The impact of the COVID-19 pandemic on life and health has intensified, geopolitical conflicts have led to supply chain disruptions and economic losses, and global warming has led to an increase in an extreme climate, bringing unprecedented impacts, challenges and risks to enterprises and governments around the world. ABC-ATEC Electronics Group has likewise been impacted by the pandemic. However, with the strong resilience empowered by its over 40 years of experience, the Group has been able to sustain its business development by upholding the spirit of "only the paranoid survive, only the innovator succeeds & only the speedy player wins", with business scopes continuing to grow and develop. The Group's consolidated net revenue for 2021 was NT$2,478,376 thousand, representing a 22.65% growth in revenue, and net profit after tax was NT$94,760 thousand, representing a 28.29% growth in profit, an achievement of double-digit growth.

Sustainable Governance is Key to Corporate Success
In order to comply with the Financial Supervisory Commission's "Corporate Governance 3.0" requirements and to ensure conformance with global trends, a Corporate Social Responsibility Management Committee ("CSR Committee") has been established in 2020 to formulate sustainable development strategies and integrate sustainable development into the Group's strategic plans and daily operations. To date, the CSR Committee regularly reports to the Board of Directors on environmental, social and governance (ESG)-related issues and the status of implementation of its objectives. ESG is the most critical term in 2021, as international majors demand carbon reduction in their supply chains, and various requirements come to the forefront; business operations must keep up with the times or be left behind. Among the three ESGs, the environmental-related issue of climate change is the most important. In order to implement the Group's corporate social responsibility, I requested that the second sustainability report published this year simultaneously disclose the environmental performance of our subsidiaries, and that we leverage the expertise of our Board of Directors, CSR Committee and external advisory team to monitor the risks associated with our business.

Innovative Technology and Industry-Academia Cooperation
For more than four decades, ABC has been working with various academic institutions to research and develop new materials, technologies, and products. Through close industry-academia cooperation, we have been working on basic materials (metal powder granulation technology and research on heat sink efficiency improvement technology) and processing technology research and development (three-dimensional structure electronic component module design and process development, AOI+AI smart processing). The AOI+AI project is almost complete, which is expected to save about one-third of the production line's visual inspection manpower and improve customer satisfaction in terms of delivery and quality.Continuous innovation is ABC's unwavering goal. In response to the changing needs of customers, the Group actively develops new products and has medium and long-term plans for future product expansion and investment. In addition to investing in the newly purchased Yangmei Plant 2 in Taiwan, the Group has also built a new plant in Malaysia and is looking ahead to the feasibility of setting up locations in Vietnam and India, including setting up warehouses there, controlling inventory and shipping locally to provide professional manufacturing and quality service. We will establish a "One to One" partnership with our customers and respond to their needs with quality services. Technology research and innovation are the foundation of corporate growth and sustainability. In 2021, we established the Technology Innovation and Development Committee ("Innovation Committee"), which is directly under the Board of Directors, as the highest steering body for the development of technological innovation in ABC, and are making great strides in moving toward a more focused and sophisticated innovative technology. We are also in the process of applying for the "ABC Electronics Foundation" to support research in the field of electronic components and cultivate talents in the field of electronic components, including a Taiwan Electrical and Electronic Engineering Master's and Doctoral Research Fellowship program, grants for participating in international conferences, internships in the Silicon Valley, and a Doctorate/Master's Thesis Award, which are designed to enhance the momentum of innovation through technology, so as to continue our competitive advantage and leadership in the industry. In the future, we will expand industry-academia collaboration through the "Application of Metaverse Concept Project" with the E-Business Research Center of National Taipei University, with the aim of expanding the Group's business development in the areas of "research on the development trend of the global IM market" and research and planning of marketing channels in the global IM market.

Environmental Protection, Towards Net Zero Carbon Emissions
With the development of the global economy, human consumption and demand for energy are increasing rapidly, and energy consumption brings about a large amount of greenhouse gas emissions, resulting in extreme weather caused by the greenhouse effect. The Group reduces the impact and damage to the environment through the green design of products, control of harmful substances and disposal of products after their useful life cycle. In 2022, the Group introduced the greenhouse gas inventory, which is ahead of the FSC's plan to complete the greenhouse gas inventory roadmap for all parent companies, domestic and foreign subsidiaries of listed companies by 2027. As the products we manufacture cannot use recycled materials, we focus on the final management of waste disposal service providers according to ISO 14001:2015 environmental management system to contribute to the circular economy, reduce pollution and conserve resources year by year, and reduce the impact of business operations on the environment.

Caring for Employees and Creating a Happy Workplace
I value each and every one of our employees and consider them as important as family members. Every month, together with our senior executives, we personally present a red envelope and a red rose to the birthday guy/ girl of the month to thank them for their contributions to the company and to let them feel the company's care for them. With the increase in the proportion of middle-aged employees, it is increasingly important to provide a physically and mentally beneficial working environment. We will continue to provide a series of health promotion activities, such as rope skipping and stepping competitions, weight loss activities, smoking cessation activities, muscle health seminars, etc., to support the physical and mental health of our employees. In 2021, we were even awarded the "Badge of Accredited Healthy Workplace" by the Health Promotion Administration. We will continue to create a caring health and safety culture that reduces potential workplace hazards and promotes physical and mental health.

Rooted in the Local Community, Contributing to the Common Good
The Company has its roots in Yangmei, a famous Hakka town, and we recognize the local culture and give back to local development. In view of the fact that the use of the Hakka language at home is decreasing year by year and the Hakka culture is in danger of being disconnected, in order to pass on the Hakka culture, we have been sponsoring the Hakka cultural activities in Rui-Yuan Junior High School for many years, and cultivate students to be proud of speaking Hakka. We also sponsor Seqalu and Hakka concerts and art exhibitions to enhance the public's literacy in art and lifestyle.

Fighting the Pandemic and Supporting Medical Services
The outbreak of the COVID-19 pandemic requires a rapid response from the government, businesses and local communities. Since the outbreak, the Ministry of Health and Welfare's hospitals have been the first line of care for 35% of the country's patients. At the most critical juncture of the outbreak (The Taoyuan Hospital Incident), the Company donated to the Ministry of Health and Welfare's Taoyuan Hospital to ensure that the front-line medical staff can continue to work with peace of mind, and the nation does not have to worry about the collapse of medical capacity. Since the pandemic has not yet abated, we will continue to implement epidemic prevention measures to protect the health of our employees and the continued operation of our businesses. The Russia-Ukraine war broke out in February 2022, which has severely impacted the global stock market, as well as the precious metals, energy and industrial supply chain. Taiwan's technology industry has grown from strength to strength, and the New Taiwanese Dollar is expected to continue to be a strong currency. The Group, which is mainly focused on the export market, will again face the predicament of the rapid appreciation of the New Taiwan Dollar, last seen in 1987. In response to the severe challenges of the strong New Taiwan Dollar, I have adjusted the Group's development and investment direction to "small capital, big revenue", and plan production and revenue targets for 2022~2023 and a capital expenditure budget of nearly NT$ 1 billion to invest in plant construction, R&D and production facilities, and continuous investment in R&D innovation for production expansion and enhanced efficiency. These investments will serve as a strong backbone for the Group. I will lead all of my colleagues to support the core business of ABC with technological prowess, to continuously innovate, to continue to achieve double-digit growth targets, to reach the vision of "annual revenue of NT$10 billion dollars within ten years", and to move towards the goal of becoming a world-class inductor manufacturing group.

ABC-ATEC Electronics Group