ACES - Annual Report 2023 | FinancialReports.eu

Stock code:3605

ACES ELECTRONICS CO., LTD. AND SUBSIDIARIES Consolidated Financial Statements

With Independent Auditors’ Report

For the Years Ended December 31, 2023 and 2022

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

Representation Letter

The entities that are required to be included in the consolidated financial statements of ACES Electronics Co., Ltd. as of and for the year ended December 31, 2023 under the Criteria Governing 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 the International Financial Reporting Standard No. 10, “ Consolidated Financial Statements” endorsed by the Financial Supervisory Commission of the Republic of China. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, ACES Electronics Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Hereby declare

Company Name: ACES Electronics Co., Ltd. Chairman: Yuan Wan-ting Date: March 12, 2024

Independent Auditors’ Report

To the Board of Directors of ACES Electronics Co., Ltd.:

Opinion

We have audited the consolidated financial statements of ACES Electronics Co., Ltd. And its subsidiaries (the ACES Group), which comprise the consolidated balance sheets as of December 31, 2023 and 2022, the consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years ended December 31, 2023 and 2022, and notes to the parent company 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 the ACES Group as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for each of 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 the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of ACES Electronics Co., Ltd. and its subsidiaries 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 of our opinion.

Description of 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Revenue Recognition
Please refer to Notes 4(15) to the consolidated financial statements for the accounting policy on operating revenue; and refer to Notes 6(20) for disclosures relating to revenue. Description of key audit matter:

ACES Groups engage mainly in processing, manufacturing and sales of connectors, connector sets and other electronic components. Sales revenue is one of the key matters to the financial statements. Therefore, the assessment for recognition of sales revenue is one of the key evaluation matter when we audit the Groups’ financial statements.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included:

We inspected whether the Company's revenue recognition policies are in accordance with relevant guidelines.
We tested the design of internal control process and its efficiency of execution for sales revenue.
We focused on the top 10 clients, compared differences in numbers on the same period of the previous year, and
checked if there’s any significant abnormality.
We selected sales transaction samples from a certain period before and after the end of current year, and examined revenue transaction records with vouchers arising from appropriate time period.
We assessed if there is any significant sales return and discount after the balance sheet date.
Valuation of inventory

Please refer to Notes 4(8) to the consolidated financial statements for the accounting policy on inventory valuation, Notes 5(1) for accounting estimates and assumptions of inventory, and Notes 6(4) for disclosure disclosures relating to inventory.

Description of key audit matter:

Inventory is valued at the lower of cost or net realizable value ACES Groups mainly produces electronic products such as high precision connectors and connector sets which are affected by the fast change of technology and updates of manufacturing technique; its product sales might have tremendous fluctuation which may cause the cost of inventory to be higher than its net realizable value. Therefore, the assessment for inventory valuation is one of the key evaluation matter when we audit the Groups’ financial statements.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included:

We assessed the inventory aging report, and analyzed changes in the inventory aging report from the previous to current year.
We tested samples provided by the ACES Group on inventory valued at the lower of cost and net realizable value.
We understand the selling prices adopted by the management of the Group, and use it to assess the reasonableness of inventory net realizable value.
We assessed if the inventory valuation is recorded according to the accounting policies of the Group.

Other matter

ACES Electronics Co., Ltd. has additionally 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 unmodified audit opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRS, IAS, IFRIC, 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 ACES Electronics Co., Ltd. and its subsidiaries’ 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 ACES Electronics Co., Ltd. and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (inclusive of the Audit Committee) from ACES Electronics Co., Ltd and its subsidiaries are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated 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 Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

1.Identified and assessed 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.
2.Obtained 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 ACES Group and its subsidiaries’ internal control.
3.Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
4.Concluded 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 ACES Electronics Co., Ltd. and its subsidiaries’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the ACES Group to cease to continue as a going concern.
5.Evaluated the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
6.Obtained sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicated 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 identified during our audit.

We also provided those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicated 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 determined 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 auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Lin, Heng-Shen and Chen, Zheng-Xue.

KPMG

Taipei, Taiwan (Republic of China) March 12, 2024

ACES Electronics Co., Ltd. and Subsidiaries

Consolidated Financial Statements

December 31, 2023 and 2022

(Expressed in thousands of New Taiwan dollars)

December 31,	2023 ％ 17 - - 18 - 4 - 10 1 1 51 1 - 3 31 5 2 1 2 1 3 49 100	December 31, 2023 Amount % $ 1,467,000 12 578,202 5 1,868 - 1,406,861 11 65 - 830,356 7 813 - 51,258 - 11,769 - 195,740 2 119,803 1 4,663,735 38 - - 1,737,355 14 307,893 3 110,084 1 175,318 1 2,330,650 19 6,994,385 57 1,344,177 11 993,270 8 726,030 6 62,371 1 2,236,482 18 3,024,883 25 (140,790) (1) 33,219 - (107,571) (1) 5,254,759 43 1,745 - 5,256,504 43 $ 12,250,889 100	December 31, 2023 Amount % $ 1,467,000 12 578,202 5 1,868 - 1,406,861 11 65 - 830,356 7 813 - 51,258 - 11,769 - 195,740 2 119,803 1 4,663,735 38 - - 1,737,355 14 307,893 3 110,084 1 175,318 1 2,330,650 19 6,994,385 57 1,344,177 11 993,270 8 726,030 6 62,371 1 2,236,482 18 3,024,883 25 (140,790) (1) 33,219 - (107,571) (1) 5,254,759 43 1,745 - 5,256,504 43 $ 12,250,889 100	December 31, 2022 Amount % 1,428,562 11 - - 518 - 1,623,419 13 327 - 1,012,818 8 2,823 - 47,039 - 56,365 - 1,119,167 9 101,018 1 5,392,056 42 555,906 4 660,121 5 317,009 3 75,665 1 184,265 2 1,792,966 15 7,185,022 57 1,344,177 10 988,615 8 702,410 6 168,631 1 2,492,404 19 3,363,445 26 (92,336) (1) 33,219 - (59,117) (1) 5,637,120 43 18,234 - 5,655,354 43 12,840,376 100	December 31, 2022 Amount % 1,428,562 11 - - 518 - 1,623,419 13 327 - 1,012,818 8 2,823 - 47,039 - 56,365 - 1,119,167 9 101,018 1 5,392,056 42 555,906 4 660,121 5 317,009 3 75,665 1 184,265 2 1,792,966 15 7,185,022 57 1,344,177 10 988,615 8 702,410 6 168,631 1 2,492,404 19 3,363,445 26 (92,336) (1) 33,219 - (59,117) (1) 5,637,120 43 18,234 - 5,655,354 43 12,840,376 100
Amount $ 2,058,206 - 46,942 2,221,528 25,422 448,619 528 1,189,410 87,022 97,739		Amount $ 1,467,000 578,202 1,868 1,406,861 65 830,356 813 51,258 11,769 195,740 119,803		Amount 1,428,562 - 518 1,623,419 327 1,012,818 2,823 47,039 56,365 1,119,167 101,018 5,392,056 555,906 660,121 317,009 75,665 184,265 1,792,966 7,185,022 1,344,177 988,615 702,410 168,631 2,492,404 3,363,445 (92,336) 33,219 (59,117) 5,637,120 18,234 5,655,354 12,840,376

6,175,416	51	4,663,735	38		42
167,452 - 428,470 3,740,842 598,340 304,881 142,030 227,093 80,566 385,799	1 - 3 31 5 2 1 2 1 3	- 1,737,355 307,893 110,084 175,318	- 14 3 1 1		4 5 3 1 2
		2,330,650	19		15
		6,994,385	57		57
		1,344,177	11		10
		993,270	8		8
		726,030 62,371 2,236,482	6 1 18		6 1 19
6,075,473	49
		3,024,883	25		26
		(140,790) 33,219	(1) -		(1) -
		(107,571)	(1)		(1)
		5,254,759	43		43
		1,745	-		-
		5,256,504	43		43
$ 12,250,889	100	$ 12,250,889	100		100

See accompanying notes to consolidated financial statements.

ACES ELECTRONICS CO., LTD. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income For the years ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan dollars, except for Earnings per share)

2023	`％`	2022
Amount		Amount
$ 8,188,173 96 298,055 4 8,486,228 100 6,734,424 79 1,751,804 21 585,051 7 876,700 10 621,268 7 (486) - 2,082,533 24 (330,729) (3) 49,730 - 124,934 1 5,746 - (108,725) (1) (10,648) - 61,037 - (269,692) (3) (1,504) - (268,188) (3) 1,911 - - - 1,911 - (60,484) (1) (12,097) - (48,387) (1) (46,476) (1) $ (314,664) (4) (266,543) (3) (1,645) - $ (268,188) (3) $ (313,086) (4) (1,578) - $ (314,664) (4) $ (1.98) $ (1.98)	96 4	10,047,587 344,917 10,392,504 8,159,619 2,232,885 686,463 915,292 573,935 448 2,176,138 56,747 27,212 141,151 164,921 (85,069) 10,101 258,316 315,063 91,730 223,333 10,880 - 10,880 130,098 26,020 104,078 114,958 338,291 225,319 (1,986) 223,333 340,050 (1,759) 338,291
	100 79
	21
	7 10 7 -
	24
	(3)
	- 1 - (1) -
	-
	(3) -
	(3)
	- -
	-
	(1) -
	(1)
	(1)
	(4)
	(3) -
	(3)
	(4) -
	(4)

See accompanying notes to consolidated financial statements.

ACES ELECTRONICS CO., LTD. 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 Shareholders of the parent

Common stock	Capital surplus 1,002,379	Legal reserve 651,554	Retained earnings	Retained earnings	Other Components of Equity	Other Components of Equity	Non-controlling interests 19,993
			Special reserve 122,358	Undistributed surplus earnings 2,554,928 (50,856) (46,273) (201,594) 225,319 10,880 236,199 - - - - 2,492,404 (23,620) 106,260 (73,930) (266,543) 1,911 (264,632) - 2,236,482	Difference on translation of financial statements of foreign operations (196,187) - - - - 103,851 103,851 - - - - (92,336) - - - - (48,454) (48,454) - (140,790)	Gains on property revaluation 33,219
$ 1,343,959
- - - - -	- - - - -	50,856 - - - -	- 46,273 - - -			- - - - -	- - - (1,986) 227
-	-	-	-			-	(1,759)
- - 218 -	(131) (14,827) 917 277	- - - -	- - - -			- - - -	- - - -
1,344,177 - - - - -	988,615 - - - - -	702,410 23,620 - - - -	168,631 - (106,260) - - -			33,219 - - - - -	18,234 - - - (1,645) 67
-	-	-	-			-	(1,578)
-	4,655	-	-			-	(14,911)
$ 1,344,177	993,270	726,030	62,371			33,219	1,745

See accompanying notes to consolidated financial statements.

ACES ELECTRONICS CO., LTD. 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 income tax Adjustments`：` Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit loss (gain) recognized Net loss (gain) on financial assets at fair value through profit or loss Interest expense Interest income Impairment loss Share of profit (loss) of equity-account investees Loss on disposals of property, plant and equipment Loss on disposals of equity-account investees Gain on investment property revaluation Gain on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities`：` Net changes in operating assets`：` Decrease (increase) in notes receivable Decrease in accounts receivable Increase in accounts receivable from related parties Decrease (increase) in other receivables Increase in other receivables from related parties Decrease in inventories Decrease (increase) in prepaid expenses Decrease in other current assets Decrease in other financial assets Total net changes in operating assets Net changes in operating liabilities`：` Increase (decrease) in notes payable Decrease in accounts payable Decrease in accounts payable to related parties Increase (decrease) in other payables Increase (decrease) in other payables to related parties Increase in other current liabilities Increase in net defined benefit liabilities Total net changes in operating liabilities Total adjustments Cash generated from operations Interest received Interest paid Income tax paid Net cash provided by operating activities Cash flows from investing activities`：` Acquisitions of financial assets at fair value through profit or loss Disposals of financial assets at fair value through profit or loss Acquisitions of equity-accounted investees Acquisitions of subsidiaries Disposals of subsidiaries Acquisitions of property, plant, and equipment Disposals of property, plant, and equipment Acquisitions of intangible assets Acquisition of right-of-use assets Increase in other non-current assets Increase in prepaid equipment payments Dividends received Net cash used in investing activities Cash flows from financing activities`：` Increase in short-term borrowings Proceeds from long-term borrowings Repayment of long-term borrowings Repayment of principal of lease liabilities Decrease in other non-current liabilities Cash dividends Acquisitions of subsidiary's equity Net cash (used in) provided by financing activities Effect of exchange rate change on cash and cash equivalents Decrease in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at December 31		2023 $ (269,692) 651,330 55,102 (486) (27,635) 108,725 (49,730) - 10,648 9,007 24,140 (6,067) (48)		2022 315,063 650,950 47,707 448 32,741 85,069 (27,212) 2,802 (10,101) 15,899 - 2,158 -

		774,986		800,461
		35,551 253,783 (1,869) (251,719) (528) 268,824 54,304 37,074 220,400		(21,136) 314,171 (23,553) (60,959) - 224,985 (34,701) 687 -
		615,820		399,494
		1,350 (216,712) (262) (182,738) (2,010) 14,536 1,316		(1,081) (296,549) (153) 88,354 322 9,292 4,270
		(384,520)		(195,545)
		1,006,286		1,004,410
		736,594 49,730 (86,429) (36,576)		1,319,473 27,212 (63,611) (100,440)
		663,319		1,182,634
		- 22,257 - (7,691) 21,157 (865,435) 97,868 (39,357) (71,611) (185,007) (21,827) -		(8,260) 81,833 (16,898) - - (922,935) 22,474 (36,445) - (82,832) (192,952) 20,391
		(1,049,646)		(1,135,624)
		51,602 3,775,000 (3,624,549) (70,245) (4,521) (73,930) (10,256)		353,711 3,961,000 (3,945,279) (69,369) (136,526) (201,594) (1,028)
		43,101		(39,085)
		(57,185)		(117,203)
		(400,411) 2,458,617		(109,278) 2,567,895
		$ 2,058,206		2,458,617

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements For the Years Ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

1. Organization

ACES Electronics Co., Ltd. (“The Company”) was established on November 7, 1996 with the approval of the Ministry of Economic Affairs. Its registered office is located at 13 Dong-Yuan Road, Chung-Li District, Taoyuan City, the Republic of China (“ROC”). The Group and its subsidiaries (hereinafter refer to as “the Group”) is mainly engaging in processing, manufacturing and selling of connectors, connector cable sets, metal stamping parts and other electronic components.

2. The Authorization of Financial Statements

These consolidated financial statements were approved and authorized for issue by the Board of Directors on March 12, 2024.

3. Application of New and Revised Standards, Amendments and Interpretations

(1) Impact of adoption of new, revised or amended standards and interpretations endorsed by the Financial Supervisory Commission, ROC.

The Group has adopted the amendments to the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations with effective date from January 1, 2023. The adoption does not have a material impact on the Company’s parent company only financial statements.

‧ 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 adopted the amendments to the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations with effective date from May 23, 2023. The adoption does not have a material impact on the Company’s parent company only financial statements.

‧ Amendments to IAS 12 “International Tax Reform — Pillar Two Model Rules”
(2) Impact of the IFRSs that have been endorsed by the FSC but not yet in effect The Group assessed that the adoption of the following amendments, effective for annual period beginning on January 1, 2024, would not have a material impact on its parent company only 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 IFRSs issued by International Accounting Standards Board (“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 IAS 21 “Lack of Exchangeability”

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

4. Summary of Significant Accounting Policies

The significant accounting policies applied in the preparation of these consolidated financial statements are set out as below. Unless otherwise stated, the significant accounting policies have been applied consistently to all periods presented in these consolidated financial statements. (1) Statement of compliance

The consolidated financial statements is in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRS, IAS, IFRIC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China (hereinafter refer to as IFRSs approved by FSC).

(2) Basis of preparation
a. Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the balance sheets:
(i) Financial assets at fair value through profit or loss;
(ii) Investment property at fair value ； and
(iii) Defined benefit liability is recognized as the fair value of the plan assets less the present value of the defined benefit obligation.
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 consolidated financial statements are presented in New Taiwan Dollar (“NTD”), which is also the Company’s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(3) Basis of consolidation
a. Principle of preparation of the consolidated financial statements
All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, 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.

Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries. Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. The consolidated profit and loss amount belongs to the Company’s equity owner and the controlling right. The same applies to balance of loss from non-controlling equity rights.

Changes in the consolidated ownership interest in a subsidiary that do not result in the loss of control are accounted for within equity. Any difference between such adjustment and the fair value of the consideration paid or received is recognized directly in equity and attributed to shareholders of the Company.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Subsidiaries included in the consolidated financial statements Subsidiaries included in the consolidated financial statements:

Name of investee Subsidiary The Company ACECONN ELECTRONIC CO., LTD. " ACES PRECISION INDUSTRY PTE LTD. " ACESCONN HOLDINGS CO., LTD. " WEI HONG INTERNATIONAL INVESTMENT CO., LTD. The Company ACES (HONG KONG) ELECTRONIC CO., LTD. " MEC IMEX INC. " ACES JAPAN CO., LTD. " ACES INTERCONNECT (USA), INC. " COMPUPACK TECHNOLOGY CO., LTD. " ACES Precision Machinery Co., Ltd. " KUANG YING COMPUTER EQUIPMENT CO., LTD. " GENESIS HOLDING COMPANY " GENESIS TECHNOLOGY USA, INC. " JASON TECHNOLOGY LIMITED. ACES Precision Machinery Co., Ltd. ACES Surface Treatment Co., Ltd. ACECONN ELECTRONIC CO., LTD. KUNSHAN ACES TRADING CO., LTD. " DONGGUAN ACES ELECTRONIC CO., LTD. " KUNSHAN ACES ELECTRONIC CO., LTD. " KUNSHAN CHENGGANG ELECTRONIC TECHNOLOGY CO., LTD. ACES ZHUHAI TECHNOLOGY LTD ACES PRECISION INDUSTRY PTE LTD. CHONGQING HONG GAO ELECTRONIC CO., LTD.	Business Nature	Shareholding Percentage December 31, 2023 December 31, 2022 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 99.86% 99.84% 100% 100% 100% 100% 100.00% 93.67% 100% 100% 99.66% 99.66% 100% 100% 100% 100% 100% 100% 100% - % 100% 100% 100% 100% 100% 100% 100% 100% 100% - % 100% 100%	Note
		December 31, 2023
	Investment holding Connectors sales business Investment holding Investment business Connectors sales business Connector cable set sales business Connector development business Connectors sales business Electronic component sales business Mold part manufacturing and sales business Electronic component manufacturing and sales business Investment holding Electronic component sales business Electronic component sales business Surface treatment of metals Connectors sales business Connector manufacturing and sales business Connector manufacturing and sales business Connector manufacturing and sales business Connector manufacturing and sales business Connectors sales business	100% 100% 100% 100% 100% 99.86% 100% 100% 100.00% 100% 99.66% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%	(Note 4) (Note 1) (Note 2) (Note 7) (Note 6)

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Name of investee Subsidiary ACESCONN HOLDINGS CO., LTD. ASIA CENTURY INVESTMENT LTD. ASIA CENTURY INVESTMENT LTD. GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU MEC IMEX INC. MEC INTERNATIONAL COMPANY LTD. " MEC ELECTRIC SOLUTIONS GMBH MEC INTERNATIONAL COMPANY LTD. MEC ULTRAMAX (H.K.) COMPANY LIMITED " MEC BEST KNOWN COMPANY LIMITED " MEC ELECTRONICS (HK) COMPANY LIMITED " MEC ELECTRONICS PHILIPPINES CORPORATION " MEC SUZHOU ELECTRONICS CO., LTD. MEC ULTRAMAX (H.K.) COMPANY LIMITED MEC ELECTRONICS (SUZHOU) CO., LTD. MEC BEST KNOWN COMPANY LIMITED SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. MEC ELECTRONICS (HK) COMPANY LTD. HOMEPRIDE TECHNOLOGY LIMITED HOMEPRIDE TECHNOLOGY LIMITED HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED. MEC ELECTRONICS PHILIPPINES CORPORATION MEC IMEX (USA), INC. COMPUPACK TECHNOLOGY CO., LTD. MICON PRECISE CORP. " GLOBAL ACUMEN LIMITED " DONGGUAN COMPUPACK TECHNOLOGY CO., LTD. MICON PRECISE CORP. Aces Precision Corporation KUANG YING COMPUTER EQUIPMENT CO., LTD. INFOMIGHT INVESTMENTS LIMITED INFOMIGHT INVESTMENTS LIMITED BELTA INTERNATIONAL LIMITED " CERTILINK INTERNATIONAL LIMITED	Business Nature	Shareholding Percentage December 31, 2023 December 31, 2022 Note 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 99.61% 98.91% (Note 3) - % 100% (Note 4) 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%	Note
		December 31, 2023
	Investment holding Surface treatment and sales business Investment holding Connector cable set sales business Investment holding Investment holding Connector cable set sales business Connector cable set manufacturing and sales business Connector cable set manufacturing and sales business Connector cable set manufacturing and sales business Connector cable set manufacturing and sales business Investment holding Connector cable set manufacturing and sales business Connector cable set sales business Electronic component sales business Electronic component sales business Electronic component sales business Electronic component manufacturing and sales Investment holding Investment holding Electronic component sales	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 99.61% - % 100% 100% 100% 100% 100%

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Name of investee Subsidiary " ACCURATE GROUP LIMITED BELTA INTERNATIONAL LIMITED DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD. ACCURATE GROUP LIMITED SUZHOU KUANG YING ELECTRIC CO., LTD. GENESIS HOLDING COMPANY GENESIS ELECTRO-MECHANICAL LIMITED " GENESIS INNOVATION GROUP LIMITED GENESIS ELECTRO-MECHANICAL LIMITED GENESIS TECHNOLOGY(NINGBO) INC. " SHENZHEN JINO ELECTRONIC CO., LTD. GENESIS INNOVATION GROUP LIMITED GENESIS INTERCONNECT CO., LTD. " DONGGUAN POLIXIN ELECTRIC CO., LTD. DONGGUAN POLIXIN ELECTRIC CO., LTD. GENESIS GUIZHOU TECHNOLOGY CO., LTD.	Business Nature	Shareholding Percentage December 31, 2023 December 31, 2022 Note 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - % 100% (Note 4) - % 100% (Note 4) 100% 100% - % 100% (Note 5)	Note
		December 31, 2023
	Investment holding Electronic component manufacturing and sales Electronic component manufacturing and sales Investment holding Investment holding Electronic component manufacturing and sales business Electronic component manufacturing and sales business Electronic component manufacturing and sales business Electronic component manufacturing and sales business Electronic component manufacturing and sales business	100% 100% 100% 100% 100% 100% - % - % 100% - %

Note 1: In August 2023, the Company’s subsidiary MEC IMEX INC. decreased its capital in the amount of $120,000 thousand for covering deficits. The Company acquired 11,991 thousand shares, which increase its shareholding percentage to 99.86%.

Note 2: The Company acquired shares of COMPUPACK TECHNOLOGY CO., LTD from minority shareholders in 2023, which increase its shareholding percentage to 100%.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Note 3: The Company acquired shares of MICON PRECISE CORP. from minority shareholders in September, 2023, which increase its shareholding percentage to 99.61%.

Note 4: The liquidation procedures of the subsidiaries of the Company, ACES (HONG KONG) ELECTRONIC CO., LTD, GLOBAL ACUMEN LIMITED, GENESIS INTERCONNECT CO., LTD., and SHENZHEN JINO ELECTRONIC CO., LTD. have been completed in 2023.

Note 5: The Company sold the subsidiary, GENESIS GUIZHOU TECHNOLOGY CO., LTD., to non-related parties on November 3, 2023.
Note 6: The subsidiary of the Company set up ACES ZHUHAI TECHNOLOGY LTD. on February 1, 2023, which is included into the Group since that day.

Note 7: The subsidiary of the Company obtained the control over ACES Surface Treatment Co., Ltd. on May 5, 2023, which is included into the Group since that day.

Subsidiaries not included in the consolidated financial statements: None.
(4) Foreign currency
a. Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of the Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent end of reporting date (hereinafter refer to as ‘end of reporting period’), monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at the 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 recognized in profit or loss.
b. Foreign operations
The assets and liabilities of foreign operations, including good will and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expense of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such 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 settlement of a monetary receivable from, or payable to, a foreign operation is neither planned nor likely to occur in the foreseeable future, the 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 when:

a. The asset expected to realize, or intends to sell or consume, in its normal operating cycle;
b. The asset primarily held for the purpose of trading;
c. The asset expected to realize within twelve months after the reporting date; or
d. The asset is cash and 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.

All other assets are classified as non-current.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

A liability is classified as current when:

a. The liability is expected to be settled within the consolidated company's normal operating cycle;
b. The liability is held primarily for the purpose of trading ；
c. The liability is due to be settled within twelve months after the reporting date; or
d. The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments, do not affect its classification.
(6) Cash and cash equivalents

Cash comprise cash balances and demand deposits. Cash equivalents comprise short-term highly liquid investments that are readily convertible into known amount of cash and are subject to an insignificant risk of changes in their fair value. Time deposits with short-term maturity but not for investments and other purposes and are qualified with the aforementioned criteria are classified as cash equivalent.

(7) Financial instruments

Account receivables initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the consolidated company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade 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 issuance. A trade 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 basis.

On initial recognition, a financial asset is classified as measured at amortized cost, fair value through other comprehensive income (FVOCI) – debt investment, FVCI – equity investment, or FVTL.

Financial assets are not reclassified subsequent to their initial recognition unless the consolidated 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 changes in the business model.

(i) 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 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 de-recognition is recognized in profit or

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

loss.

(ii) Financial assets at fair value through profit or loss All financial assets not classified as at amortized cost or at fair value through other comprehensive income as described above are measured at fair value through profit or loss. This includes all derivative financial assets. The consolidated company has the intention to sell account receivable at fair price through profit and loss immediately or recently; these amounts are recorded under account receivables currently. These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit and loss.
(iii) Business model assessment The Group makes an assessment of the objective of the business model in which a financial asset is held at portfolio level, because this best reflects the way the business is managed, and information is provided to management. The information considered includes:
‧ the stated policies and objectives for the portfolio and the operation of those policies
in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
‧ how the performance of the business model and the financial assets held within that
business model are evaluated and reported to the entity’s key management personnel; ‧ the risks that affect the performance of the business model (and the financial assets
held within that business model) and, in particular, the way in which those risks are managed;
‧ how managers of the business are compensated, for example, whether the
compensation is based on the fair value of the assets managed or on the contractual cash flows collected; and
‧ the frequency, volume and timing of sales of financial assets in prior periods, the
reasons for such sales and expectations about future sale activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Group’s continuing recognition of the assets.

(iv) Assessment on whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘ principal’ is defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the consolidated company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.

(v) Impairment of financial assets

The consolidated company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and trade receivables, other receivables and refundable deposit) 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

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for account receivables is 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 Consolidated company considers reasonable and supportable information that is relevant and available without undue 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.

The maximum period considered when estimating ECL is the maximum contractual period over which the consolidated company is exposed to credit risk.

The consolidated company assumes that the credit risk on a financial asset has increased significantly if it is more than 60 days past due.

The consolidated company considers a financial asset to be in default when the financial asset is more than 180 day past due or the debtor is unlikely to pay its credit obligations to the consolidated company in full.

The consolidated company considers a time deposit to have low credit risk when only deal with financial institutions with good credit rating.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

ECL are a 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 consolidated company in accordance with the contract and the cash flows that the consolidated company expects to receive). ECL is according to financial assets’ effective discount rate.

At each reporting date, the consolidated company assesses whether financial assets carried at amortized cost and debt securities at FVOCI 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 180 days 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 a security 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 customers, 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. According to experiences, the Group is not able to recover the overdue amount from company accounts after 180 days.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(vi) 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 the 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
(i) Classification of debt or equity
Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
(ii) Equity instrument
An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.
(iii) Compound financial instruments Compound financial instruments issued by the Company comprise convertible bonds denominated in NTD that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.
The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.
Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.
(iv) Financial liabilities
Financial liabilities are classified as measured at amortized 。 A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.
(v) Derecognition of financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.
(vi) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

c. Derivative financial instruments

Derivatives of financial tools were initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss, and recorded under profit and loss.

(8) Inventories
Inventory is valued at the lower of cost or net realizable value The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
(9) Investing in the affiliated Companies Affiliates are all entities over which the Company has significant influence but not control. The Company has adopted equity method to account for interests in the affiliated companies. Under the equity method, investment is initially recognized at cost. Investment cost includes transaction cost. The carrying amount of investment in the affiliates includes goodwill recognized at initial investment, net of any accumulated impairment losses After adjusting the accounting policies of the affiliated parent company to be in line with that of the Company, the consolidated reports included the income and loss as well as other comprehensive income of the affiliate companies the Company recognized in proportion to its shares owned in the affiliated companies from the date the Company has significant influence over the affiliated parent company until the date it ceases to have such significant influence. When the affiliates have changes in equities not in relations to income or loss or other comprehensive income and not affecting the shares held by the Company, the changes of equity of the Company’s shares in the affiliated companies should be recognized in proportion to its shares in the equity as capital reserve.

Unrealized gains on transactions between the Company and affiliates are eliminated to the extent of the Company’s interest in the affiliates. The elimination of unrealized loss is the same as the written-off unrealized gain but is limited to the circumstances when the impairment evidence is not available.

When the Company’s share of losses in the affiliates equals or exceeds its interests in the affiliates, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the affiliates, then additional loss or relevant liability would be recognized.

When the Company subscribes to additional shares in the affiliated companies or jointly controlled entity at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the net assets of the affiliated companies or jointly controlled entity. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. However if the balance of capital surplus is insufficient from investment accounted using equity method, the difference should debit to retained earnings. If the Company’s ownership interest is reduced due to the additional subscription to the shares of affiliated companies or joint controlled entity by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that affiliated companies or jointly controlled entity shall be reclassified to profit or loss on the same basis as would be required if the associate or jointly controlled entity had directly disposed of the related assets or liabilities. (10) Investment property

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Investment property is the property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition. Subsequent to initial recognition, investment properties are measured using the cost model.

Any gain or loss (calculated by the difference between net disposal price and its carrying amount) on disposal of an investment property is recognized in profit or loss. If the sale of investment property was recorded under property, plant and equipment then the relevant ‘other equities - property revaluation increments’ shall be transferred to capital surplus. Lease income from investment property is recognized as non-operating revenue on a straight-line basis during leased period.

(11) 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 expenditure

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:

(i) Property and plants: 3 ~ 50 years

(ii) Machinery and equipment: 2 ~ 10 years

(iii) Mold equipment: 2 ~ 5 years

(iv) Other equipment: 2 ~ 10 years

Depreciation methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate

(12) Lease
a. Identifying a lease

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.

b. 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

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

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 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:

(i) fixed payments, including in-substance fixed payments;

(ii) 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:

(i) 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, or

(ii) there is a change of its assessment on whether it will exercise an extension or termination option; or

(iii) 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 has elected not to recognize right-of-use assets and lease liabilities for short-term leases and leases of low-value assets, including houses, buildings, and part of transportation equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a practical expedient, the Company elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

(i)the rent concessions occurring as a direct consequence of the COVID-19 pandemic;

(ii) the change in lease payments that resulted in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

(iii)any reduction in lease payments that affects only those payments originally due on, or before, June 30, 2021; and

(iv) there is no substantive change in other terms and conditions of the lease.

Under the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

c. 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 of 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

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

lease is for the major part of the economic life of the asset.

If the Company acts as a lessor from another lessor, the main lease contract and the transfer lease contract shall be attended to separately. The purpose of use from main lease contract shall determine the category of the transfer lease transaction. If the main lease contract is short-term lease contract and is recognized exemption, the transfer lease contract transaction shall be categorized as operating lease.

If the agreement includes components from lease and non-lease parts, the Company adopts to Amendments to IFRS 15 to allocate considerations from the contract.

Property ownership under finance lease, the financing lease receivables shall be expressed in net amount of lease investment. The initial direct cost from negotiation and arranging operating lease was included in the net amount of lease investment. Net amount of lease investment shall reflect nature of fixed return of investment in each period; such amount shall be recognized as interest revenue and allocated in each period respectively. The Company recognizes lease income received during from operating lease as lease revenue based on straight-line basis.

(13) Intangible assets
a. Recognition and measurement
The goodwill acquired by the Company are measured at cost less accumulated impairment losses.

Expenditure related to research expenses is recognized in profit or loss as incurred. Development expenses are capitalized only when the technical or commercial feasibility of the product or process is achieved, there is a high probability of future economic benefits flowing to the consolidated entity, and the consolidated entity has the intention and sufficient resources to complete the development and use or sell the asset. All other development expenditure is recognized in profit or loss as incurred. After initial recognition, capitalized development expenditures are measured at cost less accumulated amortization and any accumulated impairment losses.

For other intangible assets 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 goodwill from internal development and brand name.

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 useful lives of intangible assets, other than goodwill, from the date that they are available for use.

(i) Software: 1~ 3 years

(ii) Franchising: 8 years

(iii) Customer relationship: 3 years

(iv) Other intangible assets 1~ 3 years

Amortization methods, useful lives and residual values for intangible assets are reviewed at each annual reporting date and adjusted if appropriate.

(14) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

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 cash-generating units(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.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

The impairment loss recognized on goodwill is not reversed in a subsequent period. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(15) Revenue Recognition

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The following is a description of the Company’s major revenues:

Revenue is recognized when the control over a product has been transferred to the customer. being when the products are delivered to the customer, 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 Company has objective evidence that all criteria for acceptance have been satisfied.

The Company often offers volume discounts to its customers. Revenue from these sales is recognized based on the price specified in the contract, net of estimated volume discount. Accumulated experience is used to estimate the discounts, using the expected value method, and revenue is only recognized to the extent that is highly probable that a significant reversal will not occur. No element of financing is deemed present as the sales of goods are made, with a credit term of 90~150 days, which is consistent with the market practice.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the consolidated company does not adjust any of the transaction prices for the time value of money.

(16) Government grants

The Company has obtained low interest rate loans from banks facilitated by the government, through the “Welcome Businesses Returning to Taiwan to Invest Solutions” launched by the Executive Yuan. The difference between such loan calculated by market borrowing interest rate valued at fair price and the amount received is recorded as deferred income. Grants that compensate the Company for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the deferred income is recognized as deduction of expenses.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(17) Employee benefits
a. Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized in the periods during which services are rendered by employees.

b. Defined benefit plans

The Company’s net obligation in respect of 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 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 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.
(18) 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 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 that reflects uncertainly related to income tax, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

a. temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
b. temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

deferred taxes are measured at tax rates that are expected to be applied to temporary

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

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:
(i) the same taxable entity; or
(ii) 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.

The unapplied tax losses and unapplied tax credits carried forward and deductible temporary differences are recognized as deferred income tax assets within the range of probable future taxable income available for use. 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.

(19) Earning 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, such as convertible bonds and estimated employee compensation.

(20) Operating segments
Operating segment is a component of the Company engaging in activities that may earn revenues and incur expenses, including relevant revenues and expenses from other components of the Company. Operating results of all segments are routinely provided to the chief operating decision-maker for review for set up policy to allocate resources and assess performance of the operating segments. Each operating segment shall have its separate financial information.

5. Critical Accounting Judgments and Key Sources of Estimations and Assumptions Uncertainty

While preparing the financial reports in compliance with the IFRSs as approved by FSC, the management should make judgment, estimate and assumption that would impact the adoption of accounting policy, as well as the amount reported for assets, liabilities, revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed by management on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

There is no information involving critical judgments in applying the accounting policies in the consolidated financial statements.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows: (1) Valuation of inventories

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumption as to future demand within a specific time horizon. Due to the obsolescence of aircraft models, there may be significant changes in the net realizable value of inventories. Please refer to note 6(4) for further description on the valuation of inventories.

(2) Impairment of goodwill

The assessment of impairment of goodwill requires the Company to make subjective judgment to determine the identified CGUs, allocate the goodwill to relevant CGUs and estimate the recoverable amount of relevant CGUs.

(3) Valuation process

The Company’s accounting policies include measuring financial and non-financial assets and liabilities at fair value through profit or loss. The Company’s financial instrument valuation group conducts independent verification on all significant fair values (including level 3 fair value), and reports directly to the chief financial officer. The Company also periodically reviews significant unobservable inputs and adjustments. If third-party information (i.e. through securities brokers or price setting service institutes) for evaluating fair value inputs were used, evidence for supporting inputs from third-party will be assessed in order to make sure the valuation and its fair value categorization is compliant with regulations from IFRSs. Investment property was appraised by external appraiser.

The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

a. Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
b. Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
c. Level 3: inputs for the assets or liability that are not based on observable market data. For any transfer within the fair value hierarchy, the impact of the transfer is recognized on the reporting date.

For assumptions used in measuring fair value, please refer to below notes:

(i) Note 6(2), financial assets.
(ii) Note 6(9), investment property at fair value.

6. Description of Significant Accounts

(1) Cash and Cash Equivalents

of Significant Accounts nd Cash Equivalents
Cash on hand Cash in banks	December 31, 2023 $ 2,397 2,055,809 $ 2,058,206		December 31, 2022
			15,262 2,443,355 2,458,617

Please refer to Note 6(23) for interest rate risk and sensitivity analysis of the financial assets and liabilities.

According to the IFRSs Q&A updated by Securities and Futures Bureau, FSC on January 5, 2024, the Group reclassified the deposits balance in repatriated offshore funds accounts amounting to $40,124 thousand and $61,468 thousand as of December 31, 2022 and January 1, 2022, respectively, from other current assets to cash and cash equivalent. In addition, the

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Group decreased the amount in “decrease in other current assets” under investing activities for the year ended December 31, 2022 by $21,344 thousand. As time deposits with original maturity date within 1 year, are held for the purpose of meeting short term cash commitments rather than for investment or other purposes, readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, those are recognized as cash and cash equivalents.

(2) Financial assets
a. Financial Assets and Liabilities at Fair Value through Profit or Loss (“FVTPL”) – current and non-current

non-current
Financial assets mandatorily measured at FVTPL: Funds Convertible bonds of embedded derivatives	December 31, 2023	December 31, 2022
	$ 167,452 - $ 167,452	163,651 62
		163,713

Please refer to Note 6(21) for amounts remeasured at fair value through profit and loss, and Note 6(22) for fair value information.

b Financial assets measured at amortized cost - non-current

Time deposit	December 31, 2023		December 31, 2022
	$ -		220,400

The financial assets referred to above had not been provided as collateral.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(3) Notes, trade and other receivables

a. Details as follows:

Notes receivable Accounts receivable Other receivables Account receivable – related parties Other receivable – related parties Less: Loss allowance	December 31, 2023 $ 46,942 2,240,994 448,619 25,422 528 (19,466)	December 31, 2022 82,493 2,518,463 196,900 23,553 - (42,390) 2,779,019
	$ 2,743,039

b. 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, notes, accounts and other receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. The loss allowance provision for notes receivable, accounts receivable and other receivables for the years ended December 31 2023 and 2022 was analyzed as follows:

December 31, 2023 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,619,353 0% - 116,086 0% - 13,102 50% 6,551 3,496 70% 2,447 10,468 100% 10,468 $ 2,762,505 19,466 December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,662,212 0% - 111,206 0% - 10,141 50% 5,071 1,770 70% 1,239 36,080 100% 36,080 $ 2,821,409 42,390	December 31, 2023 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,619,353 0% - 116,086 0% - 13,102 50% 6,551 3,496 70% 2,447 10,468 100% 10,468 $ 2,762,505 19,466 December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,662,212 0% - 111,206 0% - 10,141 50% 5,071 1,770 70% 1,239 36,080 100% 36,080 $ 2,821,409 42,390	December 31, 2023 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,619,353 0% - 116,086 0% - 13,102 50% 6,551 3,496 70% 2,447 10,468 100% 10,468 $ 2,762,505 19,466 December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,662,212 0% - 111,206 0% - 10,141 50% 5,071 1,770 70% 1,239 36,080 100% 36,080 $ 2,821,409 42,390
Carrying amount of notes, accounts and other receivables $ 2,662,212 111,206 10,141 1,770 36,080	Weighted-ave rage loss rate
	0% 0% 50% 70% 100%
$ 2,821,409		42,390

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

c. The movement of the loss allowance for notes, accounts and other receivables was as follows:

Balance at beginning of the year Impairment losses recognized (reversal) Irrecoverable amount write-off, current Effects from foreign currency exchange changes Balance at end of the year	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2022 46,161 448 (3,384) (835) 42,390
		$ 42,390 (486) (23,910) 1,472
		$ 19,466

c. The Company has signed accounts receivable factoring contracts without recourse with financial institutions. As stated in the contract, the Company does not have to bear the risks of uncollectable accounts receivables but the loss incurred due to commercial arguments. Due to the fact that the Company has already transferred almost all the risk and revenues of the above mentioned account receivables without further participation, hence meets the criteria of derecognition of financial assets. After derecognition of accounts receivable, the claim to financial institutes were recorded under other receivables. Factored accounts receivables which were not due as of the report date were as follows:

Underwriting bank			December 31, 2023
	Factoring amount $ 189,616 45,936 51,103	Acceptabl e advances	Amount collected inadvance
Financial institutes Financial institutes Financial institutes Underwriting bank		663,228 124,355 110,538	- - -
	$ 286,655	898,121	-

	Factoring amount $ 207,627 5,700 39,710	Acceptabl e advances	Amount collected inadvance
Financial institutes Financial institutes Financial institutes		476,471 221,112 107,638	186,865 - 2,918
	$ 253,037	805,221	189,783

(4) Inventories
a. Details as follows:

Raw materials Work-in-progress Semi-finished goods Finished goods Merchandise	December 31, 2023		December 31, 2022
	$ 387,620 50,281 161,177 332,074 258,258 $ 1,189,410		442,211 73,295 182,870 426,864 328,451 1,453,691

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

b. Details of cost of goods sold as follows:

ils of cost of goods sold as follows:
Cost of goods sold Loss on obsolescence write-off Loss on inventory write-down Unamortized manufacturing expenses Others	For the year ended December 31, 2023	For the year ended December 31, 2022
	$ 6,410,059 147,386 5,762 141,659 29,558 $ 6,734,424	7,819,980 110,369 63,362 143,595 22,313 8,159,619

c. As of December 31, 2023 and 2022, none of the Company’s inventories was pledged as collateral.
(5) Investments accounted for using equity method
a. Investments accounted for using equity method on the date or reporting as follows:

Affiliated company

December 31, 2023		December 31, 2022
$ 428,470		447,170

b. Details of the affiliated companies that are significant to the company as follows:

Affiliated company Name	Percentage of equity ownership interests and voting rights	Percentage of equity ownership interests and voting rights
	December 31, 2023	December 31, 2022
Nantong Dadi Electric Co., Ltd. Kung Shan Ching Zhi Electric Co., Ltd.
	19.31% 30.00%	19.31% 30.00%

c. In the fourth quarter of 2021, Nantong Dadi Electric Co., Ltd., an affiliated company, KUNSHAN ACES ELECTRONIC CO., LTD. was listed on Beijing Stock Exchange. KUNSHAN ACES ELECTRONIC CO., LTD., an affiliated company did not participate in the capital increase of affiliated company; therefore, its equity holding percentage has decreased from 24.72% to 19.31% and resulting in changes in equity in the first quarter of 2022, and the decrease of $14,827 thousand in capital surplus.
d. In January 2022, the Company acquired 30% shares of Kung Shan Ching Zhi Electric Co., Ltd. in the amount of RMB 3,750 thousand (NTD $16,898 thousand); therefore acquired significant influence over the company.
e. The summarized financial information on significant affiliated company of the Group is as follows. The financial information has adjusted the amounts included in the consolidated financial statements in accordance with IFRS of each affiliated company, to reflect the adjustments for fair value and accounting policies when the Group acquired the equity of the affiliated companies:

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(a) Summarized financial information of Nantong Dadi Electric Co., Ltd.

Total assets Total liabilities Revenue Net income for the period	December 31, 2023 $ 3,938,219 $ 2,063,352 For the year ended December 31, 2023 $ 2,381,980 $ (65,743)	December 31, 2022
		3,278,573
		1,302,579
		For the year ended December 31, 2022
		1,683,118
		40,614

(b)Summarized financial information of Kung Shan Ching Zhi Electric Co.

Total assets Total liabilities Revenue Net income for the period	December 31, 2023 $ 54,506 $ 40,409 For the year ended December 31, 2023 $ 96,393 $ 6,823	December 31, 2022
		42,781
		35,308
		For the year ended December 31, 2022
		84,468
		7,496

f. The Group is regulated by the agreement for the listing of affiliated companies for the years ended December 31, 2023 and 2022. The ordinary shares held shall not be transferred within one year after the affiliated companies go listing. Within two years after the lock-up period ends, the shares transferred shall not exceed 25% of the total shares held.
g. The investments accounted for using equity method were not pledged as collaterals as of December 31, 2023, and 2022.
(6) Acquisition of Subsidiaries and Non-controlling interests
- a. Acquisition of Genesis Group

The board of directors had resulted in acquisition of Genesis Technology USA, Inc. and Genesis Holding Company (together referred to as the “Genesis Group”), an American group consist of companies in electromagnetic shielding, high-frequency connectors and high-speed connecting cables, in order to enhance business strategies in Internet communications, cloud services and industrial controls on December 17, 2020. The transfer of shares was completed on April 14, 2021.

According to the transaction considerations and contingent payments agreed in the acquisition contract, the amounts not paid by the Group were $25,365 thousand and $61,857 thousand as of December 31, 2023 and 2022, which were recognized under “other payables” and “other non-current liabilities.”

b. Acquisition of subsidiary - JASON TECHNOLOGY LIMITED.
In order to expand sales developments in automobile industry, the Company acquired 100% of ordinary shares of JASON TECHNOLOGY LIMITED. (hereinafter refer to as Jason Company) on July 1, 2021.

According to the acquisition contract, the amount that the Group shall pay to the original share holder of JASON TECHNOLOGY LIMITED. for the percentage of achieving sales amount do not exceed US$20 thousand, and shall be paid by installments in three years. The Group has paid $1,857 (about US$66 thousand), and the residual contingent

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

considerations are recognized under “other non-current liabilities.”

c. Acquisition of subsidiary - ACES Surface Treatment Co., Ltd.
In consideration of the extending demands of product processing and attaining the effectiveness from vertical integration of production, the Group acquired 100% of Yunchengyou Precision Technology Co., Ltd. (hereinafter “Yunchengyou Company”)’s shares by consideration of $7,000 thousand on May 5, Yunchengyou Company is primarily engaged in manufacture and sales of mold.
According to the acquisition contract, part of the consideration of $6,000 thousand has been paid. After deducting the cash obtained, the amount paid is $5,834 thousand, and the residual payment of $1,000 thousand is expected to be paid one year after the settlement date, which is recognized under “other current liabilities.” Yunchengyou Company has completed the change of registration on May 30, 2023, and renamed as ACES Surface Treatment Co., Ltd.
d. Loss of control over subsidiaries
(i) The liquidation of the subsidiaries of the Group, ACES (HONG KONG) ELECTRONIC CO., LTD, GLOBAL ACUMEN LIMITED, GENESIS INTERCONNECT CO., LTD., and SHENZHEN JINO ELECTRONIC CO., LTD. have been resolved by the board of directors in 2023, and the relevant procedures have been completed in 2023. As of December 31, 2023, the Group has recovered distribution of liquidated remaining properties of $18,909 thousand, and recognized losses on disposals of investments of $22,527 thousand, which were presented in “other gains and losses.”
(ii) The Company sold the subsidiary, GENESIS GUIZHOU TECHNOLOGY CO., LTD., to non-related parties on November 3, 2023. The Group has disposed 100% of the shares and lost control over the subsidiary. The proceeds from the disposal are $6,416 thousand. The losses on disposals of $1,613 thousand have included under “other gains and losses” in the consolidated statements of comprehensive income.
e. Changes in ownership of subsidiary equity
(i) MEC IMEX INC.
The Group subscribed 9,999 thousand of shares of MEC IMEX INC. in cash capital increase by cash of $99,998 thousand in 2022, which increase its shareholding percentage from 99.79% to 99.84%. The resulting changes in equity increase the capital surplus by $87 thousand.
The Group subscribed 11,991 thousand of shares of MEC IMEX INC. in cash capital increase by cash of $119,907 thousand in 2023, which increase its shareholding percentage from 99.84% to 99.86%. The resulting changes in equity increase the capital surplus by $20 thousand.
(ii) COMPUPACK TECHNOLOGY CO., LTD
The Group subscribed 3,000 thousand of shares of COMPUPACK TECHNOLOGY CO., LTD in cash capital increase by cash of $30,000 thousand in 2022, which increase its shareholding percentage from 92.64% to 93.67%. The resulting changes in equity increase the capital surplus by $190 thousand.
The Group bought back 1,362 thousand of shares of COMPUPACK TECHNOLOGY CO., LTD from minority shareholders by cash of $10,000 thousand in 2023, which increase its shareholding percentage from 93.67% to 100%. The resulting changes in equity increase the capital surplus by $4,840 thousand.
(iii) MICON PRECISE CORP.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

The Company bought back 91 thousand of shares of MICON PRECISE CORP. from related parties by cash of $256 thousand in 2023, which increase its shareholding percentage from 98.91% to 99.61%. The resulting changes in equity decrease the capital surplus by $205 thousand.

(7) Property, plant and equipment

a. Changes in the cost, depreciation and impairment loss of the Company’s real estate property, plant and equipment are as follows:

Land $ 338,579 - - - - -	Property and plants 1,560,763 - 8,986 544 (6,827) (17,157)	Machinery and equipment 1,726,391 3,284 86,041 16,684 (44,614) (35,778)	Mold equipment 1,380,841 - 153,966 55,822 (88,481) (18,281)	Other equipment 1,386,682 - 102,146 44,085 (134,174) (12,050)	Constructi ons in process 705,715 - 514,296 16,065 - (6,998)	Total 7,098,971 3,284 865,435 133,200 (274,096) (90,264)
$ 338,579	1,546,309	1,752,008	1,483,867	1,386,689	1,229,078	7,736,530
$ 338,424 - - - 155	1,456,325 70,271 7,409 - 26,758	1,608,345 108,116 12,312 (47,750) 45,368	1,215,456 110,473 94,149 (41,698) 2,461	1,250,941 118,347 131,406 (127,021) 13,009	186,376 515,728 - - 3,611	6,055,867 922,935 245,276 (216,469) 91,362
$ 338,579	1,560,763	1,726,391	1,380,841	1,386,682	705,715	7,098,971
$ - - - -	616,597 71,349 (3,089) (10,692)	1,060,245 152,458 (37,111) (29,016)	1,189,254 168,158 (37,055) (14,716)	804,546 173,608 (89,966) (18,882)	- - - -	3,670,642 565,573 (167,221) (73,306)
$ -	674,165	1,146,576	1,305,641	869,306	-	3,995,688
$ - - - - -	536,266 71,458 - - 8,873	910,196 150,004 2,802 (33,924) 31,167	1,039,311 174,591 - (33,558) 8,910	741,585 168,383 - (110,614) 5,192	- - - - -	3,227,358 564,436 2,802 (178,096) 54,142
$ -	616,597	1,060,245	1,189,254	804,546	-	3,670,642
$ 338,579	872,144	605,432	178,226	517,383	1,229,078	3,740,842
$ 338,424	920,059	698,149	176,145	509,356	186,376	2,828,509
$ 338,579	944,166	666,146	191,587	582,136	705,715	3,428,329

b. The Group acquired the land in MIRDC in Taoyuan from related parties with total transaction amount of $522,729 thousand. As of December 31, 2023, the prepayment for land of $156,819 thousand is recognized under “other non-current assets – others.” Please refer to Note 7.

c. As of December 31, 2023 and 2022, some part of properties and plants were pledged as guaranteed for long-term borrowings and credit limit amount. For details, please refer to Note 8.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(8) Right-of-use asset

Changes in equity assets recognized for property, plant and equipment leased by the Company are as follows:

Land	Buildings and structures 181,087 1,664 96,810 (58,723) (5,334)	Other equipment
$ 516,050 - 93,854 (45,465) (12,855)		31,681 - 1,540 (8,628) (307)
$ 551,584	215,504	24,286
$ 507,912 1,985 (3,033) 9,186	176,538 10,479 (7,045) 1,115	30,860 5,221 (4,695) 295
$ 516,050	181,087	31,681
$ 80,845 27,207 (34,684) (1,314)	113,300 49,470 (58,723) (346)	17,045 9,080 (8,628) (218)
$ 72,054	103,701	17,279
$ 51,817 31,108 (3,033) 953	76,543 44,436 (7,045) (634)	10,692 10,970 (4,695) 78
$ 80,845	113,300	17,045
$ 479,530	111,803	7,007
$ 456,095	99,995	20,168
$ 435,205	67,787	14,636

As the Group considers that the area of the plant in Dongguan, China is not enough for future development, the subsidiary, ACES ZHUHAI TECHNOLOGY LTD acquired the state-owned construction land use rights, and acquired the property right in October, 2023. The term of the use of the property right is from 2023 to 2073, which is recognized as right-of-use assets of $71,611 thousand.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(9) Investment property

a. Details of investment property as follows:

Cost: Balance at January 1, 2023 Gains on fair value adjustment Balance at December 31, 2023 Balance at January 1, 2022 Losses on fair value adjustment Balance at December 31, 2022 Fair value: December 31, 2023 January 1, 2022 December 31, 2022	Land $ 259,599 5,149	Buildings and structures 39,215 918
	$ 264,748	40,133
	$ 261,048 (1,449)	39,924 (709)
	$ 259,599	39,215

b Investment property fair value basis

The investment properties held by the consolidated company are located in the Nangang and Neihu districts of Taipei City. Their fair values are determined based on the results of an independent appraisal by valuation experts, using the discounted cash flow analysis method under the income approach. The main assumptions and relevant explanations are as follows:
(i) The expected future cash inflows from investment properties of the consolidated company include rental income, interest income from deposits, vacancy losses, and disposal value at the end of the period. The rental income is estimated based on local and comparable market rental rates, taking into consideration the estimated annual rental growth rate for the next ten years. The interest income from deposits is estimated based on the average deposit interest rate published by the central bank for the top five banks, ranging from 1.575% for a one-year term. The vacancy losses are calculated based on the vacancy situation of similar properties in the neighboring area. The disposal value at the end of the period is determined by capitalizing the projected operating income for the next year, after deducting normal operating expenses, using a direct capitalization approach.
The future cash outflows include related taxes, insurance premiums, management fees, and repair costs that are directly related to the leases. The changing rates used to estimate future variations in these expenses are based on the current expenditure levels, taking into consideration adjustments to announced land prices and tax rates stipulated by housing tax regulations.
(ii) The estimation of the discount rate is based on the regulations of the Financial Supervisory Commission, which stipulate that it shall not be lower than the interest rate for a two-year postal time deposit announced by Chunghwa Post Co., Ltd., plus three digits. However, considering the recent real estate market conditions, it is estimated to be 2.345% 2.470%.
(iii) The decision on capitalizing end-of-period earnings is based on the reasonable capitalization rate of the subject and the future benefits of building improvements, estimated at 0.940% 1.230%.
(iv) The monthly rent for investment properties in the local area and similar targets ranges from NT$1,010 to NT$1,390 per ping.

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(v) The fair value of the Nangang and Neihu properties, as assessed by discounted cash flow analysis, is NT$54,434 thousand and NT$250,447 thousand, respectively.
(vi) The real estate appraisal reports used by the consolidated company are signed and issued by Mr. Tsai Jia-ho, a certified appraiser from Cushman & Wakefield, with appraisal dates of July 4, 2023 and June 29, 2023, respectively.
c. For details on investment property pledged as collateral, please refer to Note 8.
(10) Intangible assets

The costs and amortization of the Company’s intangible assets for 2023 and 2022 are detailed as follows:

Goodwill	Computer software	Customer relationship	Others	Total 316,073 39,357 3,934 (11,403) (1,305)
$ 31,201 - - - (5) $ 31,196 $ 28,123 - 3,078 $ 31,201 $ - - - - $- $ - - - $- $ 31,196 $ 28,123 $ 31,201	134,993 16,842 - (11,043) (1,271)	76,776 - - - (27) 76,749 69,242 - 7,534 76,776 20,730 12,306 - (184) 32,852 7,751 9,981 2,998 20,730 43,897 61,491 56,046	73,103 22,515 3,934 (360) (2)
	139,521		99,190	346,656
	122,605 11,520 868		45,875 24,925 2,303	265,845 36,445 13,783
	134,993		73,103	316,073
	110,868 17,514 (11,043) (609)		30,179 25,282 (360) (57)	161,777 55,102 (11,403) (850)
	116,730		55,044	204,626
	89,497 20,376 995		12,499 17,350 330	109,747 47,707 4,323
	110,868		30,179	161,777
	22,791		44,146	142,030
	33,108		33,376	156,098
	24,125		42,924	154,296

As of December 31, 2023 and 2022, none of the Company’s intangible assets was pledged as collateral.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(11) Short-term borrowings
a. The Company’s short-term borrowing details as follows:

	December 31, 2023	December 31, 2022
$	1,225,000 242,000 1,467,000 3,518,777 1.225%~7.18%	1,166,562 262,000 1,428,562 3,168,996 0.75%~6.55%
$
$

b For details on property pledged as collateral for bank loans, please refer to Note 8.
(12) Long-term borrowings
a. The Company’s long-term borrowing details as follows:

Unsecured bank loans Secured bank loans Subtotal Less: current maturity Total Unused credit lines Interest rate	December 31, 2023			December 31, 2022
	$ 521,475 1,411,620 1,933,095 (195,740) $ 1,737,355 $ 2,606,000 1.225%~2.44%			1,724,500 54,788 1,779,288 (1,119,167) 660,121 501,000 0.80%~2.15%

b. The maturity date for the unsecured bank loans of the Company is from 2023 to 2026; while the maturity date for the secured bank loans is from 2023 to year 2030.
c. The Company entered into a syndicated loan agreement with group of banks. During the loan term, the Company is required to calculate and maintain certain financial ratios at an agreed level based on the consolidated financial statements audit. For the years ended December 31, 2023 and 2022, there is no incident of the Company violating such financial ratios.
d. The Company has obtained special low-interest rate loans of $600,000 thousand from banks according to “Welcome Businesses Returning to Taiwan to Invest Solution” on June 2020. The actual special loan interest rate was 0.85%, and the difference calculated by the fair loan value on market interest rate of 1.35% was regarded as government grants and recorded as deferred income. As of December 31, 2023 and 2022, deferred revenue amounted to $3,526 thousand and $6,500 thousand respectively. These amounts were recorded under “other non-current liabilities.”

e For details on property pledged as collateral for bank loans, please refer to Note 8.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(13) Bonds payable

a. The details of unsecured convertible bonds were as follows:

Total convertible corporate bonds issued Unamortized discounted corporate bonds payable Cumulative converted amount Corporate bonds issued balance at year-end (recognized in current portion of corporate bonds and bonds payables) Embedded derivatives - redemption (recognized in financial assets at fair value through profi or loss) Equity component – conversion options (recognized in capital surplus) Embedded derivative – redeem options (recognized in other gains and losses) Interest expenses	December 31, 2023	December 31, 2022 600,000 (42,994) (1,100) 555,906 62 71,065 For the year ended December 31, 2022 (1,184) 21,459
	$ 600,000 (20,698) (1,100) $ 578,202 t $ - $ 71,065 For the year ended December 31, 2023 $ (62) $ 22,296

b. Major terms and conditions of the second issuance of convertible company bonds in 2021: (i) Issued period: Three years, from November 22, 2021 to November 22, 2024. (ii) Interest rate: 0%
(iii) Redemption at the option of the Company: The Company may redeem the bonds under the following conditions:
A. The Company may redeem the bonds, in whole or in part, 3 months after the issuance and forty days prior to the maturity date, at the principal amount of the bonds if the closing price of the Company’s ordinary shares on the Taiwan Stock Exchange for a period of 30 consecutive trading days, is at least 30% of the conversion price.
B. The Company may redeem the bonds, in whole or in part, 3 months after the issuance and forty days prior to the maturity date, at the early redemption conversion price if at least 10% in principal amount of the bonds has already been exchanged, redeemed, purchased or canceled.
(iv) Terms of conversion:
A. From February 23, 2022 to November 22, 2024, bondholders may convert bonds into common shares of the Company according to terms of conversion.
B. Conversion price: The conversion price at the time of issuance was NT$51.3 per share. The conversion price will be subject to adjustments upon the occurrence of certain events set out in the indenture. This bond does not have reset clause.
The Company announced capital increase by issuing new share on December 8, 2021. As of December 16, 2021, the conversion price per share is from $51.3 New Taiwan dollars to $50.4 New Taiwan dollars. The Company announced due to the distribution of cash dividends for ordinary shares, the conversion price per share is from $50.4 New Taiwan dollars to $48.5 New Taiwan dollars as of August 12, 2022.
(v) If the bondholder does not convert the bonds at maturity, the Company has to pay in full in cash for redemption of bonds held at the principal amount of bonds with additional interest for compensation (interest compensation at maturity is 1.5075% of the principal amount).
c. The bondholders of the Company's convertible bonds redeemed the bonds during the year of 2022 and 22 thousand new shares were issued at par value.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(14) Lease liabilities

abilities
Current Non-current	December 31, 2023	December 31, 2022
	$ 51,258 $ 110,084	47,039 75,665

a. For the maturity analysis, please refer to note 6(22) Financial Instruments.

b. The amounts recognized in profit and loss were as follows:

For the year ended December 31, 2023 For the year ended December 31, 2022 Interests on lease liabilities $ 4,991 4,602 Expenses relating to short-term leases $ 11,436 11,749 Expenses relating to low-value leases (excluding low-value lease of short-term leases) $ 5,729 3,045 amounts recognized in the statement of cash flows for the Company were as follows: For the year ended December 31, 2023 For the year ended December 31, 2022 Total cash outflow for leases $ 92,401 88,765	For the year ended December 31, 2023 For the year ended December 31, 2022 Interests on lease liabilities $ 4,991 4,602 Expenses relating to short-term leases $ 11,436 11,749 Expenses relating to low-value leases (excluding low-value lease of short-term leases) $ 5,729 3,045 amounts recognized in the statement of cash flows for the Company were as follows: For the year ended December 31, 2023 For the year ended December 31, 2022 Total cash outflow for leases $ 92,401 88,765		For the year ended December 31, 2022
		88,765

c. The amounts recognized in the statement of cash flows for the Company were as follows:

d. Lease of land, property and plants

The Company leases land, property and plants for its office and factory with lease terms of usually 2 to 50 years. Some lease contract can be renewed before contract expires and have the option to extend to the same term.

e. Other lease

The Company leases machinery and transport equipment with lease terms of usually 3 to 5 years.

(15) Employee benefits

a. Defined benefit plans

Adjustment of the Company's present value of defined obligation and fair value of plan assets was as follows:

Present value of defined obligation Fair value of plan assets Net defined benefit liabilities	December 31, 2023		December 31, 2022
	$ 70,761 (24,957) $ 45,804		71,058 (25,692) 45,366

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 a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(i) 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.

As of reporting date, the Company’ s Bank of Taiwan labor pension reserve account balance amounted to $29,197 thousand. 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.

(ii) Changes on current value of defined obligation

The changes on current value of defined obligation for the years ended December 31, 2023 and 2022 were as follows:

Defined benefit obligation on January 1 Current service cost and interest Remeasurements of net defined benefit liabilities Benefits paid by the plan Exchange differences Defined benefit obligation on December 31	For the year ended December 31, 2023 $ 71,058 4,517 (1,840) (3,156) 182	For the year ended December 31, 2022 75,946 3,724 (9,039) - 427 71,058
	$ 70,761

(iii) Changes on fair value of plan assets

The changes on current value of defined benefit asset plan for the years ended December 31, 2023 and 2022 were as follows:

Fair value of plan assets on January 1 Interest revenue Amount appropriated to plan Remeasurements of net defined benefit liabilities Benefits paid by the plan Fair value of plan assets on December 31	For the year ended December 31, 2023 $ 25,692 456 1,883 82 (3,156)	For the year ended December 31, 2022 22,997 155 798 1,742 - 25,692
	$ 24,957

(iv) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company for the years ended December 31, 2023 and 2022 were as follows:

mber 31, 2023 and 2022 were as follows:
Current service cost Net interest of net defined benefit liabilities Operating costs and expenses	For the year ended December 31, 2023 $ 1,780 2,281	For the year ended December 31, 2022 2,027 1,542 3,569 For the year ended December 31, 2022 3,569
	$ 4,061
	For the year ended December 31, 2023 $ 4,061

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(v) Recognized as remeasurements of net defined benefit liabilities under other comprehensive profit and loss.

Recognized accumulatively as remeasurements of net defined benefit liabilities under other comprehensive profit and loss.

comprehensive profit and loss.
Accumulated balance on January 1 Current recognition Accumulated balance on December 31	For the year ended December 31, 2023 $ (16,859) 1,911 $ (14,948)		For the year ended December 31, 2022 (27,739) 10,880 (16,859)

		$ (14,948)		(16,859)

(6) Actuarial assumptions

Details of actuarial assumptions used at the end of reporting date as follows:

Discount rate Increase on future payroll	December 31, 2023 1.625% 1%~3%	December 31, 2022
		1.750% 1%~5.5%

The Company has planned to appropriate in the amount of $909 thousand for defined benefit plan within 1 year after the reporting date of the year ended December 31, 2023. The weighted average duration for defined benefit plan is 10 to 13 years.

(vii) Sensitivity analysis

Details of the impact to current value of defined benefit obligation by using main actuarial assumption change for the years ended December 31, 2023 and 2022 was as follows:

ws:
Balance at December 31, 2023 Discount rate Increase on future payroll December 31, 2022 Discount rate Increase on future payroll	Impact to defined benefit obligation Increase by 0.25% Decrease by 0.25% (802) 828 799 (777) (1,160) 1,202 983 (960)
	Increase by 0.25% (802) 799 (1,160) 983

Reasonably possible changes to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. In practical, the relevant actuarial assumptions are correlated to each other. The approach used in recognizing the net defined liability in the balance sheets is the same as the one used in developing the sensitivity analysis.

And the relevant actuarial assumptions in the current and previous years.

b. Defined contribution plans

The Company and its domestic subsidiaries allocate 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance, Ministry of Labor (hereinafter referred to as the Bureau of Labor Insurance) in accordance with the provisions of the Labor Pension Act.

The Company’s pension costs under the defined contribution method were $104,397thousand and $98,103thousand for the years ended December 31, 2023 and 2022, respectively. Payment was made to the Bureau of Labor Insurance.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(16) Income taxes

a. Income tax expenses

(i) The components of income tax expenses in the years 2023 and 2022 were as follows:

Current tax expense (gain) Deferred income tax expense (gain) Income tax expenses (gain)	For the year ended December 31, 2023	For the year ended December 31, 2022 106,904 (15,174) 91,730
	$ (3,864) 2,360 $ (1,504)

(ii) Details of the amount of income tax benefits recognized in other comprehensive income for the years ended December 31, 2023 and 2022 was as follows:

For the year ended December 31, 2023 Components of other comprehensive income that will be reclassified to profit or loss: Exchange differences on translation of foreign financial statements $ 12,097	For the year ended December 31, 2023	For the year ended December 31, 2022 (26,020)

(iii) Reconciliation of income tax expenses and profit before tax for 2023 and 2022 were as follows:

Profit before income tax Income tax using the Company’s domestic tax rate The effect of difference in tax rates in foreign territories Not deductible expenses Unrecognized temporary difference – related to investments in subsidiaries Unrecognized temporary difference – related to tax losses Over or underestimation in prior periods Others	For the year ended December 31, 2023	For the year ended December 31, 2022 315,063 63,013 (44,502) 10,645 24,306 - - 38,268 91,730
	$ (269,692) $ (53,938) (31,270) (9,377) 90,154 13,041 (13,415) 3,301 $ (1,504)

b. Deferred tax assets and liabilities

(i) Unrecognized deferred tax liabilities

As of the years ended December 31, 2023 and 2022, the temporary differences related to investments in subsidiaries and associates was not recognized under deferred tax liabilities because the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not be reversed in the foreseeable future. Relevant amount as follows:

Aggregate amount of temporary differences related to investments in subsidiaries Unrecognized amount of deferred tax liabilities	December 31, 2023		December 31, 2022 1,448,762
	$ 997,990
	$ 199,598		289,752

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(ii) Unrecognized deferred tax assets

Items not recognized as deferred income tax assets by the parent company are as follows:

Tax loss Unrecognized amount of deferred tax assets	December 31, 2023		December 31, 2022
	$ 655,510 $ 131,102		590,306 118,061

Some of the subsidiaries have yet to have steady growth and profit earning capabilities in 2023 and 2022; therefore, the deferred income tax assets were not recognized because it is speculated if the tax losses were recoverable. If the operating revenue is continuing to grow for the next year, the aforementioned tax loss would be recognized. (iii) Recognized deferred tax assets and liabilities

The changes on deferred income tax assets and liabilities for the years ended December 31, 2023 and 2022 were as follows:

Share of profit

Share of profit	Share of profit
or loss of subsidiaries accounted for using equity method Unrealized gains or losses from financial assets Inventory valuation loss Others Deferred income tax assets: January 1, 2023 $ 33,169 319 13,266 33,822 (Debit) credit in profit or loss (4,372) (138) (207) 4,707 December 31, 2023 $ 28,797 181 13,059 38,529 January 1, 2022 $ 36,575 1,289 9,707 30,812 (Debit) credit in profit or loss (3,406) (970) 3,559 3,010 December 31, 2022 $ 33,169 319 13,266 33,822 Share of profit or loss of subsidiaries accounted for using equity method Unrealized gains or losses from financial assets Others Deferred tax liabilities: January 1, 2023 $ 286,608 4,088 26,313 Credit (debit) in profit or loss (2,688) 1,490 3,548 Credit (debt) in other comprehensive income (11,365) - - Exchange differences on translation of foreign financial statements (100) - (1) December 31, 2023 $ 272,455 5,578 29,860 January 1, 2022 $ 269,707 (5,121) 37,381 Credit (debit) in profit or loss (11,548) - (1,433) Credit (debit) in other comprehensive income 26,020 - - Exchange differences on translation of foreign financial statements 2,429 9,209 (9,635) December 31, 2022 $ 286,608 4,088 26,313	or loss of subsidiaries accounted for using equity method	Unrealized gains or losses from financial assets 319 (138)		Inventory valuation loss			Others	Total 80,576 (10 80,566 78,383 2,193 80,576 Total 317,009 2,350 (11,365 (101) 307,893 301,967 (12,981 26,020 2,003 317,009
			319 (138)		13,266 (207)		33,822 4,707
			181		13,059		38,529
			1,289 (970)		9,707 3,559		30,812 3,010
			319		13,266		33,822
			Unrealized gains or losses from financial assets 4,088 1,490 - -			Others 26,313 3,548 - (1) 29,860 37,381 (1,433) - (9,635) 26,313
	$ 286,608 (2,688) (11,365) (100) $ 272,455 $ 269,707 (11,548) 26,020 2,429 $ 286,608
			5,578
			(5,121) - - 9,209
			4,088

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

c. Assessment of tax

The Company’s tax returns for the years through 2020 were assessed by the tax authority.

(17) Capital and other equity

a. Share capital

As of December 31, 2023 and 2022, the authorized common stock of the Company was $2,000,0000 thousand in both years, comprising 200,000 thousand shares with a par value of $10 per share. The issued ordinary shares were 134,418 thousand in both years.

(a) Common stock issuance

The bondholders of the Company's convertible bonds redeemed the bonds during the year of 2022 and 22 thousand new shares were issued at par value. All the capital for issued shares had been received and relevant statutory registration procedures have since been completed and categorized under equity.

(ii) Capital reserve

The balances of capital surplus were as follows:

Additional paid-in capital Consolidation excess Changes in net value of equity investment in affiliated companies accounted for using equity method Employee stock options Expired employee stock options Stock option for conversion of convertible bonds Others	December 31, 2023 $ 756,155 3,831 105,197 13,978 30,378 71,065 12,666	December 31, 2022 756,155 3,831 100,542 13,978 30,378 71,065 12,666 988,615
	$ 993,270

According to the ROC Company 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. Please refer to notes 6(6) and 6(13) for details on other changes on capital surplus.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

c. Retained earnings
In accordance with the Articles of Incorporation, the current year’s after-tax earnings should be used initially to cover any accumulated deficit (including adjustments for undistributed earnings) and set aside 10% of the remaining earnings as legal reserve; however this is not required if total legal reserve equals total paid-in capital. Special legal reserve was set aside according to the Company's operational requirements and rules and regulations of relevant laws. The distribution of the remaining amount, plus unappropriated earnings from prior years, shall be proposed by the Board of Directors and resolved by shareholders in their general meeting.

If dividend is distributed in issued new shares, shall be made in accordance with the provisions of Article 241 of the Company Law. If dividend is distributed in cash, the board of directors shall be attended by two-thirds of the total directors, and resolved by a majority votes at the board of directors, to distribute dividends and bonuses in whole or in part to be paid in cash, and report to the shareholders’ meeting.

(i) 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.
(ii) Special reserve
In accordance with the guidelines of FSC, a portion of current-period earnings and undistributed prior-period earnings shall be retained as a special reserve. The amount to be retained should be equal to the current-period total reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special reserve to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions. According to the regulations of FSC, the Company reserved special earning surplus from current profit and loss and undistributed earnings from previous period as net debit item of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of 。
other shareholders’ equity shall qualify for additional distributions.
d. Earnings distribution
The amount of cash dividends of appropriations of earnings for the years ended December 31, 2022 and 2021 had been approved in the board meeting held on March 24, 2023 and March 30, 2022, respectively. The proposals of appropriations were resolved on June 27, 2023 and June 29, 2022 by the shareholders’ meetings respectively. These earnings were appropriated as follows:

Dividends distributed to ordinary shareholders: Cash	For the year ended December 31, 2022 Dividend (dollar) Amount $ 0.55 73,930	For the year ended December 31, 2021 Dividend (dollar) Amount 1.50 201,594
		Dividend (dollar) 1.50

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

e. Other equity

Balance at January 1, 2023 Exchange differences on foreign operations Gains or losses on disposals of foreign operations recognized to profit or loss Balance at December 31, 2023 Balance at January 1, 2022 Exchange differences on foreign operations Balance at December 31, 2022	Exchange differences on translation of foreign financial statements $ (92,336) (75,615) 27,161 $ (140,790) $ (196,187) 103,851 $ (92,336)	Property revaluation increments 33,219 - - 33,219 33,219 - 33,219	Total (59,117) (75,615) 27,161 (107,571) (162,968) 103,851 (59,117)

(18) Earnings per share

The calculation of basic earnings per share and diluted earnings per share were as follows:

Basic earnings per share Current net profit (loss) attributable to the Company Weighted average number of ordinary shares outstanding (shares in thousands) Basic earnings per share (dollar) Diluted earnings per share Profit (loss) attributable to ordinary shareholders of the Company (basic) After tax effects of interest expenses of convertible bonds Profit (loss) attributable to ordinary shareholders of the Company (diluted) Weighted average number of ordinary shares outstanding (basic) Effect of dilutive ordinary shares Effect of remuneration to employees in stock Effect of conversion of convertible Company bonds Weighted average number of ordinary shares outstanding (diluted)(shares in thousands) Diluted earnings per share(dollar) (Note)	For the year ended December 31, 2023		For the year ended December 31, 2022
	$ (266,543)
	134,418
	$ (1.98)
	$ (266,543) -
	$ (266,543)
	134,418 - -
	134,418
	$ (1.98)

Note: As the result calculated by adding dilutive potential common stocks is anti-dilutive for the year

ended December 31, 2023, diluted earnings (losses) per share were not calculated

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(19) Revenue from contracts with customers

a. Disaggregation of revenue

For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	Total 1,338,728 4,111,424 749,432 420,409 1,866,235
Connectors segment $ 697,001 3,264,505 1,162 70,251 601,572	Cable segment	Metal stamping segment 383,068 346,103 157,163 177,590 558,863	Other segment 113,577 64,586 - 12,421 459,123
	145,082 436,230 591,107 160,147 246,677 1,579,243 - 1,579,243 - - 1,579,243
$ 4,634,491		1,622,787	649,707	8,486,228
$ 4,634,491 - - -		- - 1,622,787 -	- - - 649,707	4,634,491 1,579,243 1,622,787 649,707
$ 4,634,491		1,622,787	649,707	8,486,228

For the year ended December 31, 2022	For the year ended December 31, 2022	For the year ended December 31, 2022	For the year ended December 31, 2022	Total 1,940,883 5,291,207 909,160 498,064 1,753,190
Connectors segment $ 900,558 3,701,789 1,269 86,025 308,921	Connectors cable segment	Metal stamping segment 495,932 941,494 157,616 190,332 693,409	Other segment 141,229 143,058 - 37,672 509,344
	403,164 504,866 750,275 184,035 241,516 2,083,856 - 2,083,856 - - 2,083,856
$ 4,998,562		2,478,783	831,303	10,392,504
$ 4,998,562 - - -		- - 2,478,783 -	- - - 831,303	4,998,562 2,083,856 2,478,783 831,303
$ 4,998,562		2,478,783	831,303	10,392,504

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

b. Contract balances

Notes and account receivable (including related parties) Less: Loss allowance Total	December 31, 2023		December 31, 2022
	$ 2,313,358 (19,466) $ 2,293,892		2,624,509 (42,390) 2,582,119

For details on notes and accounts receivable and allowance for impairment, please refer to note 6(3).

(20) Remunerations to employees and directors

In accordance with the Articles of Incorporation, if there’s any profit of the year, no less than 1% shall be appropriated to employees remuneration and no more than 3% to directors remuneration. However, if the Company has accumulated deficits, this profit shall be reserved for covering losses. The aforementioned employees remuneration must be controlled with conditions set forth by the Board of Directors or its proxy, or employees of subsidiaries.

The aforementioned employees compensation shall be distributed in the form of shares or cash. Those who received shares by the resolution of the board of directors can resolve in new share or purchase own shares. Compensation for the board of directors can only be distributed in the form of cash.

The employee compensation and directors’ remuneration were estimated as the income before tax, excluding the amount of employee compensation and directors’ remuneration, multiplied by the percentage of remuneration to employees and directors as specified in the Company’ s articles. These remunerations were expensed under operating costs or operating expenses. If there is a difference between estimation and actual appropriated amounts, changes in accounting estimates shall be applied. Such effect on changes shall be recognized in profit and loss in the next year. As the Group incurred loss in the year ended December 31, 2023, the amounts were not estimated.

mber 31, 2023, the amounts were not estimated.
Employees remuneration Directors remuneration	For the year ended December 31, 2023	For the year ended December 31, 2022
	$ - - $ -	10,776 6,408 17,184

The amount, as stated in the consolidated financial statements, are identical to those of the actual distributions for 2023 and 2022. Relevant information can be referred to on the “Market Observation Post System”.

(21) Non-operating income and expenses
a. Other revenue

For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2022
$ 9,078 53,890 61,966 $ 124,934 For the year ended December 31, 2023		6,932 68,100 66,119 141,151 For the year ended December 31, 2022


	$ 31,627 (9,007) 6,067 27,635 (24,140) - (26,436)	227,551 (15,899) (2,158) (32,741) - (2,802) (9,030)
	$ 5,746	164,921

b. Other gains and losses

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

The Company can longer obtain market price from periodical financial tools SPECTRA SPC POWERFUND. According to Article 13 ‘Fair value measurement’ of IFRS on assessment of relevant information credibility and limitations, it is therefore moved from Level 1 to Level 3. The Company measured loss on fair value of the aforementioned asset recognized under “other gains and losses.” Please refer to Note 6(22) for details.

The dissolution and liquidation of the subsidiaries of the Group, ACES (HONG KONG) ELECTRONIC CO., LTD, GLOBAL ACUMEN LIMITED, GENESIS INTERCONNECT CO., LTD., and SHENZHEN JINO ELECTRONIC CO., LTD. have been resolved by the board of directors in 2023, and the relevant procedures have been completed in 2023. As of December 31, 2023, the Group has recovered distribution of liquidated remaining properties of $18,909 thousand, and recognized losses on disposals of investments of $22,527 thousand, which were presented in “other gains and losses.”

The Company sold the subsidiary, GENESIS GUIZHOU TECHNOLOGY CO., LTD., to non-related parties in 2023. The proceeds from the disposal are $2,248 thousand. The losses on disposals of $1,613 thousand have been recognized under “other gains and losses.” Please refer to Note 6(6).

c. Finance costs

Bank loan interest Lease liabilities interest Convertible company bond interest	For the year ended December 31, 2023 $ 81,438 4,991 22,296 $ 108,725	For the year ended December 31, 2022	For the year ended December 31, 2022
			59,008 4,602 21,459 85,069

(23) Financial instruments

a. Credit risk

(i) Maximum credit risk exposure

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

(ii) Concentration to credit risk

The Company has a vast group of customer without obvious concentration on single customer and the sales locations are spread out all over. Therefore there is no concentration of credit risk on account receivable. In order to reduce credit risk, the Company continues to assess financial status of its customers.

(iii) For details on credit risks of notes and accounts receivables, please refer to Note 6(3).

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

b. Liquidity Risk

Below table specifies maturity dates of financial liabilities contracts, including estimated interest, but not including effects on net amount agreements.

Carrying amount	contractual cash flows	Within 1 years	2-5 years	Over 5 years
$ 1,467,000 1,868 1,406,861 65 830,356 813 161,342 578,202 1,933,095	1,505,729 1,868 1,406,861 65 830,356 813 186,736 578,202 1,943,097	1,505,729 1,868 1,406,861 65 830,356 813 55,168 578,202 190,947	- - - - - - 93,108 - 1,742,549	- - - - - - 38,460 - 9,601
$ 6,379,602	6,453,727	4,570,009	1,835,657	48,061
$ 1,482,562 518 1,623,419 327 1,012,818 2,823 122,704 555,906 1,779,288	1,471,442 518 1,623,419 327 1,012,818 2,823 148,978 600,000 1,822,772	1,471,442 518 1,623,419 327 1,012,818 2,823 50,341 - 1,146,413	- - - - - - 53,275 600,000 662,826	- - - - - - 45,362 - 13,533
$ 6,580,365	6,683,097	5,308,101	1,316,101	58,895

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

c. Currency risk

(i) Currency risk

The Company’s significant exposure to foreign currency risk was as follows:

Expressed in thousands of dollars

December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2022 Foreign currency Exchange rate (dollar) NTD 111,539 30.710 3,425,363 55,474 30.710 1,703,593	December 31, 2022 Foreign currency Exchange rate (dollar) NTD 111,539 30.710 3,425,363 55,474 30.710 1,703,593
Foreign currency	Exchange rate (dollar)	NTD	Foreign currency	Exchange rate (dollar)
$ 113,335 64,039	30.705 30.705	3,479,948 1,966,316	111,539 55,474	30.710 30.710

(ii) Sensitivity analysis

The foreign currency risk mainly arose from the translation of cash and cash equivalents, accounts receivable, other receivables, accounts payable, and other payables. In 2023, if the exchange rate had changed, given no changes in other factors, when NTD is depreciated or appreciated against USD by 5%, profit after tax would have increased or decreased by $75,682thousand and $86,089thousand for the years ended December 31, 2023 and 2022, respectively. The method of analysis remains the same for both periods.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(iii) Foreign exchange gains and losses on monetary items

The Company's information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For years ended December 31, 2023 and 2022, foreign exchange gains (loss) (including realized and unrealized portions) amounted to $31,627 thousands and $227,551 thousands, respectively.

d Interest rate analysis

The Company’ s exposure to interest rate risk arising from financial assets and liabilities is described in the liquidity risk part of this note.

The following sensitivity analysis is determined through the exposure to interest rate risk of derivative and non-derivative instruments on the reporting date. For floating rate liabilities, the analysis assumes that the balances of outstanding liabilities on the reporting date have been outstanding for the whole period, and their rational change intervals are being estimated. If the interest rate increases/decreases by 1%, representing the reasonable interest rates changes made by management.

If the interest rate increased or decreased by 1%, given no changes in other factors, the profit before tax will decrease or increase by $34,001thousand and $32,079thousand for the years ended December 31, 2023 and 2022 respectively. This is mainly because of the Company's floating rate loans.

v. Fair value
(i) Fair value hierarchy

The fair value of financial assets and liabilities at fair value through profit or loss are measured on a recurring basis. The carrying amount and fair value of the Company’ s financial assets and liabilities, including the information on fair value hierarchy are stated below:

stated below:
Financial assets at fair value through profit or loss Non-derivative financial assets mandatory measured at FVTPL Financial assets at fair value through profit or loss Non-derivative financial assets mandatory measured at FVTPL Convertible bonds of embedded derivatives Total		December 31, 2023			Total 167,452
	Carrying amount		Fair value
		Level 1 -	Level 2 -	Level 3 167,452
	$ 167,452
		December 31, 2022			Total 163,651 62
	Carrying amount		Fair value
		Level 1 - -	Level 2 - 62	Level 3 163,651 -
	$ 163,651 62
	$ 163,713	-	62	163,651	163,713

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(ii) Valuation techniques of financial instruments not measured at fair value
A. Non-derivative financial instruments

Financial instruments traded in active market are based on quoted market prices. The quoted price of a financial instrument obtained from main exchanges and on-the-run bonds from Taipei Exchange can be used as a basis to determine the fair value of the listed companies equity instrument and debt instrument of the quoted price in an active market.

If a quoted price of a financial instrument can be obtained readily and regularly from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities, and such price can reflect those actual trading and regularly occurring in the market. Then the financial instrument is considered to have a quoted price in an active market. If a financial instrument is not in accord with the definition mentioned above, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of a nonactive market. If the financial instrument held by the Company is of an active market, the fair value of it is determined in accordance with market price. If its of a nonactive market, the fair value is measured by net assets.
B. Derivative financial instruments

Measurement of the fair value of derivative instruments is based on the valuation techniques generally accepted by market participants such as the discounted cash flow or option pricing models (Black-Scholes Model).

(iii) Changes on Level 3 table

January 1, 2022 Recategorized from Level 1 Total loss (recognized on profit and loss) December 31, 2022	Non-derivative financial assets mandatory measured at FVTPL $ - 46,683 (46,683) $ -

The Company can longer obtain market price from periodical financial tools. According to Article 13 ‘Fair value measurement’ of IFRS on assessment of relevant information credibility and limitations, it is therefore moved from Level 1 to Level 3. The above loss was recorded under ‘other gain and loss’.

(iv) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Company's financial instruments that use Level 3 inputs to measure fair value include financial assets and liabilities measured at fair value through profit and loss. Most of the Company's fair value were classified as Level 3 with only one significant unobservable input. Only liabilities instruments of nonactive market has more than one significant unobservable inputs. The significant unobservable inputs of financial instrument investments without an active market are individually independent, and there is no correlation between them.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Quantified information of significant unobservable inputs was as follow:

Item Financial assets at fair value through profit and loss - non-current Financial assets at fair value through profit and loss - current	Valuation technique Net asset valuation method Net asset valuation method	Significant unobservable inputs Net asset valuation Illiquidity and market discount and credit risk adjustment (including risk of breach of contract) were 100%.	Interrelationship between significant unobservable inputs and fair value measurement
			Not applicable • The higher the market illiquidity discount is, the lower the fair value. • The higher the credit risk is, the lower the fair value.

(23) Financial risk information
a. Overview

The Company have exposures to the following risks from its financial instruments:

i. Credit risk

ii. Liquidity Risk

iii. Market risk

The following likewise discusses the Company’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying parent company only financial statements.

b. Structure of risk management
Detailed financial information on the Company's significant financial instruments were disclosed under notes of each listing. However, the Company is still exposed to financial risks posed by aforementioned financial instruments. Such risks include market risks (including exchange rate risks, interest rate risks and other pricing risks) credit risk and liquidity risk.

The Company has stipulated risk management policies or risk management procedure in writing which were in resolution with the board of directors in order to identify, measure, monitor and control credit risks, market risks and liquidity risks. Risk management of the Company is executed by the finance department in accordance with risk management polices approved by the board of directors. Risk management department works closely with other departments to identify, evaluate and avoid any kind of financial risks. The board of directors has stipulated written policies for risk management. Such policies included certain risk exposures such as exchange rate risks, interest rate risks, credit risks, derivatives and non-derivatives financial instrument risks and etc. Moreover, the internal audit department is also responsible for risk management and control of environment for independent audit.

c. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment of marketable securities.

(i) Accounts receivable and other receivables

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’ s standard payment and delivery terms and conditions are offered, thus set up individual credit limit in order to control credit risk.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(ii) Financial investments

The credit risk exposure in the bank deposits, fix income investments and other financial instruments are measured and monitored by the Company's finance department. As the Company deals with the banks and other external parties with good credit standing and financial institutions, corporate organization and government agencies which are graded above investment level, the management believes that the Company does not have any compliance issues, and therefore, there is no significant credit risk.

(iii) Guarantee

The Company only provide guarantee to parties listed under procedures for guarantee and endorsement. The Company did not provide guarantee to any third party not listed by the Company's policy as of December 31, 2023 and 2022.

d. Liquidity Risk

The Company is supporting the operation and reducing effects caused by cash flow fluctuations by manage and maintain sufficient cash and cash equivalents. The management of the Company monitors financing credit limits from banks and makes sure contracts were adhered to.

Bank borrowing is an important source of liquidity for the Company. As of December 31, 2023 and 2022, the Company’ s unused credit lines were amounted to $6,124,777 and $3,669,996, respectively.

e. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, 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.

(ii) Currency risk

The Company is exposed to currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of the Company. The Group's functional currency is NTD, as well as USD and RMB. These transactions were in NTD, USD and RMB.

(iii) Interest rate risk

The Company borrows with both floating interest rate and fixed interest rate, thus change risk and cash flow risk were incurred for fair value. The Company can manage its interest risk through maintaining an appropriate portfolio of floating interest rate and fixed interest rate.

(iv) Other market price risk

The Company is exposed to equity price risk due to the investment in equity securities. This is a strategic investment and is not held for trading. The Company does not actively trade in these investments as the management of the Company minimizes the risk by holding different investment portfolios.

(24) Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence, and to sustain the future development of the business. The capital includes common stock, capital surplus, retained earnings and other equities. The board of directors are in control of ordinary shares’ dividend value.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

The Company use the debt-to-equity ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital is the total components of equity (i.e. share capital, capital surplus, retained earnings and other equities).

Debt-to-equity ratio for the years ended December 31, 2023 and 2022 as follows:

December 31, 2023	December 31, 2023	December 31, 2022
$	6,994,385 (2,058,206) 4,936,179 5,256,504 93.91%	7,185,022 (2,458,617) 4,726,405 5,655,354 83.57%
$

(25) Investing and financing activities not affecting the current cash flow

Details of investing and financing activities not affecting the current cash flow of the Company for the years ended December 31, 2023 and 2022 were as follows:

a. Conversion of convertible bonds to ordinary shares, please refer to Note 6(17) for details.

b. Reconciliation of liabilities arising from financing activities was as follows:

Non-Cash changes

January 1, 2023 $ 1,779,288 1,428,562 122,704 555,906	Cash flow 150,451 51,602 (70,245) -	Acquisition by business combination
		382 - - - 382
$ 3,886,460	131,808
January 1, 2022 $ 1,763,572 1,044,234 175,547 535,452	Cash flow 15,721 353,711 (69,369) -	Non-Cash
		Acquisition by business combination
		- - - - -
$ 3,518,805	300,063

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

7. Related-party transactions

(1) Names and relationship with related parties

Related parties which had transactions with the Company during the time period of the consolidated financial statements:

Name of related parties Relationship with the Company Nantong Dadi Electric Co., Ltd. Affiliated company Wei Chi Investment Co., Ltd. Legal persons as the corporate director of the Company Hsu, Chang-Fei Director of the Company Shin Yi Electronics Technology (Suzhou) Its main management is the chairman from COMPUPACK. Co., Ltd. (Note 1) Di Der Electronics (SUZHOU) CO., LTD. Its chairman is the person in charge of the subsidiary, COMPUPACK. (Note 2) Kung Shan Ching Zhi Electric Co., Ltd. Affiliated company of the Company Fan, Ji-Yuan The person in charge of the subsidiary, COMPUPACK

Note 1: As the person in charge of the subsidiary of the Company has transferred the shares of Shin Yi Electronics Technology (Suzhou) Co., Ltd. on December 10, 2022, subsequent transaction amounts will not be disclosed.

Note 2: As Di Der Electronics (SUZHOU) CO., LTD. has changed its person in charge on June 28, 2022, it becomes non-related party since the day. Therefore, subsequent transaction amounts will not be disclosed.

(2) Significant related party transactions

a. Operating revenue

Significant sales to related parties were as follows;

Affiliated company	For the year ended December 31, 2023 $ 56,810	For the year ended December 31, 2022 53,989

Selling price and sales term to subsidiaries is not significantly different from general sales. . No collaterals were pledged from the receivables of the related parties and it was deemed not necessary to be recorded as impairment loss after assessment.

b. Purchase

Affiliated company	For the year ended December 31, 2023 $ 62	For the year ended December 31, 2022 -

The Company did not purchase the above mentioned items from other companies; therefore these is no comparison for purchase price. Payment terms is 1 to 2 month which is the same as other suppliers.

c. Receivables from related parties

Item	Type of related parties	December 31, 2023 $ 25,422 528	December 31, 2022 23,553 - 23,553
Accounts receivable Other receivables	Affiliated company Affiliated company
		$ 25,950

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

d. Payables to Related Parties

Item	Type of related parties	December 31, 2023 $ 65 2 811	December 31, 2022 327 2,823 -
Accounts payable Other payables Other payables
	Affiliated company Affiliated company Other related parties
		$ 878	3,150

e. Property transactions

The proceeds from acquisition of property, plant and equipment from related parties are as follows:

Key management

December 31, 2023 $ 522,729	December 31, 2022 -

The Group acquired the land in MIRDC in Taoyuan, with area of 2,686 ping, from related parties with total transaction amount of $522,729 thousand in September, 2023. The acquisition price of the land referred to the appraisal report from CPAC and Cushman & Wakefield Real Estate Appraiser Firm. As of December 31, 2023, the transfer procedures have not been completed. The prepayment for the land is $156,819 thousand (recognized under “other non-current assets – others”), and the balance unpaid is $365,911 thousand.

f. Lease

The Group has rented buildings and land from related parties, and signed 1 to 3 years lease contracts with reference of neighboring rental market price and land market price in the total contract amount of $31,258 thousand and $36,759 thousand for the year of 2023 and 2022 respectively. The Company paid leases in the amount of $12,938 and $13,710 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, the balance of lease liabilities amounted to $7,762 and $6,826, respectively.

g. Others

The Group acquired 91 thousand of shares of subsidiaries from related parties, with total transaction amount of $256 thousand. The shares have been delivered and the payment has been made in full.

(3) Key management personnel transactions

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits	For the year ended December 31, 2023 $ 52,095 1,568	For the year ended December 31, 2022 76,061 1,844
	$ 53,663	77,905

(8) Assets pledged as security:

Details of the carrying value of assets pledged by the Company’s as guarantee as follows:

Asset name	Pledge or Mortgage underlying subject	December 31, 2023 $ 198,258 163,837	December 31, 2022 49,920 29,935
Property, plant and equipment Land Buildings and structures Investment property Land Buildings and structures	Bank loan and credit limit guarantee `〃` Bank loan and credit limit guarantee `〃`
		$ 362,095	79,855
		$ 264,748 40,133	259,599 39,215
		$ 304,881	298,814

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

9. Significant Commitments and contingencies:

(1) Significant and unrecognized commitments of the Company:

Acquisition of property, plant and equipment Acquisition of intangible assets	December 31, 2023 $ 748,441 16,147	December 31, 2022 793,391 27,174 820,565
	$ 764,588

For the purpose of sales development and future operational needs, the board of directors approved to use own land to build buildings on August 12, 2021. A building contract was signed with not-related parties in the first quarter of 2021 in the amount of $1,098,800 thousand. As of December 31, 2023, $824,100 thousand of the contracted price had been paid.

(2) Promissory note issued by the Company for credit limit:

	December 31,	December 31,
	2023	2022
$	7,803,375	6,199,935

(3) Amounts paid in as customs duties guarantee for imported goods:

	December 31,	December 31,
	2023	2022
$	6,000	14,816

10. Due to Major Disasters: none.

11. Materiality after the period: None

12. Other

a. A summary of employee benefits, depreciation, and amortization, by function, is as follows:

By function By item	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2022	For the year ended December 31, 2022	For the year ended December 31, 2022
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Other employee benefits Depreciation Amortization	1,235,401 70,228 60,275 80,844 490,984 1,116	915,217 69,445 48,183 54,706 160,346 53,986	2,150,618 139,673 108,458 135,550 651,330 55,102	1,297,353 70,820 57,969 87,226 444,800 437	900,732 63,638 43,703 60,156 206,150 47,270	2,198,085 134,458 101,672 147,382 650,950 47,707

13. Other disclosures

(1) Information of 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 for the years ended December 31, 2022.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

a. Lending to other parties:

No.	Loan amount Name of Holder	Name of borrower Underwriting bank	Account name Financial Statement Account	Related party Name of related parties	Highest balance for guarantees and endorsement s during the period Amount	Balance of guarantees and endorsemen ts as of reporting date Balance at end of the year	Actual usage amount during the period Amount	Interest rate Interest rate	Maxim um limit of fund financi ng Name of borrow er Nature (Note 11)	Business Amount	Reason for short-term financing Unusual transaction details	Allowance for bad debt Amount	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing Total Amount	Note Note 12:
													Item	Value
1 1 2 3 4 4 4	KUNSHAN ACES ELECTRONIC CO., LTD. KUNSHAN ACES ELECTRONIC CO., LTD. ASIA CENTURY INVESTMENTLTD ACES PRECISION INDUSTRY PTELTD MEC IMEX INC. MEC IMEX INC. MEC IMEX INC.	GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU KUNSHAN CHENGGANG ELECTRONIC TECHNOLOGY CO., LTD. MEC INTERNATIONA L COMPANY LTD MEC INTERNATIONA L COMPANY LTD SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED. MEC SUZHOU ELECTRONICS CO.,LTD.	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes Yes Yes	323,700 133,350 21,076 32,425 92,250 32,270 182,700	129,810 - 19,958 30,705 - - 92,115	64,905 - 19,958 30,705 - - 92,115	2.10% 0.00% 2.95% 4.96% 0.00% 0.00% 3.80%	2 2 2 2 2 2 2	- - - - - - -	Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements	- - - - - - -	None None None None None None None	- - - - - - -	2,660,943 2,660,943 160,904 53,309 224,451 224,451 224,451	2,660,943 2,660,943 160,904 53,309 224,451 224,451 224,451	Note 3, 4, 13 Note 3, 4, 13 Note 3, 4, 13 Note 3, 4, 13 Note 4, 5, 13 `〃` `〃`
5 6 6 6 7 7 8 9 10 11 11 11 11 11	MEC BEST KNOWN COMPANY LIMITED MEC ELECTRONICS (HK) COMPANY LTD. MEC ELECTRONICS (HK) COMPANY LTD. MEC ELECTRONICS (H.K.) CO., LTD. MEC ELECTRONICS (SUZHOU) CO., LTD. MEC ELECTRONICS (SUZHOU) CO., LTD. MEC SUZHOU ELECTRONICS CO., LTD. ACCURATE GROUP LIMITED COMPUPACK TECHNOLOGY CO., LTD. GENESIS ELECTRO-MECH ANICAL LIMITED GENESIS ELECTRO-MECH ANICAL LIMITED GENESIS ELECTRO-MECH ANICAL LIMITED GENESIS ELECTRO-MECH ANICAL LIMITED GENESIS ELECTRO-MECH ANICAL LIMITED	SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED. HOMEPRIDE TECHNOLOGYLI MITED MEC INTERNATIONA L COMPANY LTD SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED. SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. MEC INTERNATIONA L COMPANY LTD Aces Precision Industry Pte Ltd. GENESIS INNOVATION GROUP LIMITED GENESIS TECHNOLOGY USA, INC. MEC ELECTRONICS PHILIPPINES CORP. MEC INTERNATIONA L COMPANY LTD MEC IMEX INC.	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	45,395 17,780 29,183 6,485 40,005 26,670 44,450 37,289 32,425 87,173 48,638 32,425 16,213 64,850	- 17,308 27,635 6,141 25,962 - - 35,311 30,705 - 46,058 30,705 15,353 61,410	- 17,308 15,353 6,141 - - - 35,311 30,705 - 46,058 30,705 15,353 61,410	0.00% 1.30% 1.00% 3.05% 0.00% 0.00% 0.00% 2.95% 2.04% 0.00% 1.20% 1.20% 3.85% 3.85%	2 2 2 2 2 2 2 2 2 2 2 2 2 2	- - - - - - - - - - - - - -	Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements Operation requirements	- - - - - - - - - - - - - -	None None None None None None None None None None None None None None	- - - - - - - - - - - - - -	128,961 122,820 122,820 122,820 129,810 129,810 10,250 165,297 56,825 656,631 656,631 656,631 656,631 131,326	128,961 122,820 122,820 122,820 129,810 129,810 10,250 165,297 56,825 656,631 656,631 656,631 656,631 131,326	Note 6, 13 Note 8, 13 Note 8, 13 Note 8, 13 Note 7, 13 Note 7, 13 Note 10, 13 Note 11, 13 Note 4, 5, 13 Note 9, 13 Note 9, 13 Note 9, 13 Note 9, 13 Note 9, 13

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

No.	Loan amount Name of Holder	Name of borrower Underwriting bank	Account name Financial Statement Account	Related party Name of related parties	Highest balance for guarantees and endorsement s during the period Amount	Balance of guarantees and endorsemen ts as of reporting date Balance at end of the year	Actual usage amount during the period Amount	Interest rate Interest rate	Maxim um limit of fund financi ng Name of borrow er Nature	Business Amount	Unusual transaction details	Allowance for bad debt Amount	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing Total Amount	Note Note12
													Item	Value
12 12 12	GENESIS INNOVATION GROUP LIMITED GENESIS INNOVATION GROUP LIMITED GENESIS INNOVATION GROUP LIMITED	DONGGUAN POLIXIN ELECTRIC CO., LTD. Aces Precision Industry Pte Ltd. MEC IMEX INC.	Other receivables Other receivables Other receivables	Yes Yes Yes	64,850 97,275 179,700	61,410 92,115 100,000	61,410 92,115 100,000	1.20%~3.50% 3.85% 1.58%	2 2 2	- - -	Operation requirements Operation requirements Operation requirements	- - -	None None None	- - -	686,815 686,815 137,363	686,815 686,815 137,363	Note 9, 13 Note 9, 13 Note 9, 13

Note 1: In accordance with the Company's ‘Procedures for Lending Funds to Others’, when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 10% of the Company's net value.
Note 2: In accordance with the Company's ‘Procedures for Lending Funds to Others’, when lending funds to others, the total loan amount shall not exceed 40% of the Company's net value.
Note 3: According to ‘Procedures for Lending Funds to Others’ of subsidiaries, KUNSHAN ACES ELECTRONIC CO., LTD., ASIA CENTURY INVESTMENT LTD, and ACES PRECISION INDUSTRY PTE LTD, when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 10% of the company’s net worth. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the individual loan amount shall not exceed 100% of the net worth of that subsidiary.
Note 4: According to ‘Procedures for Lending Funds to Others’ of subsidiaries, KUNSHAN ACES ELECTRONIC CO., LTD., MEC IMEX INC., COMPUPACK TECHNOLOGY CO., LTD., ASIA CENTURY INVESTMENT LTD, and ACES PRECISION INDUSTRY PTE LTD, when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 40% of company’s net worth. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the total loan amount shall not exceed 100% of the net worth of that subsidiary.
Note 5: According to ‘Procedures for Lending Funds to Others’ of subsidiary MEC IMEX INC. and COMPUPACK TECHNOLOGY CO., LTD., when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 40% of each lending company. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the individual loan amount shall not exceed 100% of the net value of that subsidiary.
Note 6: The total amount of funds lent to others and the limit for individual loans for an individual enterprise by MEC BEST KNOWN COMPANY LTD., a subsidiary of the Company, was fixed at USD4,200 thousand.
Note 7: The total amount of funds lent to others and the limit for individual loans for an individual enterprise by MEC ELECTRONICS (SUZHOU) CO., LTD., a subsidiary of the Company, was fixed at CNY30,000 thousand.
Note 8: The total amount of funds lent to others and the limit for individual loans for an individual enterprise by MEC ELECTRONICS (HK) COMPANY LTD., a subsidiary of the Company, was fixed at USD4,000 thousand.
Note 9: According to ‘Procedures for Lending Funds to Others’ of subsidiaries GENESIS ELECTRO-MECHANICAL LIMITED and GENESIS INNOVATION GROUP LIMITED., when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 40% of each lending company. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the individual loan amount shall not exceed 200% of the net value of that subsidiary.
Note 10: According to ‘Procedures for Lending Funds to Others’ of subsidiary MEC SUZHOU ELECTRONICS CO., LTD., when lending funds to companies or firms that are in need of short-term working capital, the total amount lend to others shall not exceed 40% of the company’s net value, and the individual loan amount shall not exceed 40% of each lending company. However, if the

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the individual loan amount shall not exceed 300% of the net value of that subsidiary.

Note 11: According to ‘Procedures for Lending Funds to Others’ of subsidiary, ACCURATE GROUP LIMITED, when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 40% of company’s net worth. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the company, the total loan amount and the individual loan amount shall not exceed 400% of the net worth of that subsidiary.

Note 12: Nature of the loan as filled out below:

(i) Fill in ‘1’ for companies with business relationship.
(ii) Fill in ‘2’ for companies with short-term financing demands.

Note 13: The above transactions have been written-off in preparation of consolidated financial statements.

b. Guarantees and endorsements for others:

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsement s for an enterprise individual (Note 1, 3, 4, )	Highest balance for guarantees and endorsement s during the period	Balance of guarantee s and endorseme nts as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsement s (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net equity of the latest financial statements	Maximum amount allowed for endorsemen t	Endorseme nts/guarant ees by parent company	Subsidiary endorseme nts/guarant ees by a subsidiary	Endorseme nts/guarant ees to a subsidiary in Mainland China
		Name	Relationship (Note 5)
0 0 0 1 2 2 3 3	The Company The Company The Company MEC IMEX INC. DONGGU AN KUANGY ING HARDWA RE PLASTIC PRODUC T CO., LTD. DONGGU AN KUANGY ING HARDWA RE PLASTIC PRODUC T CO., LTD. SUZHOU KUANG YING ELECTRI C CO., LTD. SUZHOU KUANG YING ELECTRI C CO., LTD.	KUNSHAN ACES ELECTRONI C CO., LTD. Aces Precision Industry Pte Ltd. ACES Precision Machinery Co., Ltd. MEC INTERNATI ONAL COMPANY LTD. KUANG YING COMPUTER EQUIPMENT CO., LTD. KUNSHAN ACES ELECTRONI C CO., LTD. KUANG YING COMPUTER EQUIPMENT CO., LTD. DONGGUAN KUANGYIN G HARDWARE PLASTIC PRODUCT CO.,LTD.	2 2 2 2 3 2 3 2	5,254,759 5,254,759 5,254,759 561,127 128,654 128,654 99,791 99,791	307,400 318,600 100,000 113,488 4,864 4,864 4,864 4,864	- 153,525 50,000 107,468 4,606 4,606 4,606 4,606	- - 15,000 - 1,716 1,716 178 178	- - - - - - - -	0.00% 2.92% 0.95% 19.15% 3.06% 3.06% 125.30% 125.30%	5,254,759 5,254,759 5,254,759 561,127 128,654 128,654 99,791 99,791	Y Y Y N N N N N	N N N N N N N N	Y N N N N Y N Y

Note1: According to ‘Endorsement Guarantee Procedure’ of the Company, the guarantees and endorsements for an individual enterprise shall not exceed 20% of the Company's net value. However, if it holds more than 50% of the Company's direct or indirect voting rights, then guarantees and endorsements shall not exceed 100% of the Company's net value.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Note2: According to ‘Endorsement Guarantee Procedure’ of the Company, the guarantees and endorsements shall not exceed 100% of the Company's net value.

Note 3: According to ‘Endorsement Guarantee Procedure’ of subsidiary MEC IMEX INC., the guarantees and endorsements for an individual enterprise shall not exceed 20% of the Company's net value. However, if it holds more than 20% of the Company's direct or indirect voting rights, then guarantees and endorsements shall not exceed 100% of the Company's net value. The guarantees and endorsements shall not exceed 100% of the Company's net value.
Note 4: The Company and its subsidiaries provide customs guarantee for themselves in accordance with rules and regulations for guarantees and endorsements for an individual enterprise from ‘Endorsement Guarantee Procedure’.
Note 5: Relationship between the Company and counter-party of guarantee and endorsement as follows:
(i) Companies with business relationship.
(ii) The Company holds over 50% voting rights over the counter-party directly or indirectly.
(iii) The counter-party holds over 50% voting rights of the Company directly or indirectly.
(iv) Companies that hold over 90% voting rights directly or indirectly.
(v) Companies for which the endorsement guarantee was provided by all shareholders based on shareholding ratio due to joint investment venture.
(vi) Companies mutually providing guarantee according to contract requirements for engineering contracts or joint ventures.
(vii) Joint and several guarantees for performance guarantees under pre-sale housing sales contracts among peers in accordance with the Consumer Protection Act.
Note 6:According to ‘Endorsement Guarantee Procedure’ of subsidiary DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD. And SUZHOU KUANG YING ELECTRIC CO., LTD., the guarantees and endorsements for an individual enterprise shall not exceed the Company's paid-in capital However, if it holds more than 100% of the company's direct or indirect voting rights, then guarantees and endorsements shall not exceed the endorsing company’s paid-in capital. The guarantees and endorsements shall not exceed the company's paid-in capital.
c. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

and joint ventures):	and joint ventures):	and joint ventures):	and joint ventures):
				(Shares in thousands)
Name of Holder	Type and Name of Marketable Securities Type and title of marketable securities	Relationship with the Securities Issuer Affiliation with marketable security issuers	Financial Statement Account	December 31				Highest balance for guarantees and endorsements during the period Percentage of ownership	Note
				Shares	Carrying amount	Percentage of ownership	Fair value
The Company The Company KUNSHAN ACES ELECTRONIC CO., LTD.	SPECTRA SPC POWERFUND Fund: China Development Advantage Venture Capital Limited Partnership. Fund - Kung Shan Hua Cheng Yi Da Equity Investment Company (limited partnership company)	- - -	Financial assets at FVTPL `－`current Financial assets at FVTPL `－`non-current Financial assets at FVTPL `－`non-current	380 - -	- 71,866 95,586	- % 1.54% 2.49%	- 71,866 95,586	- % - % - %	Note 1 - -

Note 1: The Group has evaluated the fair value by net value of assets method, and the result of the fair value is 0.

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:

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

											(in	thousands of	NTD)
Company acquired the real estate	Property name	Date of occurrence	Transaction amount	Payment condition	Counterparty	Relationshi p	For transact pr	ions with related ior transfers and	parties, the the relation	information on ship	Reference of price determinatio n	Acquisition purpose and usage	Other agreeme nt
							Owner	Relationship with the issuer	Date of transfer	Amount
ACES ELECTRONICS CO., LTD.	Land with No. 0638 0000 on Shangling section Zhongli District	, 2023/9/8	522,729	156,819 has been paid C	Hsu, hang-Fei	Director of the Company	N/A	N/A	N/A	-	The result of appraisa l report	For future business developme nt	-

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:

Counter-party of sales/purchase	Name of counter-party	Relations hip		Transactio	n details		Unusu	al transaction details	Notes and receivables	accounts (payables)	Note
			Sales/purc hase	Amount	% in total purchase (sales)	Credit terms	Unit price	Credit terms	Balance amount	Percentage in total notes and accounts receivable (payable)
The Company The Company KUNSHAN ACES ELECTRONIC CO.,LTD. DONGGUAN ACES ELECTRONIC CO.,LTD. GENESIS TECHNOLOGY USA,INC. KUANG YING COMPUTER EQUIPMENT CO., LTD. MEC IMEX INC.	DONGGUAN ACES ELECTRONIC CO., LTD. KUNSHAN ACES ELECTRONIC CO., LTD. GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU KUNSHAN ACES ELECTRONIC CO., LTD. GENESIS TECHNOLOGY(NI NGBO) INC. DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD. MEC SUZHOU ELECTRONICS CO.,LTD.	Sub-subsid iary Sub-subsid iary Sub-subsid iary Sub-subsid iary Affiliates Affiliates Affiliates	Purchase Purchase Purchase Purchase Purchase Purchase Purchase	525,526 944,178 280,120 190,261 171,580 471,424 340,433	27.00% 48.50% 35.84% 23.75% 44.59% 86.53% 78.25%	OA 120 days OA 120 days OA 30 days OA 90 days OA 120 days OA 60 days OA 90 days	- - - - - - -		304,537 484,732 40,949 70,836 33,157 195,025 9,602	30.14% 47.97% 10.74% 20.20% 34.61% 87.76% 26.69%	.

Note 1: The above transactions have been written-off in preparation of consolidated financial statements. Note 2: Only information pertaining to purchase was disclosed, relevant sales information will not be reiterated.

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

Recorded as other receivables Name of Holder	Name of counter-party Name of investee	Relationship	Receivables from related parties (Note 1)	Turnove r rate	Overdue receivables from related parties	Overdue receivables from related parties	Receivables from related parties Ending Balance	Allowance for bad debt Amount
					Amount	Action taken
KUNSHAN ACES ELECTRONIC CO., LTD. DONGGUAN ACES ELECTRONIC CO., LTD. DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD. GENESIS INNOVATION GROUP LIMITED	The Company The Company KUANG YING COMPUTER EQUIPMENT CO., LTD. MEC IMEX INC.	Subsidiary Subsidiary Affiliates Affiliates	484,732 304,537 195,025 100,185 (Note2)	3.90 3.45 4.83 -	- - - -		175,056 44,299 74,961 -	- - - -

Note 1: The above transactions have been written-off in preparation of consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Note 2: Loan and interest receivables.

i. Trading in derivative instruments: None.

j. Significant transactions between parent company and subsidiaries:

==> picture [448 x 260] intentionally omitted <==

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

Relation Transaction details
ship
No. Companies to make Counter-party % of combined total
purchase (sale) Accounts Amount Trading terms revenues or assets
1 KUNSHAN ACES The Company 2 Sales 944,178 OA 120 days 11.13%
ELECTRONIC CO., LTD.
1 KUNSHAN ACES DONGGUAN ACES 2 Sales 190,261 OA 90 days 2.24%
ELECTRONIC CO., LTD. ELECTRONIC CO., LTD.
1 KUNSHAN ACES The Company 2 Accounts receivable 484,732 OA 120 days 3.96%
ELECTRONIC CO., LTD.
2 DONGGUAN ACES The Company 2 Sales 525,526 OA 120 days 6.19%
ELECTRONIC CO., LTD.
2 DONGGUAN ACES The Company 2 Accounts receivable 304,537 OA 120 days 2.49%
ELECTRONIC CO., LTD.
3 DONGGUAN KUANG YING 3 Sales 471,424 OA 60 days 5.56%
KUANGYING COMPUTER EQUIPMENT
HARDWARE PLASTIC CO., LTD.
PRODUCT CO., LTD.
3 DONGGUAN KUANG YING 3 Accounts receivable 195,025 OA 60 days 1.59%
KUANGYING COMPUTER EQUIPMENT
HARDWARE PLASTIC CO., LTD.
PRODUCT CO., LTD.
4 MEC SUZHOU MEC IMEX INC. 3 Sales 340,433 OA 90 days 4.01%
ELECTRONICS CO.,
LTD.
5 GALIS ACCURATE KUNSHAN ACES 3 Sales 280,120 OA 30 days 3.30%
SMITHCRAFT ELECTRONIC CO., LTD.
PRODUCTS CO., LTD.
OF SUZHOU
6 GENESIS GENESIS TECHNOLOGY 3 Sales 171,580 OA 120 days 2.02%
TECHNOLOGY(NINGB USA, INC.
O) INC.
----- End of picture text -----

Note 1: Fill out the numbers as follows:

a. ‘0’ for parent company.

b. ‘1’ and sequential numbering for the subsidiaries.

Note 2: Categories of relationships of transacting parties as below: 1. Parent company to subsidiary

Subsidiary to parent company
Subsidiary to subsidiary

Note 3: Only information pertaining to sales, revenue and accounts receivable were disclosed, relevant information on purchase, expenses and accounts payable will not be reiterated.

(2) Information on investments:

The following is the information on investees for the years ended December 31, 2023 (excluding information on investees in Mainland China):

Investor Company	Investee Company	Location	Main Activities	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Maximum Shareholdin g in the Interim	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee
				December 31, 2023	December 31, 2022	Shares	Percentag e of ownershi p	Carrying amount	Percentage of ownership
The Company The Company The Company The Company	ACECONN ELECTRONIC CO., LTD. ACES (HONG KONG) ELECTRONIC CO., LTD. ACES PRECISION INDUSTRY PTE LTD. ACESCONN HOLDINGS CO., LTD.	SAMOA SAMOA Singapore SAMOA	Investment holding Connectors sales Connectors sales business Investment holding	771,665 - 208,410 351,112	621,315 9,579 208,410 351,112	24,800 - 8,162 12,000	100.00% - % 100.00% 100.00%	4,026,481 - 53,309 160,905	100.00% 100.00% 100.00% 100.00%	10,061 1,506 1,630 (26,709)	8,828 1,506 1,630 (26,709)	Note 1 Note 1, 4 Note 1 `〃`

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Investor Company	Investee Company	Location	Main Activities	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Maximum Shareholdin g in the Interim	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee
				December 31, 2023	December 31, 2022	Shares	Percentag e of ownershi p	Carrying amount	Percentage of ownership
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company ACESCONN HOLDINGS CO., LTD. ACES Precision Machinery Co., Ltd. MEC IMEX INC. MEC IMEX INC. MEC INTERNATI ONAL COMPANY LTD. MEC INTERNATI ONAL COMPANY LTD. MEC INTERNATI ONAL COMPANY LTD. MEC INTERNATI ONAL COMPANY LTD.	WEI HONG INTERNATIONAL INVESTMENT CO., LTD. MEC IMEX INC. ACES JAPAN CO., LTD. ACES INTERCONNECT (USA), INC. COMPUPACK TECHNOLOGY CO., LTD. KUANG YING COMPUTER EQUIPMENT CO., LTD. ACES Precision Machinery Co., Ltd. GENESIS HOLDING COMPANY GENESIS TECHNOLOGY USA, INC. JASON TECHNOLOGY LIMITED. ASIA CENTURY INVESTMENT LTD. ACES Surface Treatment Co., Ltd. MEC INTERNATIONAL COMPANY LTD. MEC ELECTRIC SOLUTIONS GMBH MEC BEST KNOWN COMPANY LIMITED MEC ULTRAMAX (HK) COMPANY LIMITED MEC ELECTRONICS (HK) COMPANY LIMITED MEC ELECTRONICS PHILIPPINES CORPORATION	Taiwan Taiwan Japan USA Taiwan Taiwan Taiwan Cayman USA Hong Kong SAMOA Taiwan British Virgin Islands Germany Hong Kong Hong Kong Hong Kong Philippin es	Investment business Connector cable set sales business Connector developmen t business Connectors sales industry Electronic component sales business Electronic component manufacturi ng and sales business Mold part manufacturi ng and sales business Investment holding Electronic component sales business Electronic component sales business Investment holding Manufactur e and sales of mold Investment holding Connector cable set sales business Investment holding Investment holding Connector cable set sales business Connector cable set manufacturi ng and sales business	25,000 928,939 15,137 9,711 287,237 198,697 130,000 589,118 20,104 1,857 351,112 8,000 1,295,195 3,179 473,201 122,400 205,445 54,085	25,000 809,032 15,137 9,711 277,237 198,697 130,000 589,118 20,104 - 351,112 - 992,350 3,179 313,435 122,400 157,515 54,085	2,500 47,582 4.5 300 21,500 25,906 13,000 27,778 1.5 5,000 9,150 700 31 1 118,250 30,000 510 8,000	100.00% 99.86% 100.00% 100.00% 100.00% 99.66% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	27,785 530,853 14,177 9,542 223,655 294,027 75,377 703,939 166,298 8,732 160,904 6,297 335,216 2,845 9,202 80,805 109,951 265,280	100.00% 99.86% 100.00% 100.00% 100.00% 99.66% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(188) (130,721) 1,078 (142) (37,892) 47,272 (15,143) 38,901 (37,708) 442 (26,709) (1,391) (114,061) (641) (4,403) 1,102 13,344 6,924	(188) (130,261) 1,078 (142) (32,703) 48,550 (15,143) 15,096 (37,708) (1,628) (26,709) (2,703) (114,061) (641) (4,403) 1,102 13,344 6,924	`〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Note 1 Note 1, 3 Note 1 Note 1, 2 Note 1 `〃` `〃` `〃`

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Investor Company	Investee Company	Location	Main Activities	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Maximum Shareholdin g in the Interim	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee
				December 31, 2023	December 31, 2022	Shares	Percentag e of ownershi p	Carrying amount	Percentage of ownership
MEC ELECTRONI CS PHILIPPINE S CORPORATI ON MEC ELECTRONI CS (HK) COMPANY LIMITED COMPUPACK TECHNOLOGY CO., LTD. COMPUPACK TECHNOLOGY CO., LTD. MICON PRECISE CORP. KUANG YING COMPUTER EQUIPMENT CO., LTD. INFOMIGHT INVESTMEN TS LIMITED INFOMIGHT INVESTMEN TS LIMITED INFOMIGHT INVESTMEN TS LIMITED GENESIS HOLDING COMPANY GENESIS HOLDING COMPANY	MEC IMEX (USA), INC. HOMEPRIDE TECHNOLOGY LIMITED MICON PRECISE CORP. GLOBAL ACUMEN LIMITED Aces Precision Industry Pte Ltd. INFOMIGHT INVESTMENTS LIMITED BELTA INTERNATIONAL LIMITED CERTILINK INTERNATIONAL LIMITED ACCURATE GROUP LIMITED GENESIS INNOVATION GROUP LIMITED GENESIS ELECTRO-MECHA NICAL LIMITED	USA Hong Kong Taiwan Belize Vietnam SAMOA British Virgin Islands British Virgin Islands SAMOA Hong Kong Hong Kong	Connector cable set sales business Investment holding Electronic component sales business Electronic component sales business Electronic component manufacturi ng and sales business Investment holding Investment holding Sales business Investment holding Investment holding Investment holding	12,544 230,261 333,845 1,497 336,292 285,904 52,349 1,605 131,588 228,280 268,229	12,544 182,331 333,845 1,497 336,292 285,904 52,349 1,605 131,588 228,280 268,229	4 56,750 12,950 - - 7,980 4 50 4,100 8,000 9,400	100.00% 100.00% 99.61% - % 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	17,555 49,137 (2,031) - (6,081) 192,927 152,521 (4,411) 41,324 343,407 328,315	100.00% 100.00% 99.61% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(213) 16,699 (39,142) 13,770 (38,316) 32,740 30,117 (14) 2,623 36,439 (23,986)	(213) 16,699 (38,785) 13,770 (38,316) 32,719 30,117 (14) 2,623 36,439 (23,986)	`〃` Note 1 `〃` Note 1, 4 `〃` `〃` `〃` `〃` `〃` `〃` `〃`

Note 1: The above transactions have been written-off in preparation of consolidated financial statements. Note 2: The Company’s subsidiary MEC IMEX INC. set up a German subsidiary during the year of 2022.

Note 3: The subsidiary of the Company, ACES Precision Machinery Co., Ltd., obtained control over Yunchengyou Precision Technology Co., Ltd. on May 5, 2023, and consolidated it into the Group since the day. Yunchengyou Precision Technology Co., Ltd. has completed the change of registration , and renamed as ACES Surface Treatment Co., Ltd. on May 30, 2023.

Note 4: The dissolution and liquidation procedures of the subsidiaries of the Company, ACES (HONG KONG) ELECTRONIC CO., LTD. and GLOBAL ACUMEN LIMITED have been completed in 2023.

(3) Information on investment in mainland China:

a. The names of investees in Mainland China, the main businesses and products, and other

information:

Name of investee	Main Activities	Total amount of paid-in capital	Method of investm ent (Note 1)	Accumulated remittance from Taiwan as of January 1, 2023	Investment flows	Investment flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Net Income (Loss) of Investee	% Ownership through Direct or Indirect Investment	Maximum Shareholdin g in the Interim	Investor’s Share of Profit (Loss) of Investee	Carrying amount of Investment as of December 31, 2023	Accumulate d Inward Remittance of Earnings as of December 31, 2023	Note
					Outflow	Inflow
DONGGUAN ACES	Connector manufacturi	115,301	(2)	115,301	-	-	115,301	(20,168)	100.00%	100.00%	(20,168)	452,479	451,444	Note 13

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ELECTRONIC CO., LTD. KUNSHAN ACES ELECTRONIC CO., LTD. KUNSHAN ACES TRADING CO., LTD. CHONGQING HONG GAO ELECTRONIC CO., LTD. GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU KUNSHAN CHENGGANG ELECTRONIC TECHNOLOG Y CO., LTD. ACES ZHUHAI TECHNOLOG Y LTD Nantong Dadi Electric Co., Ltd. Kung Shan Ching Zhi Electric Co., Ltd. MEC ELECTRONIC S (SUZHOU) CO., LTD. SUZHOU HANTENG ELECTRONIC S TECHNOLOG Y CO., LTD. HOMEPRIDE ELECTRONIC S (DONGGUAN) COMPANY LIMITED. MEC SUZHOU ELECTRONIC S CO., LTD. DONGGUAN COMPUPACK TECHNOLOG Y CO., LTD. DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD. SUZHOU KUANG YING ELECTRIC CO., LTD. GENESIS INTERCONNE CT CO., LTD. GENESIS GUIZHOU TECHNOLOG Y CO., LTD. DONGGUAN POLIXIN ELECTRIC CO., LTD. GENESIS TECHNOLOG Y(NINGBO) INC. SHENZHEN JINO ELECTRONIC CO.,LTD.	ng and sales business Connector manufacturi ng and sales business Connectors sales business Connectors sales business Surface treatment and sales business Connector manufacturi ng and sales business Connector manufacturi ng and sales business Automobile cable bundle manufacturi ng and sales business Electronic component sales business Connector cable set manufacturi ng and sales business Connector cable set manufacturi ng and sales business Connector cable set manufacturi ng and sales business Connector cable set manufacturi ng and sales business Electronic component sales business Electronic component manufacturi ng and sales Electronic component manufacturi ng and sales Electronic component sales business Electronic component sales business Electronic component sales business Electronic component sales business Electronic component sales business	629,475 9,087 173,985 256,682 527,084 150,350 410,404 - 121,853 519,336 214,991 272,030 10,477 128,110 104,307 109,860 108,600 65,150 21,720 80,897	(2) (2) (2) (2) (2) (2) (3) (3) (2) (2) (2) (2) (1) (2) (2) (2) (2) (3) (2) (2)	163,447 9,087 188,086 351,112 - - - - 301,403 210,065 73,123 176,960 10,477 129,711 153,819 56,432 161,665 - 228,805 168,495	- - - - - 150,350 - - - 159,640 48,135 95,070 - - - - - - - -	- - - - - - - - - - - - - - - - - - - -	163,447 9,087 188,086 351,112 - 150,350 - - 301,403 369,705 121,258 272,030 10,477 129,711 153,819 56,432 161,665 228,805 168,495	22,974 687 1,622 (27,235) (4,712) 3,138 (65,743) 6,823 1,185 (4,906) 17,009 (125,130) 3,231 30,156 1,833 (466) (825) 5,210 (32,245) 5,044	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 19.31% 30.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% -% -% 100.00% 100.00% -%	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 19.31% 30.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	22,974 687 1,622 (27,235) (4,712) 3,138 (12,695) 2,047 1,185 (4,906) 17,009 (125,130) 3,231 30,156 1,833 (466) (825) 5,210 (32,245) 5,044	2,660,943 47,105 1,362 139,699 507,683 149,124 408,015 20,455 75,937 8,907 64,315 3,417 13,022 150,707 3,676 - - 6,474 44,075 -	452,925 - - - - - - - - - - - - - - - - - - -	`〃` `〃` `〃` `〃` Note 6, 13 Note 10, 13 Note 2, 13 Note 9, 13 Note 3, 13 Note 3, 13 `〃` `〃` Note 4, 13 Note 5, 13 `〃` Note 11, 13 Note 12, 13 Note 7, 13 Note 8, 13 Note 11, 13

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

Note 1: There are 3 types of investment:

(1) Direct investment from Mainland China.
(2) Investment through a company located at a third party area.
(3) Other methods.
Note 2: Direct investment of KUNSHAN ACES ELECTRONIC CO., LTD. in the amount of RMB43,397 thousand.
Note 3: Indirect investment of MEC IMEX INC.
Note 4: Direct investment of COMPUPACK TECHNOLOGY CO., LTD. in the amount of USD350 thousand.
Note 5: Indirect investment of KUANG YING COMPUTER EQUIPMENT CO., LTD.
Note 6: Direct investment of ACECONN ELECTRONIC CO., LTD. In the amount of RMB120,322 thousand.
Note 7: Indirect investment of GENESIS INNOVATION GROUP LIMITED.
Note 8: Indirect investment of GEUESIS INNOVATION GROUP LIMITED.
Note 9: Direct investment of KUNSHAN ACES ELECTRONIC CO., LTD. in the amount of RMB3,750 thousand.
Note 10: The Company set up ACES ZHUHAI TECHNOLOGY LTD on February 1, 2023, which is included into the Group since that day.
Note 11: The dissolution and liquidation procedures of the subsidiaries of the Company, GENESIS INTERCONNECT CO., LTD., and SHENZHEN JINO ELECTRONIC CO., LTD. have been completed in 2023.
Note 12: The subsidiary of the Company, GENESIS GUIZHOU TECHNOLOGY CO., LTD., has been sold in 2023.
Note 13: The above transactions have been written-off in preparation of consolidated financial statements.

b. Limitation on investment in Mainland China:

Name of investee	Accumulated remittance from Taiwan to China as of December 31, 2023 (Note 1)	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on investment in Mainland China set by Investment Commission, Ministry of Economic Affairs
ACES Electronics Co.,Ltd.	1,592,780 (USD 53,316 thousand)	2,885,782 (USD 93,984 thousand) (Note 2)	3,155,041
MEC IMEX INC.	1,064,396 (USD 37,396 thousand)	1,364,684 (USD 44,445 thousand)	(Note 3)
COMPUPACK TECHNOLOGY CO.,LTD.	10,477 (USD 350 thousand)	10,747 (USD 350 thousand)	85,237
KUANG YING COMPUTER EQUIPMENT CO., LTD.	283,530 (USD 8,983 thousand)	307,166 (USD 10,004 thousand)	(Note 4)

Note 1: Accumulated remittance amount from Taiwan to China as of December 31, 2023 was estimated by
historical exchange rates.
Note 2: Inclusive on the amount of USD34,745 thousand authorized by Investment Commission as capital reserve to increase.
Note 3: As the Company obtained the operation headquarters recognition document issued by the Industrial Bureau of the Ministry of Economic Affairs in June, 2023, it is not subject to the quota restrictions of the "Principles for Reviewing Investment or Technical Cooperation in Mainland China" by the Ministry of Economic Affairs.
Note 4: As the Company obtained the operation headquarters recognition document issued by the Industrial Bureau of the Ministry of Economic Affairs in December, 2020, it is not subject to the quota restrictions of the "Principles for Reviewing Investment or Technical Cooperation in Mainland China" by the Ministry of Economic Affairs.
c. Significant transactions:

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

The significant inter-company transactions with the subsidiaries in Mainland China (which are eliminated when preparing the consolidated financial statements) for the year ended December 31, 2023 are disclosed in “Information on significant transactions”.

(4) Major shareholders:

e significant inter-company transactions with the subsidiaries in Mainland China (which e eliminated when preparing the consolidated financial statements) for the year ended ecember 31, 2023 are disclosed in “Information on significant transactions”. shareholders:	e significant inter-company transactions with the subsidiaries in Mainland China (which e eliminated when preparing the consolidated financial statements) for the year ended ecember 31, 2023 are disclosed in “Information on significant transactions”. shareholders:	e significant inter-company transactions with the subsidiaries in Mainland China (which e eliminated when preparing the consolidated financial statements) for the year ended ecember 31, 2023 are disclosed in “Information on significant transactions”. shareholders:
Unit: Shares Shareholding Shareholder’s Name Shares Percentage Yuan Wan-Ting 8,863,487 6.59%
Shareholding Shareholder’s Name	Shares	Percentage
Yuan Wan-Ting	8,863,487	6.59%

Note: (1)The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of the total nonphysical common stocks and preferred stocks (including treasury stocks) on the last business date of each quarter. The registered nonphysical stocks may be different from the capital stocks disclosed in the financial statement due to different calculations basis.
(2) If the aforementioned data contained shares which were kept in trust by the shareholders, the data disclosed will be deemed as the settlor’s separate account for the fund set by the trustee. As for the shareholder who reports its share equity as an insider and whose shareholding ratio is greater than 10% in accordance with Securities and Exchange Act and include its self-owned shares and trusted shares, as well as the shares of the individuals who have power to decide how to allocate the trust assets. For the information on reported share equity of the insider, please refer to the Market Observation Post System.

14. Segment information:

(1) General Information

The Company has 4 reporting segments: connector, connector sets, metal stamping segment and other segment. The connector segment is mainly engaging in processing, manufacturing and selling of connectors. The connector sets segment is mainly engaging in manufacturing and sales of consumer electronics, communication peripherals and industrial connectors sets. The metal stamping segment is mainly engaging in processing, manufacturing and selling of connectors. Other segment is mainly engaging in investment, sales, handling and packaging business of communication cable sets.

Each segment is responsible for its own strategic business unit in order to provide different products and services. Separate management is required because each strategic business required different techniques and marketing strategies.

(2)Information on Profit and Loss, Departmental Assets, Departmental Liabilities, and the Basis of Measurement and Adjustment for Reporting Segments

The consolidated company allocates unrecognized income tax expenses or non-recurring gains and losses to the reporting segments. In addition, not all gains and losses of reporting segments include significant non-cash items other than depreciation and amortization. The reported amounts are consistent with the reports used by operating decision-makers. The accounting policies of the operating segments of the consolidated company are the same as those summarized in the significant accounting policies. The operating segment profit and loss of the consolidated company is measured based on operating profit before tax and serves as the basis for performance evaluation.

The information and adjustments for the operating segments of the consolidated company are as follows:

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	Total 8,486,228 -
Connector segment $ 4,634,491 175,438	Connector cable segment 1,579,243 278,582	Metal stamping segment 1,622,787 15,529	Other segment 649,707 40,676	Adjustment and elimination
				- (510,225)
$ 4,809,929	1,857,825	1,638,316	690,383	(510,225)	8,486,228
$ (303,764)	(118,380)	43,457	(29,659)	138,654	(269,692)

	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	Total 10,392,504 -
Connector segment $ 4,998,562 248,116	Connector cable segment 2,083,856 191,596	Metal stamping segment 2,478,783 34,344	Other segment 831,303 43,713	Adjustment and elimination
				- (517,769)
$ 5,246,678	2,275,452	2,513,127	875,016	(517,769)	10,392,504
$ 237,409	(85,260)	269,623	(30,718)	(75,991)	315,063

(3) Information on products

Please refer to note 6(19) for revenue from products of external customers.

(4) Geographic information

Information of geographical area of the Company is as follows. The revenues are classified in term of where the customers are located, while the noncurrent assets are classified in term of where the assets are located.

Please refer to Note 6(19) for revenue of external customers from different geographical areas.

Non-current assets:

	Region China Taiwan Philippines Others Total	For the year ended December 31, 2023 $ 2,272,096 2,832,388 68,234 88,242 $ 5,260,960	For the year ended December 31, 2023 $ 2,272,096 2,832,388 68,234 88,242 $ 5,260,960	For the year ended December 31, 2022 2,342,362 2,410,666 72,238 107,697 4,932,963	For the year ended December 31, 2022 2,342,362 2,410,666 72,238 107,697 4,932,963

			$ 5,260,960		4,932,963

Non-current assets include real estate, buildings and equipment, right-of-use assets, investment properties, intangible assets, prepaid equipment payments, and other assets, but do not include financial instruments and deferred income tax assets.

(5) Information on key customers:

Key customers for the years ended December 31, 2023 and 2022.

U Customer

2023 $ 629,065	2022 760,882

AI assistant

ACES — Annual Report 2023

52353_rns_2023-11-07_7c46b881-9171-4a4b-8748-6a7768b6dbd9.pdf

ACES ELECTRONICS CO., LTD. AND SUBSIDIARIES Consolidated Financial Statements

Representation Letter

Independent Auditors’ Report

To the Board of Directors of ACES Electronics Co., Ltd.:

Opinion

Basis for Opinion

Description of key audit matter

Other matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

KPMG

ACES Electronics Co., Ltd. and Subsidiaries

Consolidated Financial Statements

December 31, 2023 and 2022

ACES ELECTRONICS CO., LTD. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income For the years ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan dollars, except for Earnings per share)

ACES ELECTRONICS CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

Equity Attributable to Shareholders of the parent

ACES ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan dollars)

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements For the Years Ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

1. Organization

2. The Authorization of Financial Statements

3. Application of New and Revised Standards, Amendments and Interpretations

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

4. Summary of Significant Accounting Policies

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

See accompanying notes to consolidated financial statements.

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

5. Critical Accounting Judgments and Key Sources of Estimations and Assumptions Uncertainty

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

6. Description of Significant Accounts

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(7) Property, plant and equipment

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(8) Right-of-use asset

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(9) Investment property

a. Details of investment property as follows:

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(13) Bonds payable

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(14) Lease liabilities

c. The amounts recognized in the statement of cash flows for the Company were as follows:

d. Lease of land, property and plants

e. Other lease

(15) Employee benefits

a. Defined benefit plans

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(i) Composition of plan assets

(ii) Changes on current value of defined obligation

(iii) Changes on fair value of plan assets

(iv) Expenses recognized in profit or loss

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements

(6) Actuarial assumptions

ACES Annual Report 2023