. In addition, the Company also emphasizes thecustomer value and customer-oriented approach. The future development goal of theCompany includes: (1) The growth momentum infused from the deep involvement of thechannel market and the expansion of industrial application projects; (2) win-win scenarios
created from cooperation on our group’s industrial projects; and (3) the professional
competencies of our sales representatives and the logistical support strengthened to create
added value by improving service quality. In the future, the Company will continue to exert
effort on the increase of product and service quality and will also convert customer
satisfaction and loyalty into stable profit of the Company.
In addition, to cooperate with the Corporate Governance 3.0 – Sustainable Development
Blueprint promoted by the government, Transcend will also actively engage in the corporate-274-

governance, prepare ESG report and is committed to protecting the interests of shareholders
and treating all shareholders equally, to enhance the functions of board of directors, toincrease information transparency, and to promote sustainable development, etc., in order toimprove international competitiveness of the Company and to fulfill the obligations for all
shareholders.
For 2022 and up to the printing date of the annual report, there have been no material risk
matters affecting the corporate image
7.6.8. Expected Benefits from, Possible Risks Relating to and Response to Merger andAcquisition Plans
None.
7.6.9. Expected Benefits from, Possible Risks Relating to and Response to Factory Expansion
Plans
None.
7.6.10. Risks Relating to and Response to Excessive Concentration of Purchasing or Sales
Operations
None.
7.6.11. Effects of, Risks Relating to and Response to Large Share Transfers or Changes inShareholdings by Directors or Shareholders with over 10% Shareholdings
None.
7.6.12. Effects of, Risks Relating to and Response to the Changes in Management Rights
None.
7.6.13. Litigation or Non-litigation Matters
None.
7.6.14. Other Major Risks and Response MeasuresNone.
7.7. Other Material Matters
The valuation accounts on the Company’s assets and liabilities include Allowance for loss on
accounts receivable, Allowance for loss on decline in market value of inventory, andFinancial assets impairment, etc. And the accounting policies adopted are as follows:
1. Allowance for loss on accounts receivable
The Company classifies customers’ accounts receivable in accordance with the credit
rating of the customer. The Group applies the simplified approach to estimate expectedcredit loss under the provision matrix basis. The Company used historical and timely
information to assess the loss rate of accounts receivable.
2. Allowance for loss on decline in market value of inventory(1) Inventories are stated at the lower of cost and net realizable value. The item by item
approach is used in applying the lower of cost and net realizable value. Net realizablevalue is the estimated selling price in the ordinary course of business, less theestimated cost of completion and applicable variable selling expenses. When the net
realizable value is lower than cost, the difference is recognized as loss on decline in-275-market value of inventory.
(2) When the ending inventory has not changed for more than six months, it is deemed as
slow-moving inventory and is listed in the slow-moving inventory report. And loss for
slow-moving inventory will be 100% recognized.
(3) When the ending inventory refers to products that the Company no longer
manufactured and sold, those products are deemed as slow-moving inventory and arelisted in the slow-moving inventory report. And loss for slow-moving inventory willbe 100% recognized.
3. Financial assets impairment
For financial assets at amortised cost including accounts receivable that have a significant
financing component, at each reporting date, the Group recognizes the impairment
provision for 12 months expected credit losses if there has not been a significant increasein credit risk since initial recognition or recognizes the impairment provision for the
lifetime expected credit losses (ECLs) if such credit risk has increased since initialrecognition after taking into consideration all reasonable and verifiable information that
includes forecasts. On the other hand, for accounts receivable or contract assets that do notcontain a significant financing component, the Group recognizes the impairment provision
for lifetime ECLs.

-276-

8. Special Disclosure
8.1. Information of Affiliated Companies
8.1.1. Organizational Chart of Affiliated Companies-277-

8.1.2. Summary of Affiliated Companies
Name
Saffire Investment
Ltd.
Memhiro Pte. Ltd.

Date ofincorporationAddress

Citco Building, Wickhams Cay,
12/18/1997 P.O.BOX 662, Road Town,
Tortola, B.V.I.
60 Albert Street, #14-01 OG Albert
03/14/1998
Complex, 189969 Singapore

Transcend Japan
Inc.

12/11/1996

1-8-5,Kuramae, Taito-Ku, Tokyo,
111-0051, Japan

Transcend
Information Europe
B.V.

06/28/1995

Cairostraat 40, 3047 BC,
Rotterdam,The Netherlands

Transcend
Information Inc.

03/28/1990

1645 North Brian St. Orange, CA
92867, U.S.A.

Transcend
Flughafenstrasse 52b(AirportInformation Trading 09/29/1992
Center), 22335 Hamburg, GermanyGmbH
12F, CBS Bldg., 159-1,
Transcend Korea
07/09/2008 Mokdongseo-ro, Yangcheon-gu,
Inc.
Seoul, Korea
Transcend
Information(Shanghai), Ltd.

No.1, Central Avenue, Shanghai
Minhang Export Processing
03/25/2005
Zone,Fengxian District, Shanghai,
China.

Paid-in capital

Main scope of operationor production

216,829 Investment holdings
173,702 Investment holdings
Wholesale of computer
89,103 memory modules andperipheral products
Wholesale of computer
1,693 memory modules andperipheral products
Wholesale of computer
38,592 memory modules andperipheral products
Wholesale of computer
2,288 memory modules andperipheral products
Wholesale of computer
6,132 memory modules andperipheral products
Manufacture and sales ofcomputer memory
150,787 modules, storage products
and disks, and lease of
self-owned buildings

Room403, Floor 4 ,No. 1010,
Transtech Trading
09/21/2006 Kaishiuan Road, Changning(Shanghai) Co., Ltd.
District, Shanghai, China

Wholesale, agent, importand export and retail of
16,310 computer memory
modules, storage products
and computer components

Transcend
Information (H.K.)
LimitedWholesale of computer
7,636 memory modules andperipheral products

Unit 17-18, 10/F, Nan Fung Comm
01/08/2013 Centre, 19 Lam Lok Street,
Kowloon Bay, Hong Kong-278-

8.1.3. Profile of Directors, Supervisors and General Managers of Affiliated Companies
Number of Shares
Name of
Name
Title
Represnetative
Shares%DirectorShu, Chung-Cheng
Memhiro Pte. Ltd.
8,277,609
100%
Director
Wang, LiWei
Saffire Investment Ltd.
DirectorShu, Chung-Cheng
6,600,000
100%
Transcend Japan Inc.
Director
Lin,Taikin
6,400
100%
Tellier, Yoann
Transcend Information Europe B.V.
Director
100
100%
Roger Jean
Transcend Information Inc.
Director
Clarence Chan
625,000
100%
DirectorShu, Chung-Won
Transcend Information Trading GmbH
100%
GeneralShu, Chung-Won
Manager
Executive
Transcend Information (Shanghai), Ltd.
Shu, Chung-Cheng
100%
Director
Executive
Transtech Trading (Shanghai) Co., Ltd.
Shu, Chung-Cheng
100%
Director
Director
Shim Dong Hoon
Transcend Korea Inc.
40,000100%
GeneralShim Dong Hoon
Manager
Transcend Information (H.K.) Limited
DirectorShu, Chung-Cheng
2,000,000
100%

-279-

8.1.4. Overview of Affiliated Companies’ Operations for 2022
Unit: NT$ thousands
Name

Capital

Total Assets

Total
Liabilities

Net Worth

Net Sales

Transcend Japan Inc.
Saffire Investment Ltd.
Memhiro Pte. Ltd.
Transcend Information Inc.
Trnascend Information Europe B.V.
Transcend Information Trading GmbH
Transcend Information (Shanghai), Ltd.
Transtech Trading (Shanghai) Co., Ltd.
Transcend Korea Inc.
Transcend Information (H.K.) Limited

89,103
216,829
173,70238,592
1,693
2,288
150,787
16,3106,132
7,636

370,916
1,676,139
1,632,726
250,614323,309
178,455
1,317,499
210,675
109,097
37,147

141,888
100,171
88,37655,708
165,427
152,076
45,583
1,449

229,028
1,676,139
1,632,726
150,442
234,933
122,747
1,152,072
58,59963,51435,697548,713708,704
558,287565,705
791,562356,683
179,102

Profit (Loss)
Profit (Loss) Earnings perfromfor the year share (NT$)
Operations
4,507
4,004
625.73(171)
1,174,872
178.01
15,983
1,174,490
141.8915,61021,452
34.32
(668)
4,143
41,431.28
5,820
5,068
(22,000)
1,128,705
10,83911,5994,474
4,275
106.87
3,086
2,474
1.24

8.1.5. Consolidated Financial Statement of Affiliated Enterprises
Please refer to page 118~188 of this Annual Report.
8.1.6. Affiliation Reports
Not applicable.
8.2. Private Placement of Securities in 2022 and as of the date of this Annual ReportNone.
8.3. Status of the Company’s Common Shares Held and Disposed by Subsidiaries in 2022 and as of the date of this Annual ReportNone.
8.4. Other Necessary Supplement
None.
9.

Latest Matters with Material Impacts on Shareholders’ Interests or Security Prices Indicated in Paragraph 3 Subparagraph 2 of Article 36 of
the Securities and Exchange Act in 2022 and as of the date of this Annual Report
None.
-280-

Transcend Information, Inc.
No. 70, XingZhong Rd., NeiHu Dist., Taipei 114, Taiwan
Tel:886-2-2792-8000

Fax:886-2-2792-3375

https://tw.transcend-info.com

Transcend Information, Inc.

Chairman: Shu, Chung-Won