Abnova — Annual Report 2023

May 24, 2024

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Stock Code: 4133

Abnova (Taiwan) Corporation

2023Annual Report

Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw Abnova (Taiwan) Corporation Annual Report is available at: http://www.abnova.com

Printed on Apr. 3, 2024

Notice to readers.

THIS IS A TRANSLATION OF THE 2023 ANNUAL REPORT (THE “ANNUAL REPORT”) OF ABNOVA (TAIWAN) CORPORATION (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE ANNUAL REPORT SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

Spokesperson

Name: Jih Pei Ju Title: President Tel: 886-2-87511888 E-mail: ir@abnova.com.tw

Headquarters, Branches and Plant

Headquarters Address: 9th Fl., No.108, Jhouzih St. Neihu District. Taipei Taiwan Tel: 886-2- 87511888

Deputy Spokesperson

Name: Tung I Ling Title: Chairman Office Special Assistant Tel: 886-2-87511888 E-mail: ir@abnova.com.tw

Zhongli Qingpu Plant

Address: No. 326-8, Sec. 4, Zhongzheng Rd. Zhongli Dist., Taoyuan Taiwan Tel: 886-3-4989228

Stock Transfer Agent

KGI Address: 5F., No. 2, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City Tel: 886-2-23892999 Website: http://www.kgieworld.com.tw

Auditors

KPMG Accounting Firm Auditors: Chiang Hsiao Ling, Kuo Rou Lan Address: 68F., No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City Tel.: 886-2-81016666 Website: http://www. kpmg.com.tw

Overseas Securities Exchange

None

Corporate Website

http://www. abnova.com

Table of Contents

Page number

I. Letter to Shareholders ................................................................................................................ 1 II. Company Profile 2.1 Date of Incorporation ............................................................................................................. 5 2.2 Company History ................................................................................................................. 5 III. Corporate Governance Report 3.1 Organization ........................................................................................................................... 7 3.1.1 Organization Chart .............................................................................................................. 7 3.1.2 Major Corporate Functions ................................................................................................. 8 3.2 Information on the Directors, Supervisors and Management Team .................................... ..9 3.2.1 Directors and supervisors .................................................................................................... ..9 3.2.2 Information on the company's President, assistant Presidents, Senior managers, and the chiefs of all the company's divisions and branch units ................................................................ 18 3.2.3 Remuneration of Directors, Independent Directors, Supervisors, President, and Vice Presidents ..................................................................................................................................... 19 3.2.4 Separately compare and describe total remuneration, as a percentage of net income stated in the parent company only financial reports or individual financial reports, as paid by this company and by each other company included in the consolidated financial statements during the past 2 fiscal years to directors, supervisors, Presidents, and assistant Presidents, and analyze and describe remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure ............................................................................................................................................. 24 3.3 Corporate Governance ...................................................................................................... …...27 3.3.1 Board of Directors ............................................................................................................... 27 3.3.2 Performance Evaluation of the Board of Directors ............................................................. 31 3.3.3 Audit Committee ................................................................................................................. 31 3.3.4 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” ....................... 34 3.3.5 If the company has a remuneration committee or nomination committee in place, the composition and operation of such committee shall be disclosed ....................................... 45 3.3.6 Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies .................................................................. 46 3.3.7 Climate-Related Information of TWSE ／ TPEx Listed Company ...................................... 58 3.3.8 Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies ...................... 61 3.3.9 If the company has adopted corporate governance best-practice principles or related bylaws, disclose how these are to be searched .................................................................................. 63

• 3.3.10 Other significant information that will provide a better understanding of the state of the company's implementation of corporate governance may also be disclosed ...................... 63

• 3.3.11 Internal Control System .................................................................................................... 64

• 3.3.12 If there has been any legal penalty against the company or 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 equity or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement ...................................................... 65

• 3.3.13 Material resolutions of a shareholders meeting or a board of directors meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ........................................................................................................................ 65

• 3.3.14 Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director or supervisor has expressed a dissenting opinion with respect to a material resolution passed by the board of directors, and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof .................................................................................................................................. 66

• 3.3.15 A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the company's chairperson, President, chief accounting officer, chief financial officer, chief internal auditor, chief corporate governance officer, and chief research and development officer ............... 66

• 3.4 Information Regarding the Certified Public Accountants' Audit Fee .................................... 67

3.4.1 The securities firm shall disclose the amounts of the audit fees and non-audit fees paid to the attesting CPAs and to the accounting firm to which they belong and to any affiliated enterprises as well as the details of non-audit services ........................................................ 67 3.4.2 When the securities firm changes its accounting firm and the audit fees paid for the financial year in which the change took place are lower than those paid for the financial year immediately preceding the change, the amount of the audit fees before and after the change and the reason shall be disclosed ......................................................................................... 67 3.4.3 When the audit fees paid for the current financial year are lower than those paid for the immediately preceding financial year by 10 percent or more, the amount and percentage of and reason for the reduction in audit fees shall be disclosed ............................................... 67 3.5 Information on replacement of certified public accountant ................................................... 67 3.5.1 Regarding the former certified public accountant ............................................................... 67 3.5.2 Regarding the successor certified public accountant .......................................................... 68 3.5.3 The reply of former CPAs on Article 10.6.1 and Article 10.6.2.3 of the Standards ......... 68 3.6 Where the company's chairperson, President, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm, the name and position of the person, and the period during which the position was held, shall be disclosed............................................................................................................................... 68 3.7 Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report .............................................................................................. 68 3.7.1 Change in shareholding by directors, supervisors, managerial officers, or major shareholders ................................................................................................................................................ 68 3.7.2 Stock trade with related party by directors, supervisors, managerial officers, or major shareholders ............................................................................................................................ 69 3.7.3 Stock pledge with related party ........................................................................................... 69 3.8 Relationship information, if among the company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another ......................................... 69 3.9 The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company and total shareholding ............................................................. 70 IV. Capital Overview 4.1 Capital and Shares .................................................................................................................. 71 4.1.1 Source of capital stock ........................................................................................................ 71 4.1.2 Composition of Shareholders .............................................................................................. 72 4.1.3 Distribution of Shareholding ............................................................................................... 72 4.1.4 List of major shareholders ................................................................................................... 73 4.1.5 Information on share prices, net worth per share, earnings per share, dividends per share for the past 2 fiscal years ........................................................................................................... 73 4.1.6 Company's dividend policy and its state of implementation ............................................... 74 4.1.7 Effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent shareholders' meeting ............................................ 75 4.1.8 Profit-sharing compensation of employees and directors ................................................... 75 4.1.9 Share repurchases by the Company .................................................................................... 76 4.2 Issuance of corporate bonds ................................................................................................... 76 4.3 Preferred shares ...................................................................................................................... 76 4.4 Global depository receipts .................................................................................................... 76 4.4 Employee share subscription warrants ................................................................................... 76 4.6 New restricted employee shares ............................................................................................. 76 4.7 Issuance of new shares in connection with mergers or acquisitions or with acquisitions of shares of other companies .................................................................................................... 76 4.8 Capital allocation plans .......................................................................................................... 76 V. Operational Highlights 5.1 Business Activities ................................................................................................................. 77 5.1.1 Business Scope .................................................................................................................. 77 5.1.2 Overview of the industry ..................................................................................................... 80 5.1.3 Overview of technologies and research and development work ......................................... 91

5.1.4 Long- and short-term business development plans ............................................................. 92 5.2 Market and Sales Overview ................................................................................................... 94 5.2.1 Market analysis.................................................................................................................... 94 5.2.2 Usage and manufacturing processes for the company's main products .............................. 98 5.2.3 Supply situation for the company's major raw materials .................................................... 99 5.2.4 List of suppliers and clients accounting for 10% or more of the company's total procurement (sales) amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement (sales) accounted for by each, and an explanation of the reason for increases or decreases ...................................................................... …………99 5.2.5 Production in the Last Two Years ................................................................................... ..100 5.2.6 The volume of units sold for the 2 most recent fiscal years ............................................ ..100 5.3 The number of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, their average years of service, average age, and education levels ....................................................................................... ..101 5.4 Environmental Protection Expenditure .............................................................................. ..101 5.5 Labor Relations .................................................................................................................. ..101 5.5.1 Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests ......................................................................... ..101 5.5.2 Any losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to labor disputes, and disclosing an estimate of possible expenses that could be incurred currently and, in the future, and measures being or to be taken ............ ..102 5.6 Cyber Security Management .............................................................................................. ..102 5.6.1 Cyber security risk management framework, cyber security policies, concrete management programs, and investments in resources for cyber security management .......................... ..102 5.6.2 Losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to significant cyber security incidents, the possible impacts therefrom, and measures being or to be taken ............................................................................................. ..105 5. 7 Important Contracts ........................................................................................................... ..106 VI. Financial Information 6.1 Financial summary for the past 5 fiscal years. ................................................................... ..107 6.1.1 Consolidated condensed balance sheets and statements of comprehensive income ....... ..107 6.1.2 Parent company only condensed balance sheets and statements of comprehensive income ............................................................................................................................................ ..108 6.1.3 Name of the certified public accountant and the auditor's opinion for the past 5 fiscal years ..................................................................................................... ..109 6.2 Financial analysis for the past 5 fiscal years ...................................................................... ..109 6.2.1 Analysis of Consolidated Financial Statements .............................................................. ..109 6.2.2 Analysis of individual financial statements .................................................................... ..111 6.3 Inspection Report of Supervisors or Audit Committee for the most recent year's financial statement ............................................................................................................................. ..113 6.4 Financial statement for the most recent fiscal year ............................................................ ..113 6.5 Parent company only financial statement for the most recent fiscal year .......................... ..113 6.6 If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation ............................................................................................................................................ ..113 VII. Review of Financial Conditions, Operating Results, and Risk Management 7.1 Analysis of Financial Status ............................................................................................... ..114 7.2 Analysis of Operation Results ............................................................................................ ..114 7.2.1 Analysis of Financial Performance ................................................................................. ..114 7.2.2 Sales volume forecast and the basis therefor, and describe the effect upon the company's financial operations as well as measures to be taken in response ...................................... ..114 7.3 Analysis of Cash Flow ....................................................................................................... ..115 7.3.1 Analysis of cash flow changes during the most recent fiscal year .................................. ..115 7.3.2 Corrective measures to be taken in response to illiquidity .............................................. ..115 7.3.3 Solvency analysis for the coming year ............................................................................ ..115 7.4 Effect upon financial operations of any major capital expenditures during the most recent fiscal year ..................................................................................................................................... ..115

7.5 Reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year .................................................................................................................. ..115 7.5.1 Reinvestment policy for the most recent fiscal year ....................................................... ..115 7.5.2 The main reasons for the profits/losses generated thereby, the plan for improving reinvestment profitability, and investment plans for the coming year ............................... ..116 7.6. Risk analysis in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report .......................................................................................... ..116 7.6.1 Effect upon the company's profits (losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future .................. ..116 7.6.2 The company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses thereby generated; and response measures to be taken in the future ...... ..117 7.6.3 Research and development work to be carried out in the future, and further expenditures expected for research and development work .................................................................... ..117 7.6.4 Effect on the company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response ............ ..117 7.6.5 Effect on the company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response ....................................... ..117 7.6.6 Effect on the company's crisis management of changes in the company's corporate image, and measures to be taken in response ................................................................................. ..118 7.6.7 Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken ........................................................................... ..118 7.6.8 Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken ............................................................................................. ..118 7.6.9 Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken ............................................................................................. ..118 7.6.10 Effect upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10% stake in the company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken .118 7.6.11 Effect upon and risk to company associated with any change in governance personnel or top management, and mitigation measures being or to be taken ........................................ ..118 7.6.12 Litigious and non-litigious matters ............................................................................... ..118 7.6.13 Other important risks, and mitigation measures being or to be taken ........................... ..118 7.7 Other important matters ..................................................................................................... ..118 VIII. Special Disclosure 8.1 Information of the Affiliates .............................................................................................. ..119 8.1.1 Consolidated Business Report of the Affiliates .............................................................. ..119 8.1.2 Consolidated Financial Statements of Affiliated Enterprises .......................................... .121 8.2 Private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, and the status of use of the capital raised through the private placement of securities, the implementation progress of the plan, and the realization of the benefits of the plan ................................................................................ ...121 8.3 Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report .................................................................................................................................. ...121 8.4 Other matters that require additional description ........................................................ .........121 IX. If any of the situations listed in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ............................................ .121

I. Letter to Shareholders

Appreciate shareholders’ support of Abnova. The following is Abnova's 2023 achievement sharing and 2024 outlook report:

I. 2023 Operating Results: (Consolidated Financial Statements)

1. Implementation overview and business plan implementation results: The operating revenue in 2023 was NTD 382,052,000, which is 7.21% lower than the 2022 operating income of NTD 411,756,000. The net income after tax in 2023 was NTD 43,678,000, which is a decrease of 41.64% compared with the net profit after tax of NTD 74,843,000 in 2022. 2023 EPS is NTD 0.72.

2. Analysis of financial balance and profitability: Please refer to the attached financial statements for the financial overview of 2023.

3. Research Development Overview: The expenses invested in research and development in 2023 was NTD 38,396,000, which is 21.22% lower than the 2022 expenses of NTD 48,740,000. The R&D mainly involves the products relevant to the applications of recombinant antibodies, nanobodies, miRNA, and mRNA cancer vaccine therapy platforms.

II. 2024 Business Plan:

1. Business Marketing:

Abnova engages in the sales of biological reagents for scientific research primarily through global-scale distributors and regional distributors in various countries. Abnova launched its new website in 2023, offering a more convenient and seamless online ordering experience for directsale customers and a user-friendly member center. The website incorporates interface concepts centering on mobile devices, presenting a fresh and improved visual appearance with enhanced user privacy protection. This aims to meet consumer demands and enhance the willingness of end customers to place orders directly on the website. In 2024, Abnova will continue to optimize its website to improve user satisfaction.

2. Product Development:

(1) miRNA Probe Customization and Catalog Products:

In Q3 2023, Abnova launched a new miRNA probe customization service and catalog products to meet the growing demand for miRNA research tools in both academic and industrial sectors. miRNA probes play a crucial role in studying miRNA expression, gene regulation, functional analysis, biomarker relevance, and drug development in biological samples. Abnova offers customization services and highly sensitive miRNA probes to meet various research needs and plans to continue expanding its miRNA catalog product line in 2024 to better cater to the evolving market demands, providing the most advanced miRNA research tools with more choices to support customers in the development of miRNArelated research fields.

• ⚫ miRNA Probe Customization Service:

• https://www.abnova.com/en global/services/mirna_probes

• ⚫ miRNA Probe Catalog:

https://www.abnova.com/en-global/product/filter?category=ARAN00000000

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(2) miRNA (circRNA) Sponge

miRNA (circRNA) Sponge is an artificial non-coding circular RNA. By integrating multiple miRNA targeting fragments on the miRNA sponge, the diversity of miRNA sponge adsorption can be increased. Compared to linear miRNA sponges, circular miRNA sponges lack 5' and 3' ends, exhibit low immunogenicity without the need for nucleoside modification, and resist degradation by nucleases, thereby enhancing adsorption stability and efficiency. miRNA sponges also overcome the toxicity concerns of traditional antimiRNA oligonucleotides (AMOs) and dosage limitations associated with plasmid-based miRNA sponges. In 2023, Abnova successfully launched a new miRNA sponge product line and plans to expand its catalog product line in 2024 to provide stable and efficient miRNA sponge products, supporting both in vivo and in vitro miRNA research fields. ⚫ miRNA Sponge Technology:

• https://www.abnova.com/en global/support/technologies/circrna_sponge

(3) Recombinant Antibodies:

Recombinant antibodies are antibodies prepared through DNA sequence recombination technology, distinguished from the traditional preparation of mouse monoclonal antibodies, which involves immunizing mice, isolating B cells from their spleen or lymph nodes, and then fusing them with myeloma cell lines to select hybridoma cell lines that secrete antibodies. In contrast, recombinant antibodies are prepared through in vitro DNA sequence recombination technology, where the genes encoding the antibody's light and heavy chains are inserted into expression vectors and transfected into host cells for antibody expression. Recombinant antibodies offer several advantages, including high specificity and sensitivity, as well as superior batch-to-batch consistency. Furthermore, recombinant antibodies allow for antibody quantification using mammalian cell lines, eliminating the need for antibody quantification preparations relying on mouse ascites production, thus adhering to the 3R principle of animal experimentation.

Abnova provides a variety of high-quality recombinant antibody options rigorously tested for their specificity to meet diverse customer demands for antibodies. In 2024, Abnova will continue to improve the qualitative results of its recombinant antibody catalog products to meet customer needs with more comprehensive qualitative data.

⚫ Recombinant Antibody Catalog Products:

• https://www.abnova.com/en global/product/specializedproductsearch/recomab

(4) Nanobodies:

Compared to traditional antibodies, nanobodies demonstrate several significant advantages. Nanobody molecules have a molecular weight of only one-tenth that of traditional antibodies, rendering better solubility and easier penetration of cellular tissues. Nanobodies possess higher antigen affinity, enabling them to bind more firmly and stably to antigens. Meanwhile, the low immunogenicity of nanobodies reduces the risk of immune reactions. The mass production of nanobodies can be made possible rapidly and stably through mammalian cell lines. These advantages make nanobodies promising in a wide range of applications in medical research, disease diagnosis, and treatment, particularly in the pharmaceutical industry, where they have the potential to overcome the limitations of traditional antibodies. Abnova's nanobody products not only offer customized services but also launched a nanobody catalog product at the end of 2023. In 2024, Abnova will continue to expand its catalog of targeted human gene-related nanobody products, providing refined catalog products to meet customer demands and offering more convenient choices for customers.

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• ⚫ Nanobodies Customization Service:

• https://www.abnova.com/en global/services/nanoab_service_1

• ⚫ Nanobodies Catalog Products:

• https://www.abnova.com/en global/product/specializedproductsearch/camelid

• (5) CellTX[TM] Regeant for Cytotherapy:

The cytotherapy market continues to thrive, especially in the field of cancer treatment. Abnova has integrated the CellTX[TM] cytotherapy product line from the end of 2023 to 2024, meanwhile launching three types of cytotherapy reagents:

• (A) GMP-Grade Protein for Cell Culture in Cytotherapy:

• Cytotherapy procedures require the isolation and expansion of specific cells in vitro, and various cytokines are needed during the culture process to expand specific cells. Abnova is committed to meeting the high-quality demand for GMP-grade proteins for cell culture in the cytotherapy market. In Q1 2024, Abnova launched GMP-grade proteins specifically designed for cytotherapy cell culture to meet the growing demands of the expanding cytotherapy market. Abnova also provides cytotherapy culture proteins for scientific research purposes to meet different user needs.

• (B) The Humanized Monoclonal Antibodies Relevant to Cytotherpy: Humanized monoclonal antibodies retain the complementarity-determining region sequences of mouse monoclonal antibodies, maintaining the affinity and specificity of the original mouse monoclonal antibodies. Other sequences are modified through humanization engineering to replace them with human antibody sequences, reducing immunogenicity and improving test safety. These antibodies are crucial in cancer research and the development of new drugs for autoimmune diseases. Leveraging years of antibody production experience, Abnova provides premium humanized monoclonal antibody catalog products for cytotherapy research through antibody humanization engineering, offering customers convenient research tools to meet the rapid development needs in the field of cytotherapy.

• (C) Human and Mice CD3/CD28 ActiveBeads[TM] :

• The cytotherapy process involves isolating specific cells from the blood for activation and expansion in vitro. Therefore, suitable cell activation reagents are essential for developing cytotherapy drugs. In 2023, Abnova began developing T-cell activation reagents. Through various processes including the development of CD3, and CD28 monoclonal antibodies to antibody humanization, and coupling of humanized antibodies with beads, Abnova successfully developed Human CD3/CD28 ActiveBeads[TM] . Furthermore, Abnova simultaneously launched Mouse CD3/CD28 ActiveBeads[TM] in response to the demand for mouse model testing in the development stages of cytotherapy drugs, meeting the needs of users in various stages of development.

• ⚫ CellTX[TM] Cytotherapy Reagent Catalog Products: https://www.abnova.com/en-global/product?category=BA0000000000

(6) mRNA Cancer Vaccine Treatment Platform Development:

The Abnova mRNA cancer vaccine therapy platform integrates antigen targets, expression vector design, and non-viral vector technology with LNP delivery, replacing the slow virus system with high manufacturing costs and limited scalability under the existing business models. It is expected that in 2024, optimization of the mRNA cancer vaccine for triplenegative breast cancer (TNBC) will be completed through testing in mouse models,

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followed by GLP preclinical animal studies and pharmacokinetic tests. Based on the data, continuous progress will be made to refine preclinical trial data.

III. The effect of external competition, the legal environment, and the overall business environment

1. External Competition:

In recent years, the health of humankind and the global economy has been impacted by the outbreak of COVID-19 and various infectious diseases, leading to increasing attention to the biotechnology and medicine industry.

Various countries have introduced incentive policies, which will attract many competitors to join, but also promote the vigorous development of the biotechnology and medical industry, cultivating more outstanding talents, which is expected to contribute to the long-term development of the whole industry.

2. Legal Environment:

Abnova strictly controls product quality and has ISO9001 certification of Neihu Plant. In response to the needs of different products and countries, relevant laws and regulations of various countries shall be followed. Meeting the above specifications will increase the management and application costs, but at the same time, it can also guarantee product quality and improve customer recognition.

3. Overall Business Environment:

About 97% of Abnova's products are exported, and the main sales areas are America, Europe, Japan, etc. The transaction currency is mainly USD, followed by Euro. Since the recent fluctuations in the US dollar exchange rate have had an impact on the Company, the financial department closely observes the exchange rate trend and timely assesses whether to conduct hedging derivative financial commodity transactions to reduce the exchange rate risk.

In 2024, Abnova will adhere to the original intention of professionalism, focus, and quality, and continue to push itself for deeper technological innovation. Looking forward to the future, it may face variable operational opportunities and challenges. Abnova will continue to strengthen its competitive strength and accumulate more growth momentum to create better operating results.

Chairman: Wilber Huang President: Jih Pei Ju Accounting Officer: Chang Ya Ping

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II. Company Profile

2.1. Date of Incorporation:

January 4, 2002

2.2 Company History

• (1) Merger and acquisition activities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

• (2) Strategic investments in affiliated enterprises during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report.

• The strategic investments in affiliated enterprises during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, including Abnova GmbH, Abnova Holding Corporation, Abnova (Cayman) Corporation, Abnova (HK) Limited, Abnova Diagnostics (Japan), AxleBio Ventures and Citil Pharma Incorporated. For details, please see affiliated enterprises (Page 119).

• (3) Corporate reorganization during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

• (4) A major quantity of shares belonging to directors, supervisors, or shareholders holding greater than a 10 percent stake in the company is transferred or otherwise changes hands during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

• (5) Any change in managerial control; any material change in operating methods or type of business; and any other matters of material significance that could affect shareholders' equity during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

• (6) Significant Historical Events:

2018:

• Qingpu, Zhongli plant registration has been approved in April 2018.

• Obtained the exclusive license for Carcinoma Homing Peptide (CHP) technology from Louisiana State University (LSU), USA in September 2018.

2019:

• Abnova integrates CARlike-IL12 technology and set up a IL-12 patent portfolio strategy for gene modified T cell therapy in November 2019.

2020:

• -The COVID-19 viral Extraction kit has been approved by the U.S. FDA for Emergency Use Authorization (EUA) in June 2020.

• -The COVID-19 Human IgM IgG antibody rapid test gains CE-IVD certification in July 2020.

• -The COVID-19 viral antigen rapid test gains CE-IVD certification in December 2020.

2021

• -The COVID-19 antigen rapid test kits have been granted "EUA for manufacture of COVID-

19 antigen test kits” by the Taiwan Food and Drug Administration (TFDA) in January 2021.

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2022

• Omicron mRNA vaccine has developed, and its efficacy is verified using a mouse model.

• COVID-19 circular RNA vaccine has developed, and its efficacy is verified using a mouse model.

2023

• Abnova launched a new and upgraded version of the official website in September 2023.

• Launched a new product line, miRNA probe, in October 2023.

• In November 2023, Human & Mouse CD3/CD28 ActiveBeads™ reagent was launched, spanning the field of cell therapy.

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III. Corporate Governance Report

3.1. Organization

3.1.1 Organization Chart

Date: March 31, 2024

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3.1.2 Major Corporate Functions

Departments	Functions
Chairman Office	Stock administration, board of directors’ operation, and investor relations maintenance
President & CEO Office	Assist the President with relevant matters in business processing.
Auditing Office	Audit and evaluate the functional operations of each division, and the implementation of internal control systems and relevant administrative provisions.
Legal Office	Review and control matter relevant to intellectual property and contracts, provide legal advice services.
Administration HQ	1. Plan and maintain hardware and software of IT equipment, design and maintain web pages. 2. Financial and tax planning and management, fund scheduling, investment planning and management. 3. Procurement of raw materials, consumables, and capital expenditures at home and abroad.
Sales and Marketing Division	Sales and marketing management, provide technical support related to products, and customer service.
System Business Division	Engage in R&D, produce and manufacture of system-related products and technologies.
Bio-Reagent Division, Zhongli	1. Produce and manufacture of antibody reagent related products, as well as improve the technology used in the manufacturing process. 2. Manage animals for immunization purposes and establish experimental animal models. 3. Arrange and manage production schedules, plan and control raw material use. 4. Issue and return as well as store raw materials, semi-finished and finished products.
Quality Assurance Division	Verify the quality of raw materials, work in progress, and finished products.
Environmental & Security Department	Inspection, supervision, and reporting of environmental and occupational safety matters.
Human Resources Department	Planning and management of human resources, education and training, and related businesses.

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3.2 Information on the Directors, Supervisors and Management Team 3.2.1 Directors and Supervisors 1. Basic Information

3.2.1 Directors and Supervisors 1. Basic Information	3.2.1 Directors and Supervisors 1. Basic Information	3.2.1 Directors and Supervisors 1. Basic Information	3.2.1 Directors and Supervisors 1. Basic Information	3.2.1 Directors and Supervisors 1. Basic Information	3.2.1 Directors and Supervisors 1. Basic Information
																	2024/03/24
Title	Nationality/ Place of Incorporation	Name	Gender Age	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience（Education）	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship			Remark
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Chairman	U.S.A.	Wilber Huang	Male 57	2023. 05.15	3	2011. 06.17	3,651,144	6.03	3,651,144	6.03	－	－	－	－	1. North-western University Medical School (MD) 2. President of Abnova (Taiwan) Corporation 3. Chairman of Abnova (Taiwan) Corporation 4. Director of Abnova Holding Corporation 5. Director of Abnova (Cayman) Corporation 6. Director of Abnova Diagnostics (Japan) 7. Director of Citil Pharma Incorporated 8. Chairman of AxleBio Ventures	1. Chairman of Abnova (Taiwan) Corporation 2. Director of Abnova Holding Corporation 3. Director of Abnova (Cayman) Corporation 4. Director of Abnova Diagnostics (Japan) 5. Director of Citil Pharma Incorporated 6. Chairman of AxleBio Ventures	Chairman of Harmony Investment Co., Ltd.	Chiu Chi Ching	Spouse	None
Director	R.O.C.	Harmony Investment Co., Ltd.	－	2023. 05.15	3	2003. 11.28	2,448,294	4.04	2,448,294	4.04	－	－	－	－	N/A	N/A		None		None
		Representative Chiu Chi Ching	Female 52	2023. 05.15	3	2012. 12.14	－	－	－	－	－	－	－	－	1. Bachelor’s degree in Housing and Architecture, Japan Women's University 2. Chairman of Harmony Investment Co., Ltd. 3. Director of Lasertech Holding International Ltd. 4. Director of Attebury Investments International Ltd. 5. Supervisor of Pan Pacific Investment Corp. 6. Director of (HK) Limited 7. Chairman of Bolster Pioneering Incorporated	1.Chairman of Harmony Investment Co., Ltd. 2.Director of Lasertech Holding International Ltd. 3.Director of Attebury Investments International Ltd. 4.Supervisor of Pan Pacific Investment Corp. 5.Director of Abnova (HK) Limited 6.Chairman of Bolster Pioneering Incorporated	Chairman	Wilber Huang	Spouse	None

• 9 -

Title	Nationality/ Place of Incorporation	Name	Gender Age	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education）	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Director	R.O.C.	Pan Pacific Investment Co., Ltd.	－	2023. 05.15	3	2023. 05.15	1,839,014	3.04	1,839,014	3.04	－	－	－	－	N/A	N/A	None			None
		Representative Jih Pei Ju	Female 45	2023. 05.15	3	2023. 05.15	86,188	0.14	86,188	0.14	－	－	－	－	1. Master in Plant Science, National Taiwan University 2. President of Abnova (Taiwan) Corporation		None			None
																President of Abnova (Taiwan)
																Corporation
Director	R.O.C.	China Wire & Cable Co., Ltd	－	2023. 05.15	3	2008. 02.29	1,037,017	1.71	1,037,017	1.71	－	－	－	－	N/A	N/A	None			None
		Representative Chen Yueh Hung	Male 59	2023. 05.15	3	2020. 06.19	－	－	－	－	－	－	－	－	1. Bachelor’s degree, University of Toronto 2. Chairman of Kai Tse Co., Ltd. 3. Director of Great Universe Metal Building Materials Corp. 4. Director of Great Universe Enterprises Co., Ltd. 5. Director of Taiwan Sun Clutch Co., Ltd. 6.Supervisor of Great Universe Development Corp. 7. Deputy Chairman of LiBAiDAi Construction & Development Co., Ltd. 8. Director of Tai Hsu Construction & Development Co., Ltd. 9. Director of Yi De Xin Construction & Development Co., Ltd.	1. Chairman of Kai Tse Co., Ltd. 2. Director of Great Universe Metal Building Materials Corp. 3. Director of Great Universe Enterprises Co., Ltd. 4. Director of Taiwan Sun Clutch Co., Ltd. 5.Supervisor of Great Universe Development Corp. 6. Deputy Chairman of LiBAiDAi Construction & Development Co., Ltd. 7. Director of Tai Hsu Construction & Development Co., Ltd. 8. Director of Yi De Xin Construction & Development Co., Ltd.	None			None

• 10 -

Title	Nationality/ Place of Incorporation	Name	Gender Age	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education）	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Independent Director	R.O.C.	Cha Anna	Female 54	2023. 05.15	3	2023. 05.15	－	－	－	－	－	－	－	－	1. Bachelor Degree in Dance, Chinese Culture University 2. Chairman of Rouge Creative Marketing Co. 3. Chairman of Chipcom International Co.,Ltd.	1. Chairman of Rouge Creative Marketing Co. 2. Chairman of Chipcom International Co.,Ltd.	None			None
Independent Director	R.O.C.	Ye Shao De	Male 56	2023. 05.15	3	2017. 06.23	－	－	－	－	－	－	－	－	1. Ph.D. in Medical Sciences, Taipei Medical University 2. Chief of Cancer Center,Taipei Medical University Hospital 3.Director, Prostate Center of Excellence, Taipei Medical University Hospital 4. Chief of Department of Urology, Chief of Outpatient Department, and Chief of Medical Affairs, Taipei Medical University Hospital	1.Chairman of Cancer Center,Taipei Medical University Hospital 2. Director, Prostate Center of Excellence, Taipei Medical University Hospital 3.Director of High Power Lighting Corporation 4.Supervisor of Ceres Biomedical Inc.	None			None
Independent Director	R.O.C.	Su Jin Jun	Male 54	2023. 05.15	3	2017. 06.23	－	－	－	－	－	－	－	－	1. PhD. in Business Administration Department, National Sun Yat –sen University 2. Professor and Dean of School of International Business, TKK College, Xiamen University 3. Associate professor and Chairman of International Tourism and Hospitality Department, I-Shou University 4. Assistant Professor and Deputy Director of the Department of Business Administration, -Shou University	Professor and Dean of School of International Business, TKK College, Xiamen University.	None			None

• 11 -

2. For directors and supervisors acting as the representatives of institutional shareholders, indicate the names of the institutional shareholders, and the names of its 10 largest shareholders and the holding percentage of each.

Table1: Major shareholders of the institutional shareholders

2024/03/24

	2024/03/24
Name of Institutional Shareholders	Major Shareholders
HarmonyInvestment Co.,Ltd.	AtteburyInvestments International Ltd.(100%)
Pan Pacific Investment Co., Ltd.	Lasertech Holding International Ltd. (96%)、Harmony Investment Co., Ltd.(4%)
China Wire & Cable Co., Ltd	Chen Ho Yuan (11.98%)、Great Universe Metal Building Materials Corp. (9.7%)、Great Universe Development Corp. (7.17%)、Taiwan
	Sun Clutch Co., Ltd (5.64%)、Chen Yueh Hung (4.38%)、Kai Tse Co.,
	Ltd. (4.33%)、Lu Wen Ling(4.28%)、Chen Liang Yin (3.82%)、Chen Hsu Li Ming (3.55%)、Chen Chin Tsuan(3.43%)

• Note 1: For directors and supervisors acting as the representatives of institutional shareholders, it shall indicate the names of the institutional shareholders.

• Note 2: It shall fill in the names of the institutional shareholders which are the major shareholders (the 10 largest shareholders) and its shareholdings. If any of those 10 largest shareholders are institutional shareholders, it shall fill in Table 2.

• Note 3: For non-institutional shareholders, it shall disclose the names of the shareholders and their shareholdings, which are the names of investors or donors and their contribution or donation ratios.

Table2: Major shareholders of the Company’s major institutional shareholders

2024/03/24

Name of Institutional Shareholders	Major Shareholders
Attebury Investments International Ltd.	Chiu Chi Ching (100%)
Lasertech Holding International Ltd.	Chiu Chi Ching (100%)
Great Universe Metal Building Materials Corp.	Chen Chin Tsuan (4.34%)、Chen Ho Yuan(47.42%）、Chen Yueh Hung (39.50%）、Chen Hsu Li Ming(3.79%)、Chen Liang Yin （2.32%）、Chen Chao Jung（2.32%）、Tai ChungChieh（0.31%）
Great Universe Development Corp.	China Wire & Cable Co., Ltd (93.26%)、ChenHo Yuan (0.77%)、Chen Hsu Li Ming (0.25%)、Chen Chin Tsuan (0.68%)、Chen Yueh Hung (3.06%)、Chen Chao Jung (1.11%)、Chen LiangYin(0.87%)
Taiwan Sun Clutch Co., Ltd	China Wire & Cable Co., Ltd (96.94%)、ChenHo Yuan (1.19%)、Chen Hsu Li Ming (0.20%)、Chen Chin Tsuan (0.30%)、Chen Yueh Hung (1.17%)、Chen Chao Jung (0.10%)、Chen LiangYin(0.10%)
Kai Tse Co., Ltd.	China Wire & Cable Co., Ltd (99.95%)、Chen Yueh Hung (0.03%)、 Chen Ho Yuan(0.02%)

• Note 1: If the major shareholder listed in Table 1 is an institutional shareholder, it shall indicate the names of the institutional shareholders.

• Note 2: It shall fill in the names of the institutional shareholders which are the major shareholders (the 10 largest shareholders) and its shareholdings.

• Note 3: For non-institutional shareholders, it shall disclose the names of the shareholders and their shareholdings, which are the names of investors or donors and their contribution or donation ratios.

• 12 -

3. Disclosure of Professional Qualifications of Directors and Independence Analysis of Independent Directors:

	Independent Directors:
Criteria Name	Professional Qualifications and Experience	Status of Independence	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
Wilber Huang	1. Professional Qualifications  Holds a medical license in the US  Expertise: Board leadership experience, global market experience, risk and regulatory knowledge, relevant industry experience (healthcare/biotech/marketing). 2. Experiences:  Academic qualification: Northwestern University Medical School (MD)  President of Abnova (Taiwan) Corporation  Chairman of Abnova (Taiwan) Corporation  Director of Abnova Holding Corporation  Director of Abnova (Cayman) Corporation  Director of Abnova Diagnostics (Japan)  Director of Citil Pharma Incorporated  Chairman of AxleBio Ventures	There are no circumstances listed in Article 30 of the Company Act.	0
Harmony Investment Co., Ltd. Representative: Chiu Chi Ching	1.Professional Qualifications  N1 level Japanese proficiency  Expertise: Board leadership experience, fluent in Japanese, risk and regulatory knowledge, relevant industry experience (architectural design/ investment). 2.Experiences:  Academic qualification:Bachelor Degree in Housing and Architecture, Japan Women's University  Chairman of Harmony Investment Co., Ltd.  Director of Lasertech Holding International Ltd.  Director of Attebury Investments International Ltd.  Supervisor of Pan Pacific Investment Corp.  Director of Abnova (HK) Limited  Chairman of Bolster Pioneering Incorporated	There are no circumstances listed in Article 30 of the Company Act.	0
Pan Pacific Investment Co., Ltd.. Representative: Jih Pei Ju	1. Professional Qualifications  Expertise: R&D experience, risk and regulatory knowledge, relevant industry experience (healthcare/biotech) 2. Experiences:  Academic qualification: Master in Plant Science, National Taiwan University  President of Abnova (Taiwan) Corporation	There are no circumstances listed in Article 30 of the Company Act.	0
China Wire & Cable Co., Ltd Representative: Chen Yueh Hung	1. Professional Qualifications  Expertise: Global market experience, risk and regulatory knowledge, relevant industry experience (construction/marketing) 2. Experiences:  Academic qualification: Bachelor’s degree, University of Toronto  Chairman of Kai Tse Co., Ltd.  Director of Great Universe Metal Building Materials Corp.  Director of Great Universe Enterprises Co., Ltd.  Director of Taiwan Sun Clutch Co., Ltd.  Supervisor of Great Universe Development Corp.  Deputy Chairman of LiBAiDAi Construction & Development Co., Ltd.  Director of Tai Hsu Construction & Development Co., Ltd.  Director of Yi De Xin Construction & Development Co., Ltd.	There are no circumstances listed in Article 30 of the Company Act.	0

• 13 -

Criteria Name	Professional Qualifications and Experience	Status of Independence	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
Cha Anna	1. Professional Qualifications  Expertise: Marketing planning, corporate management, risk and regulatory knowledge, relevant industry experience (business/marketing/ operation management) 2. Experiences:  Bachelor Degree in Dance, Chinese Culture University  Chairman of Rouge Creative Marketing Co.  Chairman of Chipcom International Co.,Ltd.	1. Serve as an independent director the Company 2. Met the following independence criteria: (1) A natural person, the person's spouse, relative within the second degree of kinship do not serve as a director, supervisor or an employee of the Company’s affiliates (2) Does not holds any of shares of the Company (3) Not a director, supervisor or an employee of a company that has specific relationship with the Company (4) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company (5) Not a director, supervisor, or employee of a company of which the chairman or President (or equivalent) themselves or their spouse also serve as the company’s chairman or President (or equivalent) (6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company	0
Ye Shao De	1. Professional Qualifications  Holds a medical license in the R.O.C  Expertise: Clinical medicine experience, risk and regulatory knowledge, relevant industry experience (healthcare/biotech/marketing) 2. Experiences:  Academic qualification: Ph.D. in Medical Sciences, Taipei Medical University  Chief of Cancer Center,Taipei Medical University Hospital  Director, Prostate Center of Excellence, Taipei Medical University Hospital  Chief of Department of Urology, Chief of Outpatient Department, and Chief of Medical Affairs, Taipei Medical University Hospital	1. Serve as an independent director the Company 2. Met the following independence criteria: (1) A natural person, the person's spouse, relative within the second degree of kinship do not serve as a director, supervisor or an employee of the Company’s affiliates (2) Does not holds any of shares of the Company (3) Not a director, supervisor or an employee of a company that has specific relationship with the Company (4) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company (5) Not a director, supervisor, or employee of a company of which the chairman or President (or equivalent) themselves or their spouse also serve as the company’s chairman or President (or equivalent) (6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company	0
Su Jin Jun	1. Professional Qualifications  Possesses the qualifications in business and financial accounting, and qualified to serve as a university professor  Expertise: Business, corporate management, financial accounting, risk and regulatory knowledge, relevant industry experience (business/ corporate management/ education). 2. Experiences:  Academic qualification: PhD. in Business Administration Department, National Sun Yat– Sen University (Accounting Regulatory Department)  Professor and Dean of School of International Business, TKK College, Xiamen University  Associate professor and Chairman of International Tourism and Hospitality Department, I-Shou University  Assistant Professor and Deputy Director of the Department of Business Administration, -Shou University	~~1. Serve as an independent director the Company~~ 2. Met the following independence criteria: (1) A natural person, the person's spouse, relative within the second degree of kinship do not serve as a director, supervisor or an employee of the Company’s affiliates (2) Does not holds any of shares of the Company (3) Not a director, supervisor or an employee of a company that has specific relationship with the Company (4) Not a director, supervisor, or employee of a company of which the majority of board seats or voting shares is controlled by a company that also controls the same of the company (5) Not a director, supervisor, or employee of a company of which the chairman or President (or equivalent) themselves or their spouse also serve as the company’s chairman or President (or equivalent) (6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company	0

• 14 -

4. The diversity policy and status of independence of the board of directors:

(1) The diversity policy of the board of directors:

• I. Pursuant to Article 20 of the "Corporate Governance Best Practice Principles” of the Company, the board of directors of the Company shall direct company strategies, supervise the management, and be responsible to the company and shareholders. The various procedures and arrangements of its corporate governance system shall ensure that, in exercising its authority, the board of directors complies with laws, regulations, its articles of incorporation, and the resolutions of its shareholders meetings. The structure of the Company's board of directors shall be determined by choosing an appropriate number of board members, in consideration of its business scale, the shareholdings of its major shareholders, and practical operational needs.

The composition of the board of directors shall be determined by taking diversity into consideration. It is advisable that directors concurrently serving as company officers not exceed one-third of the total number of the board members, and that an appropriate policy on diversity based on the Company's business operations, operating dynamics, and development needs be formulated and include, without being limited to, the following two general standards:

1. Basic requirements and values: Gender, age, nationality, and culture, etc.

2. Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience, etc.

3. All members of the board shall have the knowledge, skills, and experience necessary to perform their duties.

To achieve the ideal goal of corporate governance, the board of directors shall possess the following abilities:

• (i) Ability to make operational judgments.

• (ii) Ability to perform accounting and financial analysis.

• (iii) Ability to conduct management administration.

• (iv) Ability to conduct crisis management.

• (v) Knowledge of the industry.

• (vi) An international market perspective.

• (vii) Ability to lead.

• (viii)Ability to make policy decisions.

• II. Article 17 of the Company's "Articles of Incorporation” specified that the election of directors shall adopt a candidate nomination system. The "Procedures for Election of Directors” stated that the composition of the board of directors shall be determined by taking diversity into consideration, directors and independent directors shall have the qualifications and capabilities as required by laws and regulations, with a view to ensuring an effective selection of appropriate director candidates. The quality of decision-making will be enhanced with the diverse viewpoints and insights of the board of directors, which is beneficial to the Company's shareholders and stakeholders.

• III.At the same time, the "Rules for Performance Evaluation of Board of Directors” of the Company specified that the criteria for evaluating the performance of the board of directors, including alignment of the goals and missions of the Company, awareness of the duties of a director, participation in the operation of the Company, management of internal relationship and communication, the director's professionalism and continuing education, internal control, and ability to express specific opinions, etc., with a view to ensuring an effective operation of board of directors. The performance evaluations of directors will be conducted annually, which will be served as a reference for director selection in the future. The 9th Session of the Board of Directors of the Company is made up of 7 directors, including 4 directors and 3 independent directors, covering different nationalities, genders, and ages. The areas of expertise covering different fields, such as biotechnology, medicine, financial accounting, technology, operation management, etc., achieving the goal of diversification. The key areas of diversity are described as follows:

• 15 -

Key areas of diversity / Name of directors	Key areas of diversity / Name of directors		Directors	Directors		Independent Directors	Independent Directors	Independent Directors
		Wilber Huang	Chiu Chi Ching	Chen Yueh Hung	Jih Pei Ju	Cha Anna	Ye Shao De	Su Jin Jun
Basic requirements and values	Gender	Male	Female	Male	Female	Female	Male	Male
	Nationality	USA	ROC	ROC	ROC	ROC	ROC	ROC
	Age range	51-60	51-60	51-60	41-50	51-60	51-60	51-60
	Concurrently serving as employee of the Company	None	None	None	Yes	None	None	None
	Tenure of board of directors	9 years or more	9 years or more	3-9 years	Less than 3 years	Less than 3 years	3-9 years	3-9 years
Industry experience	Medical and biotechnology	V			V		V
	Operation management	V	V	V	V	V	V	V
	Financial accounting							V
Professional knowledge and capabilities	Able to make operational judgments	V	V	V	V	V	V	V
	Able to perform accounting and financial analysis							V
	Able to conduct management administration	V	V	V	V	V	V	V
	Able to conduct crisis management	V	V	V	V	V	V	V
	Biotech industry knowledge	V			V		V
	International market perspective	V	V	V	V	V	V	V
	Able to lead	V	V	V	V	V	V	V
	Able to make policy decisions	V	V	V	V	V	V	V

Individual Director Diversity QuantitativeDataDescription: Percentage ofdirectors who are also employees 14% Percentage of IndependentDirectors 43% Percentage of female directors 43% Percentage of directors with medical and biotechnology experience 43% Percentage of directors with financial accounting industry experience 14% Age distribution of directors: 41 - 50 years old 51 -60 years old 14% 86%	Individual Director Diversity QuantitativeDataDescription: Percentage ofdirectors who are also employees 14% Percentage of IndependentDirectors 43% Percentage of female directors 43% Percentage of directors with medical and biotechnology experience 43% Percentage of directors with financial accounting industry experience 14% Age distribution of directors: 41 - 50 years old 51 -60 years old 14% 86%	Individual Director Diversity QuantitativeDataDescription: Percentage ofdirectors who are also employees 14% Percentage of IndependentDirectors 43% Percentage of female directors 43% Percentage of directors with medical and biotechnology experience 43% Percentage of directors with financial accounting industry experience 14% Age distribution of directors: 41 - 50 years old 51 -60 years old 14% 86%
	Percentage ofdirectors who are also employees	14%
	Percentage of IndependentDirectors	43%
	Percentage of female directors	43%
	Percentage of directors with medical and biotechnology experience	43%
	Percentage of directors with financial accounting industry experience	14%
	Age distribution of directors: 41 - 50 years old 51 -60 years old	14% 86%

• 16 -

The specific goals of diversification of board of directors and its attainment status

The management goal of diversification of board of directors	Attainment status
Emphasis on gender equality on the board of directors, with the Board of Directors composing at least one director of different gender.	100%. At present, there are 3 female directors and 4 male directors, with each gender representing more than 1/3 of the total board seats.
The board of directors requires at least 1 director with medical and biotechnology related background in response to the Company's operational and drug development needs.	100%. At present, there are 3 directors with backgrounds in medical and biotechnology, accounting for 43% of the total board seats, of which 1 director is currently a medical practitioner in Taiwan.
Taking the independence status of the independent directors into consideration, their consecutive terms shall not exceed 3 terms.	100%. All 3 independent directors of the Company have not exceeded 3 consecutive terms.
Strengthening corporate governance, achieving over 1/3 representation of independent directors on the board.	100%. At present, there are 3 independent directors, accounting for 43% of the total board seats.

• 17 -

3.2.2 Information on the company's President, assistant Presidents, Senior managers, and the chiefs of all the company's divisions and branch units

												March 24,2024	March 24,2024	March 24,2024	March 24,2024	March 24,2024
Title	Nationality	Name	Gender	Date of election (Assumptio n of office)	Shareholding		Spouse & Minor Shareholding Shareholding		Shareholding in the name of others Shareholding		Main Experience (Academic Qualification)	Current Concurrent Position at Other Companies	Managerial personnel who is the spouse or relative within the second degree of kinship			Remark
					Shares	%	Shares	%	Shares	%			Title	Name	Relationship
President	ROC	Jih Pei Ju	Female	2023.02.24	86,188	0.14%	－	－	－	－	1. Master in Plant Science, National Taiwan University 2. President of Abnova (Taiwan) Corporation	None	None			Note
Senior Manager	ROC	Huang Shi Xuan	Male	2008.07.01	－	－	－	－	－	－	1. Master in Plant Science, National Chung Hsing University 2. Manager (Factory Director) of BioLASCO Taiwan Co., Ltd.	None	None			None
Senior Manager	ROC	Zheng Mei Hui	Female	2010.11.03	16,388	0.03%	－	－	－	－	1. International Trade Program, Hsing Wu High School 2. Executive Assistant to the CEO of Momentum Digital Technology Co., Ltd.	1. Supervisor of Harmony Investment Co., Ltd. 2. Director of Pan Pacific Investment Corp.	None			None
Senior Manager	ROC	Chen Si Xian	Male	2013.08.01	4,388	0.01%	－	－	－	－	1. Master in Agricultural Chemistry, National Taiwan University 2. Senior Manager of System R&D Department of Abnova (Taiwan) Corporation	None	None			None
Senior Manager	ROC	Tung I Ling	Female	2015.09.01	－	－	－	－	－	－	1. Master in Science and Technology Management, National Taiwan Normal University 2. Audit Assistant Manager of Radium Life Tech Co., Ltd. 3. Executive Assistant to the Chairman Office of Abnova (Taiwan) Corporation	None	None			None
Senior Manager	ROC	Zhou Yun Jin	Male	2015.09.01	129	－	129	－	－	－	1. Master in Biology, Fu Jen Catholic University 2. Senior Manager of Bio-Reagent Division, Zhongli of Abnova (Taiwan) Corporation	None	None			None
Senior Manager	ROC	Tung Kai Chiang	Male	2018.11.13	－	－	－	－	－	－	1. Master of Law in Business Administration, National Taiwan University. Master in Microbiology, National Taiwan University. 2. Patent Engineer of Wenping & Co. 3. Senior Manager of Legal Affairs Office of Abnova (Taiwan) Corporation	None	None			None
Senior Manager	ROC	Chang Ya Ping	Female	2019.11.13	－	－	－	－	－	－	1. Department of Accounting, Tamkang University 2.Managerof KPMGTaiwan	None	None			None

Note: Jih Pei Ju has served as Senior Manager of the Company since July 1, 2018. The Board of Directors has passed the resolution to change President on February 24, 2023, and she has assumed the position of President.

• 18 -

3.2.3 Remuneration of Directors, Independent Directors, Supervisors, President, and Vice Presidents 1. Remuneration of Directors and Independent Directors in the most recent fiscal year (2023):

Unit: NT$ thousands

Title	Name	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Ratio of Total Remuneratio n (A+B+C+D) to Net Income (%)	Ratio of Total Remuneratio n (A+B+C+D) to Net Income (%)	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%)	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%)	Remune ration from ventures other than subsidiar ies or from the parent company
		Remuneration (A)		Severance Pay (B)		Directors Compensation (C)		Allowances (D)				Salary, Bonuses, and Allowances (E)		Severance Pay (F)		Employee Compensation (G)
		The company	All companies in the consolidated financial statements	The compa ny	All companie s in the consolidat ed financial statement s	The company	All companies in the consolidat ed financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company		All companies in the consolidated financial statements		The company	All companies in the consolidated financial statements
																Cash	Stock	Cash	Stock
Chairman	Wilber Huang	240	240	0	0	58.7	58.7	4,641.4	4,641.4	11.31%	11.31%	988.5 (Note1)	988.5 (Note1)	0	0	435.6	0-	435.6	0	14.57%	14.57%	None
Director	Harmony Investment Co., Ltd. Representative : Chiu Chi Ching	240	240	0	0	58.7	58.7	0	0	0.68%	0.68%	0	0	0	0	0	0	0	0	0.68%	0.68%
Director	China Wire & Cable Co., Ltd Representative : Chen Yueh Hung	240	240	0	0	58.7	58.7	0	0	0.68%	0.68%	0	0	0	0	0	0	0	0	0.68%	0.68%
Director	Rong How Investment Co., Ltd. Representative : Chen Fang Wen (Resigned after the re-election on May 15, 2023)	90	90	0	0	22.0	22.0	0	0	0.25%	0.25%	0	0	0	0	0	0	0	0	0.25%	0.25%
Director	Pan Pacific Investment Corp. Representative: Jih Pei Ju (Newly appointed after the re-election on May 15, 2023)	150	150	0	0	36.7	36.7	0	0	0.43%	0.43%	1,314.2 (Note2)	1,314.2 (Note2)	0	0	53.8	0	53.8	0	3.56%	3.56%
Independent Director	Lin Jia Hsie (Resigned after the re-election on May 15, 2023)	135	135	0	0	22.0	22.0	0	0	0.36%	0.36%	0	0	0	0	0	0	0	0	0.36%	0.36%	None
Independent Director	Cha Anna (Newly appointed after the re-election on May 15, 2023)	225	225	0	0	36.7	36.7	0	0	0.60%	0.60%	0	0	0	0	0	0	0	0	0.60%	0.60%
Independent Director	Ye Shao De	360	360	0	0	58.7	58.7	0	0	0.96%	0.96%	0	0	0	0	0	0	0	0	0.96%	0.96%
Independent Director	Su Jin Jun	360	360	0	0	58.7	58.7	0	0	0.96%	0.96%	0	0	0	0	0	0	0	0	0.96%	0.96%

• 19 -

• (Note1) The Chairman Wilber Huang concurrently served as General Manager of the Corporation. Per 24 February 2023 motion to change general manager adopted by the Board, Mr. Wilber Huang has been relieved from concurrent roles from the same date.

(Note2) Denotes the amount from the date elected as director to December 31, 2023.

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:

2. (1) Pursuant to Article 26 of the Articles of Incorporation of the Company, directors will receive a monthly remuneration, and the amount of remuneration is determined based on the remuneration standards of the industry. The Company shall provide reasonable remuneration for independent directors that may be different from directors.

3. (2) Remuneration to each director is determined by the Board of Directors based on their respective involvement in the Company’s operations, contribution, responsibilities, and risks, as well as referring to the remuneration standards of the industry. Each regular director receives a monthly remuneration of NT$20,000. All independent directors are concurrently served as members of the Audit Committee and Remuneration Committee, considering their responsibilities to participate committee meetings that requiring to devote more time and effort; therefore, their remuneration is higher than directors, with each independent director receiving a monthly remuneration of NT$30,000.

4. (3) If the Company makes a profit in the current fiscal year, pursuant to Article 24 of the Articles of Incorporation of the Company, after deducting the pretax income for remuneration to employees and directors, and setting aside an amount to make up accumulated losses, if there is any remaining balance, the Company shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as a compensation for directors.

5. The correlation between remuneration paid to directors and performance review results:

6. (1) Remuneration: It is determined by the Board of Directors based on their respective involvement in the Company’s operations, contribution, responsibilities, and risks, as well as referring to the remuneration standards of the industry.

7. (2) Directors’ compensation: Allocation is made in accordance with Article 24 of the Articles of Incorporation of the Company. The actual distribution of compensation to directors in FY 2023 was NT$ 410,900 (at the provision rate of approximately 0.81%). The compensation paid to directors is determined according to the statistics of the board meeting attendance rate and the duration of continuing education/training of all Directors, as well as the self-assessment of each director (including independent directors) based on the criteria such as understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc. in accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company. Based on the 2023 self-assessment of the Company's board members, the evaluation result of the aforementioned assessment items was 93-97 marks. All board members have a good understanding of the Company's operations and are committed to fulfilling their respective duties as directors. The directors’ compensation Managers was reviewed by the Remuneration Committee on February 20, 2024, and passed by the Board of Directors on February 20, 2024. The amount of individual director's compensation is as shown in the table above.

8. Explanation of Reasonableness for Directors’ Remunerations for the Year 2023:

The directors’ remunerations of the Company feature the composition as follows:

(1) Remuneration:

According to Article 26 of the Company's Articles of Association, “the directors of the Company may get paid monthly, the amount of which shall be determined by the Board of Directors in accordance with the normal level of the industry”. The Company has set reasonable remuneration for independent directors different from that of directors. Depending on the level of involvement, contribution value, responsibilities, and risks borne by individual directors in the Company's operations, and considering industry standards, the Board of Directors has decided the following: a director may receive a monthly remuneration of NT$20,000; meanwhile, an independent director is entitled to a higher-than-director monthly remuneration in the amount of NT$30,000, owing to their additional dedication of time and effort on the reviews in committee meetings as a part of their concurrent roles as members of the Company’s remunerations committee and audit committee. The amounts received are the same as in the year 2022.

(2) Directors’ Compensation:

If there is a profit for the Company in a year, the Company shall, in accordance with Article 24 of the Articles of Incorporation, cover the accumulated losses from preceding years. If there is still a profit after deducting the profit before the distribution of employee remuneration and directors' remuneration from the annual pre-tax profit, no less than 1% shall be allocated for employee remuneration and no more than 3% for directors' remuneration. The directors’ remunerations for the year 2023 is NT$410,900 (an allocation rate of approximately 0.81%). The directors’ remuneration for the year 2022 was NT$795,200 (an allocation rate of approximately 0.8%), and the allocation rates for both years are equivalent.

(3) Allowance:

The Chairman of the Company originally served concurrently as the general manager, and the remuneration for such was recognized as part of the remuneration for concurrent employees for the year 2022. Following the adoption of proposal concerning the change to general manager in the board of directors’ meeting on February 24, 2023, the chairman's allowance was then recognized as part of the director's remuneration. Therefore, this item was added in 2023 statements as a change in recognition.

Excluding the chairman's allowance, the total remuneration received by directors amounts to NT$2,040 thousand, and the directors’ compensation is NT$410.9 thousand. The average directors’ remuneration per director in 2023 is NT$350.13 thousand, a decrease from NT$405.03 thousand in 2022, representing a decrease of NT$54.9 thousand or 13.55%. As a result, this reduction is reasonable as the after-tax profit for the year 2023 declined by 42% compared to the previous year, indicating a correlation between director remuneration and operational performance. The chairman is actively involved in the Company's operational management daily, executing supervisory responsibilities, and the allowance received is considered necessary and reasonable, as approved by the Remunerations Committee and the Board of Directors. The changes in directors’ remunerations between 2023 and 2022 are therefore considered reasonable.

1. 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.: None

2. 20 -

Range of Remuneration

Name of Directors

	Range of Remuneration	Range of Remuneration	Range of Remuneration	Range of Remuneration
	Name of Directors
Range of Remuneration	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements (I)
Less than NT$ 1,000,000	Harmony Investment Co., Ltd. Representative: Chiu Chi Ching, China Wire & Cable Co., Ltd Representative: Chen Yueh Hung, Rong How Investment Co., Ltd. Representative: Chen Fang Wen (Note1), Pan Pacific Investment Co., Ltd.. Representative: Jih Pei Ju (Note2)	Harmony Investment Co., Ltd. Representative: Chiu Chi Ching, China Wire & Cable Co., Ltd Representative: Chen Yueh Hung, Rong How Investment Co., Ltd. Representative: Chen Fang Wen (Note1), Pan Pacific Investment Co., Ltd.. Representative: Jih Pei Ju (Note2)	Harmony Investment Co., Ltd. Representative: Chiu Chi Ching, China Wire & Cable Co., Ltd Representative: Chen Yueh Hung, Rong How Investment Co., Ltd. Representative: Chen Fang Wen (Note1)	Harmony Investment Co., Ltd. Representative: Chiu Chi Ching, China Wire & Cable Co., Ltd Representative: Chen Yueh Hung, Rong How Investment Co., Ltd. Representative: Chen Fang Wen (Note1)
NT$1,000,000 ~ NT$1,999,999	-	-	Pan Pacific Investment Co., Ltd.. Representative: Jih Pei Ju (Note2)	Pan Pacific Investment Co., Ltd.. Representative: Jih Pei Ju (Note2)
NT$2,000,000~NT$3,499,999	-	-	-	-
NT$3,500,000~NT$4,999,999	Wilber Huang	Wilber Huang	-	-
NT$5,000,000~NT$9,999,999	-	-	Wilber Huang	Wilber Huang
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	5	5	5	5

Range of Remuneration	Name of Independent Directors	Name of Independent Directors	Name of Independent Directors	Name of Independent Directors
	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements (I)
Less than NT$ 1,000,000	Lin Jia Hsie (Note1), Cha Anna (Note2), Ye Shao De, Su Jin Jun	Lin Jia Hsie (Note1), Cha Anna (Note2), Ye Shao De, Su Jin Jun	Lin Jia Hsie (Note1), Cha Anna (Note2), Ye Shao De, Su Jin Jun	Lin Jia Hsie (Note1), Cha Anna (Note2), Ye Shao De, Su Jin Jun
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	4	4	4	4

(Note1) Dismissed as director on May 15, 2023.

(Note2) Elected as director on May 15, 2023.

(Note3)The board members of the Company are complied with the "Rules for Performance Evaluation of Board of Directors” of the Company to complete the self-assessment based on the criteria such as understanding of the Company’s goals and

• 21 -

mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc. in accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company. Based on the statistics of the board meeting attendance rate and the duration of continuing education/training of all Directors in 2023 conducted by the Company, as well as the 2023 self-assessment of the Company's board members, the score for the aforementioned assessment items is 93-97. The allocation of directors' remuneration in 2023 was reviewed by the Remuneration Committee on February 20, 2024 with reference to the aforementioned assessment results, and passed by the board of directors on February 20, 2024, the amount was received individually.

2. The remuneration paid to supervisors in the most recent fiscal year (2023): (Not applicable)

The Company has set up an Audit Committee on June 23, 2017, to replace the functions of the supervisors.

3. The remuneration paid to President and Vice Presidents in the most recent fiscal year (2023):

Unit: NT$ thousands

Title	Name	Salary (A)	Salary (A)	Severance Pay (B)	Severance Pay (B)	Bonuses and Allowances (C)	Bonuses and Allowances (C)	Employee Compensation (D)	Employee Compensation (D)	Employee Compensation (D)	Employee Compensation (D)	Ratio of total compensation (A+B+C+D) to net income (%)	Ratio of total compensation (A+B+C+D) to net income (%)	Remunerat ion from ventures other than subsidiaries or from the parent company
		The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The company		Companies in the consolidated financial statements		The company	Companies in the consolidated financial statements
								Cash	Stock	Cash	Stock
President	Wilber Huang (Note1)	849.8	849.8	0	0	138.7	138.7	435.6	0	435.6	0	3.26%	3.26%	None
President	Jih Pei Ju	1389.9	1389.9	0	0	238.6	238.6	53.8	0	53.8	0	3.85%	3.85%	None

Note 1: The Chairman Wilber Huang concurrently served as General Manager of the Corporation. Per 24 February 2023 motion to change general manager adopted by the Board, Mr. Wilber Huang has been relieved from concurrent roles from the same date. Note 2: The Company does not have a Vice President or any other position of equivalent rank.

Range of Remuneration

Range of Remuneration	Name of President and Vice Presidents	Name of President and Vice Presidents
	The company	Companies in the consolidated financial statements (E)
Less than NT$ 1,000,000	-	-
NT$1,000,000~NT$1,999,999	Wilber Huang, Jih PeiJu	Wilber Huang, Jih PeiJu
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	2	2

• 22 -

4. Names and acquisition status of managerial personnels who have acquired new restricted employee shares:

				2024/03/31 Unit: NT$ thousands	2024/03/31 Unit: NT$ thousands	2024/03/31 Unit: NT$ thousands
	Title	Name	Stock (Fair Market Value)	Cash Amount	Total	Total Profit Sharing Paid to Management Team as a % of Net Income
Managers	President	Wilber Huang (Note)	0	875	875	2%
	President	Jih Pei Ju (Note)
	Senior Manger	Huang Shi Xuan
	Senior Manger	Zheng Mei Hui
	Senior Manger	Chen Si Xian
	Senior Manger	Tung I Ling
	Senior Manger	Zhou Yun Jin
	Senior Manger	Tung Kai Qiang
	Senior Manger	Chang Ya Ping

Note: The Chairman Wilber Huang concurrently served as General Manager of the Corporation. Per 24 February 2023 motion to change general manager adopted by the Board, Mr. Wilber Huang has been relieved from concurrent roles from the same date.

• 23 -

• 3.2.4 Separately compare and describe total remuneration, as a percentage of net income stated in the parent company only financial reports or individual financial reports, as paid by this company and by each other company included in the consolidated financial statements during the past 2 fiscal years to directors, supervisors, Presidents, and assistant Presidents, and analyze and describe remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure

• The total remuneration paid to Directors, Supervisors, Presidents and Assistant Presidents in FY 2022 and 2023 were NT$9,824 thousand and NT$10,199 thousand, respectively, which accounted for 13.13% and 23.35% of the net income of the Company, respectively

• Remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure

  • (1) The remuneration paid to the directors of the Company includes remuneration and compensation to directors. The remuneration policies, standards, and packages are as follows: I. Remuneration:

    • Pursuant to Article 26 of the Articles of Incorporation of the Company, directors will receive a monthly remuneration, and the amount of remuneration is determined based on the remuneration standards of the industry. The Company shall provide reasonable remuneration for independent directors that may be different from directors. Remuneration to each director is determined by the Board of Directors based on their respective involvement in the Company’s operations, contribution, responsibilities, and risks, as well as referring to the remuneration standards of the industry. Each regular director receives a monthly remuneration of NT$20,000. All independent directors are concurrently served as members of the Audit Committee and Remuneration Committee, considering their responsibilities to participate committee meetings that requiring to devote more time and effort; therefore, their remuneration is higher than directors, with each independent director receiving a monthly remuneration of NT$30,000.

    • II. Compensation to directors:

    • If the Company makes a profit in the current fiscal year, pursuant to Article 24 of the Articles of Incorporation of the Company, after deducting the pretax income for remuneration to employees and directors, and setting aside an amount to make up accumulated losses, if there is any remaining balance, the Company shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as the compensation for directors. The actual distribution of compensation to directors in FY 2023 was NT$ 410,900 (at the provision rate of approximately 0.81%).

  • (2) The remuneration paid to the managerial personnels (at or above the level of Senior Manager) of the Company includes salary, year-end bonus, and employee compensation. The remuneration policies, standards and packages are as follows:

    • I. Salary, year-end bonus: Salary refers to the compensation employees receive for their work, which is determined based on the Company's employment rules, relevant regulations governing the human resources such as job band, etc., at the time of appointment, and approved by the Remuneration Committee and the Board of Directors, and individual amounts are reviewed regularly every year. In accordance with the Company’s work rules, if the Company makes profits after year-end settling, after paying tax, making up losses, and setting aside a legal reserve, the year-end bonus will be distributed prior to the Chinese New Year that would depend on the actual circumstances. The amount of year-end bonus for each managerial personnel will be reviewed by the Remuneration Committee and the Board of Directors at the end of each year.

    • II. For the compensation to employees, pursuant to Article 24 of the Articles of Incorporation of the Company: "If the Company makes profits (after deducting the pretax income for remuneration to employees and directors), it shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as the compensation for directors”. The provision rate will be reviewed by the Remuneration Committee and approved by the Board of Directors, as well as reported in the Board meeting.

    • The actual distribution of compensation to employees in FY 2023 was NT$ 2,154,700 (at

• 24 -

the provision rate of approximately 4.22%). For the expected amount of compensation for the managerial personnels, please refer to "4. Names and acquisition status of managerial personnels who have acquired new restricted employee shares." The distribution of compensation to managerial personnels is referred to the regular performance review results and calculated based on the standards governing the distribution of employee compensation.

• (3) Procedure for determining remuneration:

• I.The salary and compensation of directors and managerial personnel are regularly assessed based on the evaluation results according to the Company's "Rules for Performance Evaluation of Board of Directors" for directors and the "Performance Management Measures" applicable to managerial personnel and employees. In addition, the remuneration of the Chairman is linked to operating performance indicators and is submitted to the Remuneration Committee for review as well as presented to the Board of Directors for resolution. To fully assess the achievement of operating performance indicators, the performance evaluation criteria for the chairman is based on the Company's annual operational indicators, including operational management, financial results, corporate governance, etc. The assessment scope includes four main indicators: revenue, pre-tax net profit, research and development results, and corporate governance evaluation. The performance evaluation scope for the general manager includes various performance goals related to major job responsibilities, including operational management, supervision of budget plan execution, research and development progress management, internal control management, and implementation of quality assurance and management, etc.

• II. The reasonableness of the remuneration for the directors and managers of the Company has been thoroughly reviewed by the Remuneration Committee and approved by the Board of Directors, with consideration given to the performance evaluation results. In addition, individual performance achievement rates and contributions to the Company are taken into account, along with an assessment of the Company's overall operating performance, future risks and development trends of the industry. The remuneration system is reviewed in a timely manner based on the actual operating conditions and relevant regulations. Moreover, after comprehensive consideration of current trends in corporate governance, reasonable remuneration is provided to achieve a balance between sustainable operation and risk control for the Company. The actual amount of remuneration for directors and managerial personnel for the FY 2023 are reviewed by the Remuneration Committee and approved by the Board of Directors.

• (4) The correlation between remuneration paid to directors and operating performance and future risk exposure:

• I. Remuneration to directors:

  • Based on the level of involvement, contribution value, responsibilities, and risks borne by individual directors in the operation of the Company, the Board of Directors shall consider the industry standards in determining their compensation.

• II. Compensation to directors:

  • The distribution of director compensation is measured based on the statistics of the board meeting attendance rate and the duration of continuing education/training of all Directors, as well as the self-assessment of each director (including independent directors) based on the criteria such as understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc. in accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company. Based on the 2023 self-assessment of the Company's board members, the evaluation result of the aforementioned assessment items showed that the directors have obtained 93-97 marks. All board members have a good

• 25 -

understanding of the Company's operations and are committed to fulfilling their respective duties as directors. The remuneration paid to Directors, Supervisors, Presidents and Assistant Presidents was reviewed by the Remuneration Committee, and passed by the board of directors on February 20, 2024. For the individual director's remuneration, please refer to “(3) The Remuneration Paid to Directors, Supervisors, Presidents and Assistant Presidents in the Most Recent Fiscal Year”.

• (5) The correlation between remuneration paid to managerial personnels and operating performance and future risk exposure:

• For the remuneration payable to managerial personnels by the Company, in addition to evaluating the Company's overall operational performance, future business risks, and development trends, a reasonable compensation is determined with reference to the individual's attendance and job performance. The Company conducts managerial personnels’ performance review in January and July every year. The performance evaluation for managerial personnels includes three aspects: work attitude (including cooperation, learning ability, teamwork) with a weight of 40%, leadership and management (including cost control, communication and coordination, and work standards) with a weight of 30%, and job performance (including department management, planning and judgment ability, and decision-making and execution ability) with a weight of 30%. In addition, rewards and punishments are evaluated based on the special contributions or performance of employees. The performance review is divided into the following grades: A (90% or above) for outstanding performance, B (80%-90%) for good performance, C (70%-80%) for acceptable performance but requires improvement, and D (below 70%) for poor performance that fails to meet job requirements.

The Company is fully complied with the provisions of the "Remuneration Committee Charter": Regularly review the annual and long-term performance goals, as well as the policies, systems, standards, and structures of salary and remuneration for directors and managerial personnels. The compensation for each managerial personnel has been reviewed by the Remuneration Committee and the Board of Directors on August 2, 2023.Whilethe year-end bonus for each managerial personnel has been reviewed by the Remuneration Committee and the Board of Directors on November 8, 2023.

• (6) Relationship between compensation of senior managers and ESG sustainability performance: Senior managers refer to the President and Vice President or any other position with equivalent rank. The Company does not have a Vice President or any other position of equivalent rank. The compensation of managerial personnel is reviewed and approved by the Remuneration Committee and the Board of Directors of the Company. The general manager's performance evaluation is also included as part of the non-financial performance indicators for the current FY, serving as a linkage to remuneration, to motivate senior managers to prioritize long-term comprehensive performance, thereby achieving sustainable operation. Performance indicators - Sustainable development performance (15% weighing), sustainable ESG plan promotion (including environmental climate change, social and corporate governance, etc.), leading the company to establish a stable sustainable development framework, including ESG implementation status and target achievement status (such as projects: continuous GHG inventory and verification plan, progress in preparing sustainability report progress, planning and setting carbon reduction targets, etc.), ESG rating results (ex: corporate governance evaluation, etc.) and the Company's compliance with regulations, etc. The remuneration of senior managers is linked to the implementation and promotion of sustainable goals, strengthening their commitment and responsibility towards sustainability.

• 26 -

3.3 Corporate Governance 3.3.1 Board of Directors

A total of 6 (A) meetings of the Board of Directors were held in the previous period. The attendance of director and supervisor were as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) (Ｂ/Ａ)	Remarks
Chairman	Wilber Huang	6	0	100%	Re-elected
Director	Harmony Investment Co., Ltd. Representative: Chiu Chi Ching	6	0	100%	Re-elected
Director	China Wire & Cable Co., Ltd Representative: Chen Yueh Hung	5	1	83%	Re-elected
Director	Rong How Investment Co., Ltd. Representative: Chen Fang Wen	1	0	50%	Resigned after the re-election on May 15, 2023 Expected attendance: 2 times
Director	Pan Pacific Investment Co., Ltd.. Representative: Jih Pei Ju	4	0	100%	Newly appointed after the re- election on May 15, 2023 Expected attendance: 4 times
Independent director	Lin Jia Hsie	2	0	100%	Resigned after the re-election on May 15, 2023 Expected attendance: 2 times
Independent director	Cha Anna	3	1	75%	Newly appointed after the re- election on May 15, 2023 Expected attendance: 4 times
Independent director	Ye Shao De	4	1	67%	Re-elected
Independent director	Su Jin Jun	6	0	100%	Re-elected
Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified: None (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 or stated in writing require a resolution by the board of directors. 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: (1). Board Meeting of February 24, May 10, August 2, November 8, 2023  Content of the motion: To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH.  Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching  Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also concurrently served as a director of Abnova GmbH, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors. (2). Board Meeting of February 24, 2023  Content of the motion: To discuss the allocation of compensation for employees and directors for FY 2023.  Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching  Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also concurrently served as managerial personnel of the Company, and the Director, Chiu Chi Ching is the spouse of the Chairman,who shall be deemed to have apersonal interest in the matterpursuant to Article 206 of the Articles of

• 27 -

Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors.

• (3). Board Meeting of February 24, 2023

• Content of the motion: To discuss the changes of President.

• Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching

• Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also concurrently served as President of the Company, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors.

• (4). Board Meeting of May 31, 2023

• Content of the motion: To discuss the remuneration of the 9th Board of Directors of the Company from June to December 2023.

• Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching

• Reasons for abstention from voting due to conflicts of interest and voting: Due to the Chairman, Wilber Huang receiving a duty allowance for Chairman, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman's consultation by the remaining attending directors.

• (5). Board Meeting of August 2, 2023

• Content of the motion: To discuss the FY2023 salary adjustment for the managerial personnels of the Company.

• Directors who are abstaining from voting due to conflicts of interest: Jih Pei Ju

• Reasons for abstention from voting due to conflicts of interest and voting: The Director, Jih Pei Ju is also concurrently served as managerial personnel of the Company, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore she is abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors.

• (6). Board Meeting of November 8, 2023

• Content of the motion: To discuss the proposal to provide a loan facility of NT$ 5 million to the German subsidiary, Abnova GmbH.

• Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching

• Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang is also concurrently served as a director of Abnova GmbH, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors.

• (7). Board Meeting of November 9, 2023

• Content of the motion: To discuss the remuneration for the directors and managerial personnels for the year 2024.

• Directors who are abstaining from voting due to conflicts of interest: Jih Pei Ju

• Reasons for abstention from voting due to conflicts of interest and voting: The Director, Jih Pei Ju is also concurrently served as managerial personnel of the Company, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore she is abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors.

• (8). Board Meeting of November 9, 2023

• Content of the motion: To discuss the distribution of year-end bonus for the managerial personnels for FY 2023.

• Directors who are abstaining from voting due to conflicts of interest: Wilber Huang, Chiu Chi Ching, Jih Pei Ju

• Reasons for abstention from voting due to conflicts of interest and voting: The Chairman, Wilber Huang, and the director, Jih Pei Ju is also concurrently served as managerial personnel of the Company, and the Director, Chiu Chi Ching is the spouse of the Chairman, who shall be deemed to have a personal interest in the matter pursuant to Article 206 of the Articles of Incorporation, therefore they are abstaining from voting due to conflicts of interest. The motion is passed with no objection after the acting Chairman’s consultation by the remaining attending directors.

• The implementation status of self-assessments of Board performance

In accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company, the Board of Directors and the members of the functional committees will complete the performance review after the end of the assessment year and prior to the most recent regular Board meeting (as described below). The summary of the performance review results has been submitted to the Remuneration Committee and the Board of Directors on February 20, 2024, prior to the regular Board of Directors meeting. The results of the performance evaluation of the Board of Directors were submitted to the competent authority within the time limit as required by laws and regulations.

• (1). Scope of Evaluation: Board meeting

• Evaluation frequency: Once a year

• Evaluation period: 2023.1.1-2023.12.31

• Evaluation method: Internal self-assessment of the Board of Directors

• 28 -

• Evaluation content: Involvement in the Company’s operation, enhancement of the quality of the Board of Directors’ decision-making, composition and structure of Board of Directors, election of board members and continuing knowledge development, internal controls, etc.

• Evaluation result: The score of the self-assessment result is 95 marks, with the lowest scoring items are the involvement and extent of participation in the Company’s operation.

• Improvement plan: In 2023, the average Board Meeting attendance rate was 88%. The Company will continue to improve the attendance rate in order to achieve the attendance rate of 85% or above for each of the individual director.

• (2).Scope of Evaluation: Individual Board member

• Evaluation frequency: Once a year

• Evaluation period: 2023.1.1-2023.12.31

• Evaluation method: Self-assessment of the Board members

• Evaluation content: Understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc.

• Evaluation result: The score of the self-assessment result is 93-97 marks, with the lowest scoring item is the involvement in the Company’s operation.

• Improvement plan: The Company will strengthen the commitment of Board members to the Board of Directors and reduce the number of directors who concurrently serve as supervisors.

• (3).Scope of Evaluation: Individual Remuneration Committee member

• Evaluation frequency: Once a year

• Evaluation period: 2023.1.1-2023.12.31

• Evaluation method: Self-assessment of the functional committee members

• Evaluation content: Involvement in the Company’s operation, awareness of the Remuneration Committees’ duties, enhancement of the quality of the Remuneration Committees’ decision-making, composition and election of Remuneration Committee members, internal controls, etc.

• Evaluation result: The score of the self-assessment result is 97-99 marks, with the lowest scoring items are the involvement and extent of participation in the Company’s operation.

• Improvement plan: The Company will improve the attendance rate of the Remuneration committee members.

• (4) Scope of Evaluation: Audit Committee Member

• Evaluation frequency: Once a year

• Evaluation period: 2023.1.1-2023.12.31

• Evaluation method: Self-assessment of the functional committee members

• Evaluation content: Involvement in the Company’s operation, awareness of the Audit Committees’ duties, enhancement of the quality of the Audit Committees’ decision-making, composition and election of Audit Committee members, internal controls, etc.

• Evaluation result: The score of the self-assessment result was 97-99 marks, with the lowest scoring item is the involvement and extent of participation in the Company’s operation.

• Improvement plan: The Company will improve the attendance rate of the Audit Committee members.

Year	Goals of enhancing the functions of the Board of Directors	Implementation status
FY 2023	1. Professional instructors are arranged to provide directors with at least 6 hours of continuing education/training in the Company, and various courses are provided, and directors are encouraged to participate, with a view to enhancing the knowledge of diverse courses beyond their professional expertise.	The goal has been achieved, with all directors having completed more than 6 hours of courses, and 2 new directors having completed more than 12 hours of courses.
	2. The attendance rate of all directors present in person reached 85%	In 2023, the in-person attendance rate of all directors was 88%, which has achieved the target.
	3. The in-person attendance rate of directors at the AGM reached 50% (including the convener of the Audit Committee)	In 2023, the in-person attendance rate of directors at the AGM was 71%, including the convener of the Audit Committee, which has achieved the target.
As of the date of the publication of this annual report	1. The in-person attendance rate of individual director reached 85%.	In 2024, as of the date of publication of the annual report, only one Board meeting has been convened, and calculation will be made at the end of the fiscal year.
	2. The in-person attendance rate of directors at the AGM reached 50% (including the convener of the Audit Committee)	The 2024 AGM is scheduled on May 22, 2024, hence it has not yet been held.

• 29 -

• Succession planning for the board members and top management and its implementation status:

(1). Succession planning and operation for board members

• For the succession planning for board, the selection of board members is based on the following standards:

• A. Recognize the core values and business philosophy of the Company, possess the personality traits of integrity and accountability, and able to provide the professional expertise and experience required for the company's operations, and fulfill the duties and responsibilities of the Board of Directors.

• B. The analysis of the overall competencies required for the Board of Directors is taken into consideration. It is expected that the addition of newly appointed members can still continue to provide a Board of Directors that is professional, harmonious, diverse, and lead the Company to grow steadily.

• C. The qualifications of all director candidates must meet requirements as required by laws and regulations. The selection process must also comply with relevant regulations to ensure that the director selection process can be effectively identified, and suitable new board members can be elected.

The Company has "Rules for Performance Evaluation of Board of Directors”, where self-assessment will be regularly conducted every year based on the evaluation criteria such as understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc. in order to ensure effective operation of Board of Directors, and the performance review results are used to serve as a reference for the nomination and reappointment of directors.

Regarding the succession plan for the Board of Directors, the Company arranges senior managers to attend Board meetings in order to familiarize themselves with the operations of the Board of Directors and various business units. They are listed as potential candidates for future directors. The Company also ensures that the number of directors concurrently serving as managerial personnels does not exceed one-third of the total number of the board members. Gender equality and diversity in the composition of the board members also taken into considerations, with a view to complementing the professional talents from various fields that required for the Board of Directors. The Company has reported the succession plan and operation for the Board of Directors and top management in the board meeting on November 8, 2023 as follows:

• A. After the expiration of the term of office of the 8th Board of Directors of the Company, the 9th Board of Directors of the Company was re-elected at the AGM on May 15, 2023. Out of the 7 directors, five were re-elected and two were newly appointed, with one of them being a female director, increasing the proportion of female directors to 43%, achieving the goal of having each gender represent more than 1/3 of the total board seats. After the re-election, the average age of the board members was reduced to 53 years old, effectively completing the succession plan of the board of directors.

• B. The Company aims to cultivate senior managers as future director candidates by inviting them to attend board meetings, familiarizing them with the operation of the board and the business of each unit. At the time of the reelection of the 9th Board of Directors, one of the newly appointed directors was a senior manager cultivated by the Company. In addition, the practice of limiting the number of directors who are also managerial personnel of the Company to no more than 1/3 of the total board seats is implemented (with only 1 director concurrently serving as an employee, accounting for 14%).

• C. In response to the diversity of Board members and consideration of gender equality, the Board of Directors is required to comprise professionals from various fields. At the time of the re-election of the 9th Board of Directors, the board members comprise different nationalities, ages, and genders, each possessing professional competencies such as operations management, financial accounting, or medical and biotechnology as required by the Company's industry, effectively implementing the board member diversity policy and achieving the management goals.

• (2). Succession plan and operation for the top management The top management of the Company is responsible for business management within the organization, achieving various financial objectives and executing operational development plans. In addition to possessing essential professional competency and experience, the values and personality traits of the top management must also meet the Company's business philosophy.

• A. For the succession planning for the top management, potential candidates are selected and they are given opportunities to expose themselves to different roles and responsibilities through appointment of acting managers, job rotation or promotion. Also, they are arranged to attend relevant important meetings, on-the-job trainings, practical workshops, etc. to gradually enhance their execution, management, decision-making, problem identification, and problem-solving skills, cultivating talents that needed for the Company's long-term development. It can effectively enhance the succession abilities and shorten the time needed for adaptation during succession in accordance with the personal development plans.

• B. The Company progressively plans a succession plan for key managerial personnel- General Manager. The Company basis and arranges potential successors to attend board meetings, participate in various cross-departmental meetings on a weekly basis, and attend monthly management meetings. They also continuously participate in education and training courses covering important issues every year, including biotechnology industry R&D and innovation, marketing management, legal compliance, financial analysis, etc., to nurture all-round talents in operations management. The succession plan spans 1 to 3 years and has been reviewed by the Remuneration Committee on February 23, 2023. The Board of Directors resolved the proposal of changing the general manager on February 24, 2023, ensuring the completion of the General Manager succession plan and a smooth transition. The Company will continue to develop succession plans for key management positions.

• 30 -

3.3.2 Performance Evaluation of the Board of Directors

(The details are described in the aforementioned any other matters that require reporting under 3. The implementation status of self-assessments of Board performance)

3.3.3 Audit Committee

1. A total of 4(A) Audit Committee meetings were held in the previous period. The attendance of the independent directors was as follows:

	Title	Title	Name	Attendance in Person(B)	By Proxy	By Proxy	Attendance Rate (%) (Ｂ/Ａ)	Attendance Rate (%) (Ｂ/Ａ)	Remarks	Remarks
	Independent Director		Lin Jia Hsie	2	0		100%		Resigned after the re- election on May 15, 2023, expected attendance: 2 times
	Independent Director		Cha Anna	1	1		50%		Newly appointed after the re-election on May 15, 2023, expected attendance: 2 times
	Independent Director		Ye Shao De	4	0		100%		None
	Independent Director		Su Jin Jun	4	0		100%		None
	Other mentionable items: 1. If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, resolutions of the Audit Committee and the Company’s response to the Audit Committee’s opinion should be specified: (1) Matters referred to in Article 14-5 of the Securities and Exchange Act. The state of operations of the Audit Committee in FY 2023 Date of Meeting Major Resolutions Matters Listed under Article 14-5 of the Securities and Exchange Act Securities and Exchange Act Results of Audit Committee's Resolution The Company’s Response to the Audit Committee’s Opinion 2023.2.24 2nd Session, 13th Meeting 1. To discuss the "Internal Control System Statement” of the Companyfor FY 2022. v The resolution is passed with no objection by all attending members. The resolution is passed with no objection by all attending directors. 2. To discuss the changes in the financing provided to the German subsidiary,Abnova GmbH from October 2022 to January2023. v 3.To discuss theindependence and suitability ofthe CPAs. v 4.To audit the compensationpaid to attesting CPAs. v 5. To discuss the formulation of general principles for the pre- approvalpolicy of non-assurance services ofthe Company. 6. To review the Company's 2022 business report and financial statements. v 7.To discuss the profit distribution for FY 2022. 2023.5.10 2nd Session, 14th meeting 1. To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from February to March 2023. v The resolution is passed with no objection by all attending members. The resolution is passed with no objection by all attending directors. 2. To review the Q1 2023 consolidated financial statements of the Company. 2023.8.2 3nd Session, 1th meeting 1. To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from April to June 2023. v The resolution is passed with no objection by all attending members. The resolution is passed with no objection by all attending directors. 2. To review the Q2 2023 consolidated financial statements of the Company. 3. To discuss the formulation of the “Internal Control Systems" forsubsidiaries. 11.8.2023 3rd Session, 2th meeting 1. To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from July to September 2023. v The resolution is passed with no objection by all attending members. The resolution is passed with no objection by all attending directors. 2. To discuss the proposal to provide a loan facility of NT$ 5 million to the German subsidiary, Abnova GmbH. v 3. To review the Q3 2023 consolidated financial statements of the Company. 4. To discuss the revision of the "Internal Control Systems" of the Company. v 5. To discuss the addition of the "Internal Control Systems - Investment Cycle”for subsidiaries.
						Matters Listed
						under Article
										The Company’s
						14-5 of the
								Results of Audit		Response to the
	Date of					Securities and
		Major Resolutions						Committee's		Audit
	Meeting					Exchange Act
								Resolution		Committee’s
						Securities
										Opinion
						and Exchange
						Act
		1. To discuss the "Internal Control System Statement” of the
						v
		Companyfor FY 2022.
		2. To discuss the changes in the financing provided to the German
						v
		subsidiary,Abnova GmbH from October 2022 to January2023.
	2023.2.24							The resolution is		The resolution is
	2nd	3.To discuss theindependence and suitability ofthe CPAs.				v		passed with no		passed with no
	Session,	4.To audit the compensationpaid to attesting CPAs.				v		objection by all		objection by all
	13th	5. To discuss the formulation of general principles for the pre-						attending		attending
	Meeting	approvalpolicy of non-assurance services ofthe Company.						members.		directors.
		6. To review the Company's 2022 business report and financial
						v
		statements.
		7.To discuss the profit distribution for FY 2022.
	2023.5.10	1. To discuss the changes in the financing provided to the German						The resolution is		The resolution is
						v
	2nd	subsidiary, Abnova GmbH from February to March 2023.						passed with no		passed with no
	Session,							objection by all		objection by all
	14th	2. To review the Q1 2023 consolidated financial statements of the						attending		attending
	meeting	Company.						members.		directors.
		1. To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from April to June 2023.						The resolution is		The resolution is
	2023.8.2					v
	3nd	2. To review the Q2 2023 consolidated financial statements of the						passed with no		passed with no
	Session,	Company.						objection by all		objection by all
								attending		attending
	1th meeting	3. To discuss the formulation of the “Internal Control Systems"						members.		directors.
		f bidii
		orsusares.
		1. To discuss the changes in the financing provided to the German
						v
		subsidiary, Abnova GmbH from July to September 2023.
		2. To discuss the proposal to provide a loan facility of NT$ 5
	11.8.2023					v		The resolution is		The resolution is
		million to the German subsidiary, Abnova GmbH.
	3rd							passed with no		passed with no
		3. To review the Q3 2023 consolidated financial statements of the
	Session,							objection by all		objection by all
		Company.
	2th							attending		attending
		4. To discuss the revision of the "Internal Control Systems" of the
	meeting					v		members.		directors.
		Company.
		5. To discuss the addition of the "Internal Control Systems -
		Investment Cycle”for subsidiaries.

• 31 -

The Audit Committee convened a total of 4 meetings in FY 2023, and the main considering matters discussed including:

1. Quarterly and annual financial reports.

2. Assessment of the effectiveness of the internal control system.

3. Revision of the "Internal Control Systems".

4. Formulation and revision of the "Internal Control Systems" for subsidiaries.

5. Loans and advances to related parties.

6. The hiring of an attesting CPA, his/her independence, and suitability evaluation, and the compensation given thereto.

7. Legal compliance and risk management, etc.

8. (2) Other matters which were not approved by the Audit Committee but were approved by two-thirds or more of all directors: None

9. 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

10. Communications between the independent directors, the Company's chief internal auditor and CPAs: Description regarding the communications between the Independent Directors and the Internal Auditors:

11. The Internal Audit Manager of the Company regularly submits audit reports and follow-up audit reports to all independent directors monthly. If any independent director raises questions regarding the audit content, immediate clarification and discussion will be conducted. The independent directors and the Internal Audit Manager will convene at least one meeting every year to discuss the effectiveness of audit operations and the design and execution of internal control systems for a full communication and it will be recorded. The Internal Audit Manager also attends every Board meeting for report presentation.

12. The auditors of the Company will report on the Company's financial position, operating results, and the status of internal control audits at least once a quarter to the independent directors. If there is any enactment or amendment of a decree and International Financial Reporting Standards (IFRS) which might materially affect the Company, explanations and discussions will be provided to the independent directors. The attesting CPAs attends Board meetings and Audit Committee meetings to provide professional explanations if committee members have any inquiries.

13. communication and it will be recorded. The Internal Audit Manager also attends every Board meeting for report presentation.

14. The Audit Committee of the Company is composed of 3 independent directors. In addition to regular Audit Committee meetings, the independent directors, Internal Audit Manager and auditors maintain good communication through email, phone, or ad hoc meetings as needed.

15. (2) Summary of communications between independent directors and Internal Audit Manager:

Dates of Meeting	Communication Topics	Communication Results
February 24, 2023 Pre-Board Meeting	 Report on the execution of Annual Audit Plan.  To discuss the effectiveness of the design and execution of the internal control system as well as the "Internal Control System Statement" for FY 2022.	The independent directors had no opinions or suggestions after communication and discussion.
May 10, 2023 Pre-Board Meeting	 Report on the execution of Annual Audit Plan.	The independent directors had no opinions or suggestions after communication and discussion.
August 8, 2023 Pre-Board Meetin	 Report on the execution of Annual Audit Plan.  To discuss the formulation of the “Internal Control Systems" for subsidiaries.	The independent directors had no opinions or suggestions after communication and discussion.
November 8, 2023 Pre-Board Meeting	 Report on the execution of Annual Audit Plan  To discuss the revision of the "Internal Control Systems" for subsidiaries.  To discuss the addition of the “Internal Control Systems" for subsidiaries.	The independent directors had no opinions or suggestions after communication and discussion.

• 32 -

(3)	Summary of communications between independent directors and CPAs:		Communication Results The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors. The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors. The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors. The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors.
	Dates of Meeting	Communication Topics	Communication Results
	February 23, 2023 Pre-Board Meeting	 To provide explanations on audit and Q&A to the independent directors regarding the consolidated and single entity financial statements for FY 2022.  In response to the job rotation policy within the accounting firm, the CPA introduced the prospective successors CPA to the independent directors.	The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors.
	May 10, 2023 Pre-Board Meeting	To provide explanations on review and Q&A to the independent directors regarding the Q1 2023 consolidated financial statements.	The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors.
	August 8, 2023 Pre-Board Meeting	To provide explanations on review and Q&A to the independent directors regarding the Q2 2023 consolidated financial statements.	The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors.
	November 8, 2023 Pre-Board Meeting	To provide explanations on review and Q&A to the independent directors regarding the Q3 2023 consolidated financial statements.	The independent directors had no opinions or suggestions, and it was submitted to the competent authority within the time limit as required by laws and regulations after reviewed by the Board of Directors.

1. The state of participation in board meetings by the supervisors: (Not applicable)

2. 33 -

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

Evaluation Item			Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?	✓		The Company has established "Corporate Governance Best Practice Principles", and the information are disclosed on Market Observation Post System (MOPS) and the Company website.	None
2. Shareholding structure & shareholders’ rights (1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares? (3) Does the company establish and execute the risk management and firewall system within its conglomerate structure?	✓ ✓ ✓		(1) The Company has internal control mechanism to govern the equity-related operations, and it is implemented in compliance with the operating procedures. (2) Some of the directors are also major shareholders, and the Company possesses the list of major shareholders who are controlling the Company as well as the list of the actual controllers of the major shareholders. (3) The business and the financial accounting of affiliated enterprises of the Company operate independently. The Company has established specifications such as "Regulations Governing Group Enterprises, Specific Companies and Related-Party Transactions”, "Regulations for Supervising and Managing Subsidiaries”, etc., to effectively implement risk control and firewall mechanisms.	None
(4) Does the company establish internal rules against insiders trading with undisclosed information?	✓		(4) The Company has established specifications such as "Procedures for Handling Material Inside Information” etc., to ensure that all internal personnel are fully informed and strictly comply with the regulations. Any securities trading using material nonpublic information is not allowed. In addition, the Company will conduct education and training sessions from time to time for internal personnels to advocate the relevant laws and regulations and common pitfalls, with a view to improving their awareness of securities trading. Pursuant to Article 6 of the "Procedures for Handling Material Inside Information" of the Company: When insiders of the Company become aware of the contents of the Company's financial reports or relevant results, measures include, without limitation, prohibiting a director from trading its shares during the closed period of 30 days prior to the publication of the annual financial reports and 15 days prior to the publication of the quarterly financial reports. Implementation status of this regulation in the FY 2023: Financial Report Publication Date of the Financial Report Notification Time and Method Compliance with Regulations FY 2022 2023.2.24 The Chief Corporate Governance Officer notified insiders, including directors and managerial officers, via email on January 16, 2023, that trading shares during the closed period is prohibited. All insiders have complied with theregulations. Yes Q1, 2023 2023.5.10 The Chief Corporate Governance Officer notified insiders,includingdirectors Yes

• 34 -

Evaluation Item					Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No			Abstract Illustration
						and managerial officers, via email on April 17, 2023, that trading shares during the closed period is prohibited. All insiders have complied with theregulations.
				Q2, 2023	2023.8.2	The Chief Corporate Governance Officer notified insiders, including directors and managerial officers, via email on July 11, 2023, that trading shares during the closed period is prohibited. All insiders have complied with theregulations.	Yes
				Q3, 2023	2023.11.8	The Chief Corporate Governance Officer notified insiders, including directors and managerial officers, via email on October 17, 2023, that trading shares during the closed period is prohibited. All insiders have complied with theregulations.	Yes
1. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members?	✓		(1) The Company has established "Procedures for Election of Directors” that specified the diversity policy of the Board of Directors, and the Article 20 of the "Corporate Governance Best Practice Principles” of the Company has stipulated the board membership diversification criteria and the competencies of Board of Directors must possess as a whole. The areas of expertise of the Board members covering different fields, such as biotechnology, medicine, financial management, accounting, business management, etc., achieving the goal of diversification. For more details regarding diversity policy of the Board of Directors of the Company and the specific goals of diversity management and its implementation status, please see4. The diversity policy and status of independence of the board of directors(Page 15)						None Under evaluation
(2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?	✓		(2)The Company plans to establish a Risk Management Committee in 2024, appointing three independent directors of the Company as its members. Among them, Su Jin Jun, an independent director with expertise in financial accounting, will be particularly helpful in supervising risks related to monetary, financial, and international economics. Ye Shao De, another independent director with expertise in medical and biotechnology fields, primarily helpful in supervising risks related to industry development trends, product and technology development, clinical applications, and regulations. Cha Anna, an independent director with expertise in operations management, is particularly helpful in supervising risks related to business marketing and internal control management. In the future, the Company will also evaluate the necessity of establishing other functional committees based on actual operational requirements.

• 35 -

Evaluation Item			Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(3) Does the company establish a standard to measure the performance of the Board and 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?	✓		(3) In accordance with the "Rules for Performance Evaluation of Board of Directors” of the Company, the Board of Directors and the members of the functional committees will complete the self-performance review after the end of the assessment year and prior to the most recent regular Board meeting. The statistics of performance review results for FY 2023 has been submitted to the Remuneration Committee and the Board of Directors on February 20, 2024 for discussion, and were submitted to the competent authority within the time limit as required by laws and regulations. The performance review results are used to serve as a reference to determine the remuneration for individual directors and for the nomination and reappointment of directors. 1. Scope of Evaluation: Board meeting  Evaluation frequency: Once a year  Evaluation period: 2023.1.1-2023.12.31  Evaluation method: Internal self-assessment of the Board of Directors  Evaluation content: Involvement in the Company’s operation, enhancement of the quality of the Board of Directors’ decision-making, composition and structure of Board of Directors, election of board members and continuing knowledge development, internal controls, etc.  Evaluation result: The score of the self-assessment result is 95 marks, with the lowest scoring items are the involvement and extent of participation in the Company’s operation.  Improvement plan: In 2023, the average Board Meeting attendance rate was 88%. The Company will continue to improve the attendance rate in order to achieve an attendance rate of 85% or above for each of the individual directors. 2. Scope of Evaluation: Individual Board member  Evaluation frequency: Once a year  Evaluation period: 2023.1.1-2023.12.31  Evaluation method: Self-assessment of the Board members  Evaluation content: Understanding of the Company’s goals and mission, awareness of director’s duties, involvement in the Company’s operations, management of internal relationship and communication, the director's professionalism and continuing knowledge development, internal controls, etc.  Evaluation result: The score of the self-assessment result is 93-97 marks, with the lowest scoring item is the involvement in the Company’s operation.  Improvement plan: The Company will strengthen the commitment of Board members to the Board of Directors and reduce the number of directors who concurrently serve as supervisors. 3.Scope of Evaluation: Remuneration Committee members  Evaluation frequency: Once a year  Evaluation period: 2023.1.1-2023.12.31  Evaluation method: Self-assessment of the functional committee members  Evaluation content: Involvement in the Company’s operation, awareness of the Remuneration Committee members’ duties, enhancement of the quality of the Remuneration Committee members’ decision- making, composition and election of Remuneration Committee members, internal controls, etc.  Evaluation result: The score of the self-assessment	None

• 36 -

Evaluation Item			Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(4) Does the company regularly evaluate the independence of CPAs?	✓		result is 97-99 marks, with the lowest scoring items are the involvement and extent of participation in the Company’s operation.  Improvement plan: The Company will improve the attendance rate of functional committee members. 4. Scope of Evaluation: Audit Committee Member  Evaluation Cycle: Once a year  Evaluation period: 2023.1.1-2023.12.31  Evaluation method: Self-assessment of the functional committee members  Evaluation Content: Involvement in the Company’s operation, awareness of the Audit Committee members’ duties, enhancement of the quality of the Audit Committee members’ decision-making, composition and election of Audit Committee members, internal controls, etc.  Evaluation result: The score of the self-assessment result was 97-99 marks, with the lowest scoring item is the involvement and extent of participation in the Company’s operation.  Improvement plan: The Company will improve the attendance rate of the Audit Committee members. (4) The Company regularly evaluates the independence and suitability of the CPA once a year. In addition to obtaining the "Statement of Auditor Responsibilities and Functions and Independence" and Audit Quality Indicators (AQIs), the Company also conducts a CPA evaluation in reference to the independence evaluation standards for accountants as specified in the Bulletin of Norm of Professional Ethics for Certified Public Accountant of the Republic of China No. 10 "Independence in Audit and Review" and 13 AQI indicators (for details, see notes 1-2). After evaluation, it has been confirmed that the CPA all meets the independent criteria and has no other financial interest relationship with the Company except for the audit and tax fees. With reference to the AQIs, it is believed that the CPAs and the accounting firm are averagely superior to peers in the industry from the aspects of professionalism, quality control, independence, supervision, and innovation, that can provide good audit services. The most recent evaluation of independence and suitability of CPA was discussed and approved by the Audit Committee, and was submitted to the Board of Directors for approval on February 20, 2024. Note 1: CPA independence evaluation items: Evaluation Item Result Independent The CPA has no direct or significant indirect financial interestrelationship withthe Company. Yes Yes The CPA has no financing or guarantees with the Company orthe Company’s directors. Yes Yes The CPA has no close business relationship or potential employment relationship with the Company. Yes Yes The CPA and the audit team members have not served as directors, managerial personnels or positions that have significant influence on audit work in the Company at present or in the last two years. Yes Yes The CPA has no non-audit service items that may directly affect the audit work have been provided to the Company. Yes Yes			None
			Evaluation Item	Result	Independent
			The CPA has no direct or significant indirect financial interestrelationship withthe Company.	Yes	Yes
			The CPA has no financing or guarantees with the Company orthe Company’s directors.	Yes	Yes
			The CPA has no close business relationship or potential employment relationship with the Company.	Yes	Yes
			The CPA and the audit team members have not served as directors, managerial personnels or positions that have significant influence on audit work in the Company at present or in the last two years.	Yes	Yes
			The CPA has no non-audit service items that may directly affect the audit work have been provided to the Company.	Yes	Yes

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Evaluation Item			Implementation Status	Implementation Status	Implementation Status	Implementation Status			Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			The CPA has no intermediation of stocks or other securities issued bythe Company.				Yes	Yes
			The CPA has not act as a defense attorney for the company or act as a representative on behalf of the Company to coordinate conflicts with third parties.				Yes	Yes
			The CPA is not a relative of the Company's directors, managerial personnel, or persons who have a significant influence on the audit matters.				Yes	Yes
			Does the CPA		have regular rotation		Yes	Yes
			Note 2:AQIs
			Aspect	No	Indicator	Definition
			Professionalis m	1	Audit experience	Do the CPA and auditing personnel have sufficient audit experience to perform the audit work?
				2	Number of hours of training	Have the CPA and auditing personnel received sufficient education and training to acquire professional knowledge and skills?
				3	Turnover rate	Does the firm maintain a sufficient number of senior human resources?
				4	Professional support	Does the firm have sufficient non-audit professional staff, including computer auditors and evaluators, to support the audit team?
			Quality control	5	CPA workload	Is the number of audit cases accepted by the CPA and the amount of time spent on audit work excessive?
				6	Number of audit hours	Is the percentage of audit hours carried out by the audit team appropriate at each stage of the audit?
				7	Quality control review	Has the EQCR accountant spent sufficient time on the quality control review of the audit cases?
				8	Capability of quality control support	Does the firm have sufficient quality control resources, including risk management and audit professional consultants,to support the audit team?
			Independence	9	Non-audit services	Does the proportion of non-audit services provided by the firm to individual clients affect independence?
				10	Client familiarity	Could the cumulative number of years that the firm has provided audit services to individual clients affect independence?
			Supervision	11	External inspection deficiencies and disciplinary actions	Whether the quality control and audit cases of the firm are carried out in accordance with relevant laws and standards.
				12	Improvement letter issued by competent authorities
			Innovation	13	Innovative plan or initiative	The firm's commitment to enhancing audit quality, including the adoption or planning of relevant plans or engagements to enhance audit quality.

• 38 -

None

1. Does the company appoint a suitable number of ✓ competent personnel and a supervisor responsible for corporate governance matters (including but not limited to providing information for directors and supervisors to perform their functions, assisting directors and supervisors with compliance, handling work related to meetings of the board of directors and the shareholders' meetings, and producing minutes of board meetings and shareholders' meetings)?

The Board meeting on February 24, 2023, has passed the resolution to appoint the Executive Assistant to the Chairman Office, Tung I Ling as the Chief of Corporate Governance Officer, protecting the rights and interests of shareholders and strengthening the functions of the Board of Directors, and responsible for corporate governance related matters. She has expertise in financial accounting and more than 20 years of experience in internal audit, equity, and corporate governance in TWSE/TPEx Listed Companies. Her main scope of duties and authority include:

1.Handling matters relating to Board meetings, Remuneration Committees meetings, Audit Committees meetings, and Shareholder meetings in accordance with laws and regulations (including meeting notices, agendas and relevant information, minutes record and compilation, etc.). 2.Assist in matters related to changes in the Board of Directors and provide continuing education and training.

3.Furnishing information required for business execution by directors.

4.Assisting directors with legal compliance.

5.Purchase Directors and Officers (D&O) Liability insurance.

• 6.Report the examination results of the qualifications of independent directors during nomination, appointment, and during their tenure of office in accordance with relevant laws and regulations to Board of Directors.

• Other matters set out in the Company's Articles of Incorporation or contract.

The business execution status for FY 2023 are as follows:

1. Handle the matters related to convening Board meetings in accordance with laws and regulations: Arrange the Board meetings and functional committees’ meetings of the year, notify the directors and provide agendas and relevant information seven days before the meeting, and complete the Board meeting minutes record and compilation within one week after the meeting and send. A total of 6 Board meetings, 4 Audit Committee meetings, and 4 Remuneration Committees meetings were held in FY 2023, 2. Convene the annual general meeting (AGM) in accordance with laws and regulations: Handle matters related to the shareholders' meeting, handle change of registration and report to the stock exchange after the re-election of directors. The 2023 AGM was held on May 15, 2023. 3. Assist in arranging meetings between independent directors, Internal Audit Manager, and attesting CPAs to understand the state of implementation of Company's internal audit, financial position, newly revised laws and regulations, etc.

2. Revise the Company's relevant regulations and handle alteration of registration in response to the Company's operational needs and amendments to corporate governance related laws and regulations.

3. Assist to arrange continuing education and training courses for directors and ensure that all directors have completed at least 6 hours of training. All newly appointed directors have completed more than 12 hours of continuing education and training courses. For the details regarding relevant training, please refer to mops.

4. During the period of 30 days before the publication of the annual financial report and 15 days before the publication of the quarterly financial report, all directors and managerial personnels are prohibited from trading the Company's stocks. The Chief of Corporate Governance Officer will notify all directors and managerial personnels via email prior to the aforementioned periods in order to prevent internal personnels from inadvertently violating this regulation. In FY 2023, all directors and managerial

5. 39 -

Evaluation Item			Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			personnels of the Company complied with regulations and no violation is reported. 7. Purchase liability insurance for directors and key executives. The relevant information, including the insured amount, coverage scope, and insurance premium, was reported to the Board of Directors on May 31, 2023. 8. The Board meeting and the performance review for functional committees’ members for FY 2023 have been reviewed by the Remuneration Committee, and discussed by the Board of Directors on February 20, 2024. Implementation status of continuing education/ training for FY 2023 Date Training Unit Course Title Number o Training Hours 2023.6.7 The Institute of Internal Auditors- Chinese Taiwan How to Interpret Operating Performance and Risks from IFRS Financial Statements 6 2023.6.8 The Institute of Internal Auditors- Chinese Taiwan Guidelines for Internal Audit Compliance with Laws and Regulations 6 2023.8.23 Accounting Research and Development Foundation "Corporate Governance" Literacy and Practical Financial Risk Assessment 6 2023.8.24 The Institute of Internal Auditors- Chinese Taiwan Discussion and Countermeasures to the "Insider Trading" and "Financial Statement Fraud" 6 2023.10.11 Accounting Research and Development Foundation The Establishment of Audit and Compliance Practices for "Corporate Governance Personnel" as Required by the Competent Authority 6
			Date	Training Unit	Course Title	Number o Training Hours
			2023.6.7	The Institute of Internal Auditors- Chinese Taiwan	How to Interpret Operating Performance and Risks from IFRS Financial Statements	6
			2023.6.8	The Institute of Internal Auditors- Chinese Taiwan	Guidelines for Internal Audit Compliance with Laws and Regulations	6
			2023.8.23	Accounting Research and Development Foundation	"Corporate Governance" Literacy and Practical Financial Risk Assessment	6
			2023.8.24	The Institute of Internal Auditors- Chinese Taiwan	Discussion and Countermeasures to the "Insider Trading" and "Financial Statement Fraud"	6
			2023.10.11	Accounting Research and Development Foundation	The Establishment of Audit and Compliance Practices for "Corporate Governance Personnel" as Required by the Competent Authority	6
5. Does the company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers, and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities?	✓		The Company and all stakeholders have established transparent and effective communication channels in order to promptly understand and respond to stakeholders' concerns. The Company will continuously improve the Company's policies and systems. The main stakeholders are identified through understanding of the groups of people interacting with all departments within their scope of business, which are 1. Government and competent authorities, 2. Customers, 3. Suppliers, 4. Investors, and 5. Employees. The Company will regularly report on the state of communication with stakeholders to the Board of Directors. The following is the communications between the Company and the stakeholders, that was reported in the Board meeting on November 8, 2023.

• 40 -

1. Stakeholder: Government and competent authorities

Issues of concern Regulatory compliance Corporate governance Risk management

Communication Response methods and channel communication frequency Assign a contact Assign a contact person for all person business, and maintain good Government interaction with competent documents authorities, proactively Regulatory understand the latest laws and conferences and regulations and promptly adjust seminars company systems (on an ad hoc basis) Cooperate with competent authorities in various supervision and review operations (on regular and ad hoc basis). Cooperate to complete the matters within the deadline as required by competent authorities for official correspondence (on an ad hoc basis)

None

2. Stakeholder: Customers

Issues of concern	Communication channel	Response methods and communication frequency
Quality of products/ services Marketing plan Customer satisfaction Protection of rights and interests of customer	Exclusive customer service/technical support department Company website Customer satisfaction questionnaire Personal data protection policy	Customer complaint mailbox is provided, and the customers’ inquiries will be managed and responded by dedicated personnel (on an ad hoc basis) The Company has launched a new website, offered customers more convenient product inquiries and ordering functions, and introducing new products and promotions on an ad hoc basis. Regular analysis is made based on customer complaint reports (on a monthly basis) Regularly collect and analyze customer satisfaction questionnaire results to understand customer needs (on a six-month basis) Establish a "Code of Practice for the Personal Data Protection” to protect customer privacy and rights (on an ad hoc basis) Each unit conducts a personal data inventory (on a 12-month basis)

3. Stakeholder: Suppliers

Issues of concern	Communication channel	Response methods and communication frequency
Supply chain management Maintenance of supplier relationship	Procurement department Procurement contract Supplier evaluation	Set up a procurement department, and maintain day-to-day liaison with supplier, handle evaluation related matters (on an ad hoc basis) Implement supplier rating system, and sign procurement contracts with important suppliers (on an ad hoc basis) Regularly conduct supplier evaluations to ensure the quality of the products and services provided by suppliers (on a six- month basis)

1. Stakeholder: Investors Issues of Communication Response methods and concern channel communication frequency Shareholders’ Spokesperson/ KGI Securities Co., Ltd. is equity proxy appointed as the proxy for handling Corporate spokesperson stock-related matters (on an ad hoc governance Company basis) Sustainable website Set up a spokesperson and proxy development Shareholders' spokesperson, as well as investor Corporate meeting mailbox to respond the issues of image Investor concern of investors (on an ad hoc conference. basis) MOPS Convene AGM (on a 12-month basis) Convene investor conference to brief about the financial position and business conditions, as well as future prospects (at least once a

2. 41 -

Evaluation Item				Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract		Illustration
						year) Disclose financial and business information as well as significant information of the Company on the MOPS (on regular and ad hoc basis)
			5. Stakeholder: Employees
			Issues of concern	Communicati on channel		Response methods and communication frequency
			Labor relations Employee remuneration and welfare Talent cultivation Environment al health and safety in workplace	Labor- management meeting Employee compliant mailbox Remuneration Committee/ Human Resource Department Intranet site Internal/ bulletin board	The Company has formulated work rules and relevant regulations governing the personnel-related matters for compliance, and regularly convene labor-management meetings (once a quarter) Establish a smooth channel for employees to express their suggestions and complaints (on an ad hoc basis) Regularly conduct performance review (on a six-month basis) Establish an Employee Welfare Committee, providing employees with various subsidies, annual free health examination, and organizing various activities (on an ad hoc basis) Provide internal training courses for employees (on a monthly basis) and provide external training courses as needed (on an ad hoc basis)
6. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?	✓		The Company has appointed KGI Securities Co., Ltd. as the proxy for handling stock-related matters.				None
~~7. Information Disclosure~~ (1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance? (2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)? (3) Does the company announce and report annual financial statements within two months after the end of each fiscal year, and announce and report Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit?	✓ ✓		(1) The Company has established a website (http://www.abnova.com) and Investor Relations session is established in the Company website to provide relevant information on the Company's financial and business information as well as corporate governance related information for public access. (2) The company has both Chinese and English version websites, information collection and disclosure are performed by dedicated personnel, and spokesperson system is implemented that spokesperson responsible for external communication. If the Company convenes an investor conference, the relevant information will be disclosed on MOPS as well as the Company website as required by laws and regulations. (3) The Company published the financial reports for FY 2023 on February 29, 2024, that is, within two months after the end of the accounting year. The Company has also published the Q1, Q2, Q3 financial reports as well as monthly business operational status ahead the specified deadlines.				None
8. Has the Company disclosed other information to facilitate a better understanding of its corporate governance practices (e.g. including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors)?	✓		(1) Employee rights, employee wellness: The Company has established an Employee Welfare Committee to regularly organize various activities (e.g. Chinese New Year banquet, departmental gatherings, etc.) as a token of appreciation all the employees, and provide subsidies, gifts, and allowances during festival seasons. The company also contributes pension to employees as required by laws and regulations, provides national health insurance, and annual free health examination. Moreover, the Company provides free coffee and beverages. The measures governing labor- management relations follow relevant laws and regulations, and it is implemented well. (2) Investor relations: The Company convenes an annual shareholders’ meeting as required by laws and regulations, and a spokesperson system is established to handle matters related to investors. In addition, the Company handles the information disclosure in accordance with the regulations of the competent authorities, and an investor relations section is established on the Company website, providing a channel for exchange of opinions.				None

• 42 -

Evaluation Item			Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			(3) Supplier relations: The Company has established "Supplier Management Procedures" and "Procurement Management Procedures" to carefully select business partners and suppliers who emphasis on the stability of product quality and price reasonableness and establish long-term collaborations with suppliers based on mutual trust and mutual benefit, achieving a win-win situation. (4) Rights of stakeholders: The Company maintains open communication and good cooperative relationships with bankers, customers, and stakeholders, as well as protecting their entitled rights. (5) Continuing education/ training of directors: The Company arranged various types of continuing education/training courses for directors to enhance their professional knowledge and legal literacy. In FY 2023, all directors attended more than 6 hours of continuing education/training courses. Upon the expiration of the term of office of the 8th Board of Directors, the 9th Board of Directors of the Company was re-elected at the AGM on May 15, 2023. Among them, there are two newly appointed directors, and they have attended continuing education/training courses for more than 12 hours. The number of hours of continuing education/training courses for all directors complies with the legal requirement. The directors’training records are as follow:
			List of directors	Training unit	Titles of training courses
			Wilber Huang, Representative of Harmony Investment Co., Ltd., Chiu Chi Ching, Representative of Pan Pacific Investment Co., Ltd.,Jih Pei Ju, Representative of China Wire & Cable Co., Ltd, Chen Yueh Hung, Cha Anna, Ye Shao De, Su JinJun	Taiwan Corporate Governance Association	The Role of Directors and Compliance Responses to Operating Right Challenges under Corporate Governance 3.0 (3 hours)
			Wilber Huang, Representative of Harmony Investment Co., Ltd., Chiu Chi Ching, Representative of Pan Pacific Investment Co., Ltd.,Jih Pei Ju, Representative of China Wire & Cable Co., Ltd, Chen Yueh Hung, Cha Anna, Ye Shao De, Su JinJun	Taiwan Corporate Governance Association	Digital Technology and Artificial Intelligence Trends and Risk Management (3 hours)
			Cha Anna	The Institute of Internal Auditors-Chinese Taiwan	Points to Note and Practical Analysis of "Shareholders' Meetings" and "Company Act" (6hours)
			Su Jin Jun	Securities & Futures Institute	Insider Trading Legal Compliance Advocacy Seminar for the Fiscal Year 2023 (3hours)
			Representative of Pan Pacific Investment Co., Ltd., Jih Pei Ju,	Accounting Research and Development Foundation	Analysis of the Latest Corporate Governance Policies, Laws, and Common Deficiencies (3hours)
			Representative of Pan Pacific Investment Co., Ltd.,Jih Pei Ju,	Accounting Research and Development Foundation	The Basis of Compilation and Disclosure of SustainabilityReports

• 43 -

Evaluation Item			Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
					- Key Analysis of IFRS ISSB S1 and S2 Standards (3hours)
9. With respect to the results of the annual Corporate Governance Evaluation most recently issued by the Corporate Governance Center of Taiwan Stock Exchange, please describe the improvements, and provide priority and measures to enhance those matters that have not yet been improved. (It is not applicable as no improvement is required) The results of corporate governance evaluation in the FY 2022 showed that the Chairman and the President of the Company are not the same person. The Company has implemented succession planning for top management, and the resolution of changing President was passed in the Board meeting on February 24, 2023. At present, the Chairman and the President are not the same person. The results of corporate governance evaluation in the FY 2022 showed that the Chief of Corporate Governance Officer has not yet been appointed. The appointment of Chief of Corporate Governance Officer was passed in the Board meeting on February 24, 2023. The corporate governance evaluation results for the Company in the most recent fiscal year (2023) indicate that no additional functional committees beyond those required by law have been established. The Company plans to establish a Risk Management Committee in 2024 with independent directors appointed as its members. The corporate governance evaluation results for the Company in the most recent fiscal year (2023) show that the English version of the financial report has not been uploaded to the Market Observation Post System (MOPS) 16 days prior to the shareholders' meeting. The Company will upload the English version of the financial report to the MOPS 16 days before the shareholders'meeting for the FY 2024.

• 44 -

3.3.5 If the company has a remuneration committee or nomination committee in place, the composition and operation of such committee shall be disclosed

(1) Information of Members of the Remuneration Committee

• The Remuneration Committee of the Company is composed of three independent directors. For more details about their work experience, professional qualifications, and experience, as well as independence status, please refer to Page 13, Appendix - Disclosure of Professional Qualifications of Directors and Independence Analysis of Independent Directors.

(2) Attendance of Members at Remuneration Committee Meetings

1. There are three members of the Remuneration Committee.

2. The term of office for this committee is from May 15, 2023 to May 14, 2026. A total of 4 (A) Remuneration Committee meetings were held in the most recent fiscal year (FY 2023). The attendance record of the Remuneration Committee members was as follows:

	Title	Title	Name	Attendance in Person(B)	By Proxy	By Proxy	Attendance Rate (%) (Ｂ/Ａ)	Remarks
	Convener		Lin Jia Hsie	2	0		100%	Resigned after the re- election on May 15, 2023, expected attendance: 2 times
	Convener		Cha Anna	1	1		50%	Newly appointed after the re-election on May 15, 2023, expected attendance: 2 times
	Committee Member		Ye Shao De	4	0		100%	Re-elected
	Committee Member		Su Jin Jun	4	0		100%	Re-elected
	Other mentionable items: The state of operations of Remuneration Committee in FY 2023
	The state of
								The Company’s Response to
	Date of					Results of Remuneration
		Major Resolutions						the Remuneration
	Meeting					Committee's Resolution
								Committee’s Opinion
		1. To discuss the allocation of compensation for employees and						Presented to the Board of
	2023.2.23					The resolution is passed with no
		directors for FY 2022.						Directors, the resolution is
	4th Session,					objection by all attending
		2. To discuss the change of the President of the Company.						passed with no objection by
	9th Meeting					members.
								all attendingdirectors.
								Presented to the Board of
	2023.5.31					The resolution is passed with no
		To discuss the remuneration of the 9th Board of Directors of the						Directors, the resolution is
	5th Session,					objection by all attending
		Company from June to December 2023						passed with no objection by
	1th Meeting					members
								all attendingdirectors.
								Presented to the Board of
	2023.8.2					The resolution is passed with no
		To discuss the 2023 salary adjustment for the managerial personnels						Directors, the resolution is
	5th Session,					objection by all attending
		of the Company.						passed with no objection by
	2th Meeting					members
								all attendingdirectors.
		1. To discuss the remuneration for the directors and managerial						Presented to the Board of
	2023.11.8					The resolution is passed with no
		personnels for FY 2024.						Directors, the resolution is
	5th Session,					objection by all attending
		2. To discuss the distribution of year-end bonus for the chairman and						passed with no objection by
	3th Meeting					members.
		managerialpersonnels for FY 2023.						all attendingdirectors.
	Duties of the Remuneration Committee of the Company: The remuneration committee shall exercise the care of a good administrator in faithfully performing the official powers listed below, and shall submit its recommendations for deliberation by the Board of Directors: (1) Prescribe and periodically review the performance evaluation standards, annual and long-term performance goals as well as remuneration policy, system, standards, and structure for directors and managerial officers. (2) Periodically evaluate the status of attainment of goal of directors and managerial officers and prescribe the content and amount of remuneration individually based on the evaluation results. 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 (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 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.

• 45 -

3.3.6 Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies"

Evaluation Item			Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
1. Does the company assess ESG risks associated with its operations based on the principle of materiality, and establish related risk management policies or strategies?	✓		The Company has established a Sustainable Development Committee that headed by the Chairman and composed of managerial personnels with different professional expertise, jointly planning the Company's short, medium, and long-term plans as well as a sustainable development blueprint, and to be driven by the Chairman Office. The Sustainable Development Committee responsible for cross-departmental communication and planning, with the primary tasks of identifying business risks and sustainable development issues of concern to stakeholders, analyzing the resources and manpower of the Company, prioritizing urgent and important plans, conducting risk assessments on issues related to the environment, society, and corporate governance, etc. according to the principle of importance, discussing response plans, and regularly monitoring and reviewing the implementation status. The key points of the Sustainable Development Committee meeting for the year 2023 are: 1. Identify the sustainable issues that need to be addressed and develop corresponding action plans; 2. Discuss the goals and policy adjustments related to sustainability issues; 3.Develop and implement annual sustainable development plans; 4. Supervise the sustainable development program and its implementation performance.5. Sustainability report preparation. The Sustainability Committee reports to the Board of Directors at least once a year on the implementation status of sustainable development. The most recent report to the Board of Directors was made on November 8, 2023. The execution progress of GHG inventory and verification is reported quarterly to the Board of Directors. A total of four reports were made to the Board of Directors on February 24, 2023, May 10, 2023, August 2, 2023, and November 8, 2023. The Board of Directors' oversight of sustainability development: The Board of Directors heard the sustainability report by the Committee at least once a year to review the relevant execution content and direction. The Board of Directors heard the execution progress of GHG inventory and verification report every quarter to keep abreast of the progress. The Board of Directors established the position of Chief Corporate Governance Officer in 2023, and it is expected that a Risk Management Committee will be established in 2024. All of the above are completed under the strong support and supervision of the Board of Directors towards sustainable development. The Board of Directors continuously evaluates the feasibility of various sustainable development strategies, pays attention to progress and conducts reviews, provides professional advice as a reference for adjustments when necessary, as well as supervises the team to make adjustments.	None

• 46 -

Evaluation Item			Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
2. Does the company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reporting to the board?	✓		This disclosure covers the sustainable business performance from January to December 2023, with the boundary of risk assessment mainly focused on the Company, including the Japan and Taiwan subsidiaries. The Sustainable Development Committee communicates with internal stakeholders on the issues of concern and performs literature review to evaluate significant sustainable development issues in accordance with laws and regulations. The "Risk Management Policy and Procedures" was passed in the Board meeting on November 10, 2021, for compliance in handling matters related to risk identification, risk assessment, risk control and risk monitoring. Description on promotion of sustainable development: Issues Risk Assessment Item Risk Management Strategy Environ mental Environmental impact and management 1.The production environment and manufacturing process of Qingpu plant of the Company is certified with ISO9001 certification. Various internal management measures related to the environment are established for compliance. 2.The Company has established an Environmental Health and Safety (EHS) Department and appointed dedicated personnel to manage the operations related to EHS, environmental protection, occupational safety and health, etc. In addition, the Company regularly conducts fire drills and educational and promotional campaigns, providing a safe and healthy working environment for employees. 3.The Company regularly conducts audits on greenhouse gas emissions (CO2), as well as electricity and water usage, and waste generation, etc. The Company will continue to implement energy-saving and carbon-reduction policy and comply with various environmental regulations. The Company also regularly submits reports, and the implementation status will be verified by the Internal Audit Unit. Social Product safety 1.The products of the Company are produced in accordance with the relevant production regulations in various countries and are strictly controlled and inspected by the Quality Control Department to ensure stable and safe product quality, as well as the labeling is in compliance with regulations. 2.The Company strictly complies with the relevant laws and regulations related to trade, intellectual property management, and import/export control of different countries. All export products also meet local standards, ensuring all products and services comply with laws and regulations. 3.The Company has established a Customer Service Department and a Technical Support			None
			Issues	Risk Assessment Item	Risk Management Strategy
			Environ mental	Environmental impact and management	1.The production environment and manufacturing process of Qingpu plant of the Company is certified with ISO9001 certification. Various internal management measures related to the environment are established for compliance. 2.The Company has established an Environmental Health and Safety (EHS) Department and appointed dedicated personnel to manage the operations related to EHS, environmental protection, occupational safety and health, etc. In addition, the Company regularly conducts fire drills and educational and promotional campaigns, providing a safe and healthy working environment for employees. 3.The Company regularly conducts audits on greenhouse gas emissions (CO2), as well as electricity and water usage, and waste generation, etc. The Company will continue to implement energy-saving and carbon-reduction policy and comply with various environmental regulations. The Company also regularly submits reports, and the implementation status will be verified by the Internal Audit Unit.
			Social	Product safety	1.The products of the Company are produced in accordance with the relevant production regulations in various countries and are strictly controlled and inspected by the Quality Control Department to ensure stable and safe product quality, as well as the labeling is in compliance with regulations. 2.The Company strictly complies with the relevant laws and regulations related to trade, intellectual property management, and import/export control of different countries. All export products also meet local standards, ensuring all products and services comply with laws and regulations. 3.The Company has established a Customer Service Department and a Technical Support

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Evaluation Item			Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
					Department, providing customers with professional consultation and after-sales services. The Company emphases on customer satisfaction.
			Corporat e governa nce	Legal compliance Strengthen the functions of directors Stakeholders’ communication	1.The Company has established "Sustainable Management Best Practice Principles" and related regulations to promote sustainable development and review the effectiveness of implementation. Personnel related regulations and remuneration policy are meeting the reasonable standards in the industry, and employee performance review is integrated with sustainable management policy, and "Regulations Governing Reward and Punishment” also established for compliance. 2. The Company has set up a Legal Office, a Quality Assurance, Audit, Certification Department, and an Auditing Office to provide relevant regulatory consultations and regularly ensure compliance with all operation-related laws and regulations. 3. The Company has purchased D&O Liability insurance for directors (including managerial personnels). The amount of insurance coverage for FY 2023 is NT$ 85 million. Information relating to liability insurance such as the insured parties, coverage amount, scope, period, premium, etc. has been reported to the Board of Directors on May 31, 2023. 4. The Company has arranged various types of training courses for directors, and all directors have completed 6 hours or more continuing education/training. The newly appointed directors have completed 12 hours or more continuing education/training. The latest information on amendment of regulations or promotional matters will also be regularly provided. 5. The Company provides communication channels and reporting methods for stakeholders on the Company website and has appointed a spokesperson who responsible for external communication.
3. Environmental issues (1) Does the company establish proper environmental management systems based on the characteristics of their industries? (2) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?	✓ ✓		(1) The Company has established relevant environmental management systems based on medical biotech industry characteristics for compliance, such as "Management Procedures Governing the Operational Environment Assessment", "Environmental Management Procedures Governing the Manufacturing Process", "Regulations Governing the Facility and Environmental Management", etc. to effectively prevent and avoid environmental pollution. (2) The Company is committed to promoting energy conservation, encouraging employees to reduce unnecessary energy waste, as well as promoting waste recovery and separation, recycling wastepaper and				No major deviation

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Evaluation Item			Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
(3) Does the company evaluate the potential risks and opportunities in climate change with regard to the present and future of its business, and take appropriate action to counter climate change issues? (4) Does the company take inventory of its greenhouse gas 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, water reduction, or waste management?	✓ ✓		packaging materials, and using eco-friendly products as much as possible, etc. in order to strengthen its effort in protecting environment, minimizing ecological damage. (3) Climate change may result in global resource shortages, transportation disruptions, or environmental impacts that could increase business operating costs. The Company has adopted countermeasures such as maintaining good cooperative relationships with multiple air cargo companies over a long period of time, improving resource utilization efficiency, etc. In response to the trend that global attention has been accorded to the climate change, the EHS Department alerts at all times to amendments to environmental regulations, and promptly updates the Company's regulations and procedures to ensure compliance with legal requirements. (4) The main source of energy consumption for the Company is purchased electricity. Carbon dioxide sensors have been installed in specific plants to monitor the concentration of carbon dioxide. The statistics of GHG emissions, water consumption and total waste weight in the most recent two years are as follows: Data coverage: All of the Company's plants (subsidiaries are not included as they do not have substantial operations) FY 2022 FY 2023 GHG emissions (CO2) 941, 032kg 873,669kg Water consumption 5,446 m³ 5,274 m³ Waste 5.74 mt 6.47 mt (Note 1) Based on the operational boundary used to identify emission sources, the GHG emissions of the Company are categorized as other indirect emissions (Category Two): An indirect emission resulting from other activities of the Company. This information is estimated using water and electricity tariffs as the Company is not required to be verified by a professional agency. (Note 2) All of them are non-hazardous waste. 1. GHG reduction targets: Achieve a GHG emission reduction of more than 1% per year. 2. Measures to promote GHG reduction targets: (1) Gradually complete internal inventory and external verification according to the GHG inventory and verification plan formulated by the Company. (2) Opt for energy-saving models when replacing equipment with high electricity consumption. (3) Replace energy-saving LED light fixtures throughout the company and in public areas. (4) The whole company implements the temperature control of air conditioning at 26 degrees Celsius or above, sets energy-saving modes for various equipment, regularly reviews electricity usage, committed to implement energy conservation, carbon reduction, and GHG reduction. 3. Achievement of GHG reduction targets: In 2023, GHG emission has reduced by 7.16%

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Evaluation Item			Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
			compared with 2022, achieving the goal of GHG emission reduction by more than 1%. The water consumption and total waste weight of the Company are insignificant. Pursuant Water Act, the water conservation charge will be levied on users with a monthly total water consumption (including tap water, groundwater, surface water and contracted water) exceeds 9,000 m³. However, the annual water consumption of the Company in FY 2023 was only 5,274 m³. Therefore, the requirement for water consumption is low and the impact is minimal. 1. Water or other waste reduction targets: Achieve an annual water and other waste reduction of more than 1%. 2. Measures to promote water consumption or other waste reduction targets: (1) The Company implements water-saving plans, installs water-saving devices in water facilities and maximizes the benefits of available water resources. (2) The Company aims to reduce and reuse waste by adopting management measures such as process optimization, packaging improvement, etc., to reduce waste generation, reuse wastepaper, and use recycled materials. (3) The Company offers shareholders an electronic notification service for dividend distribution to reduce paper mailings, thereby practicing sustainability and environmental protection. 3. Achievement of reduction target Compared with 2022, the water consumption in 2023 has reduced by 3.16%, achieving the goal of reduction by more than 1%. Due to operational needs, the waste reduction target has not yet been achieved. We will continue striving to achieve the target.
4. Social issues (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	✓		(1) The Company complies with relevant Labor Standards Act, regulations like Act of Gender Equality in Employment, etc. In addition, the Company acknowledges and supports international human rights covenants such as the Universal Declaration of Human Rights, the United Nations Global Compact, and International Labor Conventions. The Company formulates work rules, regulations governing personnel-related matters, and human rights policies, emphasizing the human rights of employees and protecting their legitimate interests. Specific management plans: A. Workplace Health and Safety  The Company passed the ISO9001 certification and outsourced environmental monitoring and auditing in 2022. The Zhongli Qingpu Plant was audited twice, while the Neihu Taipei Headquarters was audited twice. The monitoring results showed that no major deficiencies or abnormalities, affirming that the Company provides a safe, healthy and comfortable working environment for employees.  The Company complies with the Regulations Governing the Labor Health Protection, providing employees with on-site labor health services every month by contracted professional medical personnel,	No major deviation

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Evaluation Item			Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
(2) Does the company have reasonable employee benefit measures (including salaries, leave, and other benefits), and do business performance or results reflect on employee salaries?	✓		taking full care of the physical and mental health of employees.  The Company provides a free health examination every year, caring for workers. B. Eliminating unlawful discrimination and ensuring equality at work  In accordance with the Company's personnel-related regulations, such as the "Human Rights Policy", "Work Rules", employees are fairly treated and not discriminated against on any basis, including race, language, religion, political affiliation, nationality, gender, sexual orientation, age, marital status, appearance, etc. This ensures the protection of employees' workplace human rights and provides a dignified and equal workplace environment. C. Prohibition of forced labor and compliance with local government labor laws  In compliance with the provisions of labor laws, and in accordance with the Company's "Human Rights Policy" and "Work Rules", the Company shall not use any form of slavery or force employees to perform involuntary labor.  An additional 3 days of paid sick leave are provided to employees, which is superior to the Labor Standards Law. D. Assisting employees in maintaining physical and mental health and achieving work-life balance  The Company implements a leave system, encouraging employees to strike a balance between work and leisure, emphasizing the harmonious balance between work and life.  The Company organizes various activities from time to time, such as Chinese New Year banquets, festival celebrations, etc., to strengthen cohesion and build relationships among employees.  The Company provides free coffee, beverages, occasional afternoon tea and snacks, providing employees with a warm and comfortable working atmosphere. (2) Workplace Diversity Policy: The Company is committed to promoting workplace diversity and gender equality, providing a working environment that respects the dignity, safe and equal for all people, ensuring that employees are not discriminated against, harassed, or treated unfairly due to gender, age, race, nationality, religion, politic affiliation, etc. The Company has a balanced ratio of male and female employees and follows the principle of equal pay for equal work. The Company hires employees of different ages and nationalities, adhering to the principle of talent selection based on professionalism and suitability, implementing workplace equality. Indicator % Number of female employees out of the total number of employees 58.7% Number of female employees out of the total number of managers 48.5% Number of female employees out of the total number of 50%

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Evaluation Item				Implementation Status	Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract Explanation
				senior executives
				Number of employees aged 21-30 out of the total number of employees	5.4%
				Number of employees aged 31-40 out of the total number of employees	13%
				Number of employees aged 41-50 out of the total number of employees	37%
				Number of employees aged 51-60 out of the total number of employees	2.2%
				Number of employees aged 61 and above out of the total number of employees	1.1%
				Employee who are a ROC citizen	99%
				Employee who are a non-ROC citizen	1%
				The “average” wage gap between men and women	17.8%
				The “median” wage gap between men and women	21.9%

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Evaluation Item			Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
(3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis?	✓		approximately 4.22%.  Employee performance review is conducted twice a year, and the state of the Company’s operation and employee job performance are taken into consideration when evaluating salary adjustment and salary increment rate for each individual. Implementation of the retirement system: 1. The new and old pension contributions are as follows: Oldpension scheme Newpension scheme Sources of law Labor Standards Act The Enforcement Rules of the Labor Pension Act Contribution method Sufficient pension fund has contributed to the pension fund account with Bank of Taiwan for employees who are eligible for old pension scheme. Therefore, it was approved that no further contribution is needed on September 27,2021, At least 6% of each employee’s monthly salary is contributed to the employee's individual pension account according to the grades of labor insurance salary. Contribution amount The account balance dated Dec.31, 2023 of the Labor Retirement Reserve Fund is NT$6,459,958. A total of NT$ 3,723,255 was contributed in FY 2023. 2. The procedures and criteria for retirement applications for employees of the Company are handled in accordance with the Company's "Work Rules" and "Regulation Governing Resignation, Retirement, and Unpaid Leave". In FY 2023, no employees of the Company applied for retirement. 3. The Company's Pension Supervisory Committee convenes one meeting every quarter, and a total of four meetings were held in FY 2023. (3)Occupational safety and health (OSH) policy: The design of the Company's offices and plants are complied with regulations relating to fire safety and labor safety. Also, regular disinfection and cleaning are performed, and vendor is appointed to regularly measure the concentration of carbon dioxide. The Company complies with the OSH regulations, promotes workplace safety. No occupational accident reported in 2023, achieving the goal of zero occupational accidents. A professional medical team provides on-site medical services every month, provides health information guidance, and takes care of the physical and mental health of employees. In 2023, a total of 12 on-site health services and 1 health lecture will be held. Implementation of fire safety training: Implementation of fire safety training: The EHS Department will conduct fire and evacuation drills at Qingpu plant every year. In FY 2023, a total of 50 people attended the firefighting training, with 4 hours of training each person, a total of 200 hours of training. In cooperation with the building management committee, the Taipei head office also conducts fire safety inspection and drill every quarter. Facility safety management:

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Evaluation Item			Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
(4) Does the company provide its employees with career development and training sessions (5) Do the company's products and services comply with relevant laws and international standards in relation to customer health and safety, customerprivacy, andmarketing and	✓ ✓		The EHS Department is responsible for reporting and managing the toxic chemicals used in the manufacturing process. The toxic chemicals are stored in a locked storage cabinet, and the safe use of the toxic chemicals is monitored, where application to use and reporting are required in accordance with the regulations. The reported use of toxic chemicals and its amounts in 2023 are as follow:
			0.6296 kilograms of Acetonitrile
			0.2996 kilograms of Formamide
			0.0262kilograms of Formaldehyde
			Regular maintenance and inspection of equipment used for manufacturing process and R&D are performed according to their importance, and detailed operation manuals are provided to ensure safety. In addition, inspections will be performed by the Internal Audit Unit every year. In 2023, a total of 4 environmental monitoring and inspections have been outsourced. The Zhongli Qingpu plant was inspected on June 12, 2023, and December 4, 2023, while the Taipei Headquarters was inspected on June 9, 2023, and December 8, 2023. The monitoring results showed no significant deficiencies or anomalies. Company verification status: The Company's products and manufacturing process are certified with ISO9001 certification. The number of fires, the number of deaths and injuries, and the ratio of deaths and injuries to the total number of employees for the fiscal year, and the related improvement measures in response to fires:None. (4) The Company has established “Management Procedures Governing the Education and Training" to arrange training for new employees, accelerating their understanding of the Company's regulations and the required skills for fulfilling their duties and responsibilities. Internal continuing education and training will be arranged based on job requirements during their employment. In FY 2023, the Company provided various types of courses including biotechnology, manufacturing process management, finance and accounting knowledge, legal compliance, etc., providing employees with channels for continuous learning and professional skill enhancement. In FY 2023, a total of 26 internal training courses were provided, with 260 participants attended and a total of 561 hours of training. Employees can also apply to attend external education and training courses based on legal requirements or job requirements (e.g., labor safety, accounting management, internal audit, etc.), effectively enhancing their professional competencies as well as improving their career development. (5) The marketing and labeling of all products of the Company complied with relevant laws and regulations at home and host countries, as well as the Personal Data Protection Act to protect customerprivacy.The

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Evaluation Item			Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
labeling of products and services, and are relevant consumer protection and grievance procedure policies implemented? (6) Does the company implement supplier management policies, requiring suppliers to observe relevant regulations on environmental protection, occupational health and safety, or labor and human rights? If so, describe the results.	✓		Company has established a policy to protect the rights and interests of consumers. Also, a Customer Service Department and a Technical Support Department have been established to provide a quick solution to the customers’ problems as well as professional consultation. In addition, an investor relations section is established on the Company website, providing stakeholders with a channel for communication and exchange of opinions to ensure that protection of consumer rights is in place. (6) The Company has established "Supplier Management Procedures" and "Procurement Management Procedures" to carefully select qualified suppliers. Suppliers are required to put emphasis on the environmental protection, OSH, labor rights, etc., and carefully evaluated for professionalism, integrity, and have any record of environmental and social impact, promoting ethical business practices. In FY 2023, all suppliers of the Company 100% met the supplier selection criteria. Suppliers are required to have ISO or other certifications based on the types of business and complied with the Supplier Code of Conduct or contractual provisions as follow: (1) Supplier implementation strategy ◆The Company emphasizes the cooperation with suppliers. The Company understands suppliers' awareness of social responsibility and implementation results through interviews, questionnaires, education and training, etc., as needed. ◆Considering the legal requirements, industrial characteristics, geographical environment, operating conditions, employee structure and organizational size of the supplier's location, encouraging joint efforts to practice social responsibility. ◆When the Company signs contracts with major suppliers, the contract includes provisions for compliance with the CSR policies of both parties. If a supplier violates the policy and significantly impacts the environment and society of the supply source, they must propose an improvement plan. If the violation cannot be rectified or is serious, the Company may propose termination or rescission clauses in the contract. (2) The Company shall consider the following labor issues when selecting vendors: ◆Child labor is prohibited. ◆Forced labor is prohibited. ◆Hours of work and wages should comply with local legal norms. ◆Discrimination in any form is prohibited. ◆Healthy and safe working environment. (3) Worker health and safety Suppliers shall undertake to comply with local labor safety and health regulations, and agree to comply with the relevant supplier management procedures formulated by the Company. (4) Environmental protection ◆The Company should evaluate theimpact of

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Evaluation Item			Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
			procurement activities on the environment and social of the supply source community and urge suppliers to practice CSR. ◆Suppliers should strive to conserve energy and water. ◆Encourage suppliers to adopt energy-saving measures in production, packaging, transportation, etc., or use environmentally friendly recycled materials. ◆Suppliers should be committed to reducing pollutants, toxins, and waste. Waste should be treated in accordance with relevant regulations to minimize the impact on the natural environment. (5) Ethical and integrity in business practices ◆When selecting suppliers, their ethical requirements, including but not limited to integrity, fair dealing, transparency in information, avoidance of undue or improper gains, and compliance with intellectual property rights regulations should be considered. ◆When signing contracts with suppliers, both parties shall conduct transactions based on the principle of ethical business practices. In the event that one party is engaged in unethical behavior resulting in a serious violation that renders the contract incapable of performance, the other party may terminate or rescind the contract at any time. The Company conducts important supplier evaluations biannually. The supplier evaluation results for FY 2023 are as follow:  A total of 95 raw material/product suppliers were evaluated, all of them performed well, and no suppliers failed. There are 2 suppliers listed as pending observation, and the user unit continues to observe whether the evaluation items have improved.  A total of 8 primary and secondary raw material suppliers for medical device products were evaluated, all of them performed well, and no suppliers failed or required observation.  A total of 2 suppliers for fixed assets were evaluated, all of them performed well, and no suppliers failed or required observation.  A total of 9 suppliers for facility engineering were evaluated, all of them performed well, and no suppliers failed or required observation.  A total of 3 outsourcing suppliers were evaluated, all of them performed well, and no suppliers failed or required observation.  A total of 39 service suppliers were evaluated, all of them performed well, and no suppliers failed or required observation. The Company audits the operation of supplier management annually to ensure the selection and management of suppliers are in compliance with regulations. The Procurement Department communicates with suppliers through different types of channels and provides suppliers with appropriate education and quality control training as needed, ensuring the quality and service provided meeting the Company's requirements and on-time delivery, thereby achieving win-win cooperative relationship between supply and demand.

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
5.Does the company reference internationally accepted reporting standards or guidelines, and prepare reports that disclose non-financial information of the company, such as corporate social responsibility reports? Do the reports above obtain assurance from a third party verification unit?		✓	The Company has not yet been required to prepare a sustainability report. However, the Company has disclosed relevant and reliable information on sustainable development on the Company website, MOPS, and annual reports for public access.	No major deviation as the Company has not yet been required to prepare a sustainability report.
6. Describe the difference, if any, between actual practice and the corporate social responsibility principles, if the company has implemented such principles based on the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies: The Company has established the “Sustainable Management Best Practice Principles", and all operations are carried out in accordance with the principles and relevant regulations. No major deviation reported.
7. Other useful information for explaining the status of corporate social responsibility practices: The Company's products and manufacturing process are certified with ISO9001 certification. In addition, permit/ license from agency like Food and Drug Administration (FDA) of different countries will be applied in accordance with the specific requirements of each product.

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3.3.7 Climate-Related Information of TWSE ／ TPEx Listed Company

1. Implementation of Climate-Related Information

Item		ImplementationStatus	ImplementationStatus	ImplementationStatus	ImplementationStatus	ImplementationStatus	ImplementationStatus	ImplementationStatus
1. Describe the board of directors' and management's oversight and governance of climate-related risks and opportunities.		The Board of Directors of Abnova serves as the supreme supervisory unit for climate-related risk management. It regularly evaluates the risks and opportunities of climate change, coping strategies, and relevant promotion plans. It is also responsible for reviewing annual risk management reports and audit reports to ensure the effective implementation of climate-related risk management systems. The Sustainability Committee is the Company's ESG promotion organization, responsible for promoting the implementation of climate management-related plans. It reports to the Board of Directors at least once a year on sustainable development reports, including the effectiveness of climate-related implementation, and is supervised by the Board of Directors. The Board of Directors regularly reviews the ESG impact, performance, and strategic objectives to mitigate the threat posed by climate change to the Company's operations. Since 2022, the Board of Directors has reviewed the implementation status of the GHG inventory and verification every quarter to keep abreast of the progress. In 2023, a total of 4 reports on the implementation status of the GHG inventory and verification werepresented to the Board of Directors,explainingtheprogress updates.
2. Describe how the identified climate risks and opportunities affect the business, strategy, and finances of the business (short, medium, and long term).		Impacts of and responses to climate-related risks: Risk Type Aspect Content Timeline: Impact on the Company's Business, Strategies and Finances Countermeasure Financial Impact of the Countermeasure Physical Risk Extreme Typhoons , heavy rains, and floods Short term Problems arise during typhoons or heavy rains, such as the inability to commute to work, disruptions in suppliers' logistics for deliveries or sales shipments, and equipment damage due to disasters. Resulting in an increase in relevant recovery costs and management costs, as well as a decrease in sales revenue. 1. Prevent flood and wind damage. 2. Strengthen emergency response mechanisms and manpower allocation. 1. Increase operating costs 2. Increase capita expenditures or repair costs Long-term Rise in average temperatur e Medium-long Term 1. Employee health is affected, thereby reducing the work efficiency. 2. High temperatures lead to an increase in water and electricity consumption, increasing operating costs. 3. Abnormal weather caused water and electricity shortages, which affected operations and led to a decline in revenue. 1. Use energy- saving facilities 2. Monitor the power conditions to maintain a stable power supply 1. Increase operating costs Transition Risks Markets Rise in awareness of sustainabil ity issues among stakeholde rs Medium-long Term In response to market trends and increasingly stringent regulations, it may increase manpower requirements and operating costs. If fail to meet the expectations of stakeholders, it may affect the corporate image, leading to a loss of business turnover. The Company promotes various energy-saving and carbon reduction measures, implementing transformation goal in response to climate change. Increase operatin costs and capit expenditures Policy and regulatory risks Fuel/ energy tax related regulations Medium-long Term The country has established regulations on energy consumption reduction and energy efficiency. The Company is urged to implement energy- saving and carbon reduction measures as required. 1. Introduce GHG inventory and verification 2. Purchase equipment certified with energy-saving and carbon- reduction labels. Increase operatin costs and capital expenditures
		Risk Type	Aspect	Content	Timeline:	Impact on the Company's Business, Strategies and Finances	Countermeasure	Financial Impact of the Countermeasure
		Physical Risk	Extreme	Typhoons , heavy rains, and floods	Short term	Problems arise during typhoons or heavy rains, such as the inability to commute to work, disruptions in suppliers' logistics for deliveries or sales shipments, and equipment damage due to disasters. Resulting in an increase in relevant recovery costs and management costs, as well as a decrease in sales revenue.	1. Prevent flood and wind damage. 2. Strengthen emergency response mechanisms and manpower allocation.	1. Increase operating costs 2. Increase capita expenditures or repair costs
			Long-term	Rise in average temperatur e	Medium-long Term	1. Employee health is affected, thereby reducing the work efficiency. 2. High temperatures lead to an increase in water and electricity consumption, increasing operating costs. 3. Abnormal weather caused water and electricity shortages, which affected operations and led to a decline in revenue.	1. Use energy- saving facilities 2. Monitor the power conditions to maintain a stable power supply	1. Increase operating costs
		Transition Risks	Markets	Rise in awareness of sustainabil ity issues among stakeholde rs	Medium-long Term	In response to market trends and increasingly stringent regulations, it may increase manpower requirements and operating costs. If fail to meet the expectations of stakeholders, it may affect the corporate image, leading to a loss of business turnover.	The Company promotes various energy-saving and carbon reduction measures, implementing transformation goal in response to climate change.	Increase operati costs and capi expenditures
			Policy and regulatory risk	s Fuel/ energ tax related regulations	y Medium-long Term	The country has established regulations on energy consumption reduction and energy efficiency. The Company is urged to implement energy- saving and carbon reduction measures as required.	1. Introduce GHG inventory and verification 2. Purchase equipment certified with energy-saving and carbon- reduction labels.	Increase operatin costs and capital expenditures

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Item			ImplementationStatus	ImplementationStatus	ImplementationStatus	ImplementationStatus
		Impacts of Opportunity Type Resource Efficiency Products and Services	and responses to climate-related opportunities:
			Value Chain Impact	Content	Timeline:	Impact on the Company's Business, Strategies and Finances	Countermeasure	Financial Impact of the Countermeasure
			All plants	Recycling and reuse	Short term	Failure to strictly control the reuse of waste or the use of recyclable materials may result in wastage or an increase in waste disposal costs.	1. Promote waste recycling and reuse. 2. Strengthen the use of recycled materials.	Reduce waste disposal costs.
			All plants	Reduce water resource usage and consumption	Short term	Failure to strictly control the water usage may result in wastage or an increase in water expense.	1. Effective reuse of water resources. 2. Use water- savingdevices.	Save operating costs
			Markets	Develop or expand low- carbon products and services	Short, medium, and long term	The use of recycled materials in product packaging or low- carbon services (electronic notifications instead of paper mailings) meets customer needs and enhances a positive image, which is helpful in increasingrevenue.	Understand market trends and customer needs, and develop green products or services.	1. Enhance reputation and image. 2. Increase revenue.
3. Describe the financial impact of extreme weather events and transformative actions.		The Company may face extreme weather events, such as typhoons,
4. Describe how climate risk identification, assessment, and management processes are integrated into the overall risk management system.		The Company has established a comprehensive risk management organizational structure, policies and management norms. The risk scope covers environmental (E), social (S) and corporate governance (G). The Company's risk management policy has incorporated environmental risks (including climate risks), indicating that the Company regards climate change as an operational risk that affects sustainable development, and integrates its identification, measurement and management processes into the Company's overall risk procedures. The Company's climate risk management process is mainly divided into four major steps, from risk identification, assessment, response, monitoringand communication,as follows: Management Processes Content Identification 1. The Company identifies climate risks and opportunities every year according to the business scope and integrates them into overall risk identification. 2. Refer to the climate risk reports of international organizations. Assessment 1. Identify the risk factors that the Company may face and analyze the likelihood of occurrence and impact level through risk events. 2. The measurement scope includes the impact pathway, impact timing and geographical area, impact value chain location,and fiscal impact. Response 1. Incorporate the environmental and social risk factors of each industry into the industry risk level assessment mechanism. 2. Regulate climate risk monitoringindicators to control the value loss caused byclimate risks. Monitoring and communication 1. Present risk management reports and the implementation status to the Audit Committee and the Board of Directors at least once a year. 2. Report to the Board of Directors on the progress updates of GHG inventory and verification every quarter. 3. Report to independent directors on the climate risk related information from time to time.
		Management Processes		Content
		Identification		1. The Company identifies climate risks and opportunities every year according to the business scope and integrates them into overall risk identification. 2. Refer to the climate risk reports of international organizations.
		Assessment		1. Identify the risk factors that the Company may face and analyze the likelihood of occurrence and impact level through risk events. 2. The measurement scope includes the impact pathway, impact timing and geographical area, impact value chain location,and fiscal impact.
		Response		1. Incorporate the environmental and social risk factors of each industry into the industry risk level assessment mechanism. 2. Regulate climate risk monitoringindicators to control the value loss caused byclimate risks.
		Monitoring and communication		1. Present risk management reports and the implementation status to the Audit Committee and the Board of Directors at least once a year. 2. Report to the Board of Directors on the progress updates of GHG inventory and verification every quarter. 3. Report to independent directors on the climate risk related information from time to time.

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Item		ImplementationStatus	ImplementationStatus	ImplementationStatus
5. If scenario analysis is used to assess resilience to climate change risks, the scenarios, parameters, assumptions, analysis factors and major financial impacts used should be described.		The Company follows the TCFD goal to quantify climate risk. With reference to the reports on industrial risk assessments and economic situation analyses issued by established institutions at home and abroad, the Company incorporates the environmental and social risk factors of each industry into the scope of consideration for the risk level of each industry, including the impact of emerging environmental or social factors on industry trends, climate transition risk costs, industry entry barriers, etc. Through top-down scenario analysis, the Company analyzes climate-related financial impacts from diverseperspectives at different timepoints and under different scenarios. Scenario Analysis Evaluation Methodology Primary Financial Impact Physical risk scenario analysis: Quantitative assessment of the impact of flooding at operational sites Disaster risk model The Company's main operating sites are located in Taipei Headquarters and Zhongli Qingpu plant. Since its establishment, it has experienced several typhoons and heavy rains, however, no flooding has occurred. Therefore, it does not located in high flood risk areas, and there is no significant financial impact.
		Scenario Analysis	Evaluation Methodology	Primary Financial Impact
		Physical risk scenario analysis: Quantitative assessment of the impact of flooding at operational sites	Disaster risk model	The Company's main operating sites are located in Taipei Headquarters and Zhongli Qingpu plant. Since its establishment, it has experienced several typhoons and heavy rains, however, no flooding has occurred. Therefore, it does not located in high flood risk areas, and there is no significant financial impact.
6. If there is a transition plan for managing climate- related risks, describe the content of the plan, and the indicators and targets used to identify and manage physical risks and transition risks.		Transformation plans, indicators, and goals: In response to the transformation opportunities arising from climate change challenges under the "climate emergency," the Company will transition to a low-carbon green economy in line with international trends to mitigate the impact of global warming and climate change. Based on the results of risk and opportunity analysis, the Company will adopt the strategies of "promoting low-carbon services," "improving resource efficiency," and "moving towards net zero" to set indicators and goals, and actively implement them. The Company's goals are as follows: (1) Gradually complete internal inventory and external verification according to the GHG inventory and verification plan formulated by the Company. (2). Reduce GHG emissions year by year by more than 1%, and GHG emissions in 2023 have been reduced by 7.16% compared with 2022. (3). Reduce water consumption by more than 1% per year, and water consumption in 2023 has been reduced by 3.16% compared with 2022. (4)Opt for energy-savingmodels when replacingequipment with high electricityconsumption.
7. If internal carbon pricing is used as a planning tool, the basis for setting the price should be stated.		The Company does not belong to high electricity or high energy-consuming enterprise, therefore there is no need to implement internal carbon pricing.
8. If climate-related targets have been set, the activities covered, the scope of GHG emissions, the planning horizon, and the progress achieved each year should be specified. If carbon credits or renewable energy certificates (RECs) are used to achieve relevant targets, the source and quantity of carbon credits or RECs to be offset should be specified.		Carbon reduction scope and progress: The Company's GHG inventory covers all of its plants (excluding overseas subsidiaries with no substantial operations). The carbon reduction target is to reduce emissions by 1% per year, and GHG emissions in 2023 have been reduced by 7.16% compared to 2022, achieving the target.
9. Greenhouse gas inventory and assurance status and reduction targets, strategy, and concrete actionplan.		The Company will conduct GHG inventory and verification according to the schedule, which is not applicable at present.

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3.3.8 Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"

Implementation Status Deviations from the “Ethical Corporate Management Best Practice Evaluation Item Yes No Abstract Illustration Principles for TWSE/GTSM Listed Companies” and Reasons None

• 1.Establishment of ethical corporate management policies and programs

(1)Does the company have a Board-approved ✓ (1) The Company established the "Procedures for ethical corporate management policy and stated Ethical Management and Guidelines for Conduct” in its regulations and external correspondence on March 27, 2015. In response to the amendment the ethical corporate management policy and of regulations and operational requirements of the practices, as well as the active commitment of Company, it was revised and approved by the the Board of Directors and management Board of Directors on March 29, 2017, and March towards enforcement of such policy? 26, 2020, and was also reported in the AGMs for the year and disclosed on the MOPS and the Company website. Integrity is clearly set out in the procedures and guidelines, commitments and practices are in compliance with the regulations. The Board of Directors and management team have also actively monitored its implementation. (2) Does the company have mechanisms in place to ✓ (2) The Company has established the "Procedures for assess the risk of unethical conduct, and Ethical Management and Guidelines for Conduct” perform regular analysis and assessment of for compliance, which clearly stipulates that business activities with higher risk of unethical violations such as provision or acceptance of conduct within the scope of business? Does the improper benefits, provision or promise of any company implement programs to prevent facilitating payment, provision of illegal unethical conduct based on the above and political contributions, disguised form of bribery, ensure the programs cover at least the matters engagement in unfair competition that may cause described in Paragraph 2, Article 7 of the harm to the rights and interests of stakeholders, Ethical Corporate Management Best Practice insider trading, etc. will be handled in accordance Principles for TWSE/TPEx Listed Companies? with "Regulations Governing Reward and Punishment”.

(3)Does the company provide clearly the operating ✓ (3) The Company has established the "Procedures for procedures, code of conduct, disciplinary Ethical Management and Guidelines for Conduct” actions, and appeal procedures in the programs and "Codes of Ethical Conduct". For business against unethical conduct? Does the company activities that pose a higher risk of unethical enforce the programs above effectively and behavior, in addition to adhering to the corporate perform regular reviews and amendments? culture of integrity, job rotation for the relevant position is adopted, and stakeholder mailbox for whistleblowing and complaints is established in order to prevent unethical behavior. The "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct” are consistently reviewed and revised in accordance with the amendment of regulations and operational requirements of the Company.

• 2.Fulfill operations integrity policy

• (1)Does the company evaluate business partners’ ✓ ethical records and include ethics-related clauses in business contracts?

✓ (1) The Company has established "Supplier Management Procedures" and "Procurement Management Procedures" to carefully select partners and suppliers to avoid engaging in transactions with unethical suppliers. Clauses related to integrity shall be included in trading partner agreements, as needed, and the rights and obligations of both parties, as well as the transaction terms, shall be clearly stipulated in the contracts or relevant commercial agreements. ✓ (2) In accordance with the “Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct”, Chairman Office is appointed as the dedicated unit to promote and

• (2)Does the company have a unit responsible for ethical corporate management on a full-time basis under the Board of Directors which reports the ethical corporate management

None

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Implementation Status Deviations from the “Ethical Corporate Management Best Practice Evaluation Item Yes No Abstract Illustration Principles for TWSE/GTSM Listed Companies” and Reasons

policy and programs against unethical conduct regularly (at least once a year) to the Board of Directors while overseeing such operations?

implement integrity management policy, preventing various types of unethical behavior, including provision or acceptance of improper benefits, unfair competition, insider trading, etc. The integrity management policy and the plan to prevent unethical behavior and its monitoring and implementation were reported in the Board meeting on November 8, 2023. Implementation of Integrity management execution for FY 2023:

1. The Company has established the "Procedures for Ethical Management and Guidelines for Conduct”, the relevant regulations are published on the intranet for compliance. In addition, integrity management is included in the human resource policy, preventing various types of unethical behavior, and an effective corrections system has been established. No employee dishonesty is reported in FY 2023.

2. The Legal Office provided a 2-hour advocacy training course, with a total of 100 participants.

3. A total of 7 directors and 8 managerial personnels have signed the statement of compliance with the integrity management policy, achieving a 100% signing rate.

4. A total of 95 employees have signed the confidentiality agreement upon employment, achieving a 100% signing rate.

5. (3) Does the company establish policies to prevent ✓ conflicts of interest and provide appropriate communication channels, and implement it?

✓

• (4) Does the company have effective accounting and internal control systems in place to implement ethical corporate management? Does the internal audit unit follow the results of unethical conduct risk assessments and devise audit plans to audit the systems accordingly to prevent unethical conduct, or hire outside accountants to perform the audits?

• (5) Does the company regularly hold internal and ✓ external educational trainings on operational integrity?

5.The Company has established communication channels for all stakeholders and a whistleblowing mailbox. No complaint or misconduct reporting received in FY 2023. (3) The Company has established various stakeholder mailboxes, providing internal and external channels for complaints and whistleblowing, and it is implemented accordingly. The "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct” of the Company have clearly defined policy of preventing conflicts of interest, and employees and stakeholders are required to implement accordingly. Abstention from voting due to conflicts of interest is applicable to all motions in the Board meeting.

(4) The Company has set rigorous and effective critical control points in the accounting system, internal control system, and related procedures for business activities or operating procedures that may pose higher risks. In accordance with the annual risk assessment, annual audit plan is arranged and carried out by the internal auditors, all units are required to conduct self-assessment, ensuring the appropriateness of the system design and actual implementation.

• (5) In addition to regularly organizing internal advocacy training on integrity management, the Company also sends employees to participate in external seminars in order to strengthen the concept of integrity management.

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons
	Yes	No	Abstract Illustration
3. Operation of the integrity channel (1)Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up? (2)Does the company have in place standard operating procedures for investigating accusation cases, as well as follow-up actions and relevant post-investigation confidentiality measures? (3)Does the company provide proper whistleblower protection?	✓ ✓ ✓		(1) The Company has established the "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct”, as well as whistleblowing channels for convenient and confidential reporting, which will be handled by dedicated independent personnel. (2) The Company has established a standard operating procedure for investigating reported matters and relevant confidentiality mechanisms. In FY 2023, no external and internal misconduct reporting was received, and no significant incident of unethical behavior was reported. (3) Confidentiality mechanism is adopted to handle the reported matters, ensuring the safety of the whistleblower. In FY 2023, no external and internal misconduct reporting was received, and no significant incident of unethical behavior was reported.	None
4. Strengthening information disclosure Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?	✓		The Company has disclosed relevant information on integrity management policy and the effectiveness of its implementation on the Company website and MOPS for public access.	None
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 "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct”, and all operations are carried out in accordance with relevant regulations. No major deviations reported.
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies). The "Procedures for Ethical Management and Guidelines for Conduct” is consistently reviewed and revised in accordance with the operational requirements of the Company. The aforementioned regulations is consistently revised in response to the amendment of government regulation and operational requirements of the Company. The most recent revision was made on March 26, 2020 and announced after it was reviewed by the Audit Committee and approved by the Board of Directors to ensure compliance by management and all employees. Also, the revision was reported in the AGM in 2020.

1. 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 "Procedures for Ethical Management and Guidelines for Conduct” and "Codes of Ethical Conduct”, and all operations are carried out in accordance with relevant regulations. No major deviations reported. 6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies).

The "Procedures for Ethical Management and Guidelines for Conduct” is consistently reviewed and revised in accordance with the operational requirements of the Company. The aforementioned regulations is consistently revised in response to the amendment of government regulation and operational requirements of the Company.

The most recent revision was made on March 26, 2020 and announced after it was reviewed by the Audit Committee and approved by the Board of Directors to ensure compliance by management and all employees. Also, the revision was reported in the AGM in 2020.

3.3.9 If the company has adopted corporate governance best-practice principles or related bylaws, disclose how these are to be searched.

The Company has established the corporate governance best-practice principles and relevant regulations, which are made available on the Company website (http://www.abnova.com)and MOPS (http://mops.twse.com.tw)for public access.

3.3.10 Other significant information that will provide a better understanding of the state of the company's implementation of corporate governance may also be disclosed: None.

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3.3.11 Internal Control System

1. Statement of Internal Control System

Abnova (Taiwan) Corporation Statement of Internal Control System

Date: February 20, 2024

Based on the findings of a self-assessment, Abnova (Taiwan) Corporation states the following with regard to its internal control system during the year 2023:

1. The Company is aware that the establishment, implementation and maintenance of the internal control system is the responsibility of the Board of Directors and the managers of the Company. The Company has established the system for the purpose of guaranteeing the reliability, timeliness and transparency report of the effectiveness and efficiency of the operation (including profitability, performance, asset security, etc.) and ensuring all are in compliance with relevant laws and regulations.

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

3. The Company evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the "Regulations Governing the Establishment of Internal Control Systems by Public Companies" (herein below, the Regulations). The criteria adopted by the Regulations 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. Each component also includes several items which can be found in the Regulations.

4. The Company 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, the Company believes that, on December 31, 2023, it has maintained, in all material respects, an effective internal control system (that includes the supervision and management of our subsidiaries), to provide reasonable assurance on our operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws and regulations

6. This Statement is an integral part of the Company’s annual report for the current period and prospectus, and will be made public. 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 approved by the Board of Directors in their meeting held on February 20, 2024, with all 7 attending directors affirming the content of this Statement.

Abnova (Taiwan) Corporation Chairman: Wilber Huang President: Jih Pei Ju

2. If CPA Was Engaged to Conduct a Special Audit of Internal Control System, Provide Its Audit Report: None.

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• 3.3.12 If there has been any legal penalty against the company or 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 equity or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement: None.

3.3.13 Material resolutions of a shareholders meeting or a board of directors meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

1. Major Resolutions of Shareholders’ Meeting and Implementation Status	1. Major Resolutions of Shareholders’ Meeting and Implementation Status	1. Major Resolutions of Shareholders’ Meeting and Implementation Status	1. Major Resolutions of Shareholders’ Meeting and Implementation Status
Date	Item	Major resolution	Implementation status of resolution
2023.5.15	1.	To approve the 2022 Business Report and Financial Statements.	The 2022 Business Report and Financial Statements were approved, which the consolidated revenue totaled NT$ 411,756 thousand and net profit after tax was approximately NT$ 74,843 thousand, with EPS of NT$ 1.24.
	2.	To approve the 2022 profit distribution plan.	The cash dividend of NT$ 0.8 per share was distributed. The ex-dividend date was set as June 15, 2023. and the cash dividend was distributed on July 5, 2023.
	3.	Election of the 9th term directors of the Company.	The list of elected 9th term directors has been disclosed on the MOPS. The alteration of registration has been approved by the MOEA May 24, 2023 (Letter No. MOEA-Business- 11230089030).
	4.	Proposal to lift restrictions on non- compete competition for new directors ofthe Company.	The list of non-compete competition for the 9th term directors has been disclosed on the MOPS.

2. Board Meetings:

Date	Item	Major resolution
2023.2.24	1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.	To discuss the amendment to the "Corporate Governance Best Practice Principles”. To discuss the 2022 “Internal Control System Statement”. To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from October 2022 to January 2023. To discuss the change of CPAs. To discuss the independence and suitability of the CPAs. To discuss the compensation paid to CPAs. To discuss the formulation of general principles for the pre-approval policy of non- assurance services of the Company. To discuss the allocation of compensation for employees and directors for FY 2022. To discuss the Company's 2022 business report and financial statements. To discuss the profit distribution for FY 2022. To discuss the re-election of all directors of the Company. To discuss the director nomination period and venue. To discuss the nomination and review of candidates for directors and independent directors of the Company. To discuss the proposal to lift restrictions on non-compete competition for new directors of the Company. To discuss and determine the details of convening the 2022 AGM such as date, venue, and the general nature of the business to be considered at the meeting, etc. To discuss the appointment of Chief of Corporate Governance Officer of the Company. To discuss the change of President of the Company.
2023.5.10	1. 2.	To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from February to March 2023. To discuss the Q1 2023 consolidated financial statements of the Company.
2023.5.15	1. 2.	Election of the Chairman of the Board of Directors of the Company To discuss the appointment of members of the 5th Remuneration Committee of the Company
2023.5.31	1. 2.	To discuss the amendment of the "Procedures for Handling Material Inside Information" of the Company To discuss and determine the ex-dividend date and the distribution date of cash dividends for FY 2022.

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Date	Item	Major resolution
2023.8.2	1. 2. 3. 4. 5.	To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from April to June 2023. To discuss the Q2 2023 consolidated financial statements of the Company. To discuss the renewal of the short-term lines of credits of the Company. To discuss the formulation of the "Internal Control Systems" for subsidiaries To discuss the 2023 salary adjustment for the managerial personnels of the Company.
2023.11.8	1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.	To discuss the formulation of the "Rules Governing Financial and Business Matters Among Related Parties" of the Company To discuss the formulation of the "Human Rights Policy” of the Company To discuss the amendments of the "Internal Control Systems” of the Company To discuss the addition of the "Internal Control Systems" for subsidiaries To discuss the "2024 Annual Audit Plan". To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from July to September 2023. To discuss the proposal to provide a loan facility of NT$ 5 million to the German subsidiary, Abnova GmbH. To discuss the Q3 2023 consolidated financial statements of the Company. To discuss the 2024 budget. To discuss the remuneration for the directors and managerial personnels for the year 2024. To discuss the distribution of year-end bonus for the chairman and managerial personnels for FY 2023.
2023.2.20	1. 2. 3. 4. 5. 6. 7. 8. 9. 10.	To discuss the amendment to the "Rules of Procedure for Board of Directors Meetings" and the "Audit Committee Organizational Procedures". To discuss the 2023 “Internal Control System Statement”. To discuss the changes in the financing provided to the German subsidiary, Abnova GmbH from October 2023 to January 2024. To discuss the change of CPAs. To discuss the independence and suitability of the CPAs. To discuss the compensation paid to CPAs. To discuss the allocation of compensation for employees and directors for FY 2023. To discuss the Company's 2023 business report and financial statements. To discuss the profit distribution for FY 2023. To discuss and determine the details of convening the 2024 AGM such as date, venue, and the general nature of the business to be considered at the meeting, etc.

3.3.14 Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director or supervisor has expressed a dissenting opinion with respect to a material resolution passed by the board of directors and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof: None.

3.3.15 A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the company's chairperson, President, chief accounting officer, chief financial officer, chief internal auditor, chief corporate governance officer, and chief research and development officer:

Title	Name	Date of assumption of office	Date of resignation	Reason
President	Wilber Huang	January 1, 2002	February 24, 2023	Previously, the Chairman has concurrently served as President, therefore the Board of Directors approved the change of President to strengthen corporate governance and implement succession planning for top management.

• 66 -

Unit: NT$ 1,000

3.4 Information Regarding the Certified Public Accountants' Audit Fee

Accounting firm	CPA	Audit Period	Audit Fee	Non-audit Fee	Total	Remark
KPMG Taiwan	Chiang Hsiao Ling	2023.01.01-2023.12.31	2,620	Tax Returns 300	2,920	None
	Kuo Rou Lan	2023.01.01-2023.12.31

• 3.4.1 The securities firm shall disclose the amounts of the audit fees and non-audit fees paid to the attesting CPAs and to the accounting firm to which they belong and to any affiliated enterprises as well as the details of non-audit services: None.

• 3.4.2 When the securities firm changes its accounting firm and the audit fees paid for the financial year in which the change took place are lower than those paid for the financial year immediately preceding the change, the amount of the audit fees before and after the change and the reason shall be disclosed: None.

• 3.4.3 When the audit fees paid for the current financial year are lower than those paid for the immediately preceding financial year by 10 percent or more, the amount and percentage of and reason for the reduction in audit fees shall be disclosed: None.

3.5 Information on replacement of certified public accountant:

The Company has changed its CPAs since 2023 due to an internal job adjustment of the accounting firm and was approved by the Board of Directors on February 24, 2023.

The Company has changed its CPAs since 2023 and 2024 due to an internal job adjustment of the accounting firm and was approved by the Board of Directors on February 24, 2023, and February 20, 2024, respectively.

3.5.1. Regarding the former certified public accountant:

Date ofChange	February24,2023 /February20,2024	February24,2023 /February20,2024	February24,2023 /February20,2024	February24,2023 /February20,2024
Reasons and Explanation of Changes	The Company originally appointed Hsu Shu Min and Kuo Rou Lan from KPMG Taiwan for financial statement auditing and has changed to appoint Chiang Hsiao Ling and Kuo Rou Lan from KPMG Taiwan starting from the year 2023 due to an internal job adjustment of the accounting firm. Starting from 2024, Chiang Hsiao Ling and Wu Tsao Jen from KPMG Taiwan are appointed as the CPAs ofthe Company.
State Whether the Appointment is Terminated or rejected by the Consignor or CPAs	Persons involved Situation		CPA	Consignor
	Appointment terminated automatically		V	－
	Appointment rejected (discontinued)		－	－
The Opinions Other than Unmodified Opinion Issued in the Last Two Years and the Reasons for the Said Opinions	None
Is There Any Disagreement in Opinion with the Issuer	Yes	X	Accounting principle orpractice
		X	Disclosure of financialstatements
		X	Auditing scope orprocedures
		X	Others
	No	V
	Explanation: None
Supplementary Disclosure (Disclosures Specified in Article10.6.1.4~7 ofthe Standards)	None

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3.5.2 Regarding the successor certified public accountant:

3.5.2 Regarding the successor certified public accountant:
AccountingFirm	KPMGTaiwan
CPA	FY 2023: Hsu Shu Min, Kuo Rou Lan FY 2024:Hsu ShuMin, WuTsao Jen
Date of Engagement	February 24, 2023 February20,2024
Prior to the Formal Engagement, Any Inquiry or Consultation on the Accounting Treatment or Accounting Principles for Specific Transactions, and theType of Audit OpinionthatMight beRendered ontheFinancial Report	None
Written Opinions from the Successor CPAs that are Different from the Former CPA’s Opinions	None

• 3.5.3 The reply of former CPAs on Article 10.6.1 and Article 10.6.2.3 of the Standards: Not applicable

• 3.6 Where the company's chairperson, President, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm, the name and position of the person, and the period during which the position was held, shall be disclosed: None.

• 3.7 Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

• 3.7.1 Change in shareholding by directors, supervisors, managerial officers, or major shareholders

Unit: Share

Title	Name	FY 2023	FY 2023	Current fiscal year up to March 24, 2024	Current fiscal year up to March 24, 2024
		Net Change in Shareholding	Net Change in Shares Pledged	Net Change in Shareholding	Net Change in Shares Pledged
Chairman	Wilber Huang (Note 1)	-	-	-	-
Directors	Harmony Investment Co., Ltd.	-	-	-	-
Institutional director Representative	Chiu Chi Ching	-	-	-	-
Directors	Rong How Investment Co., Ltd. (Note 2)	-	-	-	-
Institutional director Representative	Chen Fang Wen (Note 2)	-	-	-	-
Directors	Pan Pacific Investment Co., Ltd. (Note 3)	-	-	-	-
Institutional director Representative/President	Jih Pei Ju (Note 1, Note 3)	-	-	-	-
Directors	China Wire & Cable Co., Ltd	-	-	-	-
Institutional director Representative	Chen Yueh Hung	-	-	-	-
Independent Directors	Lin Jia Hsie (Note 2)	-	-	-	-
Independent Directors	Cha, Anna (Note 3)	-	-	-	-
Independent Directors	Ye Shao De	-	-	-	-
Independent Directors	Su Jin Jun	-	-	-	-
Senior Manager	Huang Shi Xuan	-	-	-	-
Senior Manager	Zheng Mei Hui	-	-	-	-
Senior Manager	Chen Si Xian	-	-	-	-
Senior Manager	Tung I Ling	-	-	-	-
Senior Manager	Zhou Yun Jin	-	-	-	-
Senior Manager	Chang Ya Ping	-	-	-	-
Senior Manager	Tung Kai Chiang	-	-	-	-

• 68 -

Note 1: The Board of Directors has passed the resolution to change President on February 24, 2023, Wilber Huang has resigned from the position of President and succeeded by Jih Pei Ju.

Note 2: Resigned after the re-election of AGM on May 15, 2023. Note 3: Newly appointed after the re-election of AGM on May 15, 2023.

• 3.7.2 Stock trade with related party by directors, supervisors, managerial officers, or major shareholders: None.

• 3.7.3 Stock pledge with related party: None.

3.8 Relationship information, if among the company's 10 largest shareholders anyone is a related party or a relative within the second degree of kinship of another.

March 24, 2024; Unit: Share; %

Name	Shares Held	Shares Held	Shares Held by Spouse & Minors	Shares Held by Spouse & Minors	Shares Held in the Name of Others	Shares Held in the Name of Others	Name and relationship for those who are the related party of or are the spouses of or are related to the top-10 shareholders within the second degree of kinship	Name and relationship for those who are the related party of or are the spouses of or are related to the top-10 shareholders within the second degree of kinship	Remark
	Shares	%	Shares	%	Shares	%	Name	Relationship
Wilber Huang	3,651,144	6.03%	-	-	-	-	1. Harmony Investment Co., Ltd. 2. Lasertech Holding International Ltd. 3. Pan Pacific Investment Co., Ltd.	1. Spouse of the representative 2. Spouse of the representative 3. Spouse of the supervisor	-
Harmony Investment Co., Ltd. Representative: Chiu Chi Ching	2,448,294	4.04%	-	-	-	-	1.Wilber Huang 2. Lasertech Holding International Ltd. 3. Pan Pacific Investment Corp.	1.Spouse of the representative 2. The same person who is the representative 3. The representative is the same as the supervisor.	-
Lasertech Holding International Ltd. Representative: Chiu Chi Ching	2,248,786	3.71%	-	-	-	-	1.Wilber Huang 2. Harmony Investment Co., Ltd. 3. Pan Pacific Investment Corp.	1. Spouse of the representative 2. The same person who is the representative 3. The representative is the same as the supervisor	-
Pan Pacific Investment Corp. Representative: Wu Cong Lin	1,839,014	3.04%	-	-	-	-	1.Harmony Investment Co., Ltd. 2. Lasertech Holding International Ltd. 3. Wilber Huang	1.The supervisor is the same as the representative 2.The supervisor is the same as the representative 3. Spouse of the supervisor	-
TCI Co., Ltd. Representative: Lin Yong Siang	1,500,000	2.48%	-	-	-	-	None	None	-
China Wire & Cable Co., Ltd Representative: Chen Zhao Rong	1,037,017	1.71%	-	-	-	-	None	None	-
Rong How Investment Co., Ltd. Representative: Lee Huan Xin	540,000	0.89%	-	-	-	-	None	None	-
E.SUN Bank in custody for Lasertech Investment Fund	510,374	0.84%	-	-	-	-	Lasertech Holding International Ltd.	Trust account	-
Hong Zhen Mei	460,386	0.76%	-	-	-	-	None	None	-
Li Run Yu	405,000	0.67%	-	-	-	-	None	None	-

• 69 -

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

			December 31, 2023; Unit: Share; %	December 31, 2023; Unit: Share; %	December 31, 2023; Unit: Share; %	December 31, 2023; Unit: Share; %
Affiliated Company (Note)	Shareholding by the Company		Shareholding of directors, supervisors, managers, or enterprises under their direct or indirect control		Total Shareholding
	Shares	%	Shares	%	Shares	%
Abnova -GmbH	(Note 1)	100％	None		(Note 1)	100％
Abnova Holding Corporation	52,700	100%	None		52,700	100%
Abnova (Cayman) Corporation	0	0%	2,605,000	100%	2,605,000	100%
Abnova (HK) Limited	0	0%	1,670,000	100%	1,670,000	100%
Abnova Diagnostics (Japan)	0	0%	1,800,000	100%	1,800,000	100%
AxleBio Ventures	130,000	100%	None		130,000	100%
Citil Pharma Incorporated	Note 2	0%	4,335,000	60%	7,224,000	100%

Note 1: Affiliated enterprise which is a subsidiary established in Germany, that is a limited liability company without issued shares.

Note 2: In August 2023, the Company sold its equity interest in its affiliate, Citil Pharma Incorporated, to its subsidiary, AxleBio Ventures, for NT$342,000. This transaction was part of an organizational restructuring under joint control.

• 70 -

IV. Capital Overview

4.1. Capital and Shares 4.1.1 Source of capital stock

Unit: 1000 shares; NT $1,000

						Unit: 1000 shares; NT $1,000	Unit: 1000 shares; NT $1,000	Unit: 1000 shares; NT $1,000
Year/ Month	Par Value (NT$)	Authorized share capital		Paid-in capital		Remark
		Shares	Amount	Shares	Amount	Sources of capital stock	~~Capital~~ increased by assets other than cash	Others
2002.01	10	3,000	30,000	1,200	12,000	Incorporation	－	Approval letter No. Government-Construction- Commercial-09013830700
2002.11	10	23,000	230,000	10,759	107,586	Capital increase by cash of NT$ 95,586 thousand	－	Approval letter No. MOEA- Business-09101451900
2003.06	12	23,000	230,000	16,697	166,974	Capital increase by cash of NT$ 59,388 thousand	－	Approval letter No. Government-Construction- Commercial-09211610410
2003.12	12	23,000	230,000	21,424	214,241	Capital increase by cash of NT$ 47,267 thousand	－	Approval letter No. Government-Construction- Commercial-09226503310
2004.03	－	21,424	214,241	21,424	214,241	Reduction of authorized share capital	－	Approval letter No. Government-Construction- Commercial-09307359410
2004.10	12	60,000	600,000	32,543	325,428	Capital increase by cash of NT$ 111,187 thousand	－	Approval letter No. Government-Construction- Commercial-09317037340
2004.12	12	60,000	600,000	38,669	386,692	Capital increase by cash of NT$ 61,264 thousand	－	Approval letter No. Government-Construction- Commercial-09326631600
2005.10	12	60,000	600,000	44,272	442,724	Capital increase by cash of NT$ 56,032 thousand	－	Approval letter No. Government-Construction- Commercial-09417987820
2006.06	12	60,000	600,000	50,795	507,946	Capital increase by cash of NT$ 65,222 thousand	－	Approval letter No. Government-Construction- Commercial-09579697300
2007.04	－	60,000	600,000	30,000	300,000	Reduction of paid-in capital	－	Approval letter No. Government-Construction- Commercial-09683490120
2007.05	20	60,000	600,000	38,240	382,399	Capital increase by cash of NT$ 82,399 thousand	－	Approval letter No. Government-Construction- Commercial-09684761500
2007.10	10	60,000	600,000	41,907	419,071	Capital increase by issuance of stock warrants of NT$ 36,672 thousand	－	Approval letter No. Government-Construction- Commercial-09690441110
2008.01	37	60,000	600,000	50,825	508,251	Capital increase by cash of NT$ 89,180 thousand	－	Approval letter No. MOEA- Business-09601321130
2008.01	10	60,000	600,000	52,899	528,989	Capital increase by issuance of stock warrants of NT$ 20,738 thousand	－	Approval letter No. MOEA- Business-09701009470
2008.07	10	80,000	800,000	54,058	540,579	Capital increase by issuance of stock warrants of NT$ 11,590 thousand	－	Approval letter No. MOEA- Business-09701160610
2008.12	10	80,000	800,000	54,158	541,579	Capital increase by issuance of stock warrants of NT$ 1,000 thousand	－	Approval letter No. MOEA- Business-09701325300
2010.01	68	80,000	800,000	59,547	595,469	Capital increase by cash of NT$ 53,890 thousand	－	Approval letter No. MOEA- Business-09901004550
2015.08	－	80,000	8 00,000	58,047	580,469	Capital reduction by reduction of treasury shares of NT$ 15,000 thousand	－	Approval letter No. MOEA- Business-10401153090
2016.09	－	80,000	800,000	58,790	587,899	Recapitalization of retained earnings of NT$ 7,430 thousand	－	Approval letter No. MOEA- Business-10501235390
2017.09	－	80,000	800,000	60,554	605,536	Recapitalization of retained earnings of NT$ 17,637 thousand	－	Approval letter No. MOEA- Business-10601130440

• 71 -

March 24, 2024; Unit: Share

Types of Shares	Authorized share capital	Authorized share capital	Authorized share capital	Remark
	Issued shares (Note)	Unissued Shares	Total
Common stock	60,553,594	19,446,406	80,000,000	－

Note: The shares of a listed company.

4.1.2 Composition of Shareholders

4.1.2 Composition of Shareholders	4.1.2 Composition of Shareholders	4.1.2 Composition of Shareholders	4.1.2 Composition of Shareholders
				March 24, 2024; Unit: Person; Share; %
Type of Shareholders Quantity	Government Agencies	Domestic Financial Institutions	Domestic Securities Investment Trust Funds	Other Domestic Juridical Persons	Domestic Natural Persons	Foreign Institutions and Natural Persons	Total
Number of Shareholders	－	－	1	252	38,746	43	39,042
Shareholding	－	－	154	7,518,174	45,520,971	7,514,295	60,553,594
Shareholding Percentage	－	－	－	12.42%	75.17%	12.41%	100.00%

4.1.3 Distribution of Shareholding

1. Common Share March 24, 2024; Unit: Person;

1. Common Share		March 24,	2024; Unit: Person;
			Share; %
Shareholding Range	Number of Shareholders	Shareholding	Shareholding Percentage
1-999	27,755	1,029,601	1.70%
1,000-5,000	9,781	17,930,177	29.61%
5,001-10,000	905	7,227,398	11.94%
10,001-15,000	206	2,640,408	4.36%
15,001-20,000	135	2,483,334	4.10%
20,001-30,000	103	2,599,892	4.29%
30,001-40,000	47	1,673,959	2.76%
40,001-50,000	28	1,274,668	2.11%
50,001-100,000	43	3,047,657	5.03%
100,001-200,000	15	2,237,473	3.70%
200,001-400,000	13	3,368,012	5.56%
400,001-600,000	5	2,316,760	3.83%
600,001-800,000	0	0	0%
800,001-1,000,000	0	0	0%
1,000,000↑	6	12,724,255	21.01%
Total	39,042	60,553,594	100.00%

1. Preferred Share: The Company does not issue preferred shares.

2. 72 -

4.1.4 List of major shareholders

4.1.4 List of major shareholders	4.1.4 List of major shareholders
March 24,		2024; Unit: Share; %
Shares Major Shareholders	Shareholding	Shareholding Percentage
Wilber Huang	3,651,144	6.03%
Harmony Investment Co., Ltd.	2,448,294	4.04%
Lasertech Holding International Ltd.	2,248,786	3.71%
Pan Pacific Investment Corp.	1,839,014	3.04%
TCI Co., Ltd.	1,500,000	2.48%
China Wire & Cable Co., Ltd	1,037,017	1.71%
Rong How Investment Co., Ltd.	540,000	0.89%
E.SUN Bank in custody for Lasertech Investment Fund	510,374	0.84%
Hong Zhen Mei	460,386	0.76%
Li Run Yu	405,000	0.67%

4.1.5 Information on share prices, net worth per share, earnings per share, dividends per share for the past 2 fiscal years

				Unit: NT$; 1,000 shares	Unit: NT$; 1,000 shares
Item	Year		2022	2023	Current fiscal year up to April 3, 2024 (Note 7)
Market price per share (Note 1)	Highest		84.9	41.55	38.00
	Lowest		31.3	30.95	31.30
	Average		42.74	34.90	35.10
Net worth per share (Note 2)	Before distribution		21.34	21.24	Not applicable
	After distribution		20.54	20.44(Note 6)	Not applicable
Earnings per share	Weighted average shares		60,554	60,554	60,554
	Earnings per share	Before Adjustment	1.24	0.72	Not applicable
		After Adjustment	1.24	0.72	Not applicable
Dividend per share	Cash dividends		0.8	0.72	Not applicable
	Bonus shares	Stock Dividend from Retained Earings	0	0	Not applicable
		Stock Dividend from Capital Reserve	0	0	Not applicable
	Accumulated unpaid dividend		0	0	Not applicable
Investment return analysis	Price / Earnings ratio (Note 3)		34.47	48.47	Not applicable
	Price / Dividend ratio (Note 4)		53.43	48.47	Not applicable
	Cash dividend yield rate (Note 5)		1.87%	2.06%	Not applicable

Note 1: The highest and lowest market prices for each year is provided, with the average price for the year computed based on each year’s transaction amount and volume.

• Note 2: Use the number of the issued shares at year’s end and the distribution passed at the following year’s shareholders’ meeting to fill in.

Note 3: Price / Earnings ratio= Average closing price for the year / earnings per share.

• Note 4: Price / Dividend ratio= Average closing price for the year / cash dividend per share, which is calculated based on the proposed cash dividend distribution approved by the Board of Directors.

• Note 5: Dividend yield= Cash dividend per share / average closing price for the year, which is calculated based on the proposed cash dividend distribution approved by the Board of Directors.

• Note 6: The earnings distribution proposal has not yet been presented for approval at the shareholders’ meeting.

Note 7: Listed net worth per share and earnings per share are according to the report reviewed by CPA in the latest quarter of the date of the publication of this annual report. Other columns show information for the current year as of the date of the publication of the annual report.

• 73 -

4.1.6 Company's dividend policy and its state of implementation

1. The dividend policy of the Company is based on the provisions of the Company's Articles of Incorporation, and the relevant provisions are as follows: Article 24:

If the Company makes profits (after deducting the pretax income for remuneration to employees and directors), it shall set aside not less than 1% of its annual profit to employees as a profit sharing and not more than 3% as the compensation for directors. However, if the Company has accumulated losses (including adjustment to undistributed earnings), the losses to be covered shall first be reserved.

The aforementioned employees’ compensation can be distributed in the form of shares or cash, and the employees who are entitled to receive the compensation including the employees of subsidiaries who meet the requirements set by the Board of Directors. The aforementioned director’ compensation can only be distributed in cash,

Both the aforementioned compensation distribution for employee and director shall be approved by a meeting of the Board of Directors, and a report of such distribution shall be submitted to the shareholders’ meeting.

Article 24-1:

If the Company has net profit after tax for the current period, it shall first be deducted to cover accumulated losses (including adjustment to undistributed earnings), set aside 10% of such profits as a legal reserve as required by law. However, when the legal reserve amounts to the authorized capital, this shall not apply. Then, appropriate another sum as a special reserve as required by law or regulations of the competent authority. If there is any remaining balance, together with the undistributed earnings at the beginning of the period (including adjustments to undistributed earnings), a proposal of surplus earning distribution shall be submitted to the Board of Directors for approval. For the distribution of dividends and bonus in the form of cash, it shall be decided by a resolution to be adopted by a majority voting of the directors present at a meeting of its Board of Directors attended by two-thirds of the directors of the Company, and the decision shall be reported to the shareholders' meeting. If the surplus earnings are distributed in the form of new shares, it shall be approved by the resolution of shareholders' meeting.

The Article 240, paragraph 5 of the Articles of Incorporation of the Company authorizes the distributable dividends and bonuses in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by twothirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

The dividend policy of the Company in line with current and future development plans, taking account of factors such as investment environment, funding needs, competition at home and abroad, shareholders' interests, etc. The Company will set aside not less than 10% of the distributable earnings as dividends and bonus every year. However, the Company will not make distribution if the accumulated distributable earnings are less than 3% of the paid-in capital. Dividends and bonuses can be distributed in the form of cash or shares, in which the cash dividend shall not less than 10% of the total dividends.

1. The dividend distribution proposed in the most recent shareholders' meeting:

2. (1) The accumulated unappropriated retained earnings are NT$ 64,923,293, added the net profit after tax in 2023 is NT$ 43,677,854. Less NT$ 618,052 earnings due to remeasurements of the net defined benefit plan and set aside NT$ 4,305,980 legal reserve and NT$ 291,781 special reserve, the distributable net profit is NT$ 103,385,334. The proposed dividend to shareholders is NT$ 43,598,588, with NT$0.72 per share is proposed.

3. (2) The proposed cash dividend will be calculated based on the shareholding as recorded in the shareholders' roster on the ex-dividend date and will be rounded down to the nearest whole dollar. The Chairman is authorized to appoint designated person to adjust the total amount of the fractional amounts less than NT$ 1.

4. 74 -

5. (3) The aforementioned dividend distribution is proposed to be distributed first based on the earnings of FY 2023.

6. (4) The Board of Directors is authorized to set the ex-dividend date and the dividend distribution date after the proposal is approved by the AGM.

Abnova (Taiwan) Corporation 2023 Profit Distribution Statement

Abnova (Taiwan) Corporation 2023 Profit Distribution Statement	Abnova (Taiwan) Corporation 2023 Profit Distribution Statement	Abnova (Taiwan) Corporation 2023 Profit Distribution Statement
Unit: NT$
Item	Amount
Beginning retained earnings		64,923,293
Add: 2023 net profit after tax	43,677,854
Less: Remeasurements of the net defined benefit plan recognized in retained earnings (Note1)	(618,052)
Net profit after tax of the current period plus the amount of items other than net profit after tax of the current period included in the unappropriated retained earnings of the current year		43,059,802
Less: legal reserve (Note2)		(4,305,980)
Less: legal reserve		(291,781)
Distributable net profit		103,385,334
Distributable items
Dividend to shareholders-Cash (NTD 0.72/share)	(43,598,588)
Unappropriated retained earnings		59,786,746

• Note 1: Other comprehensive profits and losses are recognized according to the pension actuarial report.

• Note 2: It is listed with a net amount of NTD 43,059,802, and its sum of 2023 net profit after tax is NTD 43,677,854, less other comprehensive profits and losses are recognized according to the pension actuarial report NTD 618,052.

• 4.1.7 Effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent shareholders’ meeting: No stock dividend is distributed for the current FY.

4.1.8 Profit-sharing compensation of employees and directors

1. The percentages or ranges with respect to employee and director profit-sharing compensation, as set forth in the Articles of Corporation of the Company: Article 24 of the Articles of Corporation of the Company:

2. If the Company makes profits (after deducting the pretax income for remuneration to employees and directors), it shall set aside not less than 1% of its annual profit to employees as profit sharing and not more than 3% as compensation for directors. However, if the Company has accumulated losses (including adjustment to undistributed earnings), the losses to be covered shall first be reserved.

3. The aforementioned employees’ compensation can be distributed in the form of shares or cash, and the employees who are entitled to receive the compensation including the employees of subsidiaries who meet the requirements set by the Board of Directors. The aforementioned director’ compensation can only be distributed in cash.

Both the aforementioned compensation distribution for employee and director shall be approved by a meeting of the Board of Directors, and a report of such distribution shall be submitted to the shareholders’ meeting.

1. The basis for estimating the amount of employee, director, and supervisor profit-sharing compensation, for calculating the number of shares to be distributed as employee profit-sharing compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period: The estimated amount of profit-sharing compensation for employees and directors is calculated based on the Articles of

2. 75 -

Corporation of the Company. If a stock dividend is resolved to be distributed, the number of shares is determined based on the closing price of the day before the shareholders' meeting and the impact of ex-rights and ex-dividend are taken into account. If there is a difference between the actual distribution amount and the estimated amount, it shall be regarded as changes in accounting estimate and recognized as profit or loss of the year of actual distribution.

1. Information on any approval by the board of directors of distribution of profit-sharing compensation: See Page 24-25 for details.

2. The actual distribution of employee, director, and supervisor profit-sharing compensation for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee, director, or supervisor profit-sharing compensation, additionally the discrepancy, cause, and how it is treated:

3. (1) The proposed distribution of cash compensation for employees of NT$4,178,700 and directors of NT$795,200 for FY2022 was approved by the Board of Directors on February 24, 2023, and reported to the shareholders' meeting on May 15, 2023.

4. (2) If there is any discrepancy between the actual distribution and the recognized employee, director, or supervisor profit-sharing compensation, additionally the discrepancy, cause, and how it is treated: No discrepancy between the aforementioned distribution amounts and the recognized expenses for employees, directors, and supervisors for the fiscal year. Reason for the discrepancy: None.

Treatment of the amount of difference: No discrepancy for the current period.

4.1.9 Share repurchases by the Company: None.

• 4.2 Issuance of corporate bonds: None.

• 4.3 Preferred shares: None.

• 4.4 Global depository receipts: None.

• 4.5 Employee share subscription warrants: None.

• 4.6 New restricted employee shares: None.

• 4.7 Issuance of new shares in connection with mergers or acquisitions or with acquisitions of shares of other companies: None.

4.8 Capital allocation plans

With respect to each uncompleted public issue or private placement of securities, and to such issues and placements that were completed in the most recent 3 years but have not yet fully yielded the planned benefits, the annual report shall provide a detailed description of the plan for each such public issue and private placement: None.

• 76 -

V. Operational Highlights

5.1 Business Activities

5.1.1 Business Scope

1. The main scope of the company's business activities:

2. (1) Recombinant protein for research use only (RUO)

3. (2) Polyclonal antibodies for RUO, including mouse MaxPab, rabbit MaxPab, and rabbit DNAxPab

4. (3) Monoclonal antibodies and recombinant antibodies for RUO

5. (4) Antibody pairs

6. (5) Customized recombinant protein and antibody for RUO

7. (6) Other major products:

8. A. Cell Lysate Preparation for RUO

9. B. Kits for RUO

10. C. Fluorescent dye

11. D. DNA probes for in situ hybridization (ISH)

12. E. mutaFISH™ probes

13. F. Small-molecule RNA probe (TNA dig miRNA Probe)

14. G. Tissue Slide

15. H. Beads, ActiveBeads

16. I. Pseudovirus

17. J. Laboratory disposable reagents

18. K. Negative Enrichment Cell Isolation and Retrieval System (LiquidCell™)

19. L. High-throughput extraction and purification precipitation system (Precipitor™ 32 Plus)

20. M. Non-invasive Circulating Rare Cell (CRC) Positive Enrichment & Retrieval System (CytoQuest™ CR )

21. N. CytoQuest™ kits and consumables

22. O. Spiral Hybrid Magnetic Bead Treatment System (Spiraltor™ 48)

23. P. Spiral Hybrid Magnetic Bead Treatment System (SpiralPipet™)

24. Q. All-in-One Imaging System with Artificial Intelligence Solution (CytoView™)

25. Existing products (services) provided by the Company

26. (1) Protein: 25,373 types Recombinant protein: 25,108 types Protein- fragment: 9,319 types Protein- full-length: 14,353 types Activated protein: 3,034 types

27. (2) Polyclonal antibody (Pab): 49,463 types

28. (3) Pab (mouse MaxPab): 9,045 types Pab (rabbit MaxPab):4,366 types Pab (rabbit DNAxPab): 12,199 types

29. (4) Monoclonal antibody (mAb): 43,909 types Recombinant antibody (rAb): 5,948 types

30. (5) Antibody Pair: 4,040 types

31. (6) Other major product

32. A. Cell Lysate Preparation for RUO: 8,998 types

33. B. Kit: 4,259 types

34. C. Fluorescent dye: 117 types

35. D. DNA probe for ISH: 1,369 types

36. E. mutaFISH™ probe: 32 types

37. F. TNA dig miRNA Probe: 53 types

38. G. Tissue Slide: 480 types

39. H. Beads: 25 types ActiveBeads: 2 types

40. I. Pseudovirus: 9 types

41. 77 -

42. J. Laboratory disposable reagents: 217 types

43. K. LiquidCell™: 1 types

44. L. Precipitor™ 32 Plus: 1 type

45. M. CytoQuest™ CR: 1 type

46. N. Spiraltor™ 48: 1 type

47. O. SpiralPipet™: 1 type

48. P. CytoQuest™ CR kits and consumables: 55 types

49. Q. CytoView™: 1 type

50. (7) Customized products: The Company also accepts product customization, and the feasibility of customization is evaluated through the discussion on the professional details and product specifications between the technical personnels from both parties.

51. Development of new products

(1) miRNA Probe Customization and Catalog Products:

In Q3 2023, Abnova launched a new miRNA probe customization service and catalog products to meet the growing demand for miRNA research tools in both academic and industrial sectors. miRNA probes play a crucial role in studying miRNA expression, gene regulation, functional analysis, biomarker relevance, and drug development in biological samples. Abnova offers customization services and highly sensitive miRNA probes to meet various research needs and plans to continue expanding its miRNA catalog product line in 2024 to better cater to the evolving market demands, providing the most advanced miRNA research tools with more choices to support customers in the development of miRNA-related research fields.

• ⚫ miRNA Probe Customization Service:

• https://www.abnova.com/en global/services/mirna_probes

• ⚫ miRNA Probe Catalog:

https://www.abnova.com/en-global/product/filter?category=ARAN00000000

(2) miRNA (circRNA) Sponge

miRNA (circRNA) Sponge is an artificial non-coding circular RNA. By integrating multiple miRNA targeting fragments on the miRNA sponge, the diversity of miRNA sponge adsorption can be increased. Compared to linear miRNA sponges, circular miRNA sponges lack 5' and 3' ends, exhibit low immunogenicity without the need for nucleoside modification, and resist degradation by nucleases, thereby enhancing adsorption stability and efficiency. miRNA sponges also overcome the toxicity concerns of traditional anti-miRNA oligonucleotides (AMOs) and dosage limitations associated with plasmid-based miRNA sponges. In 2023, Abnova successfully launched a new miRNA sponge product line and plans to expand its catalog product line in 2024 to provide stable and efficient miRNA sponge products, supporting both in vivo and in vitro miRNA research fields.

• ⚫ miRNA Sponge Technology:

• https://www.abnova.com/en global/support/technologies/circrna_sponge

(3) Recombinant Antibodies:

Recombinant antibodies are antibodies prepared through DNA sequence recombination technology, distinguished from the traditional preparation of mouse monoclonal antibodies, which involves immunizing mice, isolating B cells from their spleen or lymph nodes, and then fusing them with myeloma cell lines to select hybridoma cell lines that secrete antibodies. In contrast, recombinant antibodies are prepared through in vitro DNA sequence recombination technology, where the genes encoding the antibody's light and heavy chains are inserted into expression vectors and transfected into host cells for antibody expression. Recombinant antibodies offer several advantages, including high specificity and sensitivity,

• 78 -

as well as superior batch-to-batch consistency. Furthermore, recombinant antibodies allow for antibody quantification using mammalian cell lines, eliminating the need for antibody quantification preparations relying on mouse ascites production, thus adhering to the 3R principle of animal experimentation.

Abnova provides a variety of high-quality recombinant antibody options rigorously tested for their specificity to meet diverse customer demands for antibodies. In 2024, Abnova will continue to improve the qualitative results of its recombinant antibody catalog products to meet customer needs with more comprehensive qualitative data.

• ⚫ Recombinant Antibody Catalog Products:

• https://www.abnova.com/en global/product/specializedproductsearch/recomab

(4) Nanobodies:

Compared to traditional antibodies, nanobodies demonstrate several significant advantages. Nanobody molecules have a molecular weight of only one-tenth that of traditional antibodies, rendering better solubility and easier penetration of cellular tissues. Nanobodies possess higher antigen affinity, enabling them to bind more firmly and stably to antigens. Meanwhile, the low immunogenicity of nanobodies reduces the risk of immune reactions. The mass production of nanobodies can be made possible rapidly and stably through mammalian cell lines. These advantages make nanobodies promising in a wide range of applications in medical research, disease diagnosis, and treatment, particularly in the pharmaceutical industry, where they have the potential to overcome the limitations of traditional antibodies. Abnova's nanobody products not only offer customized services but also launched a nanobody catalog product at the end of 2023. In 2024, Abnova will continue to expand its catalog of targeted human gene-related nanobody products, providing refined catalog products to meet customer demands and offering more convenient choices for customers. ⚫ Nanobodies Customization Service:

• https://www.abnova.com/en global/services/nanoab_service_1

• ⚫ Nanobodies Catalog Products:

• https://www.abnova.com/en global/product/specializedproductsearch/camelid

(5) CellTX[TM] Regeant for Cytotherapy:

The cytotherapy market continues to thrive, especially in the field of cancer treatment. Abnova has integrated the CellTX[TM] cytotherapy product line from the end of 2023 to 2024, meanwhile launching three types of cytotherapy reagents:

• (A)GMP-Grade Protein for Cell Culture in Cytotherapy:

• Cytotherapy procedures require the isolation and expansion of specific cells in vitro, and various cytokines are needed during the culture process to expand specific cells. Abnova is committed to meeting the high-quality demand for GMP-grade proteins for cell culture in the cytotherapy market. In Q1 2024, Abnova launched GMP-grade proteins specifically designed for cytotherapy cell culture to meet the growing demands of the expanding cytotherapy market. Abnova also provides cytotherapy culture proteins for scientific research purposes to meet different user needs.

• (B)The Humanized Monoclonal Antibodies Relevant to Cytotherpy:

• Humanized monoclonal antibodies retain the complementarity-determining region sequences of mouse monoclonal antibodies, maintaining the affinity and specificity of the original mouse monoclonal antibodies. Other sequences are modified through humanization engineering to replace them with human antibody sequences, reducing immunogenicity and improving test safety. These antibodies are crucial in cancer research and the development of new drugs for autoimmune diseases. Leveraging years of antibody production experience, Abnova provides premium humanized monoclonal antibody catalog products for cytotherapy research through antibody humanization

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engineering, offering customers convenient research tools to meet the rapid development needs in the field of cytotherapy.

• (C)Human and Mice CD3/CD28 ActiveBeads[TM] :

• The cytotherapy process involves isolating specific cells from the blood for activation and expansion in vitro. Therefore, suitable cell activation reagents are essential for developing cytotherapy drugs. In 2023, Abnova began developing T-cell activation reagents. Through various processes including the development of CD3, and CD28 monoclonal antibodies to antibody humanization, and coupling of humanized antibodies with beads, Abnova successfully developed Human CD3/CD28 ActiveBeads[TM] . Furthermore, Abnova simultaneously launched Mouse CD3/CD28 ActiveBeads[TM] in response to the demand for mouse model testing in the development stages of cytotherapy drugs, meeting the needs of users in various stages of development.

• ⚫ CellTX[TM] Cytotherapy Reagent Catalog Products:

https://www.abnova.com/en-global/product?category=BA0000000000

(6) mRNA Cancer Vaccine Treatment Platform Development:

The Abnova mRNA cancer vaccine therapy platform integrates antigen targets, expression vector design, and non-viral vector technology with LNP delivery, replacing the slow virus system with high manufacturing costs and limited scalability under the existing business models. It is expected that in 2024, optimization of the mRNA cancer vaccine for triplenegative breast cancer (TNBC) will be completed through testing in mouse models, followed by GLP preclinical animal studies and pharmacokinetic tests. Based on the data, continuous progress will be made to refine preclinical trial data.

5.1.2 Overview of the industry

1. Current status and development of the industry

2. (1) Current status of the global biotech industry's development

Despite the disruptions caused by COVID-19 in 2022, fortunately, vaccination rates in various countries have increased. The WHO also officially lifted the global health emergency status for COVID-19 in May 2023, and pandemic prevention and control has returned to normal. Economic activity has visibly picked up, and academic research and development have gradually resumed. For biotech industry, since the outbreak of the COVID-19 pandemic at the end of 2019, biotech companies around the world have been actively developing COVID-19 related products and applications such as testing services, rapid screening products, neutralizing antibodies, vaccines, therapeutic drugs, etc., in response to the post-pandemic era. Other than the pandemic related product development, there continues to be a demand for drugs and treatment as the number of patients with other diseases do not reduce due to pandemic. Therefore, the market demand for pharmaceuticals is still maintained at the past level, and major pharmaceutical companies also continue to develop drugs for various other diseases. The new drug review for marketing also gets backs on track, and the overall biotech industry has visibly recovered.

Apart from the impact of the COVID-19 pandemic, the economic development in Europe and the US is still being affected by inflation, unresolved wars between the borders of Europe and Asia and the unpredictable situation in the Middle East has greatly impacted the stability of the world economy.

Governments continue to adopt new healthcare systems, reducing healthcare costs, improving healthcare efficiency and services, minimizing healthcare waste, as well as driving the

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development of emerging technologies such as telemedicine and digital healthcare, etc. at the same time, leading the growth and development of the global biotech industry and alleviating the impact of economic factors and pandemics. In a macro view, biopharmaceuticals and medical devices are still the two major markets in the biotech industry.

• ➢ Global pharmaceutical market

• Non-essential medical procedures are reduced due to healthcare personnel control during the pandemic.

• ➢ Following a gradual lifting of restrictions by many countries and returning to normal life, a modest growth in the global pharmaceutical market is observed,

• the sales of high-growth drugs have stabilized, and the competition of generic drugs is remained intense. An approximate 65% of the global pharmaceutical market share is mainly contributed by the advanced countries such as Europe, the US, Japan, Canada, and Australia, of these, the US has maintained its market leadership in the global largest pharmaceutical market. Global new drug developers mostly target the markets in Europe and the US for new drug listing. While the rapid development of the pharmaceutical markets in Mainland China, Brazil, India, and Russia is noteworthy, which account for approximately 25% of the global pharmaceutical market share, with slight growth, expecting will become important players in the growing pharmaceutical market. Based on the survey conducted by Evaluate Pharm, cancer drugs, immunosuppressive agents, and diabetes drugs remain are the world's top three therapeutic drug categories in the future. With the development of innovative therapies, cancer drugs are expected to grow at a compound annual growth rate (CAGR) of 13-16%, indicating a significant increase in growth rate. The immunosuppressive agents are expected to grow at a CAGR of 3-6% in the next 5 years, the growth momentum has been slightly revised downward as the listing of related biosimilars has impacted on the use of drugs for the disease and slowed down its market growth. The CAGR for hypoglycemic drugs also being revised downward to 3-6%. The sales of the specialty drugs that used to treat chronic diseases, rare diseases, etc. is expected to increase to 40% of the global pharmaceutical market share by 2024. The development of the pharmaceutical market will be influenced by the adoption of Real World Data/Real World Evidences by the US FDA as a reference for drug review decision-making, as well as changes in the medical environment such as niche biological therapies become mainstream, the uses of mobile medical apps and telemedicine, reduced expenditure on brand drug, the promotion of specialty drugs, slow growth trend for emerging pharmaceutical markets, competition in biosimilars, etc. IQVIA forecasted that the global pharmaceutical market will grow at a CAGR of 5.4% in the next 5 years.

The US FDA promotes multiple initiatives for new drug review and listing, including orphan drugs, Fast Track, Breakthrough Therapy, Priority Review, and Accelerated Approval, etc. which simplify or accelerate the review process, shortening the time required for new drug listing. The rigorous review process for new drug listing by the US FDA, coupled with the fact that the US is the world's largest pharmaceutical market, and

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the drug prices are determined by market mechanisms, resulting in many manufacturers have regarded the US as the first country for new drug listing. This not only allows them to grasp market opportunities, but it also will be more beneficial to their subsequent review in other countries, further strengthening the leading position of the US in the world's new drug market.

From the perspective of drug categories, IQVIA analyzed and estimated that cancer drugs, immunosuppressive agents, and hypoglycemic drugs will remain as the top three therapeutic drug categories in 2026. Meanwhile, out of the top ten drugs, nine of them are biologics (including mAb and recombinant proteins). The rapid growth of the mAb market drives the manufacturers to actively develop new generation antibody technologies and applications, such as antibody-drug conjugates and targeted antibodies immunotherapy, reflecting biologics are increasingly significant for the global pharmaceutical market expansion.

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➢ Global medical device market

With the pandemic subsiding, economic activity has resumed, and the in-vitro diagnostic industry, which benefited from the pandemic, also came to an end at the end of 2022. In the past two years, non-essential medical procedures and surgeries, such as those in orthopedics and dentistry were delayed or reduced due to the pandemic, however, its medical device demand now has resumed. The changes in medical procedures also affect the demand and the sales of the medical devices, as reflected in the changes in medical devices and their market demand which has approached the pre-pandemic levels. The US still is the world’s largest medical device market, accounting for approximately 51.7% of the market share, and followed by Western Europe with approximately 23.5% of the market share. It is estimated that the market ranking will not change much in the future, that the US, Western Europe, and Asia-Pacific (including China and Japan) will remain as the top three largest markets. The US medical insurance provides strong support for US medical device manufacturers for sustained development, coupled with the rising demand for medical care with the increase in elderly people. Driven by strong supply and demand, the market grew steadily. It is expected that the US will remain as the market leader in the

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world's medical device market in the coming few years. The demand structure for various medical products has returned to the pre-pandemic patterns. After Biden has been appointed as US President, various medical policies are continuously introduced in response to COVID-19 pandemic, expanding insurance coverage, establishing US medical device supply chain, promoting the procurement of US medical devices, are all driving the development of medical device market. The prospect of the US medical device industry is relatively promising.

Looking at the demand for medical devices during the COVID-19 pandemic, Europe was facing an undersupply of personal protective equipment, rapid screening products, respiratory therapy equipment, etc. due to the outbreak. The rapid spike in the number of confirmed cases also caused a severe shortage of medical facilities and resources. However, with the rise in vaccination rate, the supply of epidemic prevention supplies has been slightly relieved.

In view of Europe is the world's most aged population, the demand for related medical care products continues to grow as the elderly population keeps increasing, that has increased the financial burden of Western European governments. Furthermore, uncertainties and risks still exist in the EU region, such as unpredictable future pandemic conditions, high inflation rates, unresolved war between Ukraine and Russia, and continuing high energy prices, posing unpredictable risks and challenges to Western European economies. Germany is the largest economy of the EU, leading the growth of European economies. However, the recovery of the German economy is slow, and the United Kingdom's financial difficulties have led to the tightening of its national healthcare spending, which has also limited the development of the medical equipment market, hence the subsequent development is noteworthy.

Mainland China is another major market in the Asia-Pacific region and the third largest world's medical device market. Although the domestic medical resources were overwhelmed due to the outbreak, the demand for medical care will grow along with the rise of elderly population. Mainland China has ambitious plans for the development of the pharmaceutical industry. In addition to strengthening the R&D in big data and artificial intelligence applications, Mainland China is actively constructing high-end equipment, clustering emerging biomedical industries, and improving remote healthcare networks, etc. Despite being affected by the US-China trade war, the industrial competition between the US and Mainland China continues to escalate, which may affect the upstream supply chain and the US manufacturers' layout strategies in China, thereby promoting the development of China's biomedical industry, meanwhile, domestic leading manufacturers will be selected with first priority, replacing imported products. With policy support and the support of a huge domestic demand market, the future development of Mainland China's medical device industry is worth concern and anticipate.

According to the BMI Research's study, it is estimated to grow at the CAGR of approximately 6.7% from 2021 to 2025.

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In addition to the pharmaceutical and medical device markets, the digital healthcare and precision medicine markets are also the two key development directions with promising prospects. This is mainly in response to the global aging society, resulting in a rise in medical expenditures and a shortage of healthcare manpower. Advanced countries like Europe, the US, and Japan continue to promote preventive medicine and smart digital healthcare, strengthen medical information exchange and data security protection, big data databases, and artificial intelligence, achieving personalized treatment, reducing unnecessary medical expenses, improving medical quality. As the COVID-19 pandemic has changed the health care-seeking behavior of people that also driven the telemedicine market, alleviating the shortage of healthcare manpower.

• (2) Current status of the biotech industry's development in Taiwan

It is projected that Taiwan will become a super-aged society by 2025. Coupled with the global pandemic and the burden of medical costs arising from chronic diseases, the government is promoting the "Taiwan Precision Medicine Initiative" under the "2030 Health for All" program. Building upon the solid foundation laid in the biotech industry, this initiative aims to leverage the advantages and resources in precision health to strengthen healthcare, medical devices, pharmaceuticals, and agricultural biotechnology, pushing forward the development of biomedical industry and advancing the health and welfare of the nation's citizens. In addition, the implementation deadline for the Act for The Development of Biotech and New Pharmaceuticals Industry was originally scheduled until the end of 2021, but it was deferred to the end of 2031 and renamed as “Act for the Development of Biotech and Pharmaceutical Industry". The Act is additionally applicable to the industry that deals in new dosage forms, digital medicine, innovative technology platforms dedicated to biotech and pharmaceutical industry and the biotech and pharmaceutical companies entrusted with development and manufacturing. The Act encourages both R&D and manufacturing, integrating the advantages of Taiwan's medical technology and information and communication technology to develop biotech and pharmaceutical products that can be more precisely used for treatment, diagnosis, and prevention. The product development and listing can be expedited by using policy tools such as industry guidance, R&D subsidies, tax benefits, and technology business recommendations, etc.

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The future development of Taiwan's biotech industry will focus on (1) strengthening the sustained growth of the industry's operations; (2) facilitating the new drugs and medical devices in gaining access to the international markets; (3) accelerating the development of biotech clusters; and (4) improving the regulatory environment to promote emerging industries such as digital healthcare, precision medicine, regenerative medicine, and elderly health and wellness market, as well as strengthening collaboration with global and regional markets. New therapies and technologies are providing new business opportunities as the government relaxes regulations. It is expected that cell therapy will drive medical tourism and attract foreigners to seek medical attention in Taiwan, shaping a new image for Taiwan's biotech and pharmaceutical industries and establishing Taiwan as an international R&D center for biotech and pharmaceutical.

With the promotion of the biotech industry by government, combining with the complementary development of technology, talent, funding, regulations, clusters, etc., in addition to increasing the willingness of domestic companies to invest, it is also anticipated that it will attract multinational biotech companies to invest in Taiwan or engage local biotech professionals by converging the regulations with the international standard. The government is confident and determined in promoting Taiwan's biotech industry, and with the support of the semiconductor industry, the future development of the biotech industry can access more opportunities in the market.

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1. The relationship between the upstream, midstream, and downstream sectors of the industry. (1) Antibody reagent category

2. Antibodies and proteins are the major products of the Company, the relationship between the upstream, midstream, and downstream sectors is illustrated in the diagram below:

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	Upstream			Midstream		Downstream application industries	Downstream application industries
						Biochemical R&D industry Agriculture (agricultural diagnostic reagents) Medical industry (medical diagnostic reagents, drug development, biomarkers)
Raw materials for antibodies and proteins and expression			Antibodies and proteins
							Agriculture (agricultural diagnostic reagents)

In terms of the industry structure for the antibody and protein production and marketing process, the production of the raw materials and expression systems for recombinant proteins are the key for the upstream industry. Midstream industry is committed to the production of proteins and antibodies. The Company is the midstream industry of protein and antibody production, committed to large-scale production of product with high quality to supply to various agencies such as research institutions, medical systems, pharmaceutical companies, etc. for basic research. The downstream industry comprises mainly research institutions or enterprises related to biotechnology R&D, medical, and agricultural industry at home and abroad for various research and experiments.

(2) Detection system instruments

Upstream Midstream Downstream application industries

Mechanical components, temperature control components, biochips, microfluidic components Instrument systems	Hospitals Medical industry (drug development) Research institutions	Hospitals
		Research institutions

The upstream source of the CRC enrichment, collection, and isolation system is the assembly and production of various mechanical, temperature control, microfluidic components and biochips, that mainly used for CTC and circulating fetal cells (CFC) enrichment, collection, and isolation. The downstream industry for CTC detection can be used for clinical applications in hospitals or scientific research, including early tumor screening, prognosis assessment, individualized treatment strategy development, efficacy and drug resistance monitoring, and recurrence and metastasis warning, as well as R&D of new anti-tumor drugs by pharmaceutical companies. The CFC enrichment test can be used for research on fetal genetic disorders and gene defects.

3. Various development trends for products

• (1) Antibody reagent category

Proteins are made through gene transcription and translation that carry out the functional roles of genes. While antibodies are the essential tools for understanding proteins and their functions. Antibodies not only can be widely used in the reagent market, but they also give higher value if used in medical diagnostic reagents and drug development. Proteins are interacted with one another during the process of disease development, which has changed the research method to investigate multiple proteins in one time, to effectively understand the complexity of proteins and may understand the reason for pathological changes. This is the reason why it is necessary to obtain antibodies in a large amount in research. Antibodies play a vital role in medical research or therapy as the current biotech industry still relies on antibody as a tool for the related research. In recent years, European and American countries have attached increasing importance to the humane treatment of research animals. In the future, the preparation of antibodies will change to cell culture method to replace the current common method that

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produces mAb using ascites, which will affect production costs and the existing manufacturing process also need to adjust.

Abnova announces a new antibody program focusing on producing nanobodies using highimpact rodent and human genes. The program aims to advance next-generation antibody and bispecific antibody therapies, immunotherapy, cell and gene therapies, cancer vaccines, and delivery systems. Nano-antibodies are expected to address the current challenges and barriers to treating human diseases, changing the landscape of the therapeutic field. Beginning in 2024, Abnova is committed to the mass production and launch of a full range of nanobodies as a ready-made reagent for research findings, pre-clinical and clinical development, as well as a direct product for diagnostics and therapeutics.

• (2) RNA vaccines

In terms of pandemic prevention, RNA vaccines are an important trend for future development. Compared to traditional attenuated vaccines, RNA vaccines only require gene sequences for development, hence the cost is lower. Moreover, its manufacturing process is simpler and faster as it does not involve cell or embryo cultivation. As clinical trials of vaccines are often time-consuming, a rapid production of vaccines is extremely vital in public health emergency. Abnova plans to use mRNA, saRNA (self-amplifying RNA) and circRNA platforms for disease prevention and R&D in treatment.

• (3) Detection system instruments

• The diagnosis and treatment of cancer have been a significant challenge for the global medical community in recent decades. Study has demonstrated that if more people are screened regularly for cancer, the cancer related mortality rate as high as 35% could have been prevented. While during cancer treatment, early detection of tumor metastasis and recurrence is also vital in improving survival rates. The significant discrepancies in the dynamics of primary and metastatic tumor cells and the spread of tumor cells to different organs pose a challenge to the monitoring of tumor cell development and the prognosis of drug treatment for most cancers. Hence, many cancers are often misdiagnosed due to sampling biases in tissue biopsies. In recent years, governments and healthcare organizations worldwide have increasingly paid attention to precision medicine that develops personalized tumor treatment based on molecular subtyping. Precision health takes into account individual variability in genotype or gene expression, environment, lifestyle and molecular basis of disease to precisely predict, prevent, diagnose, and treat diseases. Liquid biopsy can be regarded as one of the important directions for the development of precision health industry. Compared to traditional tissue biopsies, liquid biopsy has the following five major characteristics: non-invasive, fast, accurate, real-time, and diversity of applications. Clinically, liquid biopsy is more competitive in diagnosing, monitoring, and evaluating the effectiveness of drug treatment for diseases. The report published by Research and Markets in July 2021 has shown that the liquid biopsy market is expected to grow at a CAGR as high as 15% from 2021 to 2026, with an annual turnover of nearly USD$ 10 billion in 2026. Therefore, cancer diagnosis methods using liquid biopsy technology have been gradually developed and validated for its clinical effectiveness by biomedical researchers in various countries in recent years. Liquid biopsies consist of tumor-derived entities like CTCs, circulating tumor DNA, and exosomes, etc., which are shed from the primary tumor and intravasate into the patient's peripheral blood or other body fluids during the growth and metastasis of tumor cells. Compared to 2020, it is projected that the burden of cancer will increase by 50% in 2040, with an estimated number of new cancer cases approaching 30 million owing to the increased aging population globally. The automated CRC retrieval system independently developed by Abnova can capture CRCs present in blood for genetic analysis, with a view to achieving cancer prevention and treatment purposes.

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4. Product Competition

(1) Antibody reagent category

Pab is the most common antibody available in the market, and the traditional Pab is produced using peptide, which has poorly folded antigen-responsive protein that can only identify one epitope. Hence, it is limited to use in Western blot and immunofluorescence staining. mAb, which is the main product of the Company, not only can be used in immunohistochemistry, immunofluorescence, Western blot, antibody pair, and system development, but also, in recent years, it has been clinically used to treat cancer due to its high specificity. Also, the use of mAb to improve autoimmune diseases has achieved considerable progress and effectiveness. Small-molecule drugs have been gradually replaced by mAb therapy. Therefore, mAb will play a crucial role in biochemical R&D and drug development in the future. The Company not only has established a resourceful mAb database, but also provides high-quality Pab, antibody pairs, proteins, etc., as well as the newly developed nanobodies, their small-volume properties endow them with excellent tissue penetration capabilities, allowing access to hidden sites that are difficult for traditional antibodies to reach, meeting customer demands with a wide range of products.

Other than providing general reagents for RUO, the Company also complements and supports the applications of diagnostic systems in many aspects, particularly providing biological reagents relating to clinical trials and in vitro diagnostics. The selected biological reagents will be produced in accordance with GMP standards and provided to both internal and external customers of the Company for clinical trials or diagnostic medical device use.

The neutralizing antibody assay of Abnova provides a platform to integrate the lentiviral pseudo typed vector with luciferase reporter gene interacting with ACE2 expressing 293T cells. This platform is the gold standard for measuring neutralizing antibody titers and is widely used to measure neutralizing antibodies after vaccination with various types of vaccine production methods, including mRNA, viral vectors, protein, and peptide vaccines. All countries in the world are now deploying and implementing large-scale vaccination programs, and there are numerous of other vaccines are currently awaiting approval. At the same time, vaccines against mutated virus are still in the early stages of clinical trials, which will continue to drive the market for neutralizing antibody testing in the post-vaccination era.

(2) RNA vaccines

mRNA technology can also be applied to cancer therapy. The combined use of mRNA4157/V940 vaccine of Moderna Inc. and the Keytruda anti-cancer drug of Merck & Co Inc. has shown promising results in the treatment of melanoma. Combining Keytruda with mRNA4157/V940 vaccine can reduce the risk of recurrence or death by 44% compared to using Keytruda alone. Out of 17 patients who treated with BNT111 cancer vaccine developed by BNT in combination with PD-1 mAb, 6 of them have improvement and 2 of them are stable. Currently, BNT is conducting 14 clinical trials for cancer vaccines, with 10 in phase 1 and 4 in phase 2.

(3) Detection system instruments

CellSearch is a CTC detection system platform developed by Veridex, a subsidiary of Johnson & Johnson. It is currently the first and only product approved by the U.S FDA and the China Food and Drug Administration (CFDA) for the detection of CTCs to facilitate the diagnosis of malignant tumors. The introduction of CellSearch represents a symbolic significance as the CTC detection technology is permitted for clinical application, but not just for scientific research for the first time ever. CellSearch mainly utilizes the specificity of antibodies coated

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magnetic beads to identify EpCAM expressing CTCs and the CTCs are isolated from whole blood through immunomagnetic separation. The system is approved for use in predicting progression-free survival and overall survival rates for metastatic breast, colorectal, or prostate cancer. However, the system has currently been discontinued and terminated from sales due to numerous factors, including technical limitations such as the cell cannot be continuously used for analysis by downstream applications, as well as its high cost which is not affordable to the public.

Celsee PREP diagnostic system is a fully automated CTC enrichment and detection platform produced by Celsee Diagnostics; a company based in the US. Its products include the CTC enrichment and diagnostic systems, Celsee PREP100, and Celsee PREP400, as well as the image analyzer, Celsee ANALYZER. Unlike other immunological and immunomagnetic bead or centrifugation-based enrichment and analysis methods, it does not rely on specific markers, but the physical properties of the CTCs are used for CTC capture and enrichment.

Rarecells Diagnostics is established in 2010, and its headquarters is located in Paris, France. The CE-labeled Rarecells® system (previously known as the ISET® , which isolation by size of tumor) consists of disposable filtration blocks and reagent sets. Whole blood is diluted with buffer, then reagent is added into the sample and transferred to the filtration block for pressurecontrolled filtration by the instrument. The instrument only performs pressure-controlled filtration, and the sample can be further processed with manual staining and imaging by the user. Including quantitative and phenotypic analysis through immunolabelling (IH, IF) and FISH that can be directly performed on the filter, as well as analysis of RNA and DNA.

Vortex Biosciences is a subsidiary of NetScientific plc, which is established in 2012. Its CElabeled VTX-1 liquid biopsy system is based on fluidic technology pioneered in the laboratory of Professor Dino Di Carlo at the University of California, Los Angeles. After the whole blood sample is loaded by the operator, all subsequent processing steps are carried out by the instrument and reaction kit. There are many related scientific and clinical studies that have been conducted on the Vortex CTC platform. It does not rely on specific markers, but the physical properties of the CTCs in the Vortex HT microfluidic flow bed are used for CTC capture and enrichment.

ApoCell is established in 2004 and its headquarters is located in Houston, Texas. CTC collection and enumeration platform is just one of the business activities of the company. The ApoStream® platform instrument utilizes dielectrophoresis (DEP) to isolate CTCs. Preprocessing includes isolation of peripheral blood mononuclear cell (PBMC) from whole blood and resuspension at approximately 107/mL are required before attach the sample to the instrument. All remaining processing steps are performed by the instrument and flow cell. The steps include capture of CTCs and the non-CTCs are depleted to waste recovery. After processing, the CTCs are cytospun onto a glass slide, fixed, stained, and observed using fluorescence microscopy. This platform is convenient to use as chemical or enzymatic release of CTCs from the collected cells is not required.

CellMax Life has initiated a clinical trial in the US to validate its product that is used for detection of CTCs in colorectal cancer. The company's CMx platform is currently only sold in Asia and uses a "hybrid microfluidic chip" that can isolate 1-10 CTCs from a background of 1 billion normal cells. In April 2018, CellMax Life collaborated with IncellDx to jointly develop and sell CTC detection products for several solid tumors, which are used for personalized treatment selection and monitoring.

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BioFluidica is established in 2006 and its Liquid Scan® platform includes a relatively simple instrument, microfluidic chip, and disposable test-specific reaction chamber, which is roughly the size of a credit card (but slightly thicker). After the whole blood sample is loaded by the operator (pre-processing is not required), all subsequent processing steps are performed by the instrument and specific labeled reaction chamber. The steps include CTC capture, wash and release, and CTC count, that is performed using fluorescence microscope, which is sensitive, compact, and low-cost. The CTCs are captured in the 50 to 500 sinusoidal channels on the Liquid Scan® reaction chamber.

In 2013, Fluxion Biosciences, a US based company successfully developed the IsoFlux system, which mainly uses positive enrichment technology to directly capture specific antigenexpressed CTCs from peripheral blood. The system is stable, fully automated, and minimal human intervention is needed; however, it has not yet been approved by FDA for clinical verification. Currently, it is mainly used for stability and reliability testing by research institutions. Moreover, it only uses reagents that identify EpCAM expressing CTCs, limiting its use and having higher rates of misidentification.

In addition, there are companies in China have independently developed or licensed technologies for the production and sale of CTC detection instruments, including Livzon Pharmaceutical Group Inc., LiquidBiopsy CTC isolation platform of Thermo Fisher, a US based company which is distributed by Cynvenio,Beijing Zhongke Natai Biotechnology Co., Ltd. and National Center for Nanoscience and Technology are jointly developed a highly sensitive technology, peptide-based magnetic nanobeads for CTC capture and isolation.

CytoQuest™ CR, CytoQuest™ DX, and CytoBot™ are the systems independently developed by Abnova for automated capture, counting, enrichment, and collection of CRCs, which are adopting immunofluorescence-based microfluidic positive enrichment and negative enrichment by magnetic beads, respectively for CRC capture, that can be used for translational research and clinical trials. Besides rare cell capture, cell release and isolation while maintaining cell viability, the cell recovery and capture rates are greater than all aforementioned similar products. The systems are used together with antibody reagents with high specificity. Compared to similar CTC detection system platforms, the Company has achieved a market-leading position in terms of development progress, regardless of scientific research applications or clinical program. In 2021, CytoQuest™ CR obtained the Class III medical device registration certificate in China, which enables it to be widely used in cancer prevention and treatment.

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5.1.3 Overview of technologies and research and development work

1. Research and development expenditures during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

Unit: NT$ 1,000; %

	Unit: NT$ 1,000; %
Item	FY 2023
R&D Expenditures (A)	38,396
Operating Revenue (B)	382,052
Proportion (A) / (B)	10.05%

As of the date of publication of the annual report, the financial statements for Q1 2024 have not yet been reviewed and audited by the CPAs, hence only information in the most recent fiscal year is disclosed.

2. Technologies and/or products successfully developed during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

Year		Technology or product that has been successfully developed
FY 2023 & FY 2024 up to the date of publication of the annual report		Diagnostic reagents Human CD3/CD28 ActiveBeads™ Mouse CD3/CD28 ActiveBeads™ miRNA CISH Blocking Solution FFPE miRNA ISH Pretreatment Solution, 10X Hsa-let-7a-5p miRNA Probe (DIG) Hsa-miR-21-5p miRNA Probe (DIG) Hsa-miR-212-3p miRNA Probe (DIG) Hsa-miR-128-3p miRNA Probe (DIG) Hsa-miR-132-3p miRNA Probe (DIG) Hsa-miR-142-3p miRNA Probe (DIG) Hsa-miR-142-5p miRNA Probe (DIG) Hsa-miR-191-5p miRNA Probe (DIG) Hsa-miR-371a-3p miRNA Probe (DIG) Hsa-miR-328-3p miRNA Probe (DIG) Hsa-miR-122-5p (19nt) miRNA Probe (DIG) Hsa-let-7c-5p miRNA Probe (DIG) Hsa-let-7d-3p miRNA Probe (DIG) Hsa-miR-7-5p miRNA Probe (DIG) Hsa-miR-9-5p miRNA Probe (DIG) Hsa-miR-1-3p miRNA Probe (DIG) Hsa-miR-15a-5p miRNA Probe (DIG) Hsa-miR-15b-5p miRNA Probe (DIG) Hsa-miR-16-5p miRNA Probe (DIG) Hsa-miR-17-3p miRNA Probe (DIG) Hsa-miR-10a-5p miRNA Probe (DIG) Hsa-miR-10b-5p miRNA Probe (DIG) Hsa-miR-18a-5p miRNA Probe (DIG) Hsa-miR-18b-5p miRNA Probe (DIG) Hsa-miR-22-3p miRNA Probe (DIG) Hsa-miR-23a-3p miRNA Probe (DIG) Hsa-miR-24-3p miRNA Probe (DIG) Hsa-miR-26a-5p miRNA Probe (DIG) Hsa-miR-28-3p miRNA Probe (DIG) Hsa-miR-29a-5pmiRNA Probe(DIG)

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Year

Technology or product that has been successfully developed

Hsa-miR-30a-5p miRNA Probe (DIG) Hsa-miR-30b-5p miRNA Probe (DIG) Hsa-miR-30c-5p miRNA Probe (DIG) Hsa-miR-30d-5p miRNA Probe (DIG) Hsa-miR-30e-5p miRNA Probe (DIG) Hsa-miR-31-5p miRNA Probe (DIG) Hsa-miR-95-3p miRNA Probe (DIG) Hsa-miR-100-5p miRNA Probe (DIG) Hsa-miR-101-3p miRNA Probe (DIG) Hsa-miR-103a-3p miRNA Probe (DIG) Hsa-miR-125b-5p miRNA Probe (DIG) Hsa-miR-126-3p miRNA Probe (DIG) Hsa-miR-127-3p miRNA Probe (DIG) Hsa-miR-133a-3p miRNA Probe (DIG) Hsa-miR-134-5p miRNA Probe (DIG) Hsa-miR-135a-5p miRNA Probe (DIG) Hsa-miR-135b-5p miRNA Probe (DIG) Hsa-miR-140-5p miRNA Probe (DIG) Hsa-miR-141-3p miRNA Probe (DIG) Hsa-miR-143-3p miRNA Probe (DIG) Hsa-miR-145-5p miRNA Probe (DIG) Hsa-miR-150-5p miRNA Probe (DIG) Hsa-miR-151a-3p miRNA Probe (DIG) Hsa-miR-152-3p miRNA Probe (DIG) Hsa-miR-155-5p miRNA Probe (DIG) Hsa-miR-182-5p miRNA Probe (DIG) Hsa-miR-183-5p miRNA Probe (DIG) Hsa-miR-192-5p miRNA Probe (DIG) Hsa-miR-193a-3p miRNA Probe (DIG) Hsa-miR-195-5p miRNA Probe (DIG) Hsa-miR-196a-5p miRNA Probe (DIG) Hsa-miR-196b-5p miRNA Probe (DIG) Hsa-miR-197-3p miRNA Probe (DIG) Hsa-miR-198 miRNA Probe (DIG) Hsa-miR-200a-3p miRNA Probe (DIG) Hsa-miR-202-3p miRNA Probe (DIG) Hsa-miR-203a-3p miRNA Probe (DIG) Hsa-miR-205-5p miRNA Probe (DIG) Hsa-miR-206 miRNA Probe (DIG) Hsa-miR-210-3p miRNA Probe (DIG) Hsa-miR-214-3pmiRNA Probe(DIG)

5.1.4 Long- and short-term business development plans

1. Short-term business development plan

(1) Antibody reagent category

Regarding bio-reagent product line for RUO, Abnova will continue to put more investment in the production of mAbs through cell culture processes and its sales. In addition, Abnova is also actively developing customized miRNA probe services and general products, circRNA Sponge, recombinant antibodies, nanobodies, and reagents for CellTX[TM ] cellular therapy,

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providing the most advanced research tools and a wide range of choices to support customers in the development of relevant research fields.

The established global distribution network of Abnova is the main sales channel of the Company, contributing the majority of operating revenue for reagent products. With years of brand building, the Company has successfully increased the direct purchase willingness from the end users through online purchase platform. In addition, the increasing demand for customized services from end customers in specialized research fields, biotech companies, and pharmaceutical industry has driven Abnova's efforts to meet the professional and quality requirements of both direct and customized demand customers, enhancing customer loyalty and product repurchase frequency through product promotion. For e-commerce marketing platforms, Abnova has achieved good marketing results on Google, BioCompare, and LinkedIn. In 2023, Abnova established a new official website, offering direct customers a simpler, more convenient, and seamless online purchasing experience. The user-friendly design of the member center also takes into account mobile interface design, providing a new, visually intuitive appearance and comprehensive user browsing privacy protection. This meets consumer needs and increases the willingness of end customers to make direct purchases through the website. In 2024, Abnova will continue to optimize its official website to enhance user satisfaction.

• (2) CTC products and medical testing services:

• Abnova has successfully established the CytoQuest™ CR positive enrichment and LiquidCell™ negative enrichment platforms, and provides a complete range of biological assay testing kits. Abnova currently has resumed its collaboration with Hangzhou Watson Biotech Co., Ltd., for the sales and distribution of CTC products and testing services of Abnova in China. Also, Abnova plans to collaborate with interested partners in the US, Europe, and Japan to jointly develop local markets for CTC instruments and test kit sets through OEM customization. The LiquidCell™ platform continues to focus on the development of prenatal applications for pregnant women.

2. Long-term business development plan

In recent years, Abnova has been actively developing diagnostic reagents, antibody drugs and diagnostic instrument systems, expanding its product portfolio from antibody database establishment in the earlier period. The Company has focused on the production of biological reagents relating to clinical trials and in vitro diagnostics, offering to both internal and external customers of the Company for clinical trials or diagnostic medical device use. At the same time, Abnova has successfully launched mutaFISH™ probe for direct detection for gene mutations in cells and tissues. It is extended to its combination and application based on the principle of fluorescence in situ hybridization (FISH). At present, Abnova continues to collaborate with multiple suppliers, actively expanding the variety of ELISA kit product line.

In addition, Abnova will continue to develop CTC product lines and technical services, CTC product lines, mRNA cancer therapy platform, customized miRNA probe services and general products, circRNA Sponge, recombinant antibodies, nanobodies, and reagents for CellTX[TM] cellular therapy, providing the most advanced research tools and a wide range of choices to support customers in the development of relevant research fields, hoping it will benefit the longterm business development of the Company.

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5.2 Market and Sales Overview

5.2.1 Market analysis

1. Geographic areas where the main products (services) of the company are provided (supplied)

Unit: NT$ 1,000; %

(supplied)	(supplied)			Unit: NT$ 1,000; %	Unit: NT$ 1,000; %
Geographic area		FY 2022		FY 2023
		Sales Amount	Sales Proportion	Sales Amount	Sales Proportion
Domestic sales		29,325	7.12%	12,387	3.24%
Foreign sales	Americas	196,828	47.80%	192,568	50.40%
	Europe	112,624	27.35%	94,885	24.84%
	Others	72,979	17.73%	82,212	21.52%
	Total	382,431	92.88%	369,665	96.76%
Grand total		411,756	100.00%	382,052	100.00%

2. Market Share

• (1) Antibody reagent category

• Currently, no statistical information related to the antibody reagent industry and the market by relevant industry research institutions at home and abroad is available, hence, no public information can be used for market share calculation and analysis. According to the research of Biocompare Surveys and Report, no single company has been able to achieve a high market share primarily due to the high manufacturing costs and low efficiency of antibody production, numerous brands with varying quality, difference in customer's experimental needs and budget, resulting in a fragmented market share. The Company provides customers with a wide range of antibodies, mainly to maintain the willingness to repurchase of existing customers in order to maintain market share.

• (2) Detection system instruments

• Currently, the CRC enrichment, separation, and collection systems and next-generation gene sequencing belong to the field of precision medicine diagnostics. The former uses the biological or physical characteristics of cells to capture CRCs, which has the non-invasive advantage in medical testing and is suitable for liquid biopsy samples. The latter can analyze the genotype and phenotype of cells and is highly advanced in technology. At present, cell enrichment, separation, and collection systems are mainly used in scientific research, while their clinical application is still primarily in the stage of clinical verification or clinical trials. The market size and acceptance of these systems are progressing most rapidly in Mainland China. For CRC detection system, compared to similar competing products in Mainland China, the Company has slightly higher market share. With years of development, the technical accuracy and cost for the next-generation sequencing have reached the level of practical clinical application. Its application scope is extensive and can be used for tumor detection, genetic disease detection, newborn genetic testing, etc. This year, the Company has officially engaged in the next-generation sequencing market and collaborated with clinical doctors to design targeted gene panel sequencing of cancer to meet the market user needs.

3. Future demand and supply conditions and the market's growth potential

• (1) Antibody reagent category

• Based on the research report by the World Health Organization (WHO), the number of new cancer cases worldwide will reach 27 million per year by 2030, with 17 million deaths, and the situation may become even more severe. Not only European and American countries facing such situation, but the situation in developing countries such as China and India are fairly serious. Therefore, cancer prevention and treatment related products are becoming a

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focus for major global companies. Biopharmaceuticals are becoming increasingly important in the global pharmaceutical market, with treatment areas covering cancer, infectious diseases, neurological disorders, antivirals, diabetes, etc. In view of increasing market demand has not been addressed, therefore, coupled with the promising prospects of the antibody drug market and the support from both healthcare reform policies and the industry, the mAb drug development will continue to lead the global biotech industry.

• (2) Detection system instruments

The global cancer diagnostics market in 2018 was estimated to be worth USD$ 144.4 billion according to a report by GRAND VIEW RESEARCH, and it is expected to grow at a CAGR of 7.0% during the forecast period. In addition, a report by FMI market research in 2014 showed that the global liquid biopsy market is expected to grow at a CAGR of 21.7% over the next ten years, with the Asia-Pacific region (excluding Japan) expected to grow at a CAGR of 25.5%. The entire liquid biopsy market is expected to achieve USD$ 28.937 billion by the end of 2026. According to the analysis on the global cancer diagnostics market trends from 2013 to 2024 by GRAND VIEW RESEARCH, the global market value of nextgeneration cancer diagnosis reached USD$ 4.38 billion in 2015, and the market size is expected to continue to grow significantly.

The next-generation cancer diagnostic market can be roughly divided into areas of individual risk analysis, tumor screening, diagnosis-based prognosis, treatment monitoring, and companion diagnostics based on their functions. As different cancer patients have different prognoses, and prognosis plays a crucial role in personalized treatment, chemotherapy, radiation therapy, and gene therapy, the prognostic diagnosis market will grow significantly during the forecast period. According to a research report released by JP Morgan, the liquid biopsy market is divided into four areas: early screening, diagnostic typing, drug companion testing, and patient condition testing. The report predicts that the global market potential will reach USD$ 23 billion, with early screening and diagnosis of cancer will account the largest proportion.

4. Competitive Niche

• (1) Construct a complete antibody platform

• With years of antibody production experience under the process standardization, equipment automation, and product systematization, the Company has constructed a complete and extensive antibody database platform. Leveraging on the existing antibody platform, the Company identifies potential antibodies for antibody drug development, and develops into antibody database system with high added value and diagnostic reagents, and further develops into antibody drugs. Currently, the Company has successfully developed many highly specific antibody reagent products that are compatible with CTC detection instrument systems. This has also overcome a critical obstacle in technical applications that other CTC detection instrument companies have been struggling with.

• (2) Continuously develop new products

• Abnova has successfully developed a rabbit mAb platform by using its independently developed CRC enrichment system. The platform utilizes pre-immune rabbit plasma to isolate cells for production, which improves the screening throughput and significantly shortens the production cycle of rabbit mAb. Abnova predicts that the market demand for rabbit mAb will continue to increase in the next few years. At the same time, Abnova has successfully launched mutaFISH™ probe for direct detection for gene mutations in cells and tissues. It is extended to its combination and application based on the principle of FISH. At present, Abnova continues to collaborate with multiple suppliers, actively expanding the variety of ELISA kit product line. The Company is also developing customized miRNA probe services and general products, circRNA Sponge, recombinant antibodies, nanobodies, and

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reagents for CellTX[TM] cellular therapy, mRNA cancer therapy platform, to continue enhancing its competitiveness.

• (3) Customized antibody services

  • With years of antibody production experience, the Company has provided protein and antibody customization services to end customers in the professional research field, general biotech companies, pharmaceutical industry, etc., meeting the professional and quality requirements of customers, and enhancing customer willingness to use the Company's products and services in the future.

• (4) Multi-dimensional distribution network and collaborative partnerships

  • The global and regional distribution network system established by the Company is the main driver of the Company's operation. The Company establishes brand awareness and builds a customer base through well-known global distribution channels in the industry. Meanwhile, the Company establishes a direct sales customer base by collaborating with renowned academic institutions, research centers, and pharmaceutical companies at home and abroad. At the same time, Abnova has achieved good marketing results on Google, BioCompare, and LinkedIn. In 2023, Abnova established a new official website, offering direct customers a simpler, more convenient, and seamless online purchasing experience. The user-friendly design of the member center also takes into account mobile interface design, providing a new, visually intuitive appearance and comprehensive user browsing privacy protection. This meets consumer needs and increases the willingness of end customers to make direct purchases through the website. In 2024, Abnova will continue to optimize its official website to enhance user satisfaction.

5. Favorable and unfavorable factors for future development and the corresponding responses

(1) Favorable factors

Antibody reagents

• A. A complete antibody platform

• The antibody platform is an important foundation and asset of the Company, which can be used as an important tool for the development of medical diagnostic reagents and mAb drugs. The practical benefits of the Company's proprietary antibody database are highlighted when collaborating with external institutions to develop diagnostic reagents, drugs, and detection system instruments.

• B. Marketing channels network

• The Company's global sales network includes global or regional distribution contracts, that has established the sales channel to academic institutions, research centers, or pharmaceutical development companies worldwide through distributors. Meanwhile, the Company has a well-established online sales platform that enables customers to quickly and conveniently search for the products they need, providing them with complete product information and increasing their willingness to place orders.

• C. Promotion of precision medicine

• The implementation of "Precision Medicine Programs" by various countries will lead the way to a new era of medicine. Precision, timeliness, sharing, and personalization are the four main themes of the Precision Medicine Program. It is hoped that appropriate treatment can be delivered to patients at the appropriate time in the future, and public and private entities are encouraged to share information through the implementation of the program.

• D. Government supports the biotech industry

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The” Act for the Development of Biotech and Pharmaceutical Industry” has become a new development direction for Taiwan's biotech industry since 2022. The Act incorporated areas such as healthcare, medical devices, pharmaceuticals, and agricultural biotechnology based on the existing biotech industry. It is hoped that the development of the bioeconomy will drive the growth and diversification of Taiwan's industries and fields. Also, it is expected that the new government will provide more support and assistance to Taiwan's biotech industry.

• E. Continuously developing new products and applications

• The reagent production is mainly focused on the applications in combination with instrument systems, incorporating reagents (e.g., antibodies, FISH probes, and reagent kits) and consumables, actively accumulating practical clinical experiments, developing more disease-specific detection reagent kits.

(2) Unfavorable factors

Antibody reagent category

• A. New technologies replacing the use of antibodies

• At present, antibodies are the most effective tools in protein research. However, there is currently no standardized method for producing antibodies, and the quality of the output can vary greatly depending on the manufacturing process, indirectly affecting the reliability of the antibodies. In the future, there may be other tools to replace antibodies. Response

The Company increases the functionality and usability of antibodies to increase the added value of products. The Company has focused on the production of biological reagents relating to clinical trials and in vitro diagnostics, offering to both internal and external customers of the Company for clinical trials or diagnostic medical device use, creating business opportunities beyond the sales for general research purposes only.

• B. The antibody market is becoming increasingly competitive There are many brands of antibodies on the market, with varying levels of quality. Given that customers have limited research budgets, resulted in increasing price competition in the antibody market, especially with low-priced but poor-quality brands from Mainland China disrupting the pricing of antibodies and affecting sales profits. Response

Pharmaceutical or biotech companies have a lot of purchasing opportunities for a variety of products due to R&D needs. The Company offers a diverse selection of antibodies, including unique antibody products, providing customers with a one-stop solution to address all their product needs. In addition to maintaining the quality of the products, the Company will also conduct additional application testing on specific antibodies to increase their added value and differentiate them in the market, in response to the price war in the antibody market.

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5.2.2 Usage and manufacturing processes for the company's main products 1. Monoclonal Antibodies

A. Applications of Monoclonal Antibodies:

Product category	Applications
Monoclonal Antibodies	Chemical reagents testing, agricultural testing reagents. Animal model tests and pre-clinical test reagents. Laboratory reagents testing.

B. Production Processes for Monoclonal Antibodies:

==> picture [144 x 383] intentionally omitted <==

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

Immunization
Serum titer test
Cell fusion
Antibody screening I
Subcloning and cell expansion I
Antibody screening II
Subcloning and cell expansion II
Ascites production
Monoclonal antibody purification
Identification and characterization
of monoclonal antibody
----- End of picture text -----

2. Polyclonal Antibodies

A. Applications of Polyclonal Antibodies:

Product category	Applications
Polyclonal Antibodies	Chemical reagents testing, agricultural testing reagents.
	Animal model tests and pre-clinical test reagents.
	Laboratory reagents testing.

B. Production Processes for Polyclonal Antibodies:

==> picture [139 x 131] intentionally omitted <==

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

Immunization
Serum collection and antibody
purification
Identification and
characterization of polyclonal
antibody
----- End of picture text -----

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3. Recombinant Proteins

A. Applications of Recombinant Proteins:

Product category	Applications
Recombinant Proteins	Chemical reagents testing, agricultural testing reagents.
	Animal model tests and pre-clinical test reagents.
	Laboratory reagents testing.

B. Production Processes for Recombinant Proteins:

==> picture [156 x 173] intentionally omitted <==

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

DNA construction
In vitro transcription
In vitro translation
Recombinant protein purification
Identification and characterization of
recombinant protein
----- End of picture text -----

5.2.3 Supply situation for the company's major raw materials

Major Raw Materials	Major Suppliers	Supply Situation
Protein raw materials	CellFree Sciences, Co. LTD.	Stable, good
Reagent for cell culture	Thermo Fisher Scientific, Level Biotechnology Inc., UNI- ONWARD Corp.	Stable, good
Plasmid extraction kit	QIAGEN Taiwan Company Ltd .	Stable, good
Purification reagent	UNI-ONWARD Corp., Level Biotechnology Inc.	Stable, good
Adjuvant	UNI-ONWARD Corp., Level Biotechnology Inc.	Stable, good

• 5.2.4 List of suppliers and clients accounting for 10 percent or more of the company's total procurement (sales) amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement (sales) accounted for by each, and an explanation of the reason for increases or decreases

1. Information on major suppliers in the 2 most recent fiscal years:

The information on major suppliers for FY 2022 and FY2023 as shown below:

						Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
Item		FY 2022				FY 2023
	Name	Amount	Percentage of annual net procurement amount(%)	Relationship with issuer	Name	Amount	Percentage of annual net procurement amount(%)	Relationship with issuer
1	Others	118,312	100.00	-	Others	134,837	100.00	-
	Net procurement amount	118,312	100.00	-	Net procurement amount	134,837	100.00	-

Reason for increase or decrease

In 2022 & 2023, there was no supplier whose net purchase amount accounted for more than 10% of the total net purchase amount.

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2. Information on major customers in the 2 most recent fiscal years:

Unit: NT$ 1,000

					Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
Item	FY 2022				FY 2023
	Name	Amount	Percentage of annual net sales amount (%)	Relationship with issuer	Name	Amount	Percentage of annual net sales amount (%) R w	elationship ith issuer
1	Abcamplc	59,699	14.50	-	Abcamplc	44,423	11.63	-
2	Others	352,057	85.50	-	Others	337,629	88.37	-
	Net sales amount	411,756	100.00		Net sales amount	382,052	100.00

Reason for increase or decrease

The decrease in sales amount for Abcam plc compared to the previous period was mainly due to an decrease in customer demand.

5.2.5 Production in the Last Two Years

				Unit: mg, mL, NT$ thousands	Unit: mg, mL, NT$ thousands	Unit: mg, mL, NT$ thousands
Year		FY 2022			FY 2023
Out put Major Products	Capacity	Quantity	Amount	Capacity	Quantity	Amount
Monoclonal Antibodies （unit:mg）	2,387 mg	2,261 mg	6,704	3,419 mg	3,281 mg	10,193
Polyclonal Antibodies - unpurified（unit:mL）	4,307 mL	3,896 mL	3,490	3,129 mL	3,097 mL	3,867
Polyclonal Antibodies - purified（unit:mg ）	731 mg	666 mg	1,932	531 mg	498 mg	1,634
Recombinant Proteins （unit:mg）	188 mg	178 mg	11,096	121 mg	114 mg	7,047

5.2.6 The volume of units sold for the 2 most recent fiscal years

Unit: mg; ml; NT$ 1,000

Year	FY 2022	FY 2022	FY 2022	FY 2022	FY 2023	FY 2023	FY 2023	FY 2023
Sales Volume Main Product	Domestic Sales		Foreign Sales		Domestic Sales		Foreign Sales
	**Quantity **	Amount	**Quantity **	Amount	**Quantity **	Amount	**Quantity **	Amount
mAb (Unit: mg)	10.54	1,035	2,117.38	131,719	105	1,142	8,788.00	119,869
Pab-unpurified (Unit:ml)	0.45	50	29.80	2,730	7	40	422.00	2,847
Pab-purified (Unit: mg)	1.19	154	329.84	27,767	15	143	2,715.00	21,472
Protein (Unit: mg)	1.53	1,089	114.03	65,736	43	528	3,671.00	62,722
Antibody pair(Unit: Set)	3,569	17,746	7,865	75,477	90	1,709	2,142.00	74,881
Detection instrument (Unit: Set)	0	0	2	(1,908)	0	0	20	7,343
Others	Note	9,251	Note	80,910	註	8,825	註	80,531
Total	-	29,325	-	382,431	-	12,387	-	369,665

Note: Other products cannot be quantified using the same unit of measurement due to the variety of product types.

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5.3 The number of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, their average years of service, average age, and education levels

	Year	FY 2022	FY 2023	As of April 3, 2024
Number of employees	Manufacturing personnel	60	55	55
	Sales and marketing personnel	31	30	29
	R&D personnel	9	9	8
	Total	100	94	92
Average years of age		42.55	43.60	42.85
Average years of service		12.01	12.19	12.19
Education levels	Ph.D.	5%	5%	5.43%
	Master’s	26%	29%	29.35%
	Bachelor’s or other higher education	69%	65%	64.13%
	High school	0%	1%	1.09%
	Below high school	0%	0%	0%

5.4 Environmental Protection Expenditure

No environmental protection expenditure

5.5 Labor Relations

5.5.1 Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests

1. Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests:

2. (1) Employee benefit plans and implementation status

   • Both labor and management in the Company have a consensus of complementary and synchronous growth. The Company has established an Employee Welfare Committee and has set aside welfare funds and managed related welfare matters in accordance with regulations. The main employee benefit plans of the Company include meal subsidies, subsidies (vouchers) during festival seasons, Chinese New Year lottery, wedding/funeral subsidies, group insurance, health examination, discounts at designated stores, etc.

3. (2) Continuing education, training, and implementation status To enhance the quality of employees and strengthen their work efficiency and quality, the Company provides guidance and training on job responsibilities to new employees. The Company also conducts professional education and training to employees based on their job requirements from time to time, including both internal and external training. The education and training received by employees are recorded and managed, with a view to training professional talents and effectively utilizing talents.

4. (3) Retirement system and implementation status The Company has established a "Supervisory Committee of Labor Retirement Fund" to safeguard the rights and interests of employees, protect employees' livelihood after retirement, and promote labor-management relations. The Company makes monthly contributions to the pension fund account with the Bank of Taiwan. In addition, since July 2005, in accordance with the Labor Pension Act, the Company has been contributed labor pension funds to individual labor pension accounts at the Bureau of Labor Insurance for employees to protect employees' livelihood after retirement.

5. 101 -

6. (4) Status of labor-management agreements and measures for preserving employees' rights and interests

   • The Company has established an internal control system for procedures governing salary and personnel-related matters, which serves as a common standard for the Company and employees. The Company also regularly conducts labor-management meetings to promote an exchange of opinions between labor and management. Employees are provided with channels for complaint and communication, employees’ opinions are sufficiently taken into account, and employees’ rights and interests are also reasonably protected.

7. 5.5.2 Any losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to labor disputes, and disclosing an estimate of possible expenses that could be incurred currently and, in the future, and measures being or to be taken: None.

5.6 Cyber Security Management:

5.6.1 Cyber security risk management framework, cyber security policies, concrete management programs, and investments in resources for cyber security management

1. Cyber security risk management framework:

To implement the Company's cyber security measures and strengthen cyber security management across all departments, the "Cyber Security Committee" has been established in accordance with the cyber security policy.

• (1) Responsibilities

• Formulate cyber security policies and cyber security control mechanisms.

• Supervise the implementation of cyber security policies.

• ˙ Establish corrective and preventive cyber security measures.

• ˙ Cyber security emergency response and crisis management.

• ˙ Implement cyber security education and training.

• (2) Organizational structure

==> picture [389 x 160] intentionally omitted <==

• (3) Job responsibilities

• ˙ Cyber Security Committee: Responsible for decision-making and management review in matters related to the cyber security management system.

• ˙ Cyber Security Audit Team: Responsible for internal audits of cyber security-related operations.

• ˙ Cyber Security Emergency Response Team: Responsible for emergency response to cyber security incidents and crisis management, planning and implementation of disaster recovery drills.

• ˙ Cyber Security Operations Team: Responsible for security management of cyber operations and reporting major cyber security incidents to the Cyber Security Emergency Response Team for handling.

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The "Personal Data Protection Management Committee" has been established in accordance with the Regulations Governing the Personal Data Protection Management to comply with the provisions of the Personal Data Protection Act (PDPA) and other regulations, and to implement matters such as personal data management, maintenance and execution to avoid infringement of the rights and interests of the interested party. The committee is convened by the General Manager, with other members including supervisors from departments such as the General Manager's Office, Legal Affairs Office, and Management Office.

2. Cyber Security Policy:

The "Cyber Security Policy" has been formulated as a guideline to strengthen cyber security management, ensuring the confidentiality, integrity, and reliability of the Company's information assets. It provides an information environment for the continuous operation of the Company's cyber security business while meeting the requirements of relevant laws and regulations and preventing internal or external deliberate or accidental threats. The Cyber Security Team continues to promote cyber security management to ensure the effective operation of cyber security management mechanisms.

The new hires of the Company are required to sign a confidentiality agreement on their first day, and they can access information circulation-related regulations from the Company's public folder. Moreover, through continuous education, training, and advocacy, the Company enhances cybersecurity awareness among employees, integrating it into various operations to ensure the implementation of the most secure and stringent cybersecurity measures. Due to the implementation of cyber security management, no major cyber security incidents occurred in FY 2023, and there were no penalties imposed by relevant competent authorities for cyber security.

The "Regulations Governing the Personal Data Protection Management" have been formulated as guidelines for procedures such as the collection, processing, and use of personal data. The Personal Data Protection Management Committee is responsible for formulating, promoting, and managing the personal data protection policy to ensure compliance with laws and regulations, as well as the data security of the parties involved. The Company's use of personal data is limited to specific purposes, and no relevant complaints have been received in FY 2023.

3. Specific management plans:

The scope of cyber security protection of the Company includes employees, customers, and operation-related IT software and hardware equipment as well as its control includes the Internet, personal information appliances (e.g., desktops, laptops, notebook computers, tablets, etc.), the Company's SAP system/ERP system, the Company's website, etc.

To implement the Company's cyber security measures, the Company utilizes the following management programs:

• (1) Establish a firewall to block viruses and hackers from attacking the Company's internal network.

• (2) Install Trend Micro antivirus software on all computers and set up automatic updates to enhance user protection.

• (3) Appoint external vendor to manage the website's network status, and continuously monitor abnormalities to prevent malicious attacks by hackers and ensure the normal operation of the network system.

• (4) Access rights to the internal information system are assigned based on the user's position. Users are required by the system to change their passwords every 3 months, and the length and strength of the passwords are also regulated.

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• (5) Data confidentiality is classified, and important data requires transmission using keys and passwords.

• (6) Implement regular backup and off-site storage of the Company's important information and conduct backup recovery and disaster drill operations every year.

• (7) In FY 2023, the Company's IT Department conducted a total of 2 cyber security advocacy programs.

• (8) The Company held a total of 2 cyber security review meetings in FY 2023.

• (9) The Company conducts internal and external audits on cyber security measures: Internal: The IT Department conducts regular self-assessment and inspection of cyber security operations every year. The Audit Office includes cyber security inspection operations in the necessary audit items of the annual audit plan and regularly verifies the continued effectiveness of the design and implementation.

• External: The CPAs from KPMG Taiwan conduct data audits every year.

• (10)Regularly report to the Board of Directors on the implementation status of cyber security (including personal data protection) operations every year. The most recent report to the Board of Directors was on November 8, 2023.

The collection, processing, and use of personal data by each department of the Company are conducted in good faith, aligning with the specific and justifiable purposes of collection. To implement the personal data protection within the Company, the Company utilizes the following management plan:

• (1) Appoint dedicated personnel in each department who are responsible for handling tasks related to personal data protection.

• (2) Each department establishes a list of personal data documents and conducts a personal data risk assessment. A personal data inventory is conducted once a year to implement risk control management.

• (3) The Legal Affairs Office regularly organizes personal data protection related education and training, as well as advocacy on personal data protection to enhance the concept of personal data security maintenance.

• (4) The Audit Office includes the operation of personal data protection management in the audit items of the annual audit plan and conducts regular checks.

• Resource allocation for cyber security management:

• (1) The Company has an IT Department, consisting of 1 Cyber Security Supervisor and 2 cyber security personnel. Dedicated personnel are responsible for software and hardware management as well as network security maintenance.

• (2) The Company has established a Webpage and e-Commerce Department. Dedicated personnel are responsible for managing the Company's website information, monitoring website traffic, and maintaining website security. In 2023, a new version of the Company website with a more user-friendly, seamless interface and enhanced cyber security protection was launched.

• (3) The Company's system software and electronic sign-off system are maintained by external consultants through contractual agreements. These vendors provide services such as troubleshooting, version updates, consultation, etc.

• (4) The Company has signed a firewall maintenance contract with an external vendor to provide maintenance and protection services.

• (5) The Company implements off-site backup and off-site data retention mechanisms, and regularly conducts disaster recovery drills.

• 104 -

(6) Education and training for the FY 2023:

Trainee	Course Title	Training Institution	Number of Training Hours
Cyber Security Supervisor	Digital Technology and Artificial Intelligence Trends and Risk Management	KPMG Taiwan	3 hours
Cyber security personnel	Digital Technology and Artificial Intelligence Trends and Risk Management	KPMG Taiwan	3 hours

5.6.2 Losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to significant cyber security incidents, the possible impacts therefrom, and measures being or to be taken

The Company continues to strengthen its internal and external cyber security concepts and is successively establishing a cyber security incident reporting and response mechanism to ensure proper response, control, and handling of cyber security incidents. Under the efforts of all colleagues, no major cyber security incidents occurred in FY 2023 up to the publication date of the annual report, and no financial and operational losses were incurred due to cyber security incidents.

• 105 -

5.7 Important Contracts

5.7 Important Contracts	5.7 Important Contracts
		January31,2024
Nature of the Contracts	Contracting Parties	Commencement and Expiration Dates	Major Content	Restrictiv e Clauses
Cooperation and supply contract	DEJIMA Infectious Diseases Research Alliance (DIDA), Nagasaki University	2023.6.19~2033.6.18	Cooperate to develop and supply specific raw materials for pre- clinical and clinical development of COVID-19 vaccines	None
Professional services agreement	KPMG Taiwan	2023.11.9~2025.9.30	Provide advice on corporate sustainability reports and GHG inventories	None
Commissioned production contract	Leadgene Biomedical, Inc.	2024.2.1~2025.7.31	Commissioning for nanobody production and collaboration	None
Construction contract	K-DESIGN CO., LTD.	2023.4.18~2023.5.25	Commissioning for the renovation of the 9th floor laboratory of the Company in Taipei	None
Construction contract	K-DESIGN CO., LTD.	2023.7.14~2023.7.31	Commissioning for the renovation of the storage cabinets of 8th floor office of the Company in Taipei	None
Distributor agreement	Funakoshi Co., Ltd.	2007.5.1-2008.4.30 Automatic renewal upon expiration	Distributor in Japan	None
Distributor agreement	Abcam plc	2007.10.4-2008.10.3 Automatic renewal upon expiration	Global distributor	None
Distributor agreement	Sigma-Aldrich International GmbH	2008.6.1-2010.5.31 Automatic renewal upon expiration	Global distributor	None
Distributor agreement	Thermo Fisher Scientific	2010.3.15-2011.3.14 Automatic renewal upon expiration	Distributor in the US Granted distribution rights in India effective as of August 1, 2010	None
Distributor agreement	VWR International, LLC	2014.4.25-2017.4.24 Automatic renewal upon expiration	Distributor in the US and Canada	None
Distributor agreement	i-DNA Biotechnology Pte Ltd	2018.2.6~2019.2.5 Automatic renewal upon expiration	Distributor in Singapore, Malaysia, and Vietnam	None
Distributor agreement	Labex Corporation	2018.2.23-2019.2.22 Automatic renewal upon expiration	Distributor in India	None

• 106 -

VI. Financial Highlights

6.1 Financial summary for the past 5 fiscal years

6.1.1 Consolidated condensed balance sheets and statements of comprehensive income

1. Consolidated Condensed Balance Sheets

	Unit: NT$ 1,000	Unit: NT$ 1,000	Unit: NT$ 1,000	Unit: NT$ 1,000	Unit: NT$ 1,000	Unit: NT$ 1,000
Item	Year	2019	2020	2021	2022	2023
Current assets		703,309	773,848	786,290	928,192	919,822
Property, plant and	equipment	312,808	294,333	270,759	256,546	257,863
Intangible assets		69,370	71,140	67,659	68,815	69,640
Other assets		178,502	155,263	158,341	121,276	108,418
Total assets		1,263,989	1,294,584	1,283,049	1,374,829	1,355,743
Current liabilities	Before Distribution	64,298	74,574	62,726	72,819	62,602
	After Distribution	70,353	110,906	100,581	121,262	Note 2
Non-current Liabilities		7,288	8,916	8,567	10,016	6,822
Total Liabilities	Before Distribution	71,586	83,490	71,293	82,835	69,424
	After Distribution	77,641	119,822	99,148	131,278	Note 2
Equity Attributable to Shareholders of the Parent		1,192,403	1,211,094	1,211,756	1,291,994	1,286,319
Share Capital		605,536	605,536	605,536	605,536	605,536
Capital surplus		474,527	474,527	474,527	474,527	474,527
Retained earnings	Before Distribution	98,272	130,039	122,464	223,838	218,455
	After Distribution	92,217	93,707	94,609	175,395	Note 2
Other Equity		14,068	992	9,229	(11,907)	(12,199)
Non-controlling Interest			0	0	0	0
Total Equity	Before Distribution	1,192,403	1,211,094	1,211,756	1,291,994	1,286,319
	After Distribution	1,186,348	1,174,762	1,183,901	1,243,551	Note 2

Note 1: All financial data from 2019 to 2023 has been audited by CPAs. Note 2: Not yet distributed.

2. Condensed Statement of Comprehensive Income

2. Condensed Statement of Comprehensive Income	2. Condensed Statement of Comprehensive Income	2. Condensed Statement of Comprehensive Income	2. Condensed Statement of Comprehensive Income	2. Condensed Statement of Comprehensive Income	2. Condensed Statement of Comprehensive Income
Unit: NT$ 1,000 (Except EPS: NT$)
Year Item	2019	2020	2021	2022	2023
Sales Revenue	414,158	456,449	451,487	411,756	382,052
Gross Profit	185,350	213,501	197,339	201,429	173,915
Operating Income	2,644	57,668	43,820	64,426	47,194
Non-operating Income and Expenses	(1,664)	(8,619)	(7,526)	30,530	1,323
Profit Before Tax	980	49,049	36,294	94,956	48,517
Profit from Continuing Operations for the Year	3,263	36,526	28,369	74,843	43,678
Profit (Loss) for the Year	3,263	36,526	28,369	74,843	43,678
Other Comprehensive Income (Loss) for the Year (Net of Tax)	(1,760)	(11,780)	8,625	33,250	(910)
Total Comprehensive Income for the Year	1,503	24,746	36,994	108,093	42,768
Net Income Attributable to Shareholders of the Parent	3,263	36,526	28,369	74,843	43,678
Net Income Attributable to Non-controlling Interests	0	0	0	0	0
Total Comprehensive Income Attributable to Shareholders of the Parent	1,503	24,746	36,994	108,093	42,768
Total Comprehensive Income Attributable to Non-controlling Interests	0	0	0	0	0
Earnings Per Share	0.05	0.60	0.47	1.24	0.72

Note: All financial data from 2019 to 2023 has been audited by CPAs.

• 107 -

6.1.2 Parent company only condensed balance sheets and statements of comprehensive income

1. Condensed Balance Sheets – Parent Company Only

6.1.2 Parent company only condensed balance sheets and statements of comprehensive income 1. Condensed Balance Sheets – Parent Company Only	6.1.2 Parent company only condensed balance sheets and statements of comprehensive income 1. Condensed Balance Sheets – Parent Company Only	6.1.2 Parent company only condensed balance sheets and statements of comprehensive income 1. Condensed Balance Sheets – Parent Company Only	6.1.2 Parent company only condensed balance sheets and statements of comprehensive income 1. Condensed Balance Sheets – Parent Company Only	6.1.2 Parent company only condensed balance sheets and statements of comprehensive income 1. Condensed Balance Sheets – Parent Company Only	6.1.2 Parent company only condensed balance sheets and statements of comprehensive income 1. Condensed Balance Sheets – Parent Company Only	6.1.2 Parent company only condensed balance sheets and statements of comprehensive income 1. Condensed Balance Sheets – Parent Company Only
Unit: NT$ 1,000
Year Item		2019	2020	2021	2022	2023
Current assets		650,384	716,048	749,572	830,588	829,966
Property, Plants and Equipment		291,397	279,303	265,122	252,134	257,749
Intangible Assets		69,351	71,140	67,659	68,815	69,640
Other Assets		243,197	221,509	210,839	217,979	195,592
Total assets		1,254,329	1,288,000	1,293,192	1,369,516	1,352,947
Current Liabilities	Before Distribution	59,810	72,004	80,253	67,506	59,806
	After Distribution	65,865	108,336	108,108	115,949	Note 2
Non-current Liabilities		2,116	4,902	1,183	10,016	6,822
Total Liabilities	Before Distribution	61,926	76,906	81,436	77,522	66,628
	After Distribution	67,981	113,238	109,291	125,965	Note 2
Equity Attributable to Shareholders of the Parent		-	-	-	-	-
Share Capital		605,536	605,536	605,536	605,536	605,536
Capital surplus		474,527	474,527	474,527	474,527	474,527
Retained earnings	Before Distribution	98,272	130,039	122,464	223,838	218,455
	After Distribution	92,217	93,707	94,609	175,395	Note 2
Other Equity		14,068	992	9,229	(11,907)	(12,199)
Non-controlling Interest		-	-	-	-	-
Total Equity	Before Distribution	1,192,403	1,211,094	1,211,756	1,291,994	1,286,319
	After Distribution	1,186,348	1,175,572	1,183,901	1,243,551	Note 2

Note 1: All financial data from 2019 to 2023 has been audited by CPAs. Note 2: Not yet distributed.

2. Condensed Statement of Comprehensive Income – Parent Company Only

2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only	2. Condensed Statement of Comprehensive Income – Parent Company Only
Unit: NT$ 1,000 (Except EPS: NT$)
Year Item	2019	2020	2021	2022	2023
Sales Revenue	402,865	454,647	450,383	410,320	380,593
Gross Profit	181,339	211,701	196,058	199,993	172,456
Operating Income	13,431	70,259	57,050	69,067	48,415
Non-operating Income and Expenses	(12,518)	(21,279)	(20,815)	25,848	62
Profit Before Tax	913	48,980	36,235	94,915	48,477
Profit from Continuing Operations for the Year	3,263	36,526	28,369	74,843	43,678
Profit (Loss) for the Year	3,263	36,526	28,369	74,843	43,678
Other Comprehensive Income (Loss) for the Year (Net of Tax)	(1,760)	(11,780)	8,625	33,250	(910)
Total Comprehensive Income for the Year	1,503	24,746	36,994	108,093	42,768
Net Income Attributable to Shareholders of the Parent	3,263	36,526	28,369	74,843	43,678
Net Income Attributable to Non-controlling Interests	-	-	-	-	-
Total Comprehensive Income Attributable to Shareholders of the Parent	1,503	24,746	36,994	108,093	42,768
Total Comprehensive Income Attributable to Non- controlling Interests	-	-	-	-	-
Earnings Per Share	0.05	0.6	0.47	1.24	0.72

Note: All financial data from 2019 to 2023 has been audited by CPAs.

• 108 -

6.1.3 Name of the certified public accountant and the auditor's opinion for the past 5 fiscal years

Year	CPA	Accounting Firm	Audit Opinion
2019	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion
2020	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion
2021	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion
2022	Hsu Shu Min, Kuo Rou Lan	KPMG Taiwan	Unqualified Opinion
2023	ChiangHsiaoLing,KuoRouLan	KPMGTaiwan	Unqualified Opinion

6.2 Financial analysis for the past 5 fiscal years

6.2.1 Analysis of Consolidated Financial Statements

Year Analysis Item	Year Analysis Item	2019	2020	2021	2022	2023
Financial Structure	Debts Ratio (%)	5.66	6.45	5.56	6.03	5.12
	Long-term Fund to Property, Plant and Equipment (%)	383.52	414.50	450.70	507.52	501.48
Solvency Analysis	Current Ratio (%)	1,093.83	1,037.69	1,253.53	1,274.66	1,469.32
	Quick Ratio (%)	359.02	414.09	570.15	719.34	789.97
	Times Interest Earned (Times)	36,923	17,936	14,853.66	62,571.05	34,266.90
Operating Performance	Accounts Receivable Turnover (Times)	4.69	5.96	7.20	6.26	6.73
	Average Collection Days	78	61	51	58	54
	Inventory Turnover (Times)	0.23	0.25	0.27	0.24	0.24
	Accounts Payable Turnover (Times)	16.86	17.41	17.87	15.89	13.91
	Average Days in Sales	1,587	1,460	1,352	1,521	1,521
	Property, Plant and Equipment Turnover (Times)	1.26	1.50	1.60	1.56	1.49
	Total Assets Turnover (Times)	0.32	0.36	0.35	0.31	0.28
Profitability	Return on Total Assets (%)	0.28	2.87	2.22	5.64	3.21
	Return on Equity (%)	0.27	3.04	2.34	5.98	3.39
	Pre-tax Income to Paid- in Capital Ratio (%)	0.16	8.10	5.99	15.68	8.01
	Net Profit Ratio (%)	0.79	8.00	6.28	18.18	11.43
	Earnings Per Share (NT$)	0.05	0.60	0.47	1.24	0.72
Cash Flow	Cash Flow Ratio (%)	115.89	141.20	148.08	182.20	121.75
	Cash Flow Adequacy Ratio (%)	61.15	124.56	284.58	1,505.31	1,078.74
	Cash Flow Reinvestment Ratio (%)	3.30	8.18	4.61	7.78	2.07
Leverage	Operating Leverage	58.09	3.46	4.13	2.88	3.44
	Financial Leverage	1.16	1.01	1.01	1.00	1.00

Note 1: All financial data from 2019 to 2023 has been audited by CPAs.

The causes of changes in the financial ratios for the preceding 2 fiscal years (Analysis of deviation over 20%):

1. Decrease in times interest earned: Mainly due to the decrease in earnings before tax in 2023.

2. Increase in return on total assets: Mainly due to the decrease in net income after tax in 2023.

3. Increase in return on equity: Mainly due to the decrease in net income after tax in 2023.

4. Decrease in the ratio of earnings before tax to paid-in capital: Due to the decrease in earnings before tax in 2023, resulting in a decrease in the ratio of earnings before tax to paid-in capital.

5. Decrease in net profit margin (%): Mainly due to the decrease in net income after tax in 2023.

6. Decrease in earnings per share (NT $): Mainly due to the decrease in net income after tax in 2023.

7. Decrease in cash flow adequacy ratio: Mainly due to the decrease in net cash flow from operating activities.

8. Decrease in cash flow adequacy ratio: Mainly due to the decrease in net cash flow from operating activities in the most recent 5 years.

9. Decrease in cash reinvestment ratio: Mainly due to the decrease in net cash flow from operating activities.

10. 109 -

Calculation formula for financial analysis:

1. Financial Structure

2. (1) Debt Ratio = Total Liabilities / Total Assets.

3. (2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment.

4. Solvency

5. (1) Current Ratio = Current Assets / Current Liabilities.

6. (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities.

7. (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses.

8. Operating Performance

9. (1) Accounts Receivable Turnover (including accounts receivables and notes receivables arising from operations) = Net Sales / Average Trade Receivables (including accounts receivables and notes receivable arising from operations).

10. (2) Average Collection Days = 365 / Accounts Receivable Turnover.

11. (3) Inventory Turnover = Cost of Sales / Average Inventory.

12. (4) Accounts Payable Turnover (including accounts payables and notes payables arising from operations) = Cost of Sales / Average Trade Payables (including accounts payables and notes payables arising from operations).

13. (5) Average Days in Sales = 365 / Average Inventory Turnover.

14. (6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment.

15. (7) Total Assets Turnover = Net Sales / Average Total Assets.

16. Profitability

17. (1) Return on Total Assets = (Net Income + Interest Expenses x (1 - Effective Tax Rate)) / Average Total Assets.

18. (2) Return on Equity = Net Income / Average Equity.

19. (3) Net Profit Ratio = Net Income / Net Sales.

20. (4) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding.

21. Cash Flow

22. (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities.

23. (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend.

24. (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Non-current Assets + Working Capital).

25. Leverage

26. (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations.

27. (2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

28. 110 -

6.2.2 Analysis of individual financial statements

Analysis Item	Year	2019	2020	2021	2022	2023
Financial Structure (%)	Debts Ratio(%)	4.94	5.97	6.30	5.66	4.92
	Long-term Fund to Property, Plant and Equipment(%)	409.93	435.66	457.50	516.40	501.71
Solvency (%)	Current Ratio(%)	1087.42	994.46	934.01	1,230.39	1,387.76
	Quick Ratio(%)	310.65	359.35	407.15	631.82	677.19
	Times Interest Earned(Times)	477.27	35,337.41	19,581.18	72,005.30	34,726.43
Operating Performance	Accounts Receivable Turnover (Times)	4.62	6.11	7.32	6.23	6.71
	Average Collection Days	79	60	50	59	55
	InventoryTurnover(Times)	0.23	0.25	0.27	0.24	0.24
	Accounts Payable Turnover (Times)	15.73	17.41	17.89	15.89	13.91
	Average Days in Sales	1,587	1,460	1,352	1,521	1,521
	Property, Plant and Equipment Turnover(Times)	1.35	1.59	1.65	1.59	1.49
	Total Assets Turnover(Times)	0.32	0.36	0.35	0.31	0.28
Profitability	Return on Total Assets(%)	0.27	2.88	2.21	5.63	3.22
	Return on Equity (%)	0.27	3.04	2.34	5.98	3.39
	Pre-tax Income to Paid- in Capital Ratio(%)	0.15	8.09	5.98	15.67	8.01
	Net Profit Ratio(%)	0.81	8.03	9.42	18.24	11.48
	Earnings Per Share(NT$)	0.05	0.60	0.47	1.24	0.72
Cash Flow	Cash Flow Ratio(%)	120.52	149.37	137.95	170.52	127.92
	Cash Flow AdequacyRatio(%)	68.46	138.93	287.60	1,199.21	820.74
	Cash Flow Reinvestment Ratio (%)	3.36	9.07	6.51	7.01	2.24
Leverage	OperatingLeverage	11.38	2.86	3.23	2.72	3.36
	Financial Leverage	1.02	1.00	1.00	1.00	1.00

Note 1: All financial data from 2019 to 2023 has been audited by CPAs.

The causes of changes in the financial ratios for the preceding 2 fiscal years (Analysis of deviation over 20%):

1. Decrease in times interest earned: Mainly due to the decrease in earnings before tax in 2023.

2. Decrease in return on total assets: Mainly due to the decrease in net income after tax in 2023.

3. Decrease in return on equity: Mainly due to the decrease in net income after tax in 2023.

4. Decrease in the ratio of earnings before tax to paid-in capital: Due to the decrease in earnings before tax in 2023, resulting in a decrease in the ratio of earnings before tax to paid-in capital.

5. Decrease in net profit margin (%): Mainly due to the decrease in net income after tax in 2023.

6. Decrease in earnings per share (NT $): Mainly due to the decrease in net income after tax in 2023.

7. Decrease in cash flow adequacy ratio: Mainly due to the decrease in net cash flow from operating activities.

8. Decrease in cash flow adequacy ratio: Mainly due to the decrease in net cash flow from operating activities in the most recent five years.

9. Decrease in cash reinvestment ratio: Mainly due to the decrease in net cash flow from operating activities.

10. Increase in operating leverage: Due to the decrease in operating income for the current period.

11. 111 -

Calculation formula for financial analysis:

1. Financial Structure

2. (1) Debt Ratio = Total Liabilities / Total Assets.

3. (2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment.

4. Solvency

5. (1) Current Ratio = Current Assets / Current Liabilities.

6. (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities.

7. (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses.

8. Operating Performance

9. (1) Accounts Receivable Turnover (including accounts receivables and notes receivables arising from operations) = Net Sales / Average Trade Receivables (including accounts receivables and notes receivable arising from operations).

10. (2) Average Collection Days = 365 / Accounts Receivable Turnover.

11. (3) Inventory Turnover = Cost of Sales / Average Inventory.

12. (4) Accounts Payable Turnover (including accounts payables and notes payables arising from operations) = Cost of Sales / Average Trade Payables (including accounts payables and notes payables arising from operations).

13. (5) Average Days in Sales = 365 / Average Inventory Turnover.

14. (6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment.

15. (7) Total Assets Turnover = Net Sales / Average Total Assets.

16. Profitability

17. (1) Return on Total Assets = (Net Income + Interest Expenses x (1 - Effective Tax Rate)) / Average Total Assets.

18. (2) Return on Equity = Net Income / Average Equity.

19. (3) Net Profit Ratio = Net Income / Net Sales.

20. (4) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding.

21. Cash Flow

22. (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities.

23. (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend.

24. (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Property, Plant and Equipment + Long-term Investments + Other Non-current Assets + Working Capital).

25. Leverage

26. (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations.

27. 112 -

6.3 Inspection Report of Supervisors or Audit Committee for the most recent year's financial statement

Abnova (Taiwan) Corporation Inspection Report of Audit Committee

The Board of Directors prepared the Company's business report, financial statements, and profit distribution proposal of 2023. The financial statements have been audited by KPMG accounting firm and an audit report has been issued. The above business report, financial statements, and profit distribution proposal have been audited by the Audit Committee and there is no nonconformity, so the feedback is reported as above in accordance with the relevant provisions of the Securities and Exchange Act and the Company Act, please proceed to certificate.

Abnova (Taiwan) Corporation

Convener of Audit Committee: Cha Anna

February 27, 2024

6.4 Consolidated financial statements for the most recent fiscal year: Please refer to page 122. 6.5 Parent company only financial statements for the most recent fiscal year: Please refer to page 170. 6.6 If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation: None.

• 113 -

VII. Review of Financial Conditions, Operating Results, and Risk Management

7.1 Analysis of Financial Status

			Unit: NT$ 1,000; %	Unit: NT$ 1,000; %
Year Item	2022	2023	Difference
			Amount	%
Current assets	928,192	919,822	(8,370)	(1%)
Property, plant and equipment	256,546	257,863	1,317	1%
Intangible Assets	68,815	69,640	825	1%
Other Assets	121,276	108,418	(12,858)	(11%)
Total assets	1,374,829	1,355,743	(19,086)	(1%)
Current Liabilities	72,819	62,602	(10,217)	(14%)
Long-term Liabilities	0	0	0	0
Other Liabilities	10,016	6,822	(3,194)	(32%)
Total Liabilities	82,835	69,424	(13,411)	(16%)
Share Capital	605,536	605,536	0	0
Capital surplus	474,527	474,527	0	0
Retained earnings	223,838	218,455	(5,383)	(2%)
Other Equity	(11,907)	(12,199)	(292)	2%
Total Equity Attributable to Shareholders	1,291,994	1,286,319	(5,675)	(0.4%)
Analysis of Deviation over 20%: 1. The change rate in other liabilities reached 32%, mainly due to the decrease in deferred income tax liabilities and lease liabilities.

7.2 Analysis of Operation Results

7.2.1 Analysis of Financial Performance

nalysis of Operation Results 7.2.1 Analysis of Financial Performance	nalysis of Operation Results 7.2.1 Analysis of Financial Performance	nalysis of Operation Results 7.2.1 Analysis of Financial Performance	nalysis of Operation Results 7.2.1 Analysis of Financial Performance	nalysis of Operation Results 7.2.1 Analysis of Financial Performance
Unit: NT$ 1,000
Year Item	2022	2023	Increase (Decrease) Amount	Deviation (%)
Sales Revenue	418,396	382,730	(35,666)	(8.52)
Deduct: Sales returns and allowances	(6,640)	(678)	5,962	(89.79)
Net Sales	411,756	382,052	(29,704)	(7.21)
Operating Costs	(210,327)	(208,137)	2,190	(1.04)
Gross Profit	201,429	173,915	(27,514)	(13.66)
Operating Expenses	(137,003)	(126,721)	10,282	(7.50)
Operating Profit	64,426	47,194	(17,232)	(26.75)
Non-operating Income and Benefits	30,699	10,680	(20,019)	(65.21)
Non-operating Expenses and Losses	(169)	(9,357)	(9,188)	5,436.69
Profit Before Tax	94,956	48,517	(46,439)	(48.91)
Deduct: Income Tax (Expenses) Benefits	(20,113)	(4,839)	15,274	(75.94)
Profit After Tax	74,843	43,678	(31,165)	(41.64)
Analysis of Deviation over 20% (Analysis is not required if the deviation does not exceed 20%): 1. Decrease in sales returns and sales discounts and allowances are mainly due to the decrease in sales discounts provided to customers in the current period. 2. Decrease in net operating profit: Mainly due to the decrease in sales revenue. 3. Decrease in non-operating income and profit: Mainly due to the decrease in foreign exchange gains. 4. Increase in non-operating expenses and losses: Mainly due to increase in other losses. 5. Decrease in net profit before tax: Mainly due to the above-mentioned reasons. 6. Increase in income tax expense: Mainly due to the decrease in profits in the current period. 7. Decrease in net profit after tax: Mainly due to the above-mentioned reasons.

7.2.2 Sales volume forecast and the basis therefor, and the effect upon the company's financial operations as well as measures to be taken in response

Please refer to the 5.2 Market and Sales Overview under Chapter V. Operational Highlights described in this annual report.

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7.3 Analysis of Cash Flow

7.3.1 Analysis of cash flow changes during the most recent fiscal year

Year Item	2022	2023	Deviation (%)
Cash Flow Ratio	182.2%	121.75%	(33.18)
Cash Flow Adequacy Ratio	1,505.31%	1,078.74 %	(28.34)
Cash Reinvestment Ratio	7.78%	2.43%	(68.72)
Decrease in cash flow ratio: Mainly due to decrease in net cash flow from operating activities. Decrease in cash flow adequacy ratio: Mainly due to decrease in net cash flow from operating activities in the past five years. Decrease in cash reinvestment ratio: Mainly due to decrease in net cash flow from operating activities.

7.3.2 Corrective measures to be taken in response to illiquidity: Not applicable.

7.3.3 Solvency analysis for the coming year

7.3.3 Solvency analysis for the coming year	7.3.3 Solvency analysis for the coming year	7.3.3 Solvency analysis for the coming year	7.3.3 Solvency analysis for the coming year
				Unit: NT$ 1,000
Estimated Cash and Cash Equivalents at Beginning of Year A	Estimated Net Cash Flow from Operating Activities B	Estimated Cash Outflow C	Estimated Cash Surplus (Deficit) A＋B－C	Estimated Remedy for Cash Deficit
				Investment Plan	Financial Plan
423,515	80,696	(51,338)	452,873	-	-
Analysis of cash flow 1. Operating activities: Mainly due to continued growth in the scale of operations in 2024 is expected and the net profit will increase, resulting in an increase in net cash flows from operating activities. 2. Investing activities: Mainly due to the acquisition of assets in response to operational needs in FY 2024. 3. Financing activities: Mainly due to cash dividends distribution is expected in 2024.

7.4 Effect upon financial operations of any major capital expenditures during the most recent fiscal year: None.

• 7.5 Reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year

7.5.1 Reinvestment policy for the most recent fiscal year

The relevant executive departments comply with the Company's reinvestment policy in accordance with the internal control system, such as the "Investment Cycle" and "Handling Procedures for Acquisition or Disposal of Assets". The aforementioned regulations or procedures have been discussed and approved by the Board of Directors or shareholders' meeting.

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7.5.2 The main reasons for the profits/losses generated thereby, the plan for improving reinvestment profitability, and investment plans for the coming year

Unit: NT$ 1,000

Description Item	Profit (Loss) Amount	Reinvestmen t Policy	Main Reasons for the Losses	Improvement Plan	Investment Plan for the Coming Year
Abnova GmbH	0	Distribution of biological products	Has not put into substantial operations	December 31, 2016, is the effective date of dissolution, and the liquidation process has been filed and processed in accordance with the law.	None
Abnova Holding Corporation	(10,504)	Investment business	Investment company	None	Depends on operational conditions
Abnova (Cayman)Corporati on	(10,394)	Investment business	Investment company	None	Depends on operational conditions
Abnova(HK)Limite d	(5,968)	Investment business	Investment company	None	Depends on operational conditions
Abnova Diagnostics (Japan)	(4,210)	R&D, production, sales and examination of medical device related products	Mainly involves relevant operating expenses incurred during the early stages of investment	Actively promoting inspection services business in Japan	Depends on operational conditions
AxleBio Ventures	(65)	Investment business	Investment company	None	None
Citil Pharma Incorporated	(491)	R&D of cell therapy technology	Mainly involves relevant operating expenses incurred during the early stages of investment	None	Depends on operational conditions

7.6. Risk analysis in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

7.6.1 Effect upon the company's profits (losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future

1. Interest rate: The Company is not affected by the interest rate as the Company has sufficient own funds, and only has small short-term loans in line with banking relationships. In addition,

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the Company has established a longstanding and close relationship with the banks, so that the Company is able to obtain funds at a lower cost. In the future, the Company will take into account the amount and cost of various sources of funds in order to raise the necessary funds.

1. Exchange Rate:

   • A. The quotation for export sales of the Company is often denominated in US dollars or euros. The Company has opened foreign currency accounts to manage and sell foreign currency positions in a timely manner, with a view to minimizing the impact of exchange rate fluctuations. Moreover, the foreign currency generated from sales are used to pay foreign currency payables, achieving a more flexible way of natural hedging, reducing the impact of exchange rate changes on the Company's profitability.

   • B. The Company has established "Handling Procedures for Acquisition or Disposal of Assets” to govern the procedures related to derivatives. In addition, necessary measures will be taken according to the situations of foreign currency positions and exchange rate fluctuations to minimize the foreign exchange risk derived from the operating activities of the Company.

2. Inflation: The Company's profits and losses have not been significantly affected by inflation. The main raw materials are purchased from suppliers at home and abroad, and the impact of inflation on the Company is minimized through supplier diversification.

3. 7.6.2 The company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future

4. The policy for loaning funds to others of the Company is formulated in accordance with the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees” of the Company. The Company provides loan funds to its subsidiaries, and the monetary amount of the loan of funds shall not exceed the maximum amount permitted as prescribed in the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees”. Also, the Company's operations, finances, and future development are taken into consideration in providing loan funds to effectively control risks, and the permitted amount of loan funds will not adversely affect the financial position of the Company. At present, the Company does not engage in high-risk investments, highly leveraged investments, endorsements, guarantees, and derivatives transactions.

7.6.3 Research and development work to be carried out in the future, and further expenditures expected for research and development work

The existing sufficient and resourceful antibody database of the Company has been used to develop antibody reagents and applications for system integration. Also, the Company is actively developing diagnostic reagents and system instruments. For the Company's R&D plan in FY 2024, please refer to 3. Development of new products on pages 78-80. An estimated R&D expenses for clinical trials and proprietary technology licensing of NT$ 34,776,000 to be invested by the Company in FY 2024.

7.6.4 Effect on the company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response

• The Company's operations comply with the relevant domestic and foreign laws and regulations. The Company pays attention at all times to the domestic and foreign policy trend developments and regulatory changes, collecting relevant information, which will be served as a reference for management in adjusting relevant operational strategies of the Company. To date, the Company has not been affected by any important policies adopted or changes in the legal environment at home and abroad which will affect the financial operations of the Company.

7.6.5 Effect on the company's financial operations of developments in science and technology as well as industrial change (including cyber security risks), and measures to be taken in response 94

The major products of the Company have been widely accepted by customers, and the Company has also been actively enhancing its R&D capabilities and keeping track of industry trends and competitor information, as well as adopting a prudent financial management strategy to maintain

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its market competitiveness. In the future, the Company will continue to monitor relevant technological changes and evaluate their impact on the Company's operations, making corresponding adjustments to enhance the business development and financial position of the Company.

7.6.6 Effect on the company's crisis management of changes in the company's corporate image, and measures to be taken in response

The Company has always adhered to the operating principles of honesty and professionalism and emphasized the corporate image. To date, there shall not have been any event affecting the corporate image of the Company.

7.6.7 Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken

There are no possible risks associated with any merger and acquisitions as the Company does not have any plans for mergers and acquisitions for the time being.

7.6.8 Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken

• There are no possible risks associated with any plant expansion as the Company does not have any plans for plant expansion for the time being.

7.6.9 Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken

Procurement: The Company has diversified suppliers at home and abroad and has established good cooperative relationships with existing suppliers. To date, there are no risks associated with any consolidation of purchasing operations.

Sales: The Company has established good cooperative relationships with existing global and regional distributors and is actively increasing its customer base through direct sales via the Company website. To date, there are no risks associated with any consolidation of sales operations.

7.6.10 Effect upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken

The Company currently does not have any major shareholders holding greater than a 10 percent stake. In the event a major quantity of shares has been transferred or has otherwise changed hands, it may result in a re-election of directors due to insufficient shareholding or more than one half of the total number of shares that have been transferred. Therefore, in addition to strengthening the functions of directors, directors are occasionally reminded about the impact of changes in shareholding on the Company's operations.

7.6.11 Effect upon and risk to company associated with any change in governance personnel or top management, and mitigation measures being or to be taken

In the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, there is no change in governance personnel or top management.

7.6.12 Litigious and non-litigious matters

If there has been any material impact upon shareholders' equity or prices for the company's securities as a result of any litigation, non-litigious proceeding, or administrative dispute involving the company that was finalized or remained pending up to the publication of the annual report, the annual report shall disclose the facts in dispute, amount in dispute, commencement date, main parties involved, and current status of the case: None.

• 7.6.13 Other important risks, and mitigation measures being or to be taken None.

7.7 Other important matters: None.

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VIII. Special Disclosure

8.1 Information of the Affiliates

8.1.1 Consolidated Business Report of the Affiliates

1. Overview of the Affiliates

(1) Basic Information of the Affiliates

		December 31, 2023; Unit: NT$ 1,000 Address Paid-In Capital Main Business or Items 69126 Heidelberg, Boxbergring 107 c/o EMBL Technology Transfer GmbH 850 Distribution of biological products Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands 80,908 Investment business The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208 Cayman Islands 79,987 Investment business Unit1606,16/F.,Citicorp Centre,No.18 Whitfield Road, Causeway Bay,Hong Kong 51,277 Investment business 2nd Floor, Ikenokata Hiro Heights, 2-12-18 Ueno, Taito-ku, Tokyo 19,548 Medical testing services, R&D, manufacturing, and sales of medical equipment 5F., No. 1-8, Sec. 5, Zhongxiao E. Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.) 1,300 Investment business 910 Foulk Road, Suite 201, New Castle Country, Wilmington DE 19803. U.S.A. 2,218 R&D of cell therapy technology	December 31, 2023; Unit: NT$ 1,000 Address Paid-In Capital Main Business or Items 69126 Heidelberg, Boxbergring 107 c/o EMBL Technology Transfer GmbH 850 Distribution of biological products Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands 80,908 Investment business The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208 Cayman Islands 79,987 Investment business Unit1606,16/F.,Citicorp Centre,No.18 Whitfield Road, Causeway Bay,Hong Kong 51,277 Investment business 2nd Floor, Ikenokata Hiro Heights, 2-12-18 Ueno, Taito-ku, Tokyo 19,548 Medical testing services, R&D, manufacturing, and sales of medical equipment 5F., No. 1-8, Sec. 5, Zhongxiao E. Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.) 1,300 Investment business 910 Foulk Road, Suite 201, New Castle Country, Wilmington DE 19803. U.S.A. 2,218 R&D of cell therapy technology	December 31, 2023; Unit: NT$ 1,000 Address Paid-In Capital Main Business or Items 69126 Heidelberg, Boxbergring 107 c/o EMBL Technology Transfer GmbH 850 Distribution of biological products Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands 80,908 Investment business The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208 Cayman Islands 79,987 Investment business Unit1606,16/F.,Citicorp Centre,No.18 Whitfield Road, Causeway Bay,Hong Kong 51,277 Investment business 2nd Floor, Ikenokata Hiro Heights, 2-12-18 Ueno, Taito-ku, Tokyo 19,548 Medical testing services, R&D, manufacturing, and sales of medical equipment 5F., No. 1-8, Sec. 5, Zhongxiao E. Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.) 1,300 Investment business 910 Foulk Road, Suite 201, New Castle Country, Wilmington DE 19803. U.S.A. 2,218 R&D of cell therapy technology
Company Name	Incorporation Date	Address	Paid-In Capital	Main Business or Items
Abnova -GmbH	2005.04.19	69126 Heidelberg, Boxbergring 107 c/o EMBL Technology Transfer GmbH	850	Distribution of biological products
Abnova Holding Corporation	2014.11.25	Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands	80,908	Investment business
Abnova (Cayman)Corporation	2014.11.28	The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208 Cayman Islands	79,987	Investment business
Abnova(HK)Limited	2015.01.06	Unit1606,16/F.,Citicorp Centre,No.18 Whitfield Road, Causeway Bay,Hong Kong	51,277	Investment business
Abnova Diagnostics (Japan)	2016.01.15	2nd Floor, Ikenokata Hiro Heights, 2-12-18 Ueno, Taito-ku, Tokyo	19,548	Medical testing services, R&D, manufacturing, and sales of medical equipment
AxleBio Ventures	2023.07.14	5F., No. 1-8, Sec. 5, Zhongxiao E. Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.)	1,300	Investment business
Citil Pharma Incorporated	2021.06.04	910 Foulk Road, Suite 201, New Castle Country, Wilmington DE 19803. U.S.A.	2,218	R&D of cell therapy technology

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(2) Organizational chart of the affiliates: (December 31, 2023)

==> picture [507 x 230] intentionally omitted <==

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

Abnova (Taiwan) Corporation
AxleBio Ventures Abnova Holding Corporation Abnova-GmbH
Citil Pharma Incorporated Abnova (Cayman) Corporation
Abnova Diagnostics (Japan) Abnova(HK)Limited
----- End of picture text -----

Note: In August 2023, the Company sold its equity interest in its affiliate, Citil Pharma Incorporated, to its

subsidiary, AxleBio Ventures. This transaction was part of an organizational restructuring under joint control.

• (3) Companies presumed to have a relationship of control and subordination under Article 369-3 of the Law: None.

• (4) The industries covered by the business operated by the affiliates overall: Please refer to the (1) Basic Information of the Affiliates . Where connections exist among the businesses operated by individual affiliates, a description of the mutual dealings and division of work among such affiliates should be provided: None.

(5) Information on the directors, supervisors, and President of each affiliate:

			December 31, 2023 Shareholding Shares % (Note 1, 2) 100% 52,700 100% 2,890,000 40% 2,605,000 100% 1,670,000 100% 1,800,000 100% 130,000 100%	December 31, 2023 Shareholding Shares % (Note 1, 2) 100% 52,700 100% 2,890,000 40% 2,605,000 100% 1,670,000 100% 1,800,000 100% 130,000 100%
Company Name	Title	Representative	Shareholding
			Shares	%
Abnova –GmbH	Responsible Person	Wilber Huang	(Note 1, 2)	100%
Abnova Holding Corporation	Director	Wilber Huang	52,700	100%
Citil Pharma Incorporated	Responsible Person	Wilber Huang	2,890,000	40%
Abnova (Cayman) Corporation	Director	Wilber Huang	2,605,000	100%
Abnova (HK) Limited	Director	Chiu Chi Ching	1,670,000	100%
Abnova Diagnostics (Japan)	Representative Director	Wilber Huang	1,800,000	100%
AxleBio Ventures	Responsible Person	Wilber Huang	130,000	100%

Note 1: A subsidiary established in Germany, which is a limited liability company without issued shares.

Note 2: A subsidiary has no operating activities, therefore there is no managerial personnel.

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2. Overview of the Operations of the Affiliates

December 31, 2023; Unit: NT$ 1,000

Company Name	Paid-in Capital	Total Assets	Total Liabilities	Net Worth	Operating Revenue	Operatin g Profit	Net Income (After Tax)	Earnings Per Share(NT$) (After Tax)
Abnova-GmbH	850	0	(2,489)	(2,809)	0	0	0	0
Abnova Holding Corporation	80,908	86,390	(114)	86,277	0	(111)	(10,504)	(199.32)
Citil Pharma Incorporated	2,218	8,528	(7,728)	800	0	(491)	(491)	(0.17)
Abnova (Cayman) Corporation	79,987	86,284	0	86,284	0	(224)	(10,394)	(3.99)
Abnova (HK) Limited	51,277	87,260	(2,733)	84,527	0	(274)	(5,968)	(3.57)
Abnova Diagnostics (Japan)	19,548	1,148	(62)	1,086	1,459	(558)	(4,210)	(2.34)
AxleBio Ventures	1,300	1,222	0	1,222	0	(57)	(65)	(0.50)

8.1.2 Consolidated Financial Statements of Affiliated Enterprises None.

• 8.2 Private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, and the status of use of the capital raised through the private placement of securities, the implementation progress of the plan, and the realization of the benefits of the plan: None.

• 8.3 Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

• 8.4 Other matters that require additional description: None.

• IX. If any of the situations listed in Article 36, paragraph 2, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

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Stock Code: 4133

Abnova (Taiwan) Corporation and Subsidiaries

Consolidated Financial Statements With Independent Auditors’ Report

For the Years Ended December 31, 2023 and 2022

Address ： 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City Telephone ： (02)8751-1888

Notice to readers.

THIS IS A TRANSLATION OF THE FINANCIAL STATEMENTS (THE “FINANCIAL STATEMENTS”) OF ABNOVA (TAIWAN) CORPORATION (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE FINANCIAL STATEMENTS SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

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Representation Letter

The entities that are required to be included in the consolidated financial statements of Abnova (Taiwan) Corporation as of and for the year ended December 31, 2023 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 by the Financial Supervisory Commission, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, Abnova (Taiwan) Corporation and Subsidiaries do not prepare a separate set of consolidated financial statements.

Company name: Abnova (Taiwan) Corporation Chairman: WILBER HUANG Date: February 27, 2024

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Independent Auditors’ Report

To the Board of Directors of Abnova (Taiwan) Corporation:

Opinion

We have audited the consolidated financial statements of Abnova (Taiwan) Corporation and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2023 and 2022, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Abnova (Taiwan) Corporation and its subsidiaries as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for opinion

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

Key audit matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters we judge that shall be communicated in the audit report are as follows:

1. Inventory valuation

Please refer to Note 4(8) “Inventories”; Note 5(1) “Significant accounting assumptions and judgments, and major sources of estimation uncertainty”, and Note 6(5) “Inventories”.

Description of key audit matter:

The major business of the Group is the manufacturing and sales of antibody, protein, test reagents and testing instruments. Inventories are measured at the lower of cost and net realizable value. Due to the longer life cycle of the products, the management considers factors such as product circulation, exposure, preservation and industry information to evaluate the net realizable value of inventories. As Abnova (Taiwan) Corporation and its subsidiaries have large amount of inventories and a large number of items, and the net realizable value used in the above-mentioned evaluation involves subjective judgment, the evaluation of loss allowance for inventory valuation has been listed as the key audit matter of the year.

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Our principal audit procedures included:

The key audit procedures for the above-mentioned key audit matter based on the understanding of the industrial characteristics of Abnova (Taiwan) Corporation and its subsidiaries include obtaining statistical information on the sales time and sales status of the products on the shelves in each year provided by the management in the subsequent years to evaluate the rationality of the policy used to recognize the inventory valuation loss; understanding the Group and its subsidiaries’ inventory management process, reviewing the annual inventory plan and participating in the annual inventory check to evaluate the effectiveness of the management’s inventory control; obtaining the inventory net realizable value calculation sheet, and spot check the correctness of the calculation.

Other matter

Abnova (Taiwan) Corporation has prepared its parent-company-only financial statements as of and for the years ended December 31, 2023 and 2022, on which we have issued an unqualified opinion.

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

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards 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 consolidated financial statements.

As part of an audit in accordance with auditing standards, we exercise professional judgment 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 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

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effectiveness 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 or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group’s to cease to continue as a going concern.

• E. Evaluate the overall presentation, structure and content of the consolidated financial reports, 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 and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

KPMG

Auditors ：

Securities ： Financial-SupervisoryCompetent Securities-AuditingAuthority 1080303300 ApprovedFinancial-Supervisorycertified No. Securities-Auditing1070304941 February 27, 2024

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Abnova (Taiwan) Corporation and Subsidiaries

Consolidated Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (Note 6(1)) 1150 Notes receivable, net (Note 6(3)) 1170 Accounts receivable, net (Note 6(3)) 1200 Other receivables (Note 6(4)) 130X Inventories (Note 6(5)) 1479 Other current assets (Note 8) Total current assets Non-current assets: 1517 Non-current financial assets measured at fair value through other comprehensive income (Note 6(2)) 1550 Investments accounted for using equity method (Note 6(6)) 1600 Property, plant and equipment (Note 6(7)) 1755 Right-of-use assets (Note 6(8)) 1780 Intangible assets (Note 6(9)) 1840 Deferred tax assets (Note 6(12)) 1900 Other non-current assets (Note 6(11) and 8) Total non-current assets Total assets	December 31, 2023 Amount ％ $ 423,515 32 491 - 39,432 3 31,099 2 408,302 30 16,983 1 919,822 68 - - 251 - 257,863 19 7,649 1 69,640 5 95,274 7 5,244 - 435,921 32 $ 1,355,743 100	December 31, 2023 Amount ％ $ 423,515 32 491 - 39,432 3 31,099 2 408,302 30 16,983 1 919,822 68 - - 251 - 257,863 19 7,649 1 69,640 5 95,274 7 5,244 - 435,921 32 $ 1,355,743 100	December 31, 2022 Amount ％ 367,065 27 246 - 59,999 4 95,657 7 396,079 29 9,146 - 928,192 67 - - 550 - 256,546 19 10,733 1 68,815 5 98,278 7 11,715 1 446,637 33 1,374,829 100 Liabilities and equity Current liabilities: 2130 Contract liability-current (Note 6(15)) 2170 Accounts payable 2200 Other payables 2230 Current tax liabilities 2280 Current lease liabilities (Note 6(10)) 2300 Other current liabilities Total current liabilities Non-current liabilities: 2570 Deferred tax liabilities (Note 6(12)) 2580 Non-current lease liabilities (Note 6(10)) 2600 Other non-current liabilities (Note 6(6) and 7) Total non-current liabilities Total liabilities Equity attributable to owners of parent (Note 6(13))： 3110 Ordinary share 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Unappropriated retained earnings 3350 Special reserve 3400 Other equity interest Total equity Total liabilities and equity	December 31, 2023 Amount % $ 2,349 - 14,935 2 34,384 3 39 - 5,105 - 5,790 - 62,602 5 3,783 - 2,601 - 438 - 6,822 - 69,424 5 605,536 45 474,527 35 98,565 7 11,907 1 107,983 8 (12,199) (1) 1,286,319 95 $ 1,355,743 100	December 31, 2023 Amount % $ 2,349 - 14,935 2 34,384 3 39 - 5,105 - 5,790 - 62,602 5 3,783 - 2,601 - 438 - 6,822 - 69,424 5 605,536 45 474,527 35 98,565 7 11,907 1 107,983 8 (12,199) (1) 1,286,319 95 $ 1,355,743 100	December 31, 2023 Amount % $ 2,349 - 14,935 2 34,384 3 39 - 5,105 - 5,790 - 62,602 5 3,783 - 2,601 - 438 - 6,822 - 69,424 5 605,536 45 474,527 35 98,565 7 11,907 1 107,983 8 (12,199) (1) 1,286,319 95 $ 1,355,743 100	December 31,	2022 % - 1 3 - 1 -
	Amount $ 423,515 491 39,432 31,099 408,302 16,983 919,822 - 251 257,863 7,649 69,640 95,274 5,244 435,921 $ 1,355,743				Amount $ 2,349 14,935 34,384 39 5,105 5,790		Amount 2,622 14,995 41,387 2,057 7,199 4,559
					62,602	5	72,819	5
					3,783 2,601 438	- - -	5,804 3,686 526	- - -
					6,822	-	10,016	-
					69,424	5	82,835	5
					605,536 474,527 98,565 11,907 107,983 (12,199)	45 35 7 1 8 (1)	605,536 474,527 85,642 - 138,196 (11,907)	44 35 7 - 10 (1)
					1,286,319	95	1,291,994	95
					$ 1,355,743	100	1,374,829	100

(See accompanying notes to financial statements.) Manager: JIH PEI JU

Chairman: WILBER HUANG

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

4000 Operating revenue (Note 6(15) and 7) 5000 Operating costs (Note 6(5)) Net gross profit Operating expenses: 6100 Marketing expenses 6200 Administrative expenses 6300 R&D expenses 6450 Gains on reversal of expected credit loss (expected credit loss) (Note 6(3)) Total operating expenses Net operating income Non-operating income and expenses (Note 6(17))： 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of associates and joint ventures income accounted for using equity method (Note 6(6)) Total non-operating income and expenses Profit from continuing operations before tax 7950 Tax expense (Note 6(12)) Profit Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of defined benefit plans (Note 6(11)) 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income (Note 6(2) and (13)) 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements (Note 6(13)) 8399 Less: Income tax related to components of other comprehensive income that may be reclassified to profit or loss Components of other comprehensive income (loss) that may be reclassified to profit or loss Other comprehensive income, net of tax Total comprehensive income Earnings per share (NT dollars) (Note 6(14)) Basic earnings per share (NT dollars) Diluted earnings per share (NT dollars)	2023	％ 100 (55)	2022	％ 100 (51) 49 (10) (11) (12) - (33) 16 1 - 6 - - 7 23 5 18 - 7 - 7 1 - 1 8 26 1.24 1.23
	Amount $ 382,052 (208,137)		Amount 411,756 (210,327)
	173,915	45	201,429
	(45,261) (46,117) (38,396) 3,053	(12) (12) (10) 1	(40,349) (47,216) (48,740) (698)
	(126,721)	(33)	(137,003)
	47,194	12	64,426
	10,528 152 (8,976) (142) (239)	3 - (2) - -	3,636 971 26,075 (152) -
	1,323	1	30,530
	48,517 4,839	13 1	94,956 20,113
	43,678	12	74,843
	(618) - -	- - -	304 28,730 -
	(618)	-	29,034
	(292) -	- -	4,216 -
	(292)	-	4,216
	(910)	-	33,250
	$ 42,768	12	108,093
	$	0.72
	$	0.72

(See accompanying notes to financial statements.)

Chairman: WILBER HUANG Manager: JIH PEI JU

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation and Subsidiaries Consolidated Statements of Changes in Equity For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Balance at January 1, 2022 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve Cash dividends on ordinary shares Effect on equity of disposal of subsidiaries Balance at December 31, 2022 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends on ordinary shares Balance at December 31, 2023	Shares Ordinary shares $ 605,536 - -	Capital surplus 474,527 - -			Retained earnings	Retained earnings		Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (11,178) 20,407 - - 4,216 28,730 4,216 28,730 - - - - - (54,082) (6,962) (4,945) - - (292) - (292) - - - - - - - (7,254) (4,945)	Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (11,178) 20,407 - - 4,216 28,730 4,216 28,730 - - - - - (54,082) (6,962) (4,945) - - (292) - (292) - - - - - - - (7,254) (4,945)	Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (11,178) 20,407 - - 4,216 28,730 4,216 28,730 - - - - - (54,082) (6,962) (4,945) - - (292) - (292) - - - - - - - (7,254) (4,945)	Total equity 1,211,756 74,843 33,250
			Legal reserve		Special reserve	Unappropriated retained earnings		Exchange differences on translation of foreign financial statements
			82,766 - -			39,698 74,843 304		(11,178) - 4,216
	-	-	-			75,147		4,216		28,730	108,093
	- - -	- - -	2,876 - -			(2,876) (27,855) 54,082		- - -		- - (54,082)	- (27,855) -
	605,536 - -	474,527 - -	85,642 - -			138,196 43,678 (618)		(6,962) - (292)		(4,945) - -	1,291,994 43,678 (910)
	-	-	-			43,060		(292)		-	42,768
	- - -	- - -	12,923 - -		11,907	(12,923) (11,907) (48,443)		- - -		- - -	- - (48,443)
	$ 605,536	474,527	98,565		11,907	107,983		(7,254)		(4,945)	1,286,319

(See accompanying notes to financial statements.) Manager: JIH PEI JU

Accounting supervisor: CHANG YA PING

Chairman: WILBER HUANG

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Abnova (Taiwan) Corporation and Subsidiaries Consolidated Statements of Cash Flows For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss) Depreciation expenses Amortization expenses Expected credit loss (reversal gains) Interest expense Interest income Share of associates and joint ventures losses accounted for using equity method Loss (gain) from disposal of property, plant and equipment Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Other receivables Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Accounts payable Other payables Other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Other receivables Acquisition of intangible assets Other financial assets Other non-current assets Other non-current liabilities Net cash flows (outflows) used in investing activities Cash flows from financing activities: Guaranteed deposits received Repayment of lease principles Cash dividends paid Proceeds from disposal of subsidiaries cash Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2023 $ 48,517 21,491 10,820 (3,053) 142 (10,528) 239 3,453	2022 94,956 23,754 10,739 698 152 (3,636) - (7)
	22,564	31,700
	(245) 23,620 7,819 (14,548) (7,827)	194 (12,335) (439) 9,314 3,794
	8,819	528
	(273) (60) (7,033) 1,231	(16) 3,515 3,504 708
	(6,135)	7,711
	2,684	8,239
	25,248	39,939
	73,765 10,072 (142) (7,476)	134,895 3,189 (152) (5,259)
	76,219	132,673
	(19,566) 160 59,760 (9,320) 786 5,059 (88)	(1,390) 45 - (5,240) 172 (7,165) (97)
	36,791	(13,675)
	- (7,177) (48,443) -	(4,423) (8,897) (27,855) (20,225)
	(55,620)	(61,400)
	(940) 56,450 367,065	2,746 60,344 306,721
	$ 423,515	367,065

(See accompanying notes to financial statements.) Chairman: WILBER HUANG Manager: JIH PEI JU

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan Dollars, unless specified otherwise)

1. Company history

Abnova (Taiwan) Corporation (the “Company”) was legally established with the approval of the Ministry of Economic Affairs (R.O.C.) on January 4, 2002, with registered address at 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City, Taiwan (R.O.C.). The Company and its subsidiaries (the “Group”) has been actively developing, manufacturing, and selling monoclonal antibody, polyclonal antibody, proteins, medical inspection instruments and testing reagents, which are mainly antibody reagents, antibody chips or related products provided to and used by academic, research institutions or pharmaceutical factories, etc. Antibodies are the most important means for understanding proteins and their functions. The products of the Group help to study the relationship between protein changes in the process of cancer, infectious diseases, metabolism and endocrine diseases, and then apply to the development of medical inspection reagents and drugs.

2. Approval date and procedures of the consolidated financial statements

These consolidated financial statements were authorized for issue by the Board of Directors on February 27, 2024.

3. New standards, amendments and interpretations adopted

• (1) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2023.

• ‧Amendments to IAS 1 “Disclosure of Accounting Policies”

• ‧Amendments to IAS 8 “Definition of Accounting Estimates”

• ‧Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

The Group has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from May 23, 2023.

‧Amendments to IAS 12 “International Tax Reform — Pillar Two Model Rules”

• (2) The impact of IFRS issued by the FSC but not yet effective The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its financial statements.

‧Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

‧Amendments to IAS 1 “Non-current Liabilities with Covenants

• ‧Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”

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

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

• The Group assesses that the adoption of the following new or amended standards, not yet endorsed by the FSC, would not have a significant impact on its financial statements.

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

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

• ‧Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9 - Comparative Information"

• ‧Amendments to IAS 21 “Lack of Exchangeability”

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

4. Summary of significant accounting policies

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

• (1) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, ands SIC Interpretations endorsed by the Financial Supervisory Commission, R.O.C.

• (2) Basis of preparation

• A. Basis of measurement

Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

• (a) Financial assets at fair value through other comprehensive income are measured at fair value; and

• (b) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in Note 4(15).

B. Functional and presentation currency

The functional currency of each entity of the Group is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan Dollars, which is the Group’s functional currency. All financial information presented in New Taiwan Dollars has been rounded to the nearest thousand.

• (3) Basis of consolidation

A. Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. Except for Abnova GmbH, the German subsidiary which is not included in an entity of the Group’s consolidated financial report, the rest of the subsidiaries have been included. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• B. List of subsidiaries in the consolidated financial statements The consolidated entities were as follows:

**Name of investor **	Name of subsidiary	Main activities	Percentage of ownership	Percentage of ownership	Note
			December 31, 2023	December 31, 2022
The Company Abnova Holding Corporation Abnova (Cayman) Corporation 〞	Abnova Holding Corporation AxleBio Ventures Abnova (Cayman) Corporation Abnova (HK) Limited Abnova Diagnostics	Investment business Investment business Investment business Investment business R&D, manufacturing and sales of medical device, etc., testing services	100.00% 100.00% 100.00% 100.00% 100.00%	100.00% - % 100.00% 100.00% 100.00%	Note

Note ： The subsidiary has been newly established in July, 2023 by the Company.

• C. Subsidiaries excluded from the consolidated financial statements:

Name of investor Name of subsidiary Main activities	Percentage of ownership December 31, 2023 December 31, 2022 Note
The Company Abnova-GmbH Distribution of biological products 100.00% 100.00% Note

Note ： Since Abnova GmbH’s capital equivalent to NT$1,210 (0.2% of the Group’s capital), its total assets were less than 1% of the Group’s total assets, and it had no operating income, the consolidated financial report with this subsidiary had not been prepared. The Board of Directors of the Company approved the dissolution and liquidation proposal of Abnova GmbH on November 11, 2016, and the dissolution and liquidation was on December 31, 2016, as the base date.

(4) Foreign currency

A. Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

• (a) an investment in equity securities designated as at fair value through other comprehensive income;

• (b) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (c) qualifying cash flow hedges to the extent that the hedges are effective.

• B. Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the New Taiwan Dollars at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the New Taiwan Dollars at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes only a part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes only a part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

• (5) Classification of current and non-current assets and liabilities

• An asset is classified as current under one of the following criteria, and all other assets are classified as non-current:

• A. It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

• B. It is held primarily for the purpose of trading;

• C. It is expected to be realized within twelve months after the reporting period; or

• D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

• A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current:

• A. It is expected to be settled in the normal operating cycle;

• B. It is held primarily for the purpose of trading;

• C. It is due to be settled within twelve months after the reporting period; or

• D. The Group does not have any unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments that do not affect its classification.

• (6) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

• (7) Financial instruments

Accounts receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is an accounts receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. An accounts receivable without a significant financing component is initially measured at the transaction price.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

A. Financial assets

• All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• (a) Financial assets measured at amortized cost

• A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• ‧It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• (b) Financial assets measured at fair value through other comprehensive income (FVOCI) On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis. Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

• Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established (usually the ex-dividend date).

• (c) Impairment of financial assets

• The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, financial assets measured at amortized costs, notes and accounts receivables, other receivable, guarantee deposit paid and other financial assets) and contract assets.

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

• ‧Debt securities that are determined to have low credit risk at the reporting date; and

• ‧Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

ECLs are probability-weighted estimate of credit losses. Credit losses are measured as the

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

‧Significant financial difficulty of the borrower or issuer;

‧A breach of contract such as a default or being more than some time past due;

‧The lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

‧It is probable that the borrower will enter bankruptcy or other financial reorganization; or ‧The disappearance of an active market for that financial assets because of financial difficulties. Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate accounts, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

• (d) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• B. Financial liabilities and equity instruments

• (a) Classification of liabilities and equity

The Group shall classify the debt and equity instruments issued by the Group as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definition of a financial liability and an equity instrument.

• (b) Financial liabilities

Financial liabilities are measured at amortized costs.

• (c) Other financial assets are measured at amortized costs by effective interest rate method subsequently. The interest expenses and exchange gains or losses are recognized in profit or loss. Any gains or losses at derecognition are recognized in profit or loss as well.

• (d) Derecognition of financial liabilities

The Group shall remove a financial liability from its statement of financial position when the obligation specified in the contract is discharged or cancelled or expires. A substantial modification of the terms of an existing financial liability and significant difference in cash flows after the modification shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability by fair value based on the modified contractual terms.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

At derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed), shall be recognized in profit or loss.

• (8) Inventories

• A. The perpetual inventory system is adopted, and the acquisition costs are recorded in the account. The costs are determined by the weighted average method, and the fixed production overheads are allocated according to the normal operating capacity of the production equipment. Inventories at the end of period except for obsolete and slow-moving inventories are provided for loss allowance. Inventories are measured at the lower of cost and net realizable value. When comparing the lower of cost and net realizable value, the item-by-item comparison method is adopted. The market price of raw materials is the replacement cost (that is, the latest purchase price); the market price of work in progress, semi-finished goods, finished goods and commodity inventories is the net realizable value.

• B. The basis for the loss allowance for each obsolete and slow-moving inventory is explained as follows:

• (a) 100% loss allowance provisions for protein inventory over two years (entering the third year); 2% to 50% loss allowance provisions for the stock age within two years (exclusive).

• (b) 1% to 3% loss allowance provisions for testing instruments within two years (exclusive) according to the stock age; 10% to 70% loss allowance provisions for the stock age over two years (entering the third year) to five years (exclusive); 100% loss allowance provisions for the stock age reaches five years (entering the sixth year).

• (c) 0.1% to 20% loss allowance provisions for the stock age of inventories other than protein and testing instruments within four years (exclusive); 40% to 80% loss allowance provisions for the stock age reaches five years (entering the sixth year) to six years (exclusive); 100% loss allowance provisions for the stock age reaches six years (entering the seventh year).

• (9) Invest in associates

Associates are that in which the Group has significant influence over their financial and operating policies but is not controlling or jointly controlling.

The Group adopts the equity method to handle the interests of the associates. Under the equity method, the original acquisition is recognized at cost, and investment costs include transaction costs. The carrying amount of investments in an associate includes the goodwill identified at the time of the original investment, less any accumulated impairment loss.

The consolidated financial report includes from the date of significant influence to the date of loss of significant influence; after the adjustments made consistent with the accounting policy of the Group, the Group recognizes the profit and loss and the amount of other comprehensive income of each investment in associates based on the equity ratio. When the equity changes in non- profit or loss and other comprehensive income of an associate does not affect the shareholding ratio of the Group, the Group will recognize all changes in equity as capital reserves according to the shareholding ratio. Unrealized gains and losses arising from transactions between the Group and associates are recognized in the corporate financial statements only within the scope of non-related party investors’ interests in associates.

When the Group shall recognize the loss share of an associate proportionally equal to or exceeds its equity in the associate, it shall stop recognizing the losses, and only within the scope of a legal obligation, a constructive obligation, or a payment made on behalf of the invested company, additional losses and related liabilities shall be recognized.

When an associate issues new shares, if the Group does not subscribe in accordance with the shareholding ratio, resulting in a change in the shareholding ratio, and thus an increase or decrease in the net equity value of the investment occurred, the increase or decrease shall be adjusted to the capital reserve and the investment using the equity method. If this adjustment is to write-down the

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

capital reserve, and the balance of the capital reserve generated by the investment using the equity method is insufficient, the difference will be debited to retained earnings. However, if the Group does not subscribe according to the shareholding ratio, resulting in a decrease in its ownership interest in the associate, the amount related to the associate previously recognized in other comprehensive income is reclassified according to the reduction ratio, and its accounting treatment is the basis same as that which an associate would have to follow if it directly disposes of the related assets or liabilities.

• (10) Property, plant and equipment

• A. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

• Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

• B. Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

• C. Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows: (a) Buildings and structures 9 to 50 years (b) Machinery and equipment 3 to 15 years (c) Office equipment 3 to 8 years (d) Leasehold improvements 3 to 10 years (e) Other equipment 1 to 7 years Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (11) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

• A. As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

(a) fixed payments;

• (b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

(c) amounts expected to be payable under a residual value guarantee; and

(d) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

(a) there is a change in future lease payments arising from the change in an index or rate;

(b) there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee;

• (c) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset;

• (d) there is a change of its assessment on whether it will exercise a purchase, extension or termination option;

• (e) there is any lease modification.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets and lease liabilities that do not meet the definition of investment property as a separate line item respectively in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for office equipment with short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

• B. As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset. When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract.

• (12) Intangible assets

• A. Recognition and measurement

Goodwill arising on the acquisition of a subsidiary is measured at cost less accumulated impairment losses.

Expenditure on research activities is recognized in profit or loss as incurred.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, including computer software, patent rights and customer relationships, are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

• B. Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, is recognized in profit or loss as incurred, including internally developed goodwill and brands.

• C. Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives of intangible assets for current and comparative periods are as follows:

(a) Royalty 5 to 30 years (b) Intangible assets internally generated 3 years

(c) Customer relationships 3 years

(d) Computer software 5 to 10 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (13) Impairment of non-derivative financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

• (14) Revenue recognition

• A. Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good to a customer. The description of main income items is as follows:

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (a) Sales of goods

The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer upon the transaction terms, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the 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, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

The Group offers volume discounts to customers. The Group recognizes revenue on the basis of the net amount of the contract price minus the estimated volume discount. The amount of the volume discount is estimated based on the expected value based on past cumulative experience, and revenue is recognized only in the range where there is a high probability that no significant reversal will occur.

• (15) Employee benefits

A. Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

B. Defined benefit plans

The Group’s net obligation in respect of each defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

• C. Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

• (16) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables, which reflects the related uncertainties of income taxes (if any), are the best estimate of the tax amount expected to be paid or received. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred income tax shall be recognized for the temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, except to the extent that:

• A. the initial recognition of an asset or liability in a transaction which is not a business combination, and at the time of the transaction, (i) affects neither accounting profit (ii) nor taxable profit (tax loss) and (ii) does not give rise to equal taxable and deductible temporary differences, or

• B. the temporary differences associated with investments in subsidiaries, and it is probable that the temporary differences will not reverse in the foreseeable future, or

• C. the deferred tax liabilities arise from the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred income tax is measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates or tax laws that have been enacted or substantively enacted at the reporting date, and already reflected the income tax related uncertainty (if any).

The Group shall offset current tax assets and current tax liabilities, only if:

• A. the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

• B. the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• (a) The same taxable entity; or

• (b) Different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

• (17) Earnings per share

The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

• (18) Segment information

The Group’s operating segments information is reported in a consistent manner with internal management reports provided to key operating decision makers. The chief operating decision maker is responsible for allocating resources to operating segments and assessing their performance.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

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

The preparation of the consolidated financial report requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates. The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Accounting policies involve critical judgments and have no significant impact on the amount recognized in this consolidated financial report.

Information about uncertainties of the following assumptions and estimates which have significant risks of causing critical adjustments to the carrying amount of assets and liabilities in the next fiscal year is as follows:

(1) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Group estimates the net realizable value of inventories for normal loss and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. In addition, the Group has also considered the industry characteristics and the liquidity of inventories to assess the loss allowance for slow-moving inventories. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the changes in industrial application technology, there may be significant changes in the net realizable value of inventories.

6. Explanation of significant accounts

(1) Cash and cash equivalents

tion of significant accounts ash and cash equivalents
Cash Checking account Demand deposits Time deposits Cash and cash equivalents listed in the consolidated statements of cash flows	December 31, 2023 $ 466 487 131,640 290,922 $ 423,515		December 31, 2022 589 716 163,855 201,905 367,065
		$ 423,515

The term of the Group’s time deposits is three months. It is used as a short-term fund that can be converted momentarily for any fund demand, and the risk of value changes is low, so it is classified under cash and cash equivalents. Please refer to Note 6(18) for the interest rate risk, and sensitivity analysis of the financial assets and liabilities.

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

December 31, 2023 December 31, 2022

Equity instruments measured at fair value through other comprehensive income: － Foreign non-listed (non-OTC-listed) stocks Hukui Biotechnology Corporation (Samoa) $ - -

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• A. Investments in equity instruments measured at fair value through other comprehensive income The Group designated the investment shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term strategic purpose.

• Please refer to Note 6(18) for information on the carrying amount, fair value and market risks of the foreign non-listed (non-OTC-listed) stocks of Hukui Biotechnology Corporation (Samoa) held by the Group.

Gains on valuation of financial assets measured at fair value through other comprehensive income recognized by the Group was $28,730,000 for the year ended December 31 2022.

• B. The aforementioned financial assets were not pledged as collateral.

• (3) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance	December 31, 2023		December 31, 2022 246 68,151 (8,152) 60,245
	$ 491 44,679 (5,247) $ 39,923

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information.

The loss allowance provisions for notes and accounts receivable of the series products of circulating tumor cell testing were determined as follows:

Current and less than 30 days past due Current and less than 30 days past due	December 31, 2023	December 31, 2023	December 31, 2023	Loss allowance provision -
	Gross carrying amount $ -	Weighted-aver age loss rate
				Loss allowance provision -
	Gross carrying amount $ 26	Weighted-aver age loss rate
		1.51%

The loss allowance provisions for notes and accounts receivable for the series products of noncirculating tumor cell testing were determined as follows:

Current and less than 30 days past due 31 to 60 days past due 61 to 90 days past due 91 to 120 days past due 121 to 180 days past due 181 to 365 days past due More than 365 days past due	December 31, 2023	December 31, 2023	December 31, 2023	Loss allowance provision 584 245 179 283 1,058 1,590 1,308
	Gross carrying amount $ 37,369 1,276 563 582 1,962 2,110 1,308	Weighted-aver age loss rate
		1.56% 19.20% 31.74% 48.68% 53.91% 75.37% 100.00%
	$ 45,170			5,247

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Current and less than 30 days past due 31 to 60 days past due 61 to 90 days past due 91 to 120 days past due 121 to 180 days past due 181 to 365 days past due More than 365 days past due	December 31, 2022	December 31, 2022	December 31, 2022	Loss allowance provision 539 1,749 474 1,418 1,161 1,899 912 8,152
	Gross carrying amount	Weighted-aver age loss rate 1.19% 14.01% 25.11% 42.32% 56.21% 81.47% 100.00%
	$ 45,339 12,486 1,888 3,350 2,066 2,330 912
	$ 68,371

The movement in the loss allowance for notes and accounts receivable were as follows:

Balance at January 1 Impairment losses Irrecoverable amount written-off in the current year Reversal of impairment losses Others Balance at December 31	2023 $ 8,152 - - (3,053) 148	2022 14,449 698 (6,995) - - 8,152
	$ 5,247

The aforementioned financial assets were not pledged as long-term loans and financing facilities.

• (4) Other receivables

Other receivables

December 31, 2023 $ 31,099	December 31, 2022 95,657

The Group disposed its subsidiary, Abnova Diagnostics (Dongguan) Limited, on November 3, 2022 for a total selling price of USD 3,035 thousand. Due to the weakening trend of the exchange rate between CNY and USD, the buyer requested to revise the amount of the sale. Both parties of the sale have reached an agreement on August 30, 2023 to revise the amount to be CNY 20,600 thousand. Losses on revising the contract amounted to NT$6,770 thousand, which were recognized under other gains and losses. As of December 31, 2023, the Group has collected the first installment of CNY 14,500 thousand, and the second installment of CNY 3,426 thousand has been collected in January, 2024. The remaining amount of CNY 2,674 thousand is expected to be collected in 2024.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(5) Inventories

ventories
Raw materials and supplies Semi-finished goods Work in progress Finished goods Merchandise Testing instruments	December 31, 2023 $ 23,680 250,513 9,954 118,303 5,163 689	December 31, 2022 21,973 239,258 6,503 119,329 6,364 2,652 396,079
	$ 408,302

The components of cost of sales for the years ended December 31, 2023 and 2022 are as follows:

Sales of inventories transferred Inventory disposal loss Gains on reversal of inventory valuation loss Total	2023 $ 160,359 60,126 (12,348)	2022 163,554 60,016 (13,243) 210,327
	$ 208,137

As of December 31, 2023 and 2022, the inventories were not pledged as collateral.

(6) Investments accounted for using equity method

The equity method adopted by the Group at the reporting date was as follows:

Subsidiary Abnova GmbH (Note) Associate Citil Pharma Incorporated	December 31, 2023 $ (2,809)	December 31, 2022 (2,809) 550
	$ 251

Note ： The net amount deducted from receivables as of December 31, 2023 and 2022 were listed in “other non-current liabilities.” Please refer to Note 7.

Since Abnova GmbH’s capital equivalent to NT$1,210 thousand (0.2% of the Group’s capital), its total assets were less than 1% of the Group’s total assets, and it had no operating income, the consolidated financial report with this subsidiary had not been prepared.

The Board of Directors of the Company approved the dissolution and liquidation proposal of Abnova GmbH on November 11, 2016, and the dissolution and liquidation was on December 31, 2016, as the base date. The liquidation has not completed by December 31, 2023.

The Company sold the shares of the associate, Citil Pharma Incorporated, by NT$342 thousand to the subsidiary, AxleBio Ventures. As the transaction is the restructure under joint control, the unrealized gains on disposal of NT$68 thousand is recognized as the deduction of investments accounted for using equity method.

As of December 31, 2023 and 2022, the investment adopting equity method were not pledged as collateral.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(7) Property, plant and equipment

The details of changes in the cost and depreciation of property, plant and equipment for the years ended December 31, 2023 and 2022 are as follows:

Cost or deemed cost: Balance at January 1, 2023 Additions Disposals Effects of changes in foreign exchange rates Balance at December 31, 2023 Balance at January 1, 2033 Additions Reclassifications Disposals Effects of changes in foreign exchange rates Balance at December 31, 2022 Depreciation and impairment loss: Balance at January 1, 2023 Depreciation Disposals Effects of changes in foreign exchange rates Balance at December 31, 2023 Balance at January 1, 2022 Depreciation Disposals Effects of changes in foreign exchange rates Balance at December 31, 2022 Carrying amount: December 31, 2023 January 1, 2022 December 31, 2022	Land	Buildings and structures	Machinery and equipment	Office equipment	Leasehold improveme nts	Other equipment	Unfinished constructio n and equipment pending acceptance	Total
	$ 137,911 - - -	101,747 - - -	187,245 11,913 (14,127) (231)	26,871 173 (805) (67)	16,780 6,980 (5,039) (355)	9,094 475 (927) -	200 25 - -	479,848 19,566 (20,898) (653)
	$ 137,911	101,747	184,800	26,172	18,366	8,642	225	477,863
	$ 137,911 - - - -	101,747 - - - -	187,951 1,390 352 (2,357) (91)	27,263 - - (367) (25)	33,426 - - (16,947) 301	9,094 - - - -	992 - (792) - -	498,384 1,390 (440) (19,671) 185
	$ 137,911	101,747	187,245	26,871	16,780	9,094	200	479,848
	$ - - - -	29,801 5,998 - -	144,716 7,240 (13,515) (184)	26,611 141 (804) (57)	13,435 617 (2,112) (107)	8,739 408 (927) -	- - - -	223,302 14,404 (17,358) (348)
	$ -	35,799	138,257	25,891	11,833	8,220	-	220,000
	$ - - - -	23,804 5,997 - -	139,115 7,958 (2,320) (37)	26,739 248 (366) (10)	29,572 380 (16,947) 430	8,395 344 - -	- - - -	227,625 14,927 (19,633) 383
	$ -	29,801	144,716	26,611	13,435	8,739	-	223,302
	$ 137,911	65,948	46,543	281	6,533	422	225	257,863
	$ 137,911	77,943	48,836	524	3,854	699	992	270,759
	$ 137,911	71,946	42,529	260	3,345	355	200	256,546

As of December 31, 2023 and 2022, the property, plant and equipment were not pledged as collateral.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(8) Right-of-use assets

The details of changes in the cost and depreciation of leased buildings and structures, and transportation equipment, etc of the Group for the years ended December 31, 2023 and 2022 are as follows ：

Cost: Balance at January 1, 2023 Additions Disposals Effects of changes in foreign exchange rates Balance at December 31, 2023 Balance at January 1, 2022 Additions Lease modifications Disposals Effects of changes in foreign exchange rates Balance at December 31, 2022 Depreciation and impairment loss: Balance at January 1, 2023 Depreciation Disposals Effects of changes in foreign exchange rates Balance at December 31, 2023 Balance at January 1, 2022 Depreciation Disposals Effects of changes in foreign exchange rates Balance at December 31, 2022 Carrying amount: December 31, 2023 January 1, 2022 December 31, 2022	Buildings and structures	Transportation equipment	Total 46,117 4,020 (5,167) (366) 44,604 40,227 11,030 1,249 (6,377) (12) 46,117 35,384 7,087 (5,167) (349) 36,955 32,903 8,825 (6,377) 33 35,384 7,649 7,324 10,733
	$ 43,163 4,020 (5,167) (366)	2,954 - - -
	$ 41,650	2,954
	$ 37,273 11,030 1,249 (6,377) (12)	2,954 - - - -
	$ 43,163	2,954 2,409 468 - - 2,877
	$ 32,975 6,619 (5,167) (349)
	$ 34,078
	$ 30,961 8,358 (6,377) 33	1,942 467 - - 2,409
	$ 32,975
	$ 7,572	77
	$ 6,312	1,012
	$ 10,188	545

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(9) Intangible assets

The details of changes in the cost and amortization of intangible assets of the Group for the years ended December 31, 2023 and 2022 were as follows:

Development

Cost: Balance at January 1, 2023 Separately acquired Internally developed Inventories transferred to intangible assets Balance at December 31, 2023 Balance at January 1, 2022 Internally developed Inventories transferred to intangible assets Disposals Effects of changes in foreign exchange rates Balance at December 31, 2022 Amortization and impairment loss: Balance at January 1, 2023 Amortization Balance at December 31, 2023 Balance at January 1, 2022 Amortization Disposals Effects of changes in foreign exchange rates Balance at December 31, 2022 Carrying amount: Balance at December 31, 2023 January 1, 2022 Balance at December 31, 2022	expenditure of monoclonal antibody hybridoma	Other - 7,771 - -	Total 393,721 7,771 1,549 2,325 405,366 382,061 5,240 6,655 (240) 5 393,721 324,906 10,820 335,726 314,402 10,739 5 (240) 324,906 69,640 67,659 68,815
	$ 321,979 75,616	7,771
	$ 306,210 75,616 5,240 - 6,655 - - - - -	235 - - (240) 5
	$ 318,105 75,616	-
	$ 303,497 21,409 8,213 2,409	- 198
	$ 311,710 23,818	198
	$ 295,167 19,000 8,330 2,409 - - - -	235 - 5 (240)
	$ 303,497 21,409	-
	$ 10,269 51,798	7,573
	$ 11,043 56,616	-
	$ 14,608 54,207	-

The amortization expenses of intangible assets for the years ended December 2023 and 2022 were presented in the following items in the consolidated statements of comprehensive income:

Operating costs Operating expenses	2023 $ 8,214 2,606	2022 8,331 2,408 10,739
	$ 10,820

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(10) Lease liabilities

The carrying amount of lease liabilities were as follows:

Current Non-current	December 31, 2023 $ 5,105	December 31, 2022 7,199 3,686
	$ 2,601

For the maturity analysis, please refer to Note 6(18) Financial instruments. The amount recognized in profit or loss were as follows:

The amount recognized in profit or loss were as	follows:
		2023	2022
Interest on lease liabilities	$	137	152
Expenses relating to short-term leases	$	2,253	3,061
The amount recognized in the statements of cash flows for the		Group were as	follows:
		2023	2022
Total cash outflow for leases	$	9,567	12,110

The amount recognized in the statements of cash flows for the Group were as follows:

A. Buildings and structures leases

The Group leases buildings and structures for its office space and factories for the year ended December 31, 2023, which typically run for a period of one to five years.

B. Other leases

The Group leases transportation equipment with contract terms of three years.

In addition, the Company leases copy machines with contract terms of five years. As these leases are short-term and/or of low-value, the Company elects the recognition exemption and does not recognize the relevant right-of-use assets and lease liabilities.

(11) Employee benefits

A. Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value were as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit assets	December 31, 2023 $ 5,609 (6,460)	December 31, 2022 5,743 (7,191) (1,448)
	$ (851)

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle retired employees to receive retirement benefits based on their years of service and average monthly salary for the six months prior to retirement. The Company received the approval letters from the Department of Labor, Taipei City Government No. 1106083461, No. 1116069618, and No. 1126041943 of September 27, 2021, August 15, 2022, and August 29,2023, respectively which approved to suspend the appropriation of pension fund from September 2021 to August 2022, from September 2022 to August 2023, and from September 2023 to August 2024.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(a) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’s Bank of Taiwan labor pension reserve account balance amounted to NT$6,460 thousand as of the reporting date. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(b) Movements in present value of defined benefit obligations

The movement in the present value of the defined benefit obligations for the years ended December 31, 2023 and 2022 were as follows:

Defined benefit obligations at January 1 Current service cost and interest cost Remeasurements of net defined benefit obligations －Actuarial gains and losses arising from experience adjustments －Actuarial gains and losses arising from changes in financial assumptions Benefits paid Defined benefit obligations at December 31	2023 $ 5,743 80 575 67 (856)	2022 5,725 40 743 (530) (235) 5,743
	$ 5,609

(c) Movements in fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2023 and 2022 were as follows:

2023 and 2022 were as follows:	2023 and 2022 were as follows:
2023 Fair value of plan assets at January 1 $ (7,191) Interest income (101) Remeasurements of net defined benefit obligations －Return on plan assets excluding interest income (24) Benefits paid 856 Fair value of plan assets at December 31 $ (6,460)		2022 (6,862) (48) (516) 235 (7,191)
	$ (6,460)

(d) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 were as follows:

Net interest of net defined benefit liabilities (assets) Operating costs Operating expenses	2023 $ (21)	2022 (8) (6) (2) (8)
	$ (16) (5)
	$ (21)

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(e) Actuarial assumptions

The principal actuarial assumptions for determining present value of defined benefit obligations at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2023 1.30% 3.00%	December 31, 2022 1.40% 3.00%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date was $0.

The weighted average lifetime of the defined benefit plans was 12 years.

(f) Sensitivity analysis

When calculating the present value of defined benefit obligations, the Company must practice judgments and estimates to determine relevant actuarial assumptions at the balance sheets date, including discount rates and future salary changes. Any changes in actuarial assumptions may cause significant impacts on the amount of defined benefit obligations.

As of December 31, 2023 and 2022, if the actuarial assumptions had changed, the impact on the present value of the defined benefit obligations shall be as follows:

December 31, 2023 Discount rate Future salary increases rate December 31, 2022 Discount rate Future salary increases rate	Influences of defined benefit obligations	Influences of defined benefit obligations
	Increase0.25% (166) 156 (175) 166	Decrease0.25%
		172 (151) 182 (161)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis was consistent with the calculation of net defined benefit liabilities in the balance sheets.

There were no changes in the method and assumptions used in the preparation of sensitivity analysis for 2023 and 2022.

B. Defined contribution plans

The Group allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Group allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to NT$3,686 thousand and NT$3,857 thousand for the years ended December 31, 2023 and 2022, respectively.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(12) Income taxes

A. Tax expense

The components of the income tax in the years 2023 and 2022 were as follows:

Current tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Income tax for the continuing operations	2023 $ 5,365 (1,509)	2022 6,561 (3,646) 2,915 17,198 20,113
	3,856 983
	$ 4,839

The reconciliation of income tax expenses recognized in other comprehensive income were as below:

Profit from continuing operations before tax Income tax using the Company’s domestic tax rate Tax effect in foreign jurisdiction Nondeductible expenses Tax incentive Overestimation for prior periods Surtax on undistributed earnings of the prior year Tax expense	2023 $ 48,517	2022 94,956 18,991 33 9,182 (4,447) (3,646) - 20,113
	$ 9,703 32 91 (5,326) (1,509) 1,848
	$ 4,839

B. Deferred tax assets and liabilities

Changes in the amount of deferred tax assets for the years ended December 31, 2023 and 2022 were as follows:

Deferred tax liabilities: Balance at January 1, 2023 Recognized in profit or loss Balance at December 31, 2023 Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2022	Other $ 5,804 (2,021) $ 3,783 $ - 5,804 $ 5,804

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Deferred tax assets: Balance at January 1, 2023 Recognized in profit or loss Balance at December 31, 2023 Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2022	Allowance for inventory valuation and obsolescence $ 95,758 (2,470)	Other 2,520 (534)	Total 98,278 (3,004) 95,274 109,672 (11,394) 98,278
	$ 93,288	1,986
	$ 98,406 (2,648)	11,266 (8,746)
	$ 95,758	2,520

C. Assessment of tax

The Company’s tax returns for the years through 2021 were assessed by the National Taiwan Bureau.

(13) Capital and other equity

A. Ordinary shares

The Company had authorized capital of NT$800,000 thousand (80,000 thousand shares) as of December 31, 2023 and 2022, of which 60,554 thousand shares with par value of NT$10 were issued. Payments for all issued shares had been received.

B. Capital surplus

The balances of capital surplus were as follows:

Share premium	December 31, 2023 $ 474,527		December 31, 2022
			474,527

According to the R.O.C. Group Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

C. Retained earnings

The Company’s article of incorporation stipulates that any Company’s profit for the period should first be used to offset the prior years’ deficits (including the adjustments of the unappropriated retained earnings), allocate 10% of the remaining balance as legal reserve, unless such legal reserve has amounted to the paid-in capital, then set aside or reverse a special reserve in accordance with the laws and regulations or competent authorities. The remainder, if any, together with any undistributed retained earnings (including the adjustments of the unappropriated retained earnings) should be proposed earnings distribution by the Company’s Board of Directors. Wherein the distributable dividend and bonus may be paid by 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 the shareholders’ meeting. Wherein the distributable dividend and bonus may be paid by issuing new shares

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

after a resolution has been adopted in the shareholders’ meeting.

The dividend distribution policy of the Company is to coordinate with the current and future development plans, consider the investment environment, capital needs, and domestic and foreign competition conditions, and take into consideration factors such as shareholders’ interests. The dividends and bonus to shareholders each year shall not be less than 10% of the distributable earnings, but when the accumulated distributable earnings are lower than 3% of the paid-in capital, the distribution may not be done. When distributing dividends and bonus to shareholders, it can be done in the form of cash or stocks, and the cash dividends should not be less than 10% of the total dividends.

(a) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

• (b) Special reserve

According to the laws and regulations, special earnings shall be set aside from the net reduction of other shareholders’ equity in current-period balance sheets during earnings distribution. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

• (c) Earnings distribution

The amount of cash dividends on the appropriations of earnings for 2022 and 2021 had been approved during the board meetings on February 24, 2023 and March 16, 2022, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary shareholders: Cash	2022 Amount per share Amount $ 0.80 48,443	2021	2021	2021
	Amount per share	Amount per share		Amount
	$ 0.80	0.46		27,855

The amount of dividends on the appropriation of earnings for 2023 had been approved during the board meetings on February 20, 2024. The distribution to shareholders was as follows:

follows:
Dividends distributed to ordinary shareholders Cash	2023 Amount per share Amount $ 0.72 43,599
	Amount per share
	$ 0.72

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

D. Other equity interest

Balance at January 1, 2023 Exchange differences on foreign operations Balance at December 31, 2023 Balance at January 1, 2022 Exchange differences on foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Effect on equity of disposal of subsidiaries Balance at December 31, 2022	Exchange differences on translation of foreign financial statements $ (6,962) (292) $ (7,254) $ (11,178) 4,216 - - $ (6,962)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensi ve income (4,945) - (4,945) 20,407 - 28,730 (54,082) (4,945)	Total (11,907) (292)
			(12,199)
			9,229 4,216 28,730 (54,082)
			(11,907)

(14) Earnings per share

A. Basic earnings per share

The basic earnings per share of the Group in 2023 and 2022 were calculated based on the net profit attributable to the ordinary shareholders of the Company according to the weighted average number of ordinary shares outstanding. The calculations were as follows: (a) Profit attributable to ordinary shareholders of the Company

2023 Profit attributable to ordinary shareholders of the Company $ 43,678 (b) Weighted average number of ordinary shares (in thousands) 2023 Weighted average number of ordinary shares at December 31 (in thousands) (the number of shares at January 1) 60,554	2023 $ 43,678	2022 74,843 2022 60,554

B. Diluted earnings per share

The diluted earnings per share in 2023 and 2022 were calculated based on the net profit attributable to the ordinary shareholders of the Company according to the weighted average number of ordinary shares outstanding after all potential ordinary shares adjusted to be diluted. The calculations were as follows:

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (a) Profit attributable to ordinary shareholders of the Company (diluted)

2023 Profit attributable to ordinary shareholders of the Company (diluted) $ 43,678 Weighted average number of ordinary shares (diluted) (in thousands) 2023 Weighted average number of ordinary shares (basic) 60,554 Effect of employee share bonus 78 Weighted average number of ordinary shares at December 31 (diluted) 60,632	2023 $ 43,678	2022 74,843 2022 60,554 110 60,664
	60,632

(b) Weighted average number of ordinary shares (diluted) (in thousands)

• (15) Revenue from contracts with customers

• A. Details of revenue

Primary geographical markets: America Europe Taiwan Other country Main products/service lines: Monoclonal antibodies Pair antibodies Protein Polyclonal antibodies Testing instruments Other B. Contract balances Notes and accounts receivable Less: Allowance for impairment Total Contract liabilities	December 31, 2023	2023 $ 192,568 94,885 12,387 82,212	2023 $ 192,568 94,885 12,387 82,212	2022 196,828 112,624 29,325 72,979 411,756 132,754 93,223 66,825 30,701 (1,908) 90,161 411,756 January 1, 2022 63,251 (14,449) 48,802 2,638
		$ 382,052
		$ 121,011 76,590 63,250 24,502 7,343 89,356
		$ 382,052
			December 31, 2022 68,397 (8,152)
	$ 39,923		60,245
	$ 2,349		2,622

For details on accounts receivable and its loss allowance, please refer to note 6(3). The balance of contract liabilities at January 1, 2023 and 2022 recognized as revenue for the years 2023 and 2022 were NT$706 thousand and NT$864 thousand, respectively.

(16) Remuneration to employees and directors

The Company’s articles of incorporation, which were authorized by the Board of Directors but has yet to be approved by the shareholders, require that earnings shall first be offset

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

against any deficit, then, a minimum of 1% will be distributed as employee remuneration, and a maximum of 3% will be allocated as remuneration to directors. Employees who are entitled to receive the abovementioned employee remuneration, in share or cash, include the employees of the Company’s subsidiaries who meet requirements set by the Board of Directors. The aforesaid remuneration to directors shall be distributed in cash only.

For the years ended December 31, 2023 and 2022, the Company recognized its employee remuneration amounting to NT$2,155 thousand and NT$4,179 thousand respectively; as well as its remuneration to directors and supervisors amounting to NT$411 thousand and NT$795 thousand, respectively. These amounts were calculated by using the Company’s pre-tax net profit for the period before deducting the amounts of the remuneration to employees and directors, multiplied by the distribution of ratio of the remuneration to employees and directors based on the Company’s articles of incorporation, and expensed under operating costs or expenses. If any discrepancy occurred between the actual distributions and the accrued amount for the following year, it shall be treated as a change in accounting estimates, and the difference shall be recognized as profit or loss for the next year. Related information would be available at the Market Observation Post System website.

The amounts, as stated in the financial statements are identical to those of the actual distributions for 2023 and 2022.

(17) Non-operating income and expenses

• A. Interest income

The details of interest income were as follows:

distributions for 2023 and 2022. on-operating income and expenses A. Interest income The details of interest income were as follows:
Interest income from bank deposits B. Other income The details of other income were as follows: Other income C. Other gains and losses The details of other gains and losses were as follows: Gains (losses) on disposal of property, plant and equipment Foreign exchange gains Miscellaneous expenses	2023 $ 10,528	2022 3,636 2022 971 2022 7 26,079 (11) 26,075
	2023 $ 152
	2023 $ (3,453) 1,247 (6,770) $ (8,976)

Please refer to Note 6(4), explanations for other receivables, for the details of miscellaneous expenses from July 1, 2023 to September 30, 2023. D. Finance costs

The details of finance costs were as follows:

Other finance expense

2023 $ 142	2022 152

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(18) Financial instruments

A. Credit risk

• (a) Credit risk exposure

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

• (b) Concentration of credit risk

Except for the biggest customers, the Company has no significant credit risk exposure to any single counterparty or any group of counterparties with similar characteristics. As of December 31, 2023 and 2022, 13% and 31%, respectively, of accounts receivable were concentrated on the biggest customer, and 87% and 69%, respectively, of accounts receivable were concentrated on other counterparties’ transactions.

• (c) Receivables and debt securities

• For credit risk exposure of notes and accounts receivable, please refer to Note 6(3). Other financial assets measured at amortized cost, including other receivables are with low credit risk and which loss allowance for the period is measured by the twelvemonth expected credit loss amount. As of December 31, 2022, the Group had no impairment on other receivables.

• B. Liquidity risk

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

December 31, 2023 Non-derivative financial liabilities Accounts payable Other payables Lease liabilities Other financial liabilities December 31, 2022 Non-derivative financial liabilities Accounts payable Other payables Lease liabilities Other financial liabilities	Carrying amount	Contractual cash flow	Within 1year	1to 2years	2to 5 years	Over 5 years
	$ 14,935 34,384 7,706 5,790	14,935 34,384 7,867 5,790	14,935 34,384 5,203 5,790	- - 2,664 -	- - - -	- - - -
	$ 62,815	62,976	60,312	2,664	-	-
	$ 14,995 41,387 10,885 4,559	14,995 41,387 11,148 4,559	14,995 41,387 7,337 4,559	- - 3,811 -	- - - -	- - - -
	$ 71,826	72,089	68,278	3,811	-	-

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

C. Currency risk

(a) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD EUR GBP CNY Financial liabilities Monetary items USD EUR CNY Financial assets Monetary items USD EUR GBP JPY Financial liabilities Monetary items USD EUR JPY		December 31, 2023	New Taiwan Dollars 339,100 10,311 3,464 26,815 9,844 2,909 3,214 New Taiwan Dollars 354,194 19,849 6,906 3,407 10,211 3,463 1,029
	Foreign currency (in thousands) Exchange rate $ 11,044 USD：TWD 30.705 303 EUR：TWD 33.98 88 GBP：TWD 39.15 6,197 CNY：TWD 4.3270 321 USD：TWD 30.705 86 EUR：TWD 33.98 743 CNY：TWD 4.3270 December 31, 2022
	Foreign currency (in thousands) Exchange rate $ 11,533 USD：TWD 30.71 607 EUR：TWD 32.72 186 GBP：TWD 37.09 14,659 JPY：TWD 0.23 333 USD：TWD 30.71 106 EUR：TWD 32.72 4,426 JPY：TWD 0.23

(b) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the conversion of the foreign currency exchange gains and losses on cash and cash equivalents, accounts and other receivables, financial assets measured at fair value through other comprehensive income and accounts and other payables that are denominated in foreign currency. A strengthening (weakening) of 1% of the NTD against the USD, EUR and JPY as of December 31, 2023 and 2022 would have increased (decreased) the net profit after tax by NT$2,910 thousand and NT$2,957 thousand, respectively. The analysis for the two periods was on the same basis.

Since the Group transacts in different functional currencies, the information on foreign exchange gains (losses) on monetary items is disclosed by total amount. For the years ended December 31, 2023 and 2022, the foreign exchange gains (losses) (including realized and unrealized portions) amounted to NT$1,247 thousand and NT$26,079 thousand, respectively.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

D. Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to the management internally, which also represents the Group management’s assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1% basis points, the Group’s net income would have increased or decreased by NT$1,316 and NT$1,639 thousand for the years ended December 31, 2023 and 2022, assuming all other variable factors remain constant. This is mainly due to the Group’s deposits and investments in floating variable rates.

E. Fair value of financial instruments

• (a) Fair value hierarchy

The Group’s financial assets at fair value through other comprehensive income are measured at fair value on a recurring basis. The carrying amount and fair value of financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value and lease liabilities, disclosure of fair value information is not required:

Financial assets measured at fair value through other comprehensive income Unquoted equity instruments measured at fair value Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable Other receivables Restricted assets (as other current assets) Guarantee deposits paid (as other non- current assets) Subtotal Total Financial liabilities measured at amortized cost Accounts payable Other payables Other financial liabilities (as other current liabilities) Lease liabilities Total		December 31, 2023	December 31, 2023	December 31, 2023
	Carrying amount $ -		Fair value		Total -
		Level 1 -	Level 2 -	Level 3 -
	423,515 39,923 31,099 858 1,786	- - - - -	- - - - -	- - - - -	- - - - -
	497,181	-	-	-	-
	$ 497,181	-	-	-	-
	$ 14,935 34,384 5,790 7,706	- - - -	- - - -	- - - -	- - - -
	$ 62,815	-	-	-	-

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Financial assets measured at fair value through other comprehensive income Unquoted equity instruments measured at fair value Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable Other receivables Restricted assets (as other current assets) Guarantee deposits paid (as other non- current assets) Subtotal Total Financial liabilities measured at amortized cost Accounts payable Other payables Other financial liabilities (as other current liabilities) Lease liabilities Total		December 31, 2022	December 31, 2022	December 31, 2022	Total -
	Carrying amount $ -		Fair value
		Level 1 -	Level 2 -	Level 3 -
	367,065 60,245 95,657 849 2,581	- - - - -	- - - - -	- - - - -	- - - - -
	526,397	-	-	-	-
	$ 526,397	-	-	-	-
	$ 14,995 41,387 4,559 10,885	- - - -	- - - -	- - - -	- - - -
	$ 71,826	-	-	-	-

• (b) Valuation techniques for financial instruments measured at fair value

(2.1) Non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available.

The fair values of financial instruments other than those in an active market are acquired through valuation technique or referring to quotations from counterparties. The fair value acquired through valuation technique can refer to the current fair value of other financial instruments with substantial conditions and similar characteristics, discounted cash flow method or other valuation techniques.

(c) Movements of Level 3

January 1 Total gains or losses Recognized to other comprehensive income Disposals December 31	Measured at fair value through other comprehensive income 2023 2022 $ - $ 36,547 - 28,730 - (65,277)
	$ - $ -

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

The above-mentioned total gains or losses were accrued and recognized to “unrealized gains (losses) of financial assets measured at fair value through other comprehensive income”. Wherein, those related to the assets still held in 2023 and 2022 are as follows:

Total gains or losses Recognized to other comprehensive income (accrued and recognized to “unrealized gains (losses) of financial assets measured at fair value through other comprehensive income”)	2023 $ -	2022 28,730

(19) Financial risk management

A. Overview

The Group has exposures to the following risks from its financial instruments:

• (a) Credit risk

• (b) Liquidity risk

• (c) Market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the abovementioned risks. For more disclosures about the quantitative effects of these risk exposures, please refer to the respective notes in the accompanying financial statements.

• B. Risk management framework

The Board of Directors is fully responsible for the development and control of the risk management policy of the Group, which its establishment is to identify and analyze the risks faced by the Group, set adequate risk limits and controls and supervise the risks and compliance with risk limits. Risk management policies and systems are regularly reviewed to reflect changes in market conditions and operations of the Group. The Group develops a disciplined and constructive control environment through training, management principles and operating procedures so that all employees understand their roles and responsibilities. The Board of Directors oversees how the managements supervision is in compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, and reports the reviews to the Board of Directors.

C. Credit risk

Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations. A credit policy of the Group is stipulated internally to assess the credit quality of customers through the internal risk controls of considering their financial conditions, past experience and other factors, and periodically monitor the use of credit lines. The main credit risk arises principally from cash and cash equivalents, deposits in banks and financial institutions and outstanding accounts receivable from customers’ sales. The credits quality of the financial institutions that the Group contacts is stable, and deals with multiple institutions to diversify credit risks. The possibility of default is expected to be very low. The maximum amount of exposure to credit risk on the balance sheet date is the carrying amount of cash and deposits in banks.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• D. Liquidity risk

Cash flow forecasts are summarized by the Group’s finance department. The management regularly monitors rolling forecasts of working capital needs to ensure sufficient funds to cover daily operating activities and appropriate financial flexibility to maintain a balance between funding continuity and agility.

• E. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices that will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

• (a) Currency risk

• The Group operates transnationally, so it is subject to currency risks arising from transactions that are relatively different from the functional currency of the Company and its subsidiaries, mainly the US dollar and Euro. The related currency risk arises from future commercial transactions, assets and liabilities recognized and net investments in foreign operating institutions.

• The management of the Group has established a policy, managing currency risk arises from future commercial transactions and assets and liabilities recognized, and based on the principal of natural hedging, the Group considers the funding needs and net positions in the Company and its subsidiaries’ currency to hedge risks in accordance with market foreign exchange conditions. Currency risks arise when future commercial transactions and assets or liabilities recognized are denominated in a foreign currency that is not the Group’s functional currency.

• (b) Interest rate risk

The measures taken by the Group to respond to the risk of interest rate changes are mainly to regularly assess loan interest rates from banks and each currency and maintain good relationships with financial institutions to obtain lower financing costs, meanwhile practice methods such as strengthening working capital management to reduce the dependence on bank loans and diversify the risk of interest rate changes.

• (20) Capital management

The goal of the Group’s capital management is to ensure for continuing operating, maintain an optimal capital structure to reduce capital costs, and provide remuneration to shareholders. The Group achieves the goal of capital management through monitoring whether the capital position is sufficient to meet the debt repayments.

7. Related-party transactions

• (1) Names of related parties and their relationships

The transactions between the Group and other related parties within the period of this consolidated financial report were as follows:

Name of related party Relationship with the Group Abnova-GmbH Subsidiary of the Group Citil Pharma Incorporated Associate of the Group Wellconn Genomics Other related party

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (2) Significant transactions with related parties

• A. Operating revenue

The significant sales amount of the Group to related parties were as follows:

Associate

2023 $ 448	2022 -

The general sales price is no significant difference between the Group’s sales to associates and other related parties, and the collection period is one month.

B. Loans to related parties

Loans to related parties
Related parties Abnova GmbH Less: Investment additions accounted for using equity method Other non-current liabilities	December 31, 2023 $ 2,371 (2,809)	December 31, 2022 2,283 (2,809) (526)
	$ (438)

• (a) The Group did not charge interest for the above-mentioned transactions of loans to related parties.

• (b) The Group’s maximum limit of fund lent to related parties in 2023 and 2022 were both NT$5,000 thousand.

C. Other

• (a) The Group entrusted other related parties to provide cell testing services. Since there was no similar type of transaction for reference, the transaction price and payment terms were agreed according to the contract signed by both parties. The commissioned research expenses (as R&D expenses) in 2023 and 2022 were NT$360 thousand and NT$1,575 thousand, respectively.

• (b) The Group signed an office leasing contract with other related parties, which will be renewed every year after the expiration. The leasing price was negotiated by both parties, and the Group collects rent on a monthly basis according to the contract. The rent income in 2023 and 2022 were NT$135 thousand and NT$648 thousand, respectively.

• (3) Key management personnel transaction

Key management personnel compensation comprised:

Short-term employee benefits

2023	2022 9,606
$ 11,651

8. Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2023 $ 858 1,786 $ 2,644	December 31, 2022 849 2,581 3,430
Pledged time deposits (as other current assets) Guarantee deposits paid (as other non-current assets)	Customs duty pledged, Deposits for office and plant

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

9. Commitments and contingencies

The Group’s significant contractual commitments were as follows:

The Group and Louisiana State University of the United States signed an exclusive license for CHP technology on September 20, 2018, and the first payment was paid in 2018. Since the follow-up payments of the above contract must meet the requirements of conditions stipulated in the contract and the outcome obtained, whether and when it will be paid are uncertain. The Company’s contractual commitments for the acquisition of intangible assets that were not recognized in 2023 and 2022 were NT$33,315 thousand and NT$33,320 thousand, respectively. In addition, the Company paid the maintenance fee on an annual basis according to the contract, and paid royalty after the income was generated.

10. Losses due to major disasters ： None.

11. Subsequent events ： None.

12. Other

The employee benefits, depreciation, and amortization expenses categorized by function, were as follows:

ollows:
By function By item	2023			2022
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salaries and wages Labor and health insurance Pension Other Depreciation expenses Amortizationexpenses	34,285 3,893 1,895 1,872 7,038 8,214	43,784 3,588 1,770 1,606 14,453 2,606	78,069 7,481 3,665 3,478 21,491 10,820	36,480 3,977 1,983 1,854 8,037 8,331	45,693 3,695 1,866 1,756 15,717 2,408	82,173 7,672 3,849 3,610 23,754 10,739

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

13. Other disclosures

• (1) Information on significant transactions

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

A. Loans to other parties:

(Expressed in Thousands of New Taiwan Dollars)

==> picture [485 x 122] intentionally omitted <==

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

Name of Name of Account Related Highest Ending Actual Range of Nature of Transaction Reasons for Allowance Collateral Individual Maximum
Number lender borrower name party balance of balance usage interest financing amount for short-term for bad funding limit of
financing amount rates business financing debt Name Value loan limits fund
to other during the during the between two Amount financing
parties period period parties
during the
period
0 Abnova Abnova- Other Yes 5,000 5,000 2,371 - 2 - Operating - - 128,631 514,527
(Taiwan) GmbH receivables- turnover for
Corporation related party subsidiaries
----- End of picture text -----

• Note 1 ： The numbers filled in were as follows:

• The Company is ‘0’.

• The investee companies are numbered in order starting from ‘1’.

Note 2 ： Financing purpose:

1. ‘1’ for entities the Company has business transactions with.

2. ‘2’ for entities that have short-term financing needs.

3. Note 3 ： Limit of fund financing:

4. The total amount available for financing purposes shall not exceed 40% of the Company’s net worth in the latest financial statements audited or reviewed by accountants.

5. The individual financing amount to one entity that have business transaction with the Company shall not exceed the total transaction amount.

6. The total amount for short-term financing to one entity shall not exceed 10% (inclusive) of the Company’s net worth in the latest financial statements audited or reviewed by auditors.

7. Note 4 ： The aforementioned transactions have been eliminated in preparing the consolidated financial statements.

8. B. Guarantees and endorsements for other parties: None.

9. C. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

Unit: New Taiwan Dollars / share

Name of holder	Category and name of security	Relationship with company	Account name	Ending balance	Ending balance	Ending balance	Ending balance	Highest percentage of ownership	Note
				Shares	Carrying amount	Percentage of ownership	Fair value
The Company	Hukui Biotechnology Corporation (Samoa)	-	Financial assets measured at fair value through other comprehensive income	50,000	-	1.32%	-	- %

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

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

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

• G. Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

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

• I. Trading in derivative instruments: None.

• J. Business relationships and significant intercompany transactions: None.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (2) Information on investees (excluding information on investees in Mainland China): The following is the information on investees for the years ended December 31, 2023

Unit: New Taiwan Dollars / share

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Highest percentage of ownership	Net income (loss) of investee	Investment profit (loss) recognized by investor	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of ownership	Carrying amount
The Company " " " AxleBio Ventures Abnova Holding Corporation Abnova (Cayman) Corporation "	Abnova GmbH (Note 5) Abnova Holding Corporation AxleBio Ventures Citil Pharma Incorporated Citil Pharma Incorporated Abnova (Cayman) Corporation Abnova (HK) Limited Abnova Diagnostics	Germany British Virgin Islands Taiwan USA USA Cayman Islands Hong Kong Japan	Distribution of biological products Investment business Investment business R&D of cell therapy technology R&D of cell therapy technology Investment business Investment business R&D, manufacturing and sales of medical device, etc., testing services	850 80,908 1,300 - 342 79,987 51,277 19,548	850 80,908 - 887 - 79,987 51,277 19,548	(Note4) 52,700 130,000 - 2,890,000 2,605,000 1,670,000 1,800,000	100.00% 100.00% 100.00% - 40.00% 100.00% 100.00% 100.00%	(2,809) 86,277 1,154 - 251 86,284 84,527 1,086	- % - % - % - % - % - % - % - %	- (10,504) (65) (491) (491) (10,394) (5,968) (4,210)	- (10,504) (65) (230) (9) (10,394) (5,968) (4,210)	Subsidiary " " Associates (Note 6) " Second- tier subsidiary " "

Note 1 ： The above transaction amount was eliminated in the consolidated financial statements.

Note 2 ： The original investment amount of investees was calculated at USD1:TWD30.705 of December 31, 2023. Note 3 ： The original investment amount of investees was calculated at JPY1:TWD0.2172 of December 31, 2023. Note 4 ： The investee is a limited company with no shares issued.

Note 5 ： The investee is a subsidiary of the Company, and the net amount after deducting its receivables was listed in “Other non-current liabilities”. Note 6 ： Please refer to Note 6(6).

• (3) Information on investment in Mainland China: None.

• (4) Major shareholders ：

Note 6：Please refer to Note 6(6). formation on investment in Mainland China: None. ajor shareholders：
	Unit: Shares
Shareholding Shareholder’s name	Shares	Percentage
Wilber Huang	3,651,144	6.02%

14. Segment information

(1) General information

The Group’s main business is the R&D and production of biotechnology and operates only a single industry. The operating decision-makers of the Group evaluate performance and allocate resources based on the company’s overall operating results, and the group is identified as a single reportable segment.

(2) Segment information

The accounting policies of the Group's operating segments are the same as ‘summary of significant accounting policies’ stated in Note 4 to the financial reports, and profit or loss are measured by net operating income, which is as the basis for evaluating the operating segments’ performance.

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Abnova (Taiwan) Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(3) Reconciliation of segment’s income

The Group’s net operating income reported to the chief operating decision-maker adopts the same measurement method as the income and expenses in the statements of comprehensive income, so the reconciliation items of net operating income are the same as those in the statements of comprehensive income.

(4) Geographic information

In presenting information on the basis of geography, segment revenue was based on the geographical location of customers, while non-current assets were based on the geographical location of the assets. Please refer to Note 6(15) for the revenue from external customers. Non-current assets include property, plant and equipment, intangible assets and other assets, excluding financial instruments, deferred tax assets, assets of post-employment benefits and guarantee deposits paid.

Non-current assets Non-current assets: Taiwan Japan Total	December 31, 2023 $ 337,896 114	December 31, 2022 339,607 4,723
	$ 338,010	344,330

(5) Major customers

The Group’s income from a single customer accounted for 10% of the operating revenue for the years ended December 31, 2023 and 2022 was as follows:

Customer A

ws:
2023	2022 59,699
$ 44,423

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Stock Code ： 4133

Abnova (Taiwan) Corporation Parent Company Only Financial Statements

With Independent Auditors’ Report

For the Years Ended December 31, 2023 and 2022

Address ： 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City Telephone ： (02)8751-1888

Notice to readers.

THIS IS A TRANSLATION OF THE FINANCIAL STATEMENTS (THE “FINANCIAL STATEMENTS”) OF ABNOVA (TAIWAN) CORPORATION (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE FINANCIAL STATEMENTS SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

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Independent Auditors’ Report

To the Board of Directors of Abnova (Taiwan) Corporation:

Opinion

We have audited the financial statements of Abnova (Taiwan) Corporation (“the Company”), which comprise the balance sheets as of December 31, 2023 and 2022, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, 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 auditing standards. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statement section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters we judge that shall be communicated in the audit report are as follows:

1. Inventory valuation

Please refer to Note 4(7) “Inventories”; Note 5(1) “Significant accounting assumptions and judgments, and major sources of estimation uncertainty”, and Note 6(5) “Inventories”.

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Description of key audit matter:

The major business of the Company is the manufacturing and sales of antibody, protein, test reagents and testing instruments. Inventories are measured at the lower of cost and net realizable value. Due to the longer life cycle of the products, the management considers factors such as product circulation, exposure, preservation and industry information to evaluate the net realizable value of inventories. As the Company has large amount of inventories and a large number of items, and the net realizable value used in the above-mentioned evaluation involves subjective judgment, the evaluation of loss allowance for inventory valuation has been listed as the key audit matter of the year.

Our principal audit procedures included:

The key audit procedures for the above-mentioned key audit matter based on the understanding of the industrial characteristics of the Company include obtaining statistical information on the sales time and sales status of the products on the shelves in each year provided by the management in the subsequent years to evaluate the rationality of the policy used to recognize the inventory valuation loss; understanding the Company’s inventory management process, reviewing the annual inventory plan and participating in the annual inventory check to evaluate the effectiveness of the management’s inventory control; obtaining the inventory net realizable value calculation sheet, and spot check the correctness of the calculation.

Responsibilities of management and those charged with governance for the financial statements

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

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the 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 the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards 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 financial statements.

As part of an audit in accordance with auditing standards, we exercise professional judgment and professional skepticism throughout the audit. We also:

• A. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as

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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 auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company’s to cease to continue as a going concern.

• E. Evaluate the overall presentation, structure and content of the financial reports, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• F. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on these financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

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

KPMG

Auditors ：

Securities ： Financial-Supervisory-Securities Competent -Auditing -1080303300 Authority Financial-Supervisory-Securities Approved-certi -Auditing-1070304941 fied No. February 27, 2024

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Abnova (Taiwan) Corporation

Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (Note 6(1)) 1150 Notes receivable, net (Note 6(3)) 1170 Accounts receivable, net (Note 6(3)) 1200 Other receivables (Note 6(4) and Note 7) 1220 Current income tax assets (Note 6(12)) 130X Inventories (Note 6(5)) 1479 Other current assets (Note 8) Total current assets Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note 6(2)) 1550 Investments accounted for using equity method (Note 6(6)) 1600 Property, plant and equipment (Note 6(7)) 1755 Right-of-use assets (Note 6(8)) 1780 Intangible assets (Note 6(9)) 1840 Deferred tax assets (Note 6(12)) 1900 Other non-current assets (Note 6(11) and Note 8) Total non-current assets Total assets	December 31, 2023 Amount ％ $ 360,329 27 491 - 39,358 3 3,223 - 1,602 - 408,302 30 16,661 1	December 31, 2023 Amount ％ $ 360,329 27 491 - 39,358 3 3,223 - 1,602 - 408,302 30 16,661 1	December 31, 2022 Amount ％ 362,971 27 246 - 59,999 5 2,452 - - - 396,079 29 8,841 - 830,588 61 - - 97,564 7 252,134 18 10,422 1 68,815 5 98,278 7 11,715 1 538,928 39 1,369,516 100 Liabilities and equity Current liabilities: 2130 Contract liability-current (Note 6(15)) 2170 Accounts payable 2200 Other payables 2230 Current tax liabilities 2280 Current lease liabilities (Note 6(10)) 2300 Other current liabilities Total current liabilities Non-current liabilities: 2570 Deferred tax liabilities (Note 6(12)) 2580 Non-current lease liabilities (Note 6(10)) 2600 Other non-current liabilities (Note 6(6) and Note 7) Total non-current liabilities Total liabilities Equity (Note 6(13)) 3110 Ordinary share 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest Total equity Total liabilities and equity	December 31, 2023 Amount % $ 2,349 - 14,935 2 31,630 3 - - 5,105 - 5,787 - 59,806 5 3,783 - 2,601 - 438 - 6,822 - 66,628 5 605,536 45 474,527 35 98,565 7 11,907 1 107,983 8 (12,199) (1) 1,286,319 95 $ 1,352,947 100	December 31, 2023 Amount % $ 2,349 - 14,935 2 31,630 3 - - 5,105 - 5,787 - 59,806 5 3,783 - 2,601 - 438 - 6,822 - 66,628 5 605,536 45 474,527 35 98,565 7 11,907 1 107,983 8 (12,199) (1) 1,286,319 95 $ 1,352,947 100	December 31,	2022 % - 1 3 - - -
	Amount $ 360,329 491 39,358 3,223 1,602 408,302 16,661		Amount 362,971 246 59,999 2,452 - 396,079 8,841 830,588 - 97,564 252,134 10,422 68,815 98,278 11,715 538,928 1,369,516	Amount $ 2,349 14,935 31,630 - 5,105 5,787		Amount 2,622 14,995 36,541 2,015 6,778 4,555
				59,806	5	67,506	4
	829,966	61		3,783 2,601 438	- - -	5,804 3,686 526	- - -
	- 87,431 257,749 7,649 69,640 95,274 5,238	- 7 19 1 5 7 -
				6,822	-	10,016	-
				66,628	5	77,522	4
				605,536 474,527 98,565 11,907 107,983 (12,199)	45 35 7 1 8 (1)	605,536 474,527 85,642 - 138,196 (11,907)	45 35 7 - 10 (1)
	522,981	39
				1,286,319	95	1,291,994	96
	$ 1,352,947	100		$ 1,352,947	100	1,369,516	100

(See accompanying notes to financial statements.) Manager: JIH PEI JU

Chairman: WILBER HUANG

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation Statements of Comprehensive Income For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

2023 Amount 4000 Operating revenue (Note 6(15) and Note 7) $ 380,593 5000 Operating costs (Note 6(5)) (208,137) Net gross profit 172,456 Operating expenses: 6100 Marketing expenses (45,261) 6200 Administrative expenses (43,437) 6300 R&D expenses (38,396) 6450 Expected credit loss (Note 6(3)) 3,053 Total operating expenses (124,041) Net operating income 48,415 Non-operating income and expenses (Note 6(17)): 7100 Interest income 10,332 7010 Other income 152 7020 Other gains and losses 517 7050 Finance costs (140) 7375 Share of subsidiaries, associates and joint ventures income accounted for using equity method (Note 6(6)) (10,799) Total non-operating income and expenses 62 Profit from continuing operations before tax 48,477 7950 Tax expense (Note 6(12)) 4,799 Profit 43,678 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of defined benefit plans (618) 8330 Share of subsidiaries, associates and joint ventures other comprehensive income accounted for using equity method－components that will not be reclassified to profit or loss - 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss - Components of other comprehensive income that will not be reclassified to profit or loss (618) 8360 Components of other comprehensive income (loss) that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements (292) 8399 Less: Income tax related to components of other comprehensive income that may be reclassified to profit or loss - Components of other comprehensive income (loss) that may be reclassified to profit or loss (292) 8300 Other comprehensive income, net of tax (910) 8500 Total comprehensive income $ 42,768 Earnings per share (NT dollars)(Note 6(14)) 9750 Basic earnings per share (NT dollars) $ 9850 Diluted earnings per share (NT dollars) $	2023	％ 100 (55)	2022	％ 100 (51)
	Amount $ 380,593 (208,137)		Amount 410,320 (210,327)
	172,456	45	199,993	49
	(45,261) (43,437) (38,396) 3,053	(12) (11) (10) 1	(40,349) (41,139) (48,740) (698)	(10) (10) (12) -
	(124,041)	(32)	(130,926)	(32)
	48,415	13	69,067	17
	10,332 152 517 (140) (10,799)	3 - - - (3)	3,463 800 26,053 (132) (4,336)	1 - 6 - (1)
	62	-	25,848	6
	48,477 4,799	13 1	94,915 20,072	23 5
	43,678	12	74,843	18
		- - -	304 28,730 -	- 7 -
	(618)	-	29,034	7
	(292) -	- -	4,216 -	1 -
	(292)	-	4,216	1
	(910)	-	33,250	8
	$ 42,768	12	108,093	26
	$	0.72		1.24
	$	0.72		1.23

(See accompanying notes to financial statements.)

Chairman: WILBER HUANG Manager: JIH PEI JU

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation Statements of Changes in Equity For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2022 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve Cash dividends on ordinary shares Effect on equity of disposal of subsidiaries Balance at December 31, 2022 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends on ordinary shares Balance at December 31, 2023		Shares Ordinary shares $ 605,536 - - - - - - 605,536 - - - - - - $ 605,536	Capital surplus 474,527 - - - - - - 474,527 - - - - - - 474,527			Retained earnings	Unappropriated retained earnings 39,698 74,843 304 75,147 (2,876) (27,855) 54,082 138,196 43,678 (618) 43,060 (12,923) (11,907) (48,443) 107,983	Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (11,178) 20,407 - - 4,216 28,730 4,216 28,730 - - - - - (54,082) (6,962) (4,945) - - (292) - (292) - - - - - - - (7,254) (4,945)	Total equity 1,211,756 74,843 33,250
				Legal reserve 82,766 - - - 2,876 - - 85,642 - - - 12,923 - 98,565		Special reserve 11,907 11,907
									108,093
									- (27,855) -
									1,291,994 43,678 (910)
									42,768
									- - (48,443)
									1,286,319

(See accompanying notes to financial statements.) Manager: JIH PEI JU

Chairman: WILBER HUANG

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation Statements of Cash Flows

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss) Depreciation expenses Amortization expenses Expected credit loss (reversal gains) Interest expense Interest income Share of subsidiaries, associates and joint ventures losses accounted for using equity method Gains on disposals of property, plant and equipment Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Other receivables Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Accounts payable Other payables Other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Acquisition of investments accounted for using equity method Disposal of investments accounted for using equity method Cash refund from capital reduction of investees accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of intangible assets Other financial assets Other non-current assets Other non-current liabilities Net cash flows (outflows) used in investing activities Cash flows from financing activities: Repayment of lease principles Cash dividends paid Net cash flows from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2023 $ 48,477 20,744 10,820 (3,053) 140 (10,332) 10,799 (160)	2022 94,915 21,324 10,739 698 132 (3,463) 4,336 -
	28,958	33,766
	(245) 23,694 (317) (14,548) (7,811)	194 (12,344) (300) 8,583 3,515
	773	(352)
	(273) (60) (4,911) 1,232	(16) 3,515 3,493 (17,884)
	(4,012)	(10,892)
	(3,239)	(11,244)
	25,719	22,522
	74,196 9,878 (140) (7,433)	117,437 3,016 (132) (5,212)
	76,501	115,109
	(1,300) 342 - (19,566) 160 (9,320) 791 5,059 (88)	- - 21,675 (1,390) - (5,240) (350) (7,165) (97)
	(23,922)	7,433
	(6,778) (48,443)	(7,421) (27,855)
	(55,221)	(35,276)
	(2,642) 362,971	87,266 275,705
	$ 360,329	362,971

(See accompanying notes to financial statements.) Chairman: WILBER HUANG Manager: JIH PEI JU

Accounting supervisor: CHANG YA PING

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation Notes to the Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan Dollars, unless specified otherwise)

1. Company history

Abnova (Taiwan) Corporation (the “Company”) was legally established with the approval of the Ministry of Economic Affairs (R.O.C.) on January 4, 2002, with registered address at 9th Fl., No. 108, Jhouzih St., Neihu District, Taipei City, Taiwan (R.O.C.). The Company has been actively developing, manufacturing, and selling monoclonal antibody, polyclonal antibody, proteins, medical inspection instruments and testing reagents, which are mainly antibody reagents, antibody chips or related products provided to and used by academic, research institutions or pharmaceutical factories, etc. Antibodies are the most important means for understanding proteins and their functions. The products of the Company help to study the relationship between protein changes in the process of cancer, infectious diseases, metabolism and endocrine diseases, and then apply to the development of medical inspection reagents and drugs.

2. Approval date and procedures of the financial statements

• These parent company only financial statements were authorized for issue by the Board of Directors on February 27, 2024.

3. New standards, amendments and interpretations adopted

• (1) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted. The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2023.

  • ‧Amendments to IAS 1 “Disclosure of Accounting Policies”

  • ‧Amendments to IAS 8 “Definition of Accounting Estimates”

  • ‧Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

• The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from May 23, 2023.

• ‧Amendments to IAS 12 “International Tax Reform — Pillar Two Model Rules”

• (2) The impact of IFRS issued by the FSC but not yet effective

  • The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its financial statements.

  • ‧Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

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

  • ‧Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”

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

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

  • The Company assesses that the adoption of the following new or amended standards, not yet endorsed by the FSC, would not have a significant impact on its financial statements.

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

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

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

‧Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9 - Comparative Information"

‧Amendments to IAS 21 “Lack of Exchangeability”

4. Summary of significant accounting policies

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(1) Statement of compliance

These financial statements have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” (hereinafter referred to as the Regulations).

• (2) Basis of preparation

• A. Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

• (a) Financial assets at fair value through other comprehensive income are measured at fair value; and

• (b) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in Note 4(15).

• B. Functional and presentation currency

The functional currency of each entity of the Company is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan Dollars, which is the Company’s functional currency. All financial information presented in New Taiwan Dollars has been rounded to the nearest thousand.

• (3) Foreign currency

• A. Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

• (a) an investment in equity securities designated as at fair value through other comprehensive income;

• (b) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

• (c) qualifying cash flow hedges to the extent that the hedges are effective.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

• B. Foreign operations

• The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the New Taiwan Dollars at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the New Taiwan Dollars at the average exchange rate. Exchange differences are recognized in other comprehensive income.

• When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes only a part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Company disposes only a part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

• When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

• (4) Classification of current and non-current assets and liabilities

• An asset is classified as current under one of the following criteria, and all other assets are classified as non-current:

• A. It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

• B. It is held primarily for the purpose of trading;

• C. It is expected to be realized within twelve months after the reporting period; or

• D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

• A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current:

• A. It is expected to be settled in the normal operating cycle;

• B. It is held primarily for the purpose of trading;

• C. It is due to be settled within twelve months after the reporting period; or

• D. The Company does not have any unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments that do not affect its classification.

• (5) Cash and cash equivalents

• Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

• (6) Financial instruments

Accounts receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is an accounts receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. An accounts receivable without a significant financing component is initially measured at the transaction price.

• A. Financial assets

• All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• (a) Financial assets measured at amortized cost

• A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• ‧It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• (b) Financial assets measured at fair value through other comprehensive income On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis. Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

• Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established (usually the ex-dividend date).

• (c) Impairment of financial assets

• The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivables, other receivable, guarantee deposit paid and other financial assets) and contract assets. The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

• ‧Debt securities that are determined to have low credit risk at the reporting date; and

• ‧Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Loss allowance for accounts receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

ECLs are probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

‧Significant financial difficulty of the borrower or issuer;

‧A breach of contract such as a default or being some time past due;

‧The lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

‧It is probable that the borrower will enter bankruptcy or other financial reorganization; or

‧The disappearance of an active market for that financial assets because of financial difficulties. Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate accounts, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

• (d) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• B. Financial liabilities and equity instruments

• (a) Classification of liabilities and equity

The Company shall classify the debt and equity instruments issued by the Company as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definition of a financial liability and an equity instrument.

• (b) Financial liabilities

Financial liabilities are measured at amortized costs.

Other financial assets are measured at amortized costs by effective interest rate method subsequently. The interest expenses and exchange gains or losses are recognized in profit or loss. Any gains or losses at derecognition are recognized in profit or loss as well.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

• (c) Derecognition of financial liabilities

• The Company shall remove a financial liability from its statement of financial position when the obligation specified in the contract is discharged or cancelled or expires. A substantial modification of the terms of an existing financial liability and significant difference in cash flows after the modification shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability by fair value based on the modified contractual terms.

At derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed), shall be recognized in profit or loss.

• (7) Inventories

• A. The perpetual inventory system is adopted, and the acquisition costs are recorded in the account. The costs are determined by the weighted average method, and the fixed production overheads are allocated according to the normal operating capacity of the production equipment. Inventories at the end of period except for obsolete and slow-moving inventories are provided for loss allowance. Inventories are measured at the lower of cost and net realizable value. When comparing the lower of cost and net realizable value, the item-by-item comparison method is adopted. The market price of raw materials is the replacement cost (that is, the latest purchase price); the market price of work in progress, semi-finished goods, finished goods and commodity inventories is the net realizable value.

• B. The basis for the loss allowance for each obsolete and slow-moving inventory is explained as follows:

• (a) 100% loss allowance provisions for protein inventory over two years (entering the third year); 2% to 50% loss allowance provisions for the stock age within two years (exclusive).

• (b) 1% to 3% loss allowance provisions for testing instruments within two years (exclusive) according to the stock age; 10% to 70% loss allowance provisions for the stock age over two years (entering the third year) to five years (exclusive); 100% loss allowance provisions for the stock age reaches five years (entering the sixth year).

• (c) 0.1% to 20% loss allowance provisions for the stock age of inventories other than protein and testing instruments within four years (exclusive); 40% to 80% loss allowance provisions for the stock age reaches five years (entering the sixth year) to six years (exclusive); 100% loss allowance provisions for the stock age reaches six years (entering the seventh year).

• (8) Invest in associates

Associates are that in which the Company has significant influence over their financial and operating policies but is not controlling or jointly controlling.

The Company adopts the equity method to handle the interests of the associates. Under the equity method, the original acquisition is recognized at cost, and investment costs include transaction costs. The carrying amount of investments in an associate includes the goodwill identified at the time of the original investment, less any accumulated impairment loss.

The financial report includes from the date of significant influence to the date of loss of significant influence; after the adjustments made consistent with the accounting policy of the Company, the Company recognizes the profit and loss and the amount of other comprehensive income of each investment in associates based on the equity ratio. When the equity changes in non- profit or loss and other comprehensive income of an associate does not affect the shareholding ratio of the Company, the Company will recognize all changes in equity as capital reserves according to the shareholding ratio.

Unrealized gains and losses arising from transactions between the Company and associates are recognized in the corporate financial statements only within the scope of non-related party investors’ interests in associates. When the Company shall recognize the loss share of an associate proportionally equal to or exceeds its equity in the associate, it shall stop recognizing the losses, and

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

only within the scope of a legal obligation, a constructive obligation, or a payment made on behalf of the invested company, additional losses and related liabilities shall be recognized.

• (9) Invest in subsidiaries

When preparing the parent company only financial statements, investment in subsidiaries which are controlled by the Company is accounted for using the equity method. Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company's share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in a parent’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within equity.

• (10) Property, plant and equipment

• A. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

• B. Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

• C. Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

(a) Buildings and structures 9 to 50 years (b) Machinery and equipment 3 to 15 years (c) Office equipment 3 to 8 years (d) Leasehold improvements 3 to 10 years (e) Other equipment 1 to 7 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (11) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

• A. As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• (a) fixed payments;

• (b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• (c) amounts expected to be payable under a residual value guarantee; and

• (d) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• (a) there is a change in future lease payments arising from the change in an index or rate;

• (b) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee;

• (c) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset;

• (d) there is a change of its assessment on whether it will exercise a purchase, extension or termination option;

• (e) there is any lease modification.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets and lease liabilities that do not meet the definition of investment property as a separate line item respectively in the statement of financial position. The Company has elected not to recognize right-of-use assets and lease liabilities for office equipment with short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

• B. As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS 15 to allocate the consideration in the contract.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(12) Intangible assets

• A. Recognition and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, including computer software, patent rights and customer relationships, are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

• B. Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, is recognized in profit or loss as incurred, including internally developed goodwill and brands.

• C. Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

• The estimated useful lives of intangible assets for current and comparative periods are as follows:

• (a)Royalty 5 to 30 years (b)Intangible assets internally generated 3 years (c)Customer relationships 3 years (d)Computer software 5 to 10 years Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (13) Impairment of non-derivative financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

(14) Revenue recognition

• A. Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good to a customer. The description of main income items is as follows:

• (a) Sales of goods

The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer upon the transaction terms, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the 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, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

The Company offers volume discounts to customers. The Company recognizes revenue on the basis of the net amount of the contract price minus the estimated volume discount. The amount of the volume discount is estimated based on the expected value based on past cumulative experience, and revenue is recognized only in the range where there is a high probability that no significant reversal will occur.

• (15) Employee benefits

• A. Defined contribution plans

• Obligations for contributions of pension to defined contribution plans are expensed as the related service is provided.

• B. Defined benefit plans

The Company’s net obligation is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

• C. Short-term employee benefits

• Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

• (16) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

when they reserve, using tax rates enacted or substantively enacted at the reporting date. Deferred income tax shall be recognized for the temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, except to the extent that:

• A. the initial recognition of an asset or liability in a transaction which is not a business combination, and at the time of the transaction, (i) affects neither accounting profit (ii) nor taxable profit (tax loss) and (ii) does not give rise to equal taxable and deductible temporary differences, or

• B. the temporary differences associated with investments in subsidiaries, and it is probable that the temporary differences will not reverse in the foreseeable future, or

• C. the deferred tax liabilities arise from the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred income tax is measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates or tax laws that have been enacted or substantively enacted at the reporting date.

The Company shall offset current tax assets and current tax liabilities, only if:

• A. the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

• B. the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• (a) The same taxable entity; or

• (b) Different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

• (17) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

• (18) Segment information

The Company discloses the operating segments information in the consolidated financial statements. Therefore, the Company does not disclose such information in the parent company only financial statements.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

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

The preparation of the consolidated financial report requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates. The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Accounting policies involve critical judgments and have no significant impact on the amount recognized in this parent company only financial report.

Information about uncertainties of the following assumptions and estimates which have significant risks of causing critical adjustments to the carrying amount of assets and liabilities in the next fiscal year is as follows:

(1) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for normal loss and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. In addition, the Company has also considered the industry characteristics and the liquidity of inventories to assess the loss allowance for slow-moving inventories. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the changes in industrial application technology, there may be significant changes in the net realizable value of inventories.

6. Explanation of significant accounts

(1) Cash and cash equivalents

ation of significant accounts ash and cash equivalents
Cash Checking account Demand deposits Time deposits	December 31, 2023 $ 466 487 68,454 290,922	December 31, 2022 566 716 159,784 201,905
	$ 360,329	362,971

The term of the Company’s time deposits is three months It is used as a short-term fund that can be converted momentarily for any fund demand, and the risk of value changes is low, so it is classified under cash and cash equivalents. Please refer to Note 6(18) for the interest rate risk, and sensitivity analysis of the financial assets and liabilities.

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

Equity instruments measured at fair value through other comprehensive income: Foreign non-listed (non-OTC-listed) stocks －Hukui Biotechnology Corporation (Samoa)	December 31, 2023 $ -	December 31, 2022 -

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

• A. Investments in equity instruments measured at fair value through other comprehensive income

The Company designated the investment shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term strategic purpose.

Please refer to Note 6(18) for information on the carrying amount, fair value and market risks of the foreign non-listed (non-OTC-listed) stocks of Hukui Biotechnology Corporation (Samoa) held by the Company.

The Company did not dispose strategic investments in 2023 and 2022, and the accumulated profits and losses during these periods have not been made for any transfer within the equity.

• B. The aforementioned financial assets were not pledged as long-term loans and financing facilities.

• (3) Notes and accounts receivable

facilities. otes and accounts receivable
Notes receivable Accounts receivable Less: Loss allowance	December 31, 2023 $ 491 44,605 (5,247) $ 39,849	December 31, 2022 246 68,151 (8,152)
		60,245

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information.

The loss allowance provisions for notes and accounts receivable of the series products of circulating tumor cell testing were determined as follows:

Current and less than 30 days past due Current and less than 30 days past due	December 31, 2023	December 31, 2023	December 31, 2023	Loss allowance provision -
	Gross carrying amount $ -	Weighted-aver age loss rate
				Loss allowance provision -
	Gross carrying amount $ 26	Weighted-aver age loss rate
		1.51%

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

The loss allowance provisions for notes and accounts receivable for the series products of non-circulating tumor cell testing were determined as follows:

Current and less than 30 days past due 31 to 60 days past due 61 to 90 days past due 91 to 120 days past due 121 to 180 days past due 181 to 365 days past due More than 365 days past due Current and less than 30 days past due 31 to 60 days past due 61 to 90 days past due 91 to 120 days past due 121 to 180 days past due 181 to 365 days past due More than 365 days past due	December 31, 2023	December 31, 2023	December 31, 2023	Loss allowance provision 584 245 179 283 1,058 1,590 1,308 5,247 Loss allowance provision 539 1,749 474 1,418 1,161 1,899 912 8,152
	Gross carrying amount Weighted-aver age loss rate $ 37,295 1.57% 1,276 19.20% 563 31.74% 582 48.68% 1,962 53.91% 2,110 75.37% 1,308 100.00% $ 45,096 December 31, 2022	Weighted-aver age loss rate
	Gross carrying amount $ 45,339 12,486 1,888 3,350 2,066 2,330 912 $ 68,371	Weighted-aver age loss rate
		1.19% 14.01% 25.11% 42.32% 56.21% 81.47% 100.00%

The movement in the loss allowance for notes and accounts receivable were as follows:

Balance at January 1 Impairment losses Irrecoverable amount written-off in the current year Reversal of impairment losses Others Balance at December 31	2023 $ 8,152 - - (3,053) 148 $ 5,247	2023 $ 8,152 - - (3,053) 148 $ 5,247	2022 14,449 698 (6,995) - - 8,152
		$ 5,247

The aforementioned financial assets were not pledged as long-term loans and financing facilities.

(4) Other receivables

Other receivables Other receivables-related parties	December 31, 2023 $ 3,109 114 $ 3,223	December 31, 2022 2,452 - 2,452

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(5) Inventories

Raw materials and supplies Semi-finished goods Work in progress Finished goods Merchandise Testing instruments	December 31, 2023 $ 23,680 250,513 9,954 118,303 5,163 689	December 31, 2022 21,973 239,258 6,503 119,329 6,364 2,652 396,079
	$ 408,302

The components of cost of sales for the years ended December 31, 2023 and 2022 are as follows:

Sales of inventories transferred Inventory disposal loss Gain from price recovery of inventory valuation and obsolescence Total	2023 $ 160,359 60,126 (12,348)	2022 163,554 60,016 (13,243) 210,327
	$ 208,137

As of December 31, 2023 and 2022, the inventories were not pledged as collateral. (6) Investments accounted for using equity method

The equity method adopted by the Company at the reporting date was as follows:

Subsidiary Abnova Holding Corporation AxleBio Ventures Abnova-GmbH (Note) Associate Citil Pharma Incorporated	December 31, 2023 $ 86,277 1,154 (2,809) -	December 31, 2022 97,014 - (2,809) 550 94,755
	$ 84,622

Note: The net amount deducted from receivables as of December 31, 2023 and 2022 were listed in “other non-current liabilities.” Please refer to Note 7.

Since Abnova GmbH’s capital equivalent to NT$1,210 thousand (0.2% of the Group’s capital), its total assets were less than 1% of the Group’s total assets, and it had no operating income, the consolidated financial report with this subsidiary had not been prepared.

The Board of Directors of the Company approved the dissolution and liquidation proposal of Abnova GmbH on November 11, 2016, and the dissolution and liquidation was on December 31, 2016, as the base date. The liquidation has not completed by December 31, 2022.

Abnova Holding Corporation executed capital reduction to cover the deficit and repaid paid-up capital amounting to NT$5,711 thousand and NT$21,675 thousand, respectively. The legal registration procedures have been completed.

The Company established AxleBio Ventures in July, 2023 by NT$1,300 thousand with 100% of percentage of ownership.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

The Company sold the shares of the associate, Citil Pharma Incorporated, by NT$342 thousand to the subsidiary, AxleBio Ventures. As the transaction is the restructure under joint control, the unrealized gains on disposal of NT$68 thousand is recognized as the deduction of investments accounted for using equity method.

Share attributable to the Company: Net loss from continuing operations	2023 $ (10,799)	2022 (4,336)

For information on the Company’s subsidiaries, please refer to the 2023 consolidated financial statements.

As of December 31, 2023 and 2022, the investment accounted for using equity method were not pledged as collateral.

(7) Property, plant and equipment

The movements of costs and depreciation of the property, plant and equipment as of and for the years ended December 31, 2023 and 2022 were as follows:

Cost or deemed cost: Balance at January 1, 2023 Additions Disposals Balance at December 31, 2023 Balance at January 1, 2022 Additions Reclassifications Disposals Balance at December 31, 2022 Depreciation and impairment loss: Balance at January 1, 2023 Depreciation Disposals Balance at December 31, 2023 Balance at January 1, 2022 Depreciation Disposals Balance at December 31, 2022 Carrying amount: December 31, 2023 January 1, 2022 December 31, 2022	Land	Buildings and structures	Machinery and equipment	Office equipment	Leasehold improvem ents	Other equipment Unfinished construction and equipment pending acceptance	Total
	$ 137,911 - -	101,747 - -	183,264 11,913 (11,945)	25,833 173 (734)	11,386 6,980 -	9,094 200 475 25 (927) -	469,435 19,566 (13,606)
	$ 137,911	101,747	183,232	25,272	18,366	8,642 225	475,395
	$ 137,911 - - -	101,747 - - -	183,423 1,390 352 (1,901)	25,922 - - (89)	11,386 - - -	9,094 992 - - - (792) - -	470,475 1,390 (440) (1,990)
	$ 137,911	101,747	183,264	25,833	11,386	9,094 200	469,435
	$ - - -	29,801 5,998 -	141,622 7,049 (11,945)	25,753 49 (734)	11,386 447 -	8,739 - 408 - (927) -	217,301 13,951 (13,606)
	$ -	35,799	136,726	25,068	11,833	8,220 -	217,646
	$ - - -	23,804 5,997 -	136,025 7,498 (1,901)	25,745 97 (89)	11,384 2 -	8,395 - 344 - - -	205,353 13,938 (1,990)
	$ -	29,801	141,622	25,753	11,386	8,739 -	217,301
	$ 137,911	65,948	46,506	204	6,533	422 225	257,749
	$ 137,911	77,943	47,398	177	2	699 992	265,122
	$ 137,911	71,946	41,642	80	-	355 200	252,134

As of December 31, 2023 and 2022, the property, plant and equipment were not pledged as collateral.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(8) Right-of-use assets

The movements of costs and depreciation of the buildings and structures and transportation equipment rented by the Company were as follows:

Cost: Balance at January 1, 2023 Additions Balance at December 31, 2023 Balance at January 1, 2022 Additions Balance at December 31, 2022 Depreciation: Balance at January 1, 2023 Depreciation Balance at December 31, 2023 Balance at January 1, 2022 Depreciation Balance at December 31, 2022 Carrying amount: December 31, 2023 January 1, 2022 December 31, 2022	Buildings and structures		Transportation equipment	Total 40,584 4,020 44,604 29,554 11,030 40,584 30,162 6,793 36,955 22,776 7,386 30,162 7,649 6,778 10,422
	$ 37,630 4,020		2,954 -
	$ 41,650		2,954
	$ 26,600 11,030		2,954 -
	$ 37,630		2,954
	27,753 6,325		2,409 468 2,877
	$ 34,078
	$ 20,834 6,919		1,942 467 2,409
	$ 27,753
	$ 7,572		77 1,012
	$ 5,766
	$ 9,877		545

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(9) Intangible assets

The movements of costs, amortization and impairment of the intangible assets for the years ended December 31, 2023 and 2022 were as follows:

Cost: Balance at January 1, 2023 Separately acquired Internally developed Inventories transferred to intangible assets Balance at December 31, 2023 Balance at January 1, 2022 Internally developed Inventories transferred to intangible assets Balance at December 31, 2022 Amortization and impairment loss: Balance at January 1, 2023 Amortization Balance at December 31, 2023 Balance at January 1, 2022 Amortization Balance at December 31, 2022 Carrying amount: Balance at December 31, 2023 January 1, 2022 Balance at December 31, 2022	Development expenditure of monoclonal antibody hybridoma $ 318,105 - 1,549 2,325 $ 321,979 $ 306,210 5,240 6,655 $ 318,105 $ 303,497 8,213 $ 311,710 $ 295,167 8,330 $ 303,497 $ 10,269 $ 11,043 $ 14,608		Royalty 75,616 - - - 75,616 75,616 - - 75,616 21,409 2,409 23,818 19,000 2,409 21,409 51,798 56,616 54,207	Others - 7,771 - - 7,771 - - - - - 198 198 - - - 7,573 - -	Total 393,721 7,771 1,549 2,325
					405,366
					381,826 5,240 6,655
					393,721
					324,906 10,820
					335,726
					314,167 10,739
					324,906
					69,640
					67,659
					68,815

The amortization expenses of intangible assets for the years ended December 2023 and 2022 were presented in the following items in the statements of comprehensive income:

Operating costs Operating expenses	2023 $ 8,214 2,606	2022 8,331 2,408 10,739
	$ 10,820

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Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(10) Lease liabilities

The carrying amount of lease liabilities were as follows:

Lease liabilities The carrying amount of lease liabilities were as follows:
Current Non-current	December 31, 2023 $ 5,105	December 31, 2022 6,778 3,686
	$ 2,601

For the maturity analysis, please refer to Note 6(18) Financial instruments. The amount recognized in profit or loss were as follows:

The amount recognized in profit or loss were as	follows:
		2023	2022
Interest on lease liabilities	$	136	132
Expenses relating to short-term leases	$	2,203	2,825
The amount recognized in the statements of cash flows for the		Company were as follows:
		2023	2022
Total cash outflow for leases	$	9,117	10,378

The amount recognized in the statements of cash flows for the Company were as follows:

A. Buildings and structures leases

The Company leases buildings and structures for its office space for the year ended December 31, 2023, which typically run for a period of one to five years.

B. Other leases

The Company leases transportation equipment with contract terms of three years.

In addition, the Company leases copy machines with contract terms of five years. As these leases are short-term and/or of low-value, the Company elects the recognition exemption and does not recognize the relevant right-of-use assets and lease liabilities.

(11) Employee benefits

A. Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value were as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit assets	December 31, 2023 $ 5,609 (6,460)	December 31, 2022 5,743 (7,191) (1,448)
	$ (851)

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle retired employees to receive retirement benefits based on their years of service and average monthly salary for the six months prior to retirement. The Company received the approval letters from the Department of Labor, Taipei City Government No. 1106083461, No. 1116069618, and No. 1126041943 of September 27, 2021, August 15, 2022, and August 29,2023, respectively which approved to suspend the appropriation of pension fund from September 2021 to August 2022, from September 2022 to August 2023, and from September 2023 to August 2024.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(a) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’s Bank of Taiwan labor pension reserve account balance amounted to NT$6,460 thousand as of the reporting date. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(b) Movements in present value of defined benefit obligations

The movement in the present value of the defined benefit obligations for the years ended December 31, 2023 and 2022 were as follows:

Defined benefit obligations at January 1 Current service cost and interest cost Remeasurements of net defined benefit obligations －Actuarial gains or losses arising from experience adjustments －Actuarial gains or losses arising from changes in financial assumptions Benefits paid Defined benefit obligations at December 31	2023 $ 5,743 80 575 67 (856)	2022 5,725 40 743 (530) (235) 5,743
	$ 5,609

(c) Movements in fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2023 and 2022 were as follows:

2023 and 2022 were as follows:	2023 and 2022 were as follows:
2023 Fair value of plan assets at January 1 $ (7,191) Interest income (101) Remeasurements of net defined benefit obligations －Return on plan assets excluding interest income (24) Benefits paid 856 Fair value of plan assets at December 31 $ (6,460)		2022 (6,862) (48) (516) 235 (7,191)
	$ (6,460)

(d) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 were as follows:

Net interest of net defined benefit liabilities (assets) Operating costs Operating expenses	2023 $ (21)	2022 (8) (6) (2) (8)
	$ (16) (5)
	$ (21)

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

(e) Actuarial assumptions

The principal actuarial assumptions for determining present value of defined benefit obligations at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2023 1.30% 3.00%	December 31, 2022 1.40% 3.00%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date was $0.

The weighted average lifetime of the defined benefit plans was 12 years.

(f) Sensitivity analysis

When calculating the present value of defined benefit obligations, the Company must practice judgments and estimates to determine relevant actuarial assumptions at the balance sheets date, including discount rates and future salary changes. Any changes in actuarial assumptions may cause significant impacts on the amount of defined benefit obligations.

As of December 31, 2023 and 2022, if the actuarial assumptions had changed, the impact on the present value of the defined benefit obligations shall be as follows:

December 31, 2023 Discount rate Future salary increase rate December 31, 2022 Discount rate Future salary increase rate	Influences of defined benefit obligations	Influences of defined benefit obligations
	Increase 0.25% (166) 156 (175) 166	Decrease 0.25%
		172 (151) 182 (161)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis was consistent with the calculation of net defined benefit liabilities in the balance sheets.

There were no changes in the method and assumptions used in the preparation of sensitivity analysis for 2023 and 2022.

B. Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to NT$3,686 thousand and NT$3,857 thousand for the years ended December 31, 2023 and 2022, respectively.

• (12) Income taxes

A. Tax expense

The components of the income tax in the years 2023 and 2022 were as follows:

		2023		2022
Current tax expense
Current period	$		5,325	6,520
Adjustment for prior periods		(1,509)		(3,646)
			3,816	2,874
Deferred tax expense
Origination and reversal of temporary differences			983	17,198
Income tax for the continuing operations	$		4,799	20,072
The reconciliation of income tax expenses recognized in other			comprehensive income
were as below:
		2023		2022
Profit from continuing operations before tax Income tax using the Company’s domestic tax rate	$ $	48,477 9,695		94,915 18,983
Nondeductible expenses			91	9,182
Tax incentive		(5,326)		(4,447)
Overestimation for prior periods		(1,509)		(3,646)
Surtax on undistributed earnings of the prior year			1,848	-
Tax expense	$		4,799	20,072

B. Deferred tax assets and liabilities

Changes in the amount of deferred tax assets for the years ended December 31, 2023 and 2022 were as follows:

Deferred tax liabilities: Balance at January 1, 2023 Recognized in profit or loss Balance at December 31, 2023 Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2023	Other $ 5,804 (2,021) $ 3,783 $ - 5,804 $ 5,804

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Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

Deferred tax assets: Balance at January 1, 2023 Recognized in profit or loss Balance at December 31, 2023 Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2022	Allowance for inventory valuation and obsolescence $ 95,758 (2,470)	Other 2,520 (534)	Total 98,278 (3,004)
	$ 93,288	1,986	95,274
	$ 98,406 (2,648)	11,266 (8,746)	109,672 (11,394)
	$ 95,758	2,520	98,278

C. Assessment of tax

The Company’s tax returns for the years through 2021 were assessed by the National Taiwan Bureau.

(13) Capital and other equity

• A. Ordinary shares

The Company had authorized capital of NT$800,000 thousand (80,000 thousand shares) as of December 31, 2023 and 2022, of which 60,554 thousand shares with par value of NT$10 were issued. Payments for all issued shares had been received.

B. Capital surplus

The balances of capital surplus were as follows:

Share premium	December 31, 2023 $ 474,527	December 31, 2022 474,527

According to the R.O.C. Group Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

C. Retained earnings

The Company’s article of incorporation stipulates that any Company’s profit for the period should first be used to offset the prior years’ deficits (including the adjustments of the unappropriated retained earnings), allocate 10% of the remaining balance as legal reserve, unless such legal reserve has amounted to the paid-in capital, then set aside or reverse a special reserve in accordance with the laws and regulations or competent authorities. The remainder, if any, together with any undistributed retained earnings (including the adjustments of the unappropriated retained earnings) should be proposed earnings distribution by the Company’s Board of Directors. Wherein the distributable dividend and bonus may be paid by 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 the shareholders’

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

meeting. Wherein the distributable dividend and bonus may be paid by issuing new shares after a resolution has been adopted in the shareholders’ meeting.

The dividend distribution policy of the Company is to coordinate with the current and future development plans, consider the investment environment, capital needs, and domestic and foreign competition conditions, and take into consideration factors such as shareholders’ interests. The dividends and bonus to shareholders each year shall not be less than 10% of the distributable earnings, but when the accumulated distributable earnings are lower than 3% of the paid-in capital, the distribution may not be done. When distributing dividends and bonus to shareholders, it can be done in the form of cash or stocks, and the cash dividends should not be less than 10% of the total dividends. (a) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

• (b) Special reserve

• According to the laws and regulations, special earnings shall be set aside from the net reduction of other shareholders’ equity in current-period balance sheets during earnings distribution. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

• (c) Earnings distribution

The amount of cash dividends on the appropriations of earnings for 2022 and 2021 had been approved during the board meetings on February 24, 2023 and March 16, 2022, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary shareholders: Cash	2022 Amount per share Amount $ 0.80 48,443	2021 Amount per share Amount 0.46 27,855	2021 Amount per share Amount 0.46 27,855
	Amount per share	Amount per share
	$ 0.80	0.46

The amount of dividends on the appropriation of earnings for 2023 had been approved during the board meetings on February 20, 2024. The distribution to shareholders was as follows:

as follows:
Dividends distributed to ordinary shareholders: Cash	2023 Amount per share Amount $ 0.72 43,599
	Amount per share
	$ 0.72

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Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

D. Other equity interest

Balance at January 1, 2023 Exchange differences on foreign operations Balance at December 31, 2023 Balance at January 1, 2022 Exchange differences on foreign operations Share of unrealized gains and losses from financial assets measured at fair value through other comprehensive income in subsidiaries accounted for using equity method Effect on equity of disposal of subsidiaries Balance at December 31, 2022	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (4,945) - (4,945) 20,407 - 28,730 (54,082) (4,945)	Total (11,907) (292) (12,199) 9,229 4,216 28,730 (54,082) (11,907)
	$ (6,962) (292) $ (7,254) $ (11,178) 4,216 - - $ (6,962)

(14) Earnings per share

A. Basic earnings per share

The basic earnings per share of the Company in 2023 and 2022 were calculated based on the net profit attributable to the ordinary shareholders of the Company according to the weighted average number of ordinary shares outstanding. The calculations were as follows:

(a) Profit attributable to ordinary shareholders of the Company

2023 Profit attributable to ordinary shareholders of the Company $ 43,678 Weighted average number of ordinary shares (in thousands) 2023 Weighted average number of ordinary shares at December 31 (in thousands) (the number of shares at January 1) 60,554	2023	2022 74,843 2022 60,554
	$ 43,678

(b) Weighted average number of ordinary shares (in thousands)

B. Diluted earnings per share

The diluted earnings per share in 2023 and 2022 were calculated based on the net profit attributable to the ordinary shareholders of the Company according to the weighted average number of ordinary shares outstanding after all potential ordinary shares adjusted to be diluted. The calculations were as follows:

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Notes to the Financial Statements (Cont.)

Abnova (Taiwan) Corporation

(a) Profit attributable to ordinary shareholders of the Company (diluted)

2023 Profit attributable to ordinary shareholders of the Company (diluted) $ 43,678 Weighted average number of ordinary shares (diluted) (in thousands) 2023 Weighted average number of ordinary shares (basic) 60,554 Effect of employee share remuneration 78 Weighted average number of ordinary shares at December 31 (diluted) 60,632	2023 $ 43,678	2022 74,843 2022 60,554 110
	60,632	60,664

(b) Weighted average number of ordinary shares (diluted) (in thousands)

• (15) Revenue from contracts with customers A. Details of revenue

Primary geographical markets: America Europe Taiwan Other country Main products/service lines: Monoclonal antibodies Pair antibodies Protein Polyclonal antibodies Testing instruments Other	2023 $ 192,568 94,885 12,387 80,753	2022 196,828 112,624 29,325 71,543 410,320 132,754 93,223 66,825 30,701 (1,908) 88,725 410,320
	$ 380,593
	$ 121,011 76,590 63,250 24,502 7,343 87,897
	$ 380,593

B. Contract balances

Notes and accounts receivable Less: Allowance for impairment Total Contract liabilities	December 31, 2023	December 31, 2022 68,397 (8,152)	January 1, 2022 63,242 (14,449) 48,793 2,638
	$ 45,096 (5,247)
	$ 39,849	60,245 2,622
	$ 2,349

For details on accounts receivable and its loss allowance, please refer to Note 6(3). The balance of contract liabilities at January 1, 2023 and 2022 recognized as revenue for the years 2023 and 2022 were NT$706 thousand and NT$864 thousand, respectively.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

• (16) Remuneration to employees and directors

The Company’s articles of incorporation, which were authorized by the Board of Directors but has yet to be approved by the shareholders, require that earnings shall first be offset against any deficit, then, a minimum of 1% will be distributed as employee remuneration, and a maximum of 3% will be allocated as remuneration to directors. Employees who are entitled to receive the abovementioned employee remuneration, in share or cash, include the employees of the Company’s subsidiaries who meet requirements set by the Board of Directors. The aforesaid remuneration to directors shall be distributed in cash only. For the years ended December 31, 2023 and 2022, the Company recognized its employee remuneration amounting to NT$2,155 thousand and NT$4,179 thousand respectively; as well as its remuneration to directors and supervisors amounting to NT$411 thousand and NT$795 thousand, respectively. These amounts were calculated by using the Company’s pre-tax net profit for the period before deducting the amounts of the remuneration to employees and directors and supervisors, multiplied by the distribution of ratio of the remuneration to employees and directors and supervisors based on the Company’s articles of incorporation, and expensed under operating costs or expenses. If any discrepancy occurred between the actual distributions and the accrued amount for the following year, it shall be treated as a change in accounting estimates, and the difference shall be recognized as profit or loss for the next year. Related information would be available at the Market Observation Post System website.

The amounts, as stated in the financial statements are identical to those of the actual distributions for 2023 and 2022.

• (17) Non-operating income and expenses

• A. Interest income

The details of interest income were as follows:

Interest income from bank deposits B. Other income The details of other income were as follows: Other income C. Other gains and losses The details of other gains and losses were as follows: Gains on disposals of property, plant and equipment Foreign exchange gains (losses) D. Finance costs The details of finance costs were as follows: Other finance expenses	2023 $ 10,332 2023 $ 152 2023 $ 160 357 $ 517 2023 $ 140	2022 3,463 2022 800 2022 - 26,053 26,053 2022 132

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Abnova (Taiwan) Corporation

Notes to the Financial Statements (Cont.)

(18) Financial instruments

A. Credit risk

• (a) Credit risk exposure

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

• (b) Concentration of credit risk

Except for the biggest customers, the Company has no significant credit risk exposure to any single counterparty or any group of counterparties with similar characteristics. For the years ended December 31, 2023 and 2022, 13% and 31%, respectively, of accounts receivable were concentrated on the biggest customer, and 87% and 69%, respectively, of accounts receivable were concentrated on other counterparties’ transactions.

• (c) Receivables and debt securities

• For credit risk exposure of notes and accounts receivable, please refer to Note 6(3). Other financial assets measured at amortized cost, including other receivables are with low credit risk and which loss allowance for the period is measured by the twelve-month expected credit loss amount. As of December 31, 2023, the Company had no impairment on other receivables.

• B. Liquidity risk

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

December 31, 2023 Non-derivative financial liabilities Accounts payable Other payables Lease liabilities Other financial liabilities December 31, 2022 Non-derivative financial liabilities Accounts payable Other payables Lease liabilities Other financial liabilities	Carrying amount	Contractua lcash flow	Within 1 **year **	1to 2years	2to 5 years	Over 5 years
	$ 14,935 31,630 7,706 5,787	14,935 31,630 7,867 5,787	14,935 31,630 5,203 5,787	- - 2,664 -	- - - -	- - - -
	$ 60,058	60,219	57,555	2,664	-	-
	$ 14,995 36,541 10,464 4,555	14,995 36,541 10,725 4,555	14,995 36,541 6,914 4,555	- - 3,811 -	- - - -	- - - -
	$ 66,555	66,816	63,005	3,811	-	-

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

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

C. Currency risk

(a) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD EUR GBP Non-monetary items USD EUR Financial liabilities Monetary items USD EUR Financial assets Monetary items USD EUR GBP JPY Non-monetary items USD EUR Financial liabilities Monetary items USD EUR JPY	December 31, 2023 Foreign currency (inthousands) Exchange rate $ 11,048 USD：TWD 30.705 373 EUR：TWD 33.98 88 GBP：TWD 39.15 2,810 USD：TWD 30.705 (83) EUR：TWD 33.98 321 USD：TWD 30.705 86 EUR：TWD 33.98 December 31, 2022		December 31, 2023	New Taiwan Dollars 339,214 12,682 3,464 86,277 (2,809) 9,844 2,909 New Taiwan Dollars 354,194 22,132 6,906 3,407 97,564 (2,809) New Taiwan Dollars 10,211 3,463 1,029
	Foreign currency (in thousands) Exchange rate $ 11,533 USD：TWD 30.71 676 EUR：TWD 32.72 186 GBP：TWD 37.09 14,659 JPY：TWD 0.2324 3,177 USD：TWD 30.710 (86) EUR：TWD 32.72 December 31, 2022
	Foreign currency (inthousands) Exchange rate 333 USD：TWD 30.71 106 EUR：TWD 32.72 4,426 JPY：TWD 0.23

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

• (b) Sensitivity analysis

• The Company’s monetary items of exposure to foreign currency risk arises from the conversion of the foreign currency exchange gains and losses on cash and cash equivalents, accounts and other receivables, accounts and other payables and financial assets measured at fair value through other comprehensive income that are denominated in foreign currency. A strengthening (weakening) of 1% of the NTD against the USD as of December 31, 2023 and 2022 would have increased (decreased) the net profit after tax by NT$2,741 thousand and NT$2,975 thousand, respectively.

• Since the Company transacts in different functional currencies, the information on foreign exchange gains (losses) on monetary items is disclosed by total amount. For the years ended December 31, 2023 and 2022, the foreign exchange gains (losses) (including realized and unrealized portions) amounted to NT$357 thousand and NT$26,053 thousand, respectively.

• D. Interest rate analysis

• Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to the management internally, which also represents the Company management’s assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1% basis points, the Company’s net income would have increased or decreased by NT$685 thousand and NT$1,598 thousand for the years ended December 31, 2023 and 2022, assuming all other variable factors remain constant. This is mainly due to the Company’s deposits and investments in floating variable rates.

• E. Fair value of financial instruments

• (a) Fair value hierarchy

The Company’s financial assets at fair value through other comprehensive income are measured at fair value on a recurring basis. The carrying amount and fair value of financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value and lease liabilities, disclosure of fair value information is not required:

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Financial assets measured at fair value through other comprehensive income Unquoted equity instruments measured at fair value Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable Other receivables Restricted assets (as other current assets) Guarantee deposits paid (as other non-current assets) Subtotal Total Financial liabilities measured at amortized cost Accounts payable Other payables Other financial liabilities (as other current liabilities) Lease liabilities Total Financial assets measured at fair value through other comprehensive income Unquoted equity instruments measured at fair value Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable Other receivables Restricted assets (as other current assets) Guarantee deposits paid (as Other non-current assets) Subtotal Total		December 31, 2023	December 31, 2023	December 31, 2023
	Carrying amount $ -		Fair value		Total -
		Level 1 -	Level 2 -	Level 3 -
	360,329 39,849 3,223 858 1,781	- - - - -	- - - - -	- - - - -	- - - - -
	406,040	-	-	-	-
	$ 406,040	-	-	-	-
	$ 14,935 31,630 5,787 7,706	- - - -	- - - -	- - - -	- - - -
	$ 60,058	-	-	-	-
		December 31, 2022
	Carrying amount $ -		Fair value		Total -
		Level 1 -	Level 2 -	Level 3 -
	362,971 60,245 2,452 849 2,581	- - - -	- - - -	- - - -	- - - -
	429,098	-	-	-	-
	$ 429,098	-	-	-	-

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

Financial liabilities measured at amortized cost Accounts payable Other payables Other financial liabilities (as Other current liabilities) Lease liabilities Total		December 31, 2022	December 31, 2022	December 31, 2022
	Carrying amount $ 14,995 36,541 4,555 10,464		Fair value		Total - - - -
		Level 1 - - - -	Level 2 - - - -	Level 3 - - - -
	$ 66,555	-	-	-	-

• (b) Valuation techniques for financial instruments measured at fair value

• (2.1) Non-derivative financial instruments

The fair values of financial instruments other than those in an active market are acquired through valuation technique or referring to quotations from counterparties. The fair value acquired through valuation technique can refer to the current fair value of other financial instruments with substantial conditions and similar characteristics, discounted cash flow method or other valuation techniques.

• (19) Financial risk management

• A. Overview

The Company has exposures to the following risks from its financial instruments:

• (a) Credit risk

• (b) Liquidity risk

• (c) Market risk

The following likewise discusses the Company’s objectives, policies and processes for measuring and managing the abovementioned risks. For more disclosures about the quantitative effects of these risk exposures, please refer to the respective notes in the accompanying financial statements.

• B. Risk management framework

The Board of Directors is fully responsible for the development and control of the risk management policy of the Company, which its establishment is to identify and analyze the risks faced by the Company, set adequate risk limits and controls and supervise the risks and compliance with risk limits. Risk management policies and systems are regularly reviewed to reflect changes in market conditions and operations of the Company. The Company develops a disciplined and constructive control environment through training, management principles and operating procedures so that all employees understand their roles and responsibilities.

The Board of Directors oversees how the managements supervision is in compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, and reports the reviews to the Board of Directors.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

• C. Credit risk

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. A credit policy of the Company is stipulated internally to assess the credit quality of customers through the internal risk controls of considering their financial conditions, past experience and other factors, and periodically monitor the use of credit lines. The main credit risk arises principally from cash and cash equivalents, deposits in banks and financial institutions and outstanding accounts receivable from customers’ sales. The credit quality of the financial institutions that the Company contacts is stable, and deals with multiple institutions to diversify credit risks. The possibility of default is expected to be very low. The maximum amount of exposure to credit risk on the balance sheet date is the carrying amount of cash and deposits in banks.

• D. Liquidity risk

Cash flow forecasts are summarized by the Company’s finance department. The management regularly monitors rolling forecasts of working capital needs to ensure sufficient funds to cover daily operating activities and appropriate financial flexibility to maintain a balance between funding continuity and agility.

• E. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices that will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

• (a) Currency risk

The Company operates transnationally, so it is subject to currency risks arising from transactions that are relatively different from the functional currency of the Company and its subsidiaries, mainly the US dollar and Euro. The related currency risk arises from future commercial transactions, assets and liabilities recognized and net investments in foreign operating institutions.

The management of the Company has established a policy, managing currency risk arises from future commercial transactions and assets and liabilities recognized, and based on the principal of natural hedging, the Company considers the funding needs and net positions in the Company and its subsidiaries’ currency to hedge risks in accordance with market foreign exchange conditions. Currency risks arise when future commercial transactions and assets or liabilities recognized are denominated in a foreign currency that is not the Company’s functional currency.

• (b) Interest rate risk

The measures taken by the Company to respond to the risk of interest rate changes are mainly to regularly assess loan interest rates from banks and each currency and maintain good relationships with financial institutions to obtain lower financing costs, meanwhile practice methods such as strengthening working capital management to reduce the dependence on bank loans and diversify the risk of interest rate changes.

• (20) Capital management

The goal of the Company’s capital management is to ensure for continuing operating, maintain an optimal capital structure to reduce capital costs, and provide remuneration to shareholders. The Company achieves the goal of capital management through monitoring whether the capital position is sufficient to meet the debt repayments.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

7. Related-party transactions

• (1) Names of related parties and their relationships

The transactions between the Company and subsidiaries and other related parties within the period of this financial report were as follows:

Name of related party Relationship with the Company Abnova-GmbH Subsidiary of the Company Abnova Holding Corporation Subsidiary of the Company AxleBio Ventures Subsidiary of the Company Abnova (Cayman) Corporation Subsidiary indirectly owned by the Company Abnova (HK) Limited Subsidiary indirectly owned by the Company Abnova Diagnostics Subsidiary indirectly owned by the Company Citil Pharma Incorporated Investee accounted for using equity method of subsidiary of the Company (associate) Wellconn Genomics Other related party

• (2) Significant transactions with related parties

• A. Operating revenue

The significant sales amount of the Company to related parties were as follows:

Associate	2023 $ 448	2022 -

The sales between the Company and its associates have no other counterparty for comparison but is negotiated. The collection period is one to four months, and the receivables between the related parties have not collateral.

• B. Receivables from related parties

Receivables from related parties were as follows:

Account Relationship Other receivables Subsidiary . Loans to related parties Related parties Abnova-GmbH Less: Investment additions accounted for using equity method Other non-current liabilities	December 31, 2023	December 31, 2022 - December 31, 2022 2,283 (2,809) (526)
	$ 114 December 31, 2023 $ 2,371 (2,809)
	$ (438)

• C. Loans to related parties

• (a) The Company did not charge interest for the above-mentioned transactions of loans to related parties.

• (b) The Company’s maximum limit of fund lent to related parties in 2023 and 2022 were both NT$5,000 thousand.

D. Other

(a) The Company entrusted other related parties to provide cell testing services. Since there was no similar type of transaction for reference, the transaction price and payment terms were agreed according to the contract signed by both parties. The commissioned

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

research expenses (as R&D expenses) in 2023 and 2022 were NT$360 thousand and NT$1,575 thousand respectively.

• (b) The Company signed an office leasing contract with other related parties, which has been expired in March, 2023. The leasing price was negotiated by both parties, and the Company collects rent on a monthly basis according to the contract. The rent income in 2023 and 2022 were NT$135 thousand and NT$648 thousand, respectively.

• (3) Key management personnel transaction

Key management personnel compensation comprised:

Short-term employee benefits

d:
2023	2022 9,606
$ 11,651

8. Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2023 $ 858 1,781 $ 2,639	December 31, 2022 849 2,581 3,430
Pledged time deposits (as other current assets) Customs duty pledged, Guarantee deposits paid (as other non-current assets) Deposits for office and plant

9. Commitments and contingencies

The Company’s significant contractual commitments were as follows:

The Company and Louisiana State University of the United States signed an exclusive license for CHP technology on September 20, 2018, and the first payment was paid in 2018. Since the follow-up payments of the above contract must meet the requirements of conditions stipulated in the contract and the outcome obtained, whether and when it will be paid are uncertain. The Company’s contractual commitments for the acquisition of intangible assets that were not recognized in 2023 and 2022 were NT$33,315 thousand and NT$33,320 thousand, respectively. In addition, the Company paid the maintenance fee on an annual basis according to the contract, and paid royalty after the income was generated.

1. Losses due to major disasters ： None.

2. Subsequent events ： None.

3. Other

The employee benefits, depreciation, and amortization expenses categorized by function, were as follows:

follows:
By function By item	2023			2022
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salaries and wages Labor and health insurance Pension Remuneration to directors Other Depreciation expenses Amortizationexpenses	34,285 3,893 1,895 - 1,872 7,038 8,214	41,333 3,588 1,770 2,451 1,606 13,706 2,606	75,618 7,481 3,665 2,451 3,478 20,744 10,820	36,480 3,977 1,983 - 1,854 8,037 8,331	45,568 3,695 1,866 2,835 1,756 13,287 2,408	82,048 7,672 3,849 2,835 3,610 21,324 10,739

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

The complementary information on the number of employees and employee benefits for the years ended December 31, 2023 and 2022 was as follows:

Number of employees Number of non-employee directors Average employee benefits Average salaries and wages Adjustments of average salaries and wages Remuneration to supervisors	2023 105 6 $ 912 $ 764 (3.17)% $ -	2022 110 6 934 789 8.68% -

The remuneration policy (including directors, managers and employees) is as follows:

• (1) Directors

• A. Remuneration to directors is paid monthly in accordance with the Company’s Articles of Incorporation, and is allocated according to the annual income and the ratio specified in the Articles of Incorporation. The appropriation is reviewed by the Remuneration Committee and reported to the shareholders’ meeting after resolved by the Board of Directors.

• B. According to Article 24 of the Company’s Articles of Incorporation, remuneration to directors are not more than 3% of the current year net profit (the profit refers to the profit before tax deducting the distribution of remunerations to employees and directors). When allocating the net profits, including the adjustments of unappropriated retained earnings, for each fiscal year, the Company shall first offset its losses in previous years. The aforesaid directors’ remuneration shall be paid in cash only.

According to Article 25 of the Articles of Incorporation, the Company’s directors may be paid traveling expenses on a case-by-case basis, and the amount is authorized to the Board of Directors to determine in accordance with the general standards in the industry.

According to Article 26 of the Articles of Incorporation, the Company’s directors may be paid remuneration monthly, and the amount is authorized to the Board of Directors to determine in accordance with the general standards in the industry. Remuneration to independent directors may be set a reasonable amount different from general directors.

• (2) Managers

The rule of remuneration to managers (including salary, bonus and employee remuneration) is based on the regulations of the Company, and salary and bonus are reviewed by the Remuneration Committee and approved by the Board of Directors. The appropriation of employee remuneration is reviewed by the Remuneration Committee and reported to the shareholders’ meeting after resolved by the Board of Directors according to the annual income and the ratio specified in the Articles of Incorporation.

• (3) Employees

• A. Assess by the appointment of position, education, work ability, experience and professional knowledge and skills.

• B. According to Article 24 of the Company’s Articles of Incorporation, remuneration to employees is not more than 1% of the current year net profit (the profit refers to the profit before tax deducting the distribution of remunerations to employees and directors). When allocating the net profits, including the adjustments of unappropriated retained earnings, for each fiscal year, the Company shall first offset its losses in previous years. Employees who are entitled to receive the abovementioned employee remuneration, in

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

share or cash, include the employees of the Company’s subsidiaries who meet requirements set by the Board of Directors.

• (4) The Company’s remuneration policy is regularly reviewed by the Remuneration Committee. In addition to evaluating the Company’s overall operating performance, future industry operating risks and development trends, and peer industry conditions, the remuneration policy sets reasonable remuneration with reference to the personal performance and contribution of directors and managers to the Company, and is reviewed in due time depending on the actual operating conditions and laws and regulations.

13. Other disclosures

(1) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company: A. Loans to other parties ：

(Expressed in Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Nature of financing	Transactio n amount for business between two parties	Reasons for short-term financing	Allowance for bad debt Amount	Coll	ateral	Individual funding loan limits	Maximum limit of fund financing
													Name	Value
0	Abnova (Taiwan) Corporation	Abnova- GmbH	Other receivables －related party	Yes	5,000	5,000	2,371	-	2	-	Operating turnover for insufficient working capital	-		-	128,631	514,527

Note 1 ： The numbers filled in were as follows:

1. The Company is ‘0’.

2. The investee companies are numbered in order starting from ‘1’.

Note 2 ： Financing purpose:

1. ‘1’ for entities the Company has business transactions with.

2. ‘2’ for entities that have short-term financing needs.

Note 3 ： Limit of fund financing:

1. The total amount available for financing purposes shall not exceed 40% of the Company’s net worth in the latest financial statements.

2. The individual financing amount to one entity shall not exceed 10% of the Company’s net worth in the latest financial statements.

3. B. Guarantees and endorsements for other parties: None.

4. C. Securities held as of December 31, 2023 (excluding investment in subsidiaries, associates and joint ventures):

			(Expressed	in Thousands of New Taiwan Dollars / Share)	in Thousands of New Taiwan Dollars / Share)	in Thousands of New Taiwan Dollars / Share)	in Thousands of New Taiwan Dollars / Share)	in Thousands of New Taiwan Dollars / Share)
Name of holder	Category and name of security	Relationship with company	Account name		Ending balance			Note
				Shares	Carrying amount	Percentage of ownership	Fair value
The Company	Hukui Biotechnology Corporation (Samoa)	-	Financial assets measured at fair value through other comprehensive income	50,000	-	1.32%	-

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

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

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

• G. Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

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Abnova (Taiwan) Corporation Notes to the Financial Statements (Cont.)

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

• I. Trading in derivative instruments: None.

• (2) Information on investees (excluding information on investees in Mainland China):

The following is the information on investees for the years ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars / Share)

Name of investor	Name of investee	Location	Main businesses and products	Original i amo	nvestment unt	Balance as	of December 31, 2023	of December 31, 2023	Net income (loss) of investee	Investment profit (loss) recognized by investor	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of ownership	Carrying amount
The Company 〞 〞 〞 AxleBio Ventures Abnova Holding Corporation Abnova (Cayman) Corporation	Abnova GmbH (Note 4) Abnova Holding Corporation AxleBio Ventures Citil Pharma Incorporated Citil Pharma Incorporated Abnova (Cayman) Corporation Abnova (HK) Limited Abnova Diagnostics	Germany British Virgin Islands Taiwan USA USA Cayman Islands Hong Kong Japan	Distribution of biological products Investment business Investment business R&D of cell therapy technology R&D of cell therapy technology Investment business Investment business R&D, manufacturing and sales of medical device, etc., testing services	850 80,908 1,300 - 342 79,987 51,277 19,548	850 80,908 - 888 - 79,987 51,277 19,548	(Note 3) 52,700 130,000 - 2,890,000 2,605,000 1,800,000	100.00% 100.00% 100.00% - 40.00% 100.00% 100.00% 100.00%	(2,809) 86,277 1,154 - 251 86,284 84,527 1,086	- (10,504) (65) (491) (491) (10,394) (5,968) (4,210)	- (10,504) (65) (230) (9) (10,394) (5,968) (4,210)	Subsidiary 〞 〞 Associate (Note 5) 〞 Second-tier subsidiary 〞 〞

Note 1 ： The original investment amount of investees was calculated at USD1:TWD30.705 of December 31, 2023.

Note 2 ： The original investment amount of investees was calculated at JPY1:TWD0.2172 of December 31, 2023.

• Note 3 ： The investee is a limited company with no shares issued.

Note 4 ： The investee is a subsidiary of the Company, and the net amount after deducting its receivables was listed in “Other non-current liabilities”. Note 5 ： Please refer to the explanation in Note 6(6).

• (3) Major shareholders:

Unit: Shares

Major shareholders:		Unit: Shares
Shareholding Shareholder’s name	Shares	Percentage 6.02%
Wilber Huang	3,651,144

14. Segment information

Please refer to the 2023 consolidated financial statements.

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Item Cash Cash in banks Total	Abnova (Taiwan) Corporation Statement of cash and cash equivalents December 31, 2023 Description Petty cash Checking account Demand deposits Foreign demand deposits (USD1,402 thousand and EUR165 thousand, etc.) Time deposits (USD8,400 thousand and NT$33,000 thousand)	(Expressed in Thousands of New Taiwan Dollars) Amount $ 466 487 15,756 52,698 290,922 $ 360,329

Statement of accounts receivable

Item Non-related party Client A Client B Client C Client D Client E Other Less: Loss allowance Total	Description	Amount $ 5,665 5,645 5,294 2,814 2,603 22,584 (5,247) $ 39,358	Note
			The amount of each item does not exceed 5% of the account balance.

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Abnova (Taiwan) Corporation Statement of inventories December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

**Item **	Amount Cost Net realizable value $ 63,404 23,680 586,351 250,513 9,954 9,954 198,268 118,303 8,378 689 8,388 5,163 874,743 408,302 (466,441) $ 408,302	Amount Cost Net realizable value $ 63,404 23,680 586,351 250,513 9,954 9,954 198,268 118,303 8,378 689 8,388 5,163 874,743 408,302 (466,441) $ 408,302	Amount Cost Net realizable value $ 63,404 23,680 586,351 250,513 9,954 9,954 198,268 118,303 8,378 689 8,388 5,163 874,743 408,302 (466,441) $ 408,302	Note
	Cost $ 63,404 586,351 9,954 198,268 8,378 8,388
Raw materials and supplies Semi-finished goods Work in progress Finished goods Testing instruments Merchandise inventory Subtotal Less: Allowance for inventory valuation and impairment loss
	874,743 (466,441)
	$ 408,302

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Abnova (Taiwan) Corporation Statement of movements in non-current financial assets measured at fair value through other comprehensive income For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Name Hukui Biotechnology Corporation (Samoa)	Beginning balance Shares Fair value 50,000 $ -	Beginning balance Shares Fair value 50,000 $ -	Acquisition Shares Amount - -	Acquisition Shares Amount - -	Acquisition Shares Amount - -	Disposal Shares Amount - -	Disposal Shares Amount - -	Disposal Shares Amount - -	Ending balance Shares Fair value 50,000 -	Ending balance Shares Fair value 50,000 -	Ending balance Shares Fair value 50,000 -	Collateral	Note
	Shares		Shares			Shares			Shares
	50,000		-			-			50,000

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Abnova (Taiwan) Corporation Statement of Other Current Assets December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 14,469 858 1,334	Note
		$ 16,661

Item	Description	Amount $ 1,781 851 2,606	Note
Guarantee deposits paid Net defined benefit assets Others Total
		$ 5,238

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Abnova (Taiwan) Corporation Statement of movements in investments accounted for using equity method For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Name Abnova Holding Corporation Citil Pharma Incorporated AxleBio Ventures	Balance at January 1 Shares Amount 52,700 $ 97,014 2,890,000 550 - - $ 97,564	Balance at January 1 Shares Amount 52,700 $ 97,014 2,890,000 550 - - $ 97,564	Acquisition Shares Amount - - - - 130,000 1,300 1,300	Acquisition Shares Amount - - - - 130,000 1,300 1,300	Acquisition Shares Amount - - - - 130,000 1,300 1,300	Disposal Shares Amount - 10,737 2,890,000 550 - 146 11,433	Disposal Shares Amount - 10,737 2,890,000 550 - 146 11,433	Disposal Shares Amount - 10,737 2,890,000 550 - 146 11,433	Balance at December 31 Shares Percentage of ownership Amount 52,700 100.00% 86,277 - - % - 130,000 100.00% 1,154 87,431	Balance at December 31 Shares Percentage of ownership Amount 52,700 100.00% 86,277 - - % - 130,000 100.00% 1,154 87,431	Balance at December 31 Shares Percentage of ownership Amount 52,700 100.00% 86,277 - - % - 130,000 100.00% 1,154 87,431	Balance at December 31 Shares Percentage of ownership Amount 52,700 100.00% 86,277 - - % - 130,000 100.00% 1,154 87,431	Market value or net assets value Unit price Total amount 1,637 86,277 0.11 800 9.4 1,222 88,299	Market value or net assets value Unit price Total amount 1,637 86,277 0.11 800 9.4 1,222 88,299	Market value or net assets value Unit price Total amount 1,637 86,277 0.11 800 9.4 1,222 88,299	Collateral None " "	Note
			Shares			Shares - 2,890,000 -			Shares 52,700 - 130,000	Percentage of ownership			Unit price 1,637 0.11 9.4
			- - 130,000							100.00% - % 100.00%							Note
		$ 97,564			1,300			11,433				87,431			88,299

Note: Please refer to the explanation in Note 6(6).

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Abnova (Taiwan) Corporation Statement of accounts payable December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Name		Description	Amount $ 2,679 1,431 859 9,966
Company A Company B Company C Other Total Item
			$ 14,935
Salaries and wages payable Labor and health insurance and pension payable Other Total	Salaries and wages, overtime pay and bonus Accrued labor and health insurance and pension payable Accrued expenses payables

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Abnova (Taiwan) Corporation Statement of operating costs For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item Raw materials and supplies, beginning of year Add: Materials purchased Less: Inventory, end of year Scrapped raw materials and supplies Transferred to expenses Transferred to intangible assets Transferred to other expenses Supplies consumed Direct labor Manufacturing expenses Manufacturing cost Add: Work in process, beginning of year Semi-finished goods, beginning of year Materials purchased Less: Work in process, end of year Semi-finished goods, end of year Scrapped semi-finished goods Transferred to expenses Transferred to other expenses Cost of finished goods Add: Finished goods, beginning of year Testing instruments, beginning of year Merchandise inventory, beginning of year Inventory purchased Less: Finished goods, end of year Testing instruments, end of year Merchandise inventory, end of year Transferred to expenses Transferred to other expenses Scrapped finished goods Cost of inventory sold Inventory disposal loss Loss on price recovery of inventory valuation and obsolescence Total operating costs

Amount Subtotal Total $ 60,253 56,287 (63,404) (2,178) (1,058) (2,325) (2,786) 44,789 11,581 86,061 142,431 6,503 600,608 6,646 (9,954) (586,351) (57,546) (40) (4,274) 98,023 189,195 9,243 9,066 71,905 (198,268) (8,378) (8,388) (27) (1,610) (402) 160,359 60,126 (12,348) $ 208,137

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Abnova (Taiwan) Corporation Statement of marketing expenses For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 11,671 13,350 3,468 4,641 12,131	Note
Salaries and wages Freight Advertisement expenses Packing expenses Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 45,261

Statement of administrative expenses

Item	Description	Amount $ 23,451 5,237 3,483 11,266	Note
Salaries and wages Services expenses Miscellaneous expenses Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 43,437

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Abnova (Taiwan) Corporation Statement of research and development expenses For the year ended December 31, 2023

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 8,662 7,680 10,043 2,497 9,514	Note
Salaries and wages Materials for R&D Depreciation Amortization Other expenses	Salaries and wages, overtime pay and bonus		Each amount does not exceed 5% of the account balance.
		$ 38,396

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Abnova (Taiwan) Corporation

Chairman: Wilber Huang

Address: 9th Floor., No.108, Jhouzih St.,Neihu District. Taipei City Phone: (02)8751-1888