ACES - Annual Report 2023 | FinancialReports.eu

Stock Code: 3605

ACES ELECTRONICS CO., LTD. Parent Company Only Financial

Statements

With Independent Auditors’ Report

For the Years Ended December 31, 2023 and 2022

The independent auditors’ report and the accompanying parent company only 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 the parent company only financial statements, the Chinese version shall prevail.

Independent Auditors’ Report

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

Opinion

We have audited the parent company only financial statements of ACES Electronics Co., Ltd., which comprise the balance sheets as of December 31, 2023 and 2022, the statements of comprehensive income, statements of changes in equity, and statements of cash flows for the years ended December 31, 2023 and 2022, and notes to the parent company only financial statements including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of ACES Electronics Co., Ltd. as of December 31, 2023 and 2022, and its financial performance and its 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 Financial Statements section of our report. We are independent of ACES Electronics Co., Ltd. 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 parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 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(13) to the parent only financial statements for the accounting policy on operating revenue; and refer to Notes 6(18) for disclosures relating to revenue.

Description of key audit matter:

ACES Electronics Co., Ltd. is mainly engaging in processing, manufacturing and selling of connectors. Sales revenue is one of the key audit matters to the financial statements. Therefore, the assessment for recognition of sales revenue is one of the key evaluation matter when we audit the Company’s 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.

2. Valuation of inventory

Please refer to Notes 4(7) to the parent only 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 Electronics Co., Ltd. mainly produces electronic products such as high precision connectors 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 Company’s 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 Company on inventory valued at the lower of cost and net realizable value.
We understand the selling prices adopted by the management of the Company, 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 Company.

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

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

In preparing the parent only financial statements, management is responsible for assessing ACES Electronics Co., Ltd.’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate ACES Electronics Co., Ltd. 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 are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 parent only 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 parent only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2.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 Electronics Co., Ltd.’s 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.’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the ACES Electronics Co., Ltd. to cease to continue as a going concern.
5.Evaluated the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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 parent company only financial statements. We are responsible for the direction, supervision and performance of ACES Electronics Co., Ltd.'s 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 parent company only financial statements for the year ended December 31, 2023 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

Notes to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance, and cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The standards, procedures, and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

ACES ELECTRONICS CO., LTD.

Balance Sheets

December 31, 2023 and 2022

(Expressed in thousands of New Taiwan dollars)

December 31,	2023 ％ 5 - - 7 1 2 - 3 - 18 1 60 17 - - 2 - 2 82 100	December 31, 2023 Amount % $ 1,120,000 11 578,202 5 1,868 - 179,236 2 829,395 8 325,166 3 57,752 - - - 4,176 - 187,500 2 35,078 - 3,318,373 31 - - 1,683,974 16 266,508 3 5,811 - 16,061 - 1,972,354 19 5,290,727 50 1,344,177 13 993,270 9 726,030 7 62,371 1 2,236,482 21 3,024,883 29 (140,790) (1) 33,219 - 5,254,759 50 $ 10,545,486 100	December 31, 2023 Amount % $ 1,120,000 11 578,202 5 1,868 - 179,236 2 829,395 8 325,166 3 57,752 - - - 4,176 - 187,500 2 35,078 - 3,318,373 31 - - 1,683,974 16 266,508 3 5,811 - 16,061 - 1,972,354 19 5,290,727 50 1,344,177 13 993,270 9 726,030 7 62,371 1 2,236,482 21 3,024,883 29 (140,790) (1) 33,219 - 5,254,759 50 $ 10,545,486 100	December 31, 2022 Amount % 650,000 6 - - 518 - 166,523 2 763,869 7 327,078 3 96,629 1 23,371 - 8,716 - 1,106,000 11 26,554 - 3,169,258 30 555,906 5 618,500 6 276,386 4 1,344 - 29,900 - 1,482,036 15 4,651,294 45 1,344,177 13 988,615 10 702,410 7 168,631 2 2,492,404 24 3,363,445 33 (92,336) (1) 33,219 - 5,637,120 55 10,288,414 100	December 31, 2022 Amount % 650,000 6 - - 518 - 166,523 2 763,869 7 327,078 3 96,629 1 23,371 - 8,716 - 1,106,000 11 26,554 - 3,169,258 30 555,906 5 618,500 6 276,386 4 1,344 - 29,900 - 1,482,036 15 4,651,294 45 1,344,177 13 988,615 10 702,410 7 168,631 2 2,492,404 24 3,363,445 33 (92,336) (1) 33,219 - 5,637,120 55 10,288,414 100
Amount $ 472,031 - 122 762,149 120,929 246,248 4,739 314,369 35,265		Amount $ 1,120,000 578,202 1,868 179,236 829,395 325,166 57,752 - 4,176 187,500 35,078		Amount 650,000 - 518 166,523 763,869 327,078 96,629 23,371 8,716 1,106,000 26,554 3,169,258 555,906 618,500 276,386 1,344 29,900 1,482,036 4,651,294 1,344,177 988,615 702,410 168,631 2,492,404 3,363,445 (92,336) 33,219 5,637,120 10,288,414

1,955,852	18
71,866 6,295,080 1,759,922 9,901 38,093 166,698 21,491 226,583	1 60 17 - - 2 - 2	3,318,373	31		30
		- 1,683,974 266,508 5,811 16,061	- 16 3 - -		5 6 4 - -
		1,972,354	19		15
		5,290,727	50		45
		1,344,177	13		13
8,589,634	82
		993,270	9		10
		726,030 62,371 2,236,482	7 1 21		7 2 24
		3,024,883	29		33
		(140,790) 33,219	(1) -		(1) -
		5,254,759	50		55
$ 10,545,486	100	$ 10,545,486	100		100

See accompanying notes to parent company only financial statements.

ACES ELECTRONICS CO., LTD. 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	2023		2022	% 97 3
Amount $ 2,990,226 100,092		%	Amount
		97 3	3,347,530 99,362
3,090,318 2,399,083		100 78	3,446,892 2,684,133	100 78
691,235 412		22 -	762,759 4,015	22 -
691,647		22	766,774	22
160,669 300,917 295,670 (745)		5 10 10 -	200,888 295,577 233,081 (231)	6 9 7 -
756,511		25	729,315	22
(64,864)		(3)	37,459	-
3,859 17,415 (6,418) (69,189) (167,794)		- 1 - (2) (5)	3,291 13,903 23,718 (49,829) 210,597	- - 1 (1) 6
(222,127)		(6)	201,680	6
(286,991) (20,448)		(9) (1)	239,139 13,820	6 -
(266,543)		(8)	225,319	6
1,911 -		- -	10,880 -	- -
1,911		-	10,880	-
(59,819) (11,365)		(2) -	129,814 25,963	4 1
(48,454)		(2)	103,851	3
(46,543)		(2)	114,731	3
$ (313,086)		(10)	340,050	9
	$	(1.98)		1.68
	$	(1.98)		1.64

See accompanying notes to parent company only financial statements.

ACES ELECTRONICS CO., LTD. Statements of Changes in Equity For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan dollars)

Common Stock Capital Surplus	Common Stock Capital Surplus	Retained Earnings	Retained Earnings	Retained Earnings	Other Components of Equity	Other Components of Equity	Other Components of Equity
					Exchange Differences on Translation of the Financial Statements of Foreign Operations Gain on Property Revaluation Total Equity
		Legal Reserve	Special Reserve Unappropriated Earnings
$ 1,343,959 - - - - - - - - - 218 1,344,177 - - - - - - - $ 1,344,177	1,002,379 - - - - - - (131) (14,827) 277 917 988,615 - - - - - - 4,655 993,270	651,554 50,856 - - - - - - - - - 702,410 23,620 - - - - - - 726,030	122,358 - 46,273 - - - - - - - - 168,631 - - (106,260) - - - - 62,371	2,554,928 (50,856) (46,273) (201,594) 225,319 10,880 236,199 - - - - 2,492,404 (23,620) (73,930) 106,260 (266,543) 1,911 (264,632) - 2,236,482	(196,187) - - - - 103,851 103,851 - - - - (92,336) - - - - (48,454) (48,454) - (140,790)	33,219 - - - - - - - - - - 33,219 - - - - - - - 33,219	5,512,210 - - (201,594) 225,319 114,731 340,050 (131) (14,827) 277 1,135 5,637,120 - (73,930) - (266,543) (46,543) (313,086) 4,655 5,254,759

See accompanying notes to parent company only financial statements.

ACES ELECTRONICS CO., LTD. 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 reversal gain Loss (gain) on financial assets at fair value through profit or loss Interest expense Interest income Share of profit of equity-account investees Gain (loss) on disposals of property, plant and equipment Loss on disposals of equity-account investees Unrealized (realized) gain (loss) between affiliated companies Loss (gain) on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities`：` Net changes in operating assets`：` Notes receivable Accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parties Inventories Other current assets Total net changes in operating assets Net changes in operating liabilities`：` Notes payable Accounts payable Accounts payable to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liabilities Total net changes in operating liabilities Total net changes in operating assets and 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 subsidiaries (deducting cash obtained) Refund of paid-up capital from liquidated subsidiaries Acquisitions of property, plant, and equipment Disposals of property, plant, and equipment Acquisitions of intangible 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 (decrease) 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 investments accounted for using equity method (capital increase of subsidiaries) Net cash (used in) provided by financing activities Decrease in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at December 31		2023 $ (286,991) 206,523 25,904 (745) (14,034) 69,189 (3,859) 167,794 907 26,725 (411) (48)	2022 239,139 201,118 25,092 (231) 37,358 49,829 (3,291) (210,597) 75 - (4,015) - 95,338

		477,945
		(80) 43,184 27,960 (190,786) 536 (9,764) (1,152)	436 63,511 20,969 (4,411) (339) 50,024 (9,741)
		(130,102)	120,449
		1,350 12,713 65,526 (1,977) (72,661) (152) (500)	(77) (82,123) (60,623) (1,447) (40,064) 2,699 (634)
		4,299	(182,269)
		(125,803)	(61,820)
		352,142	33,518
		65,151 3,859 (46,893) (1,626)	272,657 3,291 (28,371) (29,810)
		20,491	217,767
		- 13,300 (1,857) 14,860 (584,846) 422 (28,912) (183,640) (16,126) 125,000	(8,260) 77,911 - - (629,459) 1,465 (28,801) (30,010) (46,729) -
		(661,799)	(663,883)
		470,000 3,670,368 (3,526,368) (12,537) (131) (73,930) (280,257)	390,000 3,851,000 (3,806,000) (15,130) (68,895) (201,594) (129,998)
		247,145	19,383
		(394,163) 866,194	(426,733) 1,292,927
		$ 472,031	866,194

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ACES Electronics Co., Ltd.

Notes to the Parent Company Only 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 Company is mainly engaging in processing, manufacturing and selling of connectors. Shares of the Company are traded in TWSE since March 26, 2009.

2. The Authorization of Financial Statements

These parent company only 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 Company 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 Company 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 Company 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 Company assesses that the adoption of the following new or amended standards, not yet endorsed by the FSC, would not have a significant impact on its financial statements.
‧ Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
‧ IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “Insurance Contracts”
‧ Amendments to IAS 21 “Lack of Exchangeability”

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

4. Summary of Significant Accounting Policies

The significant accounting policies applied in the preparation of these parent company only financial statements are set out as below. Unless otherwise stated, the significant accounting policies have been applied consistently to all periods presented in these parent company only financial statements.

(1) Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”).

(2) Basis of preparation
a. Basis of measurement

The parent company only 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) 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 the Company is determined based on the primary economic environment in which the entity operates. The parent company only 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) 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 reporting period (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 generally 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, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When Company disposes only part of it’s investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from, or payable to, a foreign operation is

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.

(4) 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.
A liability is classified as current when:
a. The liability is expected to be settled within the 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.
(5) Cash and cash equivalents

Cash and cash equivalents 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.

(6) Financial instruments

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

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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 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 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 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. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at fair value through other comprehensive income, as at fair value through profit and loss if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
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 Company 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;

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

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

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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

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

The 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 Company in accordance with the contract and the cash flows that the Company expects to receive). ECL is according to financial assets’ effective discount rate.

At each reporting date, the 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.

(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

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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 common stocks 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 cost or FVTPL. 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

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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 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 are initially measured at fair value and the transaction cost was recognized in profit or loss. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss, and recorded under non-operating revenue or expenses in comprehensive income statements.
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.
(7) Inventories

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(8) Investments in subsidiaries

When preparing the parent company only financial statements, investment in subsidiaries which are controlled by the Company is accounted for using the equity method. Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries. In subsidiaries which are controlled by the Company is accounted for preparing the consolidated statement by each period. Changes in a parent’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within equity.

(9) 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

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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 plant: 3 35 years

(ii) Machinery and equipment: 5 years

(iii) Mold equipment: 2 years

～ (iv) Other equipment: 3 5 years Depreciation methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(10) 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. a. As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. 。 In addition, the right-of-use asset is periodically reduced by impairment losses, if 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.

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.

b. As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all 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 lease is for the major part of the economic life of the asset.

(11) Intangible assets
a. Recognition and measurement

The goodwill acquired by the Company are measured at cost less accumulated impairment losses. For computer software and 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.

c. Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. ～ (i) Software: 1 2 years

～
(ii) Other intangible assets 1 3 years

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

(12) 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 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.

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.

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.

(13) 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 Company recognizes revenue when control of the products has transferred, 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.

(14) 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.

(15) Employee benefits
a. Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss 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.

See accompanying notes to parent company only financial statements.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

c. Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(16) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received 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 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

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.

Deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

(17) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of common stocks outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of common stocks outstanding after adjustment for the effects of all potentially dilutive common stocks, such as convertible bonds and estimated employee compensation.

(18) Operating segments

Company has provided the operating segments disclosure in the consolidated financial statements. Thus, disclosure of the segment information in the parent company only financial statements is waived.

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

The preparation of the parent company only financial statements in conformity with the Regulations requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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

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) 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

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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. 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 Note 6(2) financial instrument.

6. Description of Significant Accounts

(1) Cash and Cash Equivalents

Cash on hand Cash in banks	December 31, 2023		December 31, 2022
	$ 279 471,752 $ 472,031		283 865,911 866,194

Please refer to note 6(22) for exchange 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 Company 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 Company 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.

See accompanying notes to parent company only financial statements.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

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

Financial assets mandatorily measured at FVTPL: Funds Convertible bonds of embedded derivatives Total	December 31, 2023		December 31, 2022
	$ 71,866 - $ 71,866		71,070 62 71,132

Please refer to Note 6(20) for amounts remeasured at fair value through profit and loss, and Note 6(21) for fair value information.

As at December 31, 2023 and 2022 none of the Company’s financial assets measured at fair value through profit and loss was pledged as collateral.

(3) Notes, trade and other receivables
a. Details as follows:

Notes receivable Accounts receivable Accounts receivable – related parties Other receivables Other receivables – related parties Less: Loss allowance	December 31, 2023		December 31, 2022
	$ 122 763,817 120,929 246,248 4,739 (1,668) $ 1,134,187		42 807,001 148,889 55,462 5,275 (2,413) 1,014,256

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:

Not past due Past due less than 60 days Past due 61~120 days Past due 121~180 days Past due over 181 days	December 31, 2023 Carrying amount of notes, accounts and other receivables Weighted-average loss rate Loss allowance for lifetime expected credit losses $ 1,112,650 0% - 20,140 0% - 2,783 50% 1,391 16 70% 11 266 100% 266 $ 1,135,855 1,668	December 31, 2023 Carrying amount of notes, accounts and other receivables Weighted-average loss rate Loss allowance for lifetime expected credit losses $ 1,112,650 0% - 20,140 0% - 2,783 50% 1,391 16 70% 11 266 100% 266 $ 1,135,855 1,668	December 31, 2023 Carrying amount of notes, accounts and other receivables Weighted-average loss rate Loss allowance for lifetime expected credit losses $ 1,112,650 0% - 20,140 0% - 2,783 50% 1,391 16 70% 11 266 100% 266 $ 1,135,855 1,668
	Carrying amount of notes, accounts and other receivables $ 1,112,650 20,140 2,783 16 266	Weighted-average loss rate 0% 0% 50% 70% 100%
	$ 1,135,855

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-average loss rate Loss allowance for lifetime expected credit losses $ 991,415 0% - 21,309 0% - 2,442 50% 1,221 1,038 70% 727 465 100% 465 $ 1,016,669 2,413	December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-average loss rate Loss allowance for lifetime expected credit losses $ 991,415 0% - 21,309 0% - 2,442 50% 1,221 1,038 70% 727 465 100% 465 $ 1,016,669 2,413	December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-average loss rate Loss allowance for lifetime expected credit losses $ 991,415 0% - 21,309 0% - 2,442 50% 1,221 1,038 70% 727 465 100% 465 $ 1,016,669 2,413
Carrying amount of notes, accounts and other receivables $ 991,415 21,309 2,442 1,038 465	Weighted-average loss rate
	0% 0% 50% 70% 100%
$ 1,016,669		2,413

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 gains) Balance at end of the year	For the years ended December 31, 2023 $ 2,413 (745)	For the years ended December 31, 2022 2,644 (231) 2,413
	$ 1,668

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	December 31, 2023
	Factoring amount $ 189,616	Acceptable advances	Amount collected inadvance		Interest rate 0%
Financial institutes Underwriting bank		663,228	-

	Factoring amount $ 207,627	Acceptable advances	Amount collected inadvance	Transfer to other receivable amount 20,762	Interest rate 0.6812%~ 6.1311%
Financial institutes		476,471	186,865

d. None of notes and accounts receivables held by the Company were pledged as of December 31, 2023 and 2022.

See accompanying notes to parent company only financial statements.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

(4) Inventories

a. Details as follows:

ies ils as follows:
Raw materials Semi-finished goods Work-in-progress Finished goods Merchandise	December 31, 2023	December 31, 2022
	$ 97,207 40,293 1,737 144,922 30,210 $ 314,369	39,777 66,487 5,415 169,553 23,373 304,605

b. Details of the Company’s cost of inventories recorded as cost and expenses of goods sold for the years ended December 31 2023 and 2022 are as follows:

Cost of goods sold Loss on obsolescence write-off Loss on inventory write-down Unamortized manufacturing expenses Others	For the years ended December 31, 2023 $ 2,327,129 9,783 4,690 52,195 5,286	For the years ended December 31, 2022 2,599,484 13,448 8,119 60,865 2,217 2,684,133
	$ 2,399,083

c. As at December 31, 2023 and 2022, none of the Company’s inventories was pledged as collateral.
(5) Investments accounted for using equity method

For changes in investments accounted for using equity method other than the ones mentioned below, please refer to consolidated financial statements for the year ended December 31, 2023.

a. The dissolution and liquidation procedures of the subsidiary of the Company, ACES(HONG KONG)ELECTRONIC CO.,LTD., have been completed in 2023. Please refer to Note 6(20) for losses on disposals of investments.
b. Change in ownership of subsidiaries

(i) MEC IMEX INC.

The Company 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 Company subscribed 2,007 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 Company 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

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

resulting changes in equity increase the capital surplus by $190 thousand. The Company 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.

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.

(iv) ACECONN ELECTRONIC CO., LTD.

The cash capital increase of $150,350 thousand (USD5,000 thousand) of ACECONN ELECTRONIC CO., LTD. has been resolved by the board of directors of the Company, and the capital injection has been completed in February 2023.

(6) Business combination
a. Genesis Group

The board of directors have resolved the 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 Company 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. JASON TECHNOLOGY LIMITED.

In order to expand sales developments in automobile industry, the Company acquired 100% of common stocks 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 thousand (about US$66 thousand), and the residual contingent considerations are recognized under “other non-current liabilities.”

See accompanying notes to parent company only financial statements.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

(7) Property, plant and equipment

The movement in cost, accumulated depreciation, and impairment loss of the property, plant and equipment for the years ended December 31, 2023 and 2022 was as follows:

Land $ 203,393 - - -	Buildings and structures 458,251 5,559 544 (295)	Machinery equipment 787,922 42,094 13,287 (3,435)	Mold equipment 574,729 83,200 2,446 (35,332)	Other equipment 179,520 21,064 2,881 (2,534)	Constructi ons in process 404,361 432,929 - -	Total 2,608,176 584,846 19,158 (41,596)
$ 203,393	464,059	839,868	625,043	200,931	837,290	3,170,584
$ 203,393 - - -	384,690 69,434 4,127 -	730,395 50,482 7,678 (633)	492,788 80,216 2,315 (590)	150,724 31,021 4,088 (6,313)	7,335 398,306 (1,280) -	1,969,325 629,459 16,928 (7,536)
$ 203,393	458,251	787,922	574,729	179,520	404,361	2,608,176
$ - - -	133,050 18,698 (226)	513,701 80,304 (2,530)	500,371 73,176 (34,978)	109,646 21,983 (2,533)	- - -	1,256,768 194,161 (40,267)
$ -	151,522	591,475	538,569	129,096	-	1,410,662
$ - - -	118,410 14,640 -	433,563 80,771 (633)	427,380 73,187 (196)	97,331 17,482 (5,167)	- - -	1,076,684 186,080 (5,996)
$ -	133,050	513,701	500,371	109,646	-	1,256,768
$ 203,393	312,537	248,393	86,474	71,835	837,290	1,759,922
$ 203,393	266,280	296,832	65,408	53,393	7,335	892,641
$ 203,393	325,201	274,221	74,358	69,874	404,361	1,351,408

a. Guarantee

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.

b. Prepayment for land

The Company 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 amounted to $156,819 thousand (recognized under “other non-current assets – others”). Please refer to Note 7(8) Right-of-use asset

The movement in cost, accumulated depreciation, and impairment loss of the leased land, property, plant and equipment for the years ended December 31, 2023 and 2022 were as follows:

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Cost: Balance at January 1, 2023 Additions Reductions Balance at December 31, 2023 Balance at January 1, 2022 Additions Reductions Balance at December 31, 2022 Accumulated depreciation: Balance at January 1, 2023 Provision for depreciation Reductions Balance at December 31, 2023 Balance at January 1, 2022 Provision for depreciation Reductions Balance at December 31, 2022 Carrying value: December 31, 2023 January 1, 2022 December 31, 2022	Land	Transport equipment 6,157 1,050 (1,074)	Total 40,720 23,293 (46,418) 17,595 46,825 484 (6,589) 40,720 30,969 12,362 (35,637) 7,694 22,520 15,038 (6,589) 30,969 9,901 24,305 9,751
	$ 34,563 22,243 (45,344) $ 11,462 $ 37,596 - (3,033) $ 34,563 $ 28,010 10,310 (34,563) $ 3,757 $ 18,716 12,327 (3,033) $ 28,010 $ 7,705 $ 18,880 $ 6,553
		6,133
		9,229 484 (3,556)
		6,157
		2,959 2,052 (1,074)
		3,937
		3,804 2,711 (3,556)
		2,959
		2,196
		5,425
		3,198

(9) Intangible assets

The movement in cost and accumulated amortization of intangible assets for the years ended December 31, 2023 and 2022 were as follows:

Cost: Balance at January 1, 2023 Separately acquired Balance at December 31, 2023 Balance at January 1, 2022 Separately acquired Balance at December 31, 2022 Accumulated amortization and impairment: Balance at January 1, 2023 Current amortization Balance at December 31, 2023 Balance at January 1, 2022 Current amortization Balance at December 31, 2022 Carrying value: December 31, 2023 January 1, 2022 December 31, 2022	Computer software		Others 47,783 18,457	Total 82,379 28,912 111,291 53,578 28,801 82,379 47,294 25,904 73,198 22,202 25,092 47,294 38,093 31,376 35,085
	$ 34,596 10,455
	$ 45,051		66,240
	$ 29,100 5,496		24,478 23,305
	$ 34,596		47,783
	$ 25,902 9,938		21,392 15,966
	$ 35,840		37,358
	$ 12,692 13,210		9,510 11,882
	$ 25,902		21,392
	$ 9,211		28,882
	$ 16,408		14,968
	$ 8,694		26,391

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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

(10) Short-term borrowings

The Company’s short-term borrowing details as follows:

Unsecured bank loans Unused credit lines Interest rate	December 31, 2023		December 31, 2022
	$ 1,120,000 $ 1,040,482 1.4%~2.221%		650,000 1,323,550 0.75%~2.21%

(11) Long-term borrowings

The Company’s long-term borrowing details, conditions and terms as follows:

Unsecured bank loans Secured bank loans Less: current maturity Total Unused credit facility Unsecured bank loans Less: current maturity Total Unused credit lines	December 31, 2023	Amount $ 521,474 1,350,000 (187,500)
	Currency Interest rate Maturity year
	NTD 1.2250%~1.6500% 2025-2026 NTD 1.9229%~2.2119% 2028 December 31, 2022
		$ 1,683,974
		$ 2,606,000
		Amount $ 1,724,500 (1,106,000)
	Currency Interest rate Maturity year
	NTD 0.9600%~1.8600% 2023-2026
		$ 618,500
		$ 456,000

a. 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. Up to the date of December 31, 2023, there is no incident of the Company violating such financial ratios.
b. 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%, 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 income were $3,526 thousand and $6,500 thousand respectively. These amounts were recorded under “other non-current liabilities.”

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

(12) Bonds payable

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

yable e details of unsecured convertible bonds were as follows:	follows:
December 31, 2023 Total convertible corporate bonds issued $ 600,000 Unamortized discounted corporate bonds payable (20,698) Cumulative converted amount (1,100) Corporate bonds issued balance at year-end (recognized in current portion of corporate bonds and bonds payables) $ 578,202 Embedded derivative – redeem options (recognized in financial assets at fair value through profit or loss) $ - Equity component – conversion options (recognized in capital surplus) $ 71,065	December 31, 2023	December 31, 2022
		600,000 (42,994) (1,100) 555,906 62 71,065

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Embedded derivative – gains or losses from remeasurement of fair value of redeem options (recognized in other gains and losses) Interest expenses	For the years ended December 31, 2023 $ (62) $ 22,296	For the years ended December 31, 2022 (1,184) 21,458

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.

b. Major terms and conditions of the second issuance of convertible company bonds: (i) Issued period: Three years, from November 22, 2021 to November 22, 2022. (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 common stocks on the Taiwan Stock Exchange for a period of 30 consecutive trading days, is at least 130% 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 90% 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 23, 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 common stocks, the conversion price per share is from $50.4 New Taiwan dollars to $48.5 New Taiwan dollars as of August 22, 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).

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

(13) Lease liabilities

ase liabilities
	December 31, 2023	December 31, 2022
Current	$ 4,176	8,716
Non-current	$ 5,811	1,344
For the maturity analysis, please refer to note 6(21) Financial Instruments.
	For the years ended	For the years ended
	December 31, 2023	December 31, 2022
Interests on lease liabilities	$ 330	298

Expenses relating to short-term	$ 4,587	5,654
leases
The amounts recognized in the statement of cash flows for		the Company were as
follows:
	For the years ended	For the years ended
	December 31, 2023	December 31, 2022
Total cash outflow for leases	$ 17,454	21,082
a. Lease of land, property and plant
The Company leases land, property and plant for its factory with		lease terms of usually 4
years.

b. Other lease The Company leases transport equipment with lease terms of usually 3 years. (14) 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:

December 31, 2023 Present value of defined obligation $ 32,283 Fair value of plan assets (23,835) Net defined benefit liabilities $ 8,448 The Company’s employee benefit liability details as follows: December 31, 2023 Net defined benefit obligation liabilities (under ‘other non-current liabilities’) $ 8,448 Compensated absences liabilities (under ‘other payables’) 12,877 Total employee benefit liabilities $ 21,325	December 31, 2023		December 31, 2022 39,819 (22,560) 17,259 December 31, 2022 17,259 12,877 30,136


	$ 8,448 12,877 $ 21,325

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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. (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 $23,835 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 (assets) Defined benefit obligation on December 31	For the years ended December 31, 2023	For the years ended December 31, 2022 44,442 278 (4,901) 39,819
	$ 39,819 696 (8,232) $ 32,283

(iii) Movements 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 Remeasurements of net defined benefit liabilities (assets) Amount appropriated to plan Fair value of plan assets on December 31	For the years ended December 31, 2022	For the years ended December 31, 2021 20,100 128 1,549 783 22,560
	$ 22,560 401 79 795 $ 23,835

See accompanying notes to parent company only financial statements.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

(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:

Net interest of net defined benefit liabilities (assets) Operating costs and expenses	For the years ended December 31, 2023		For the years ended December 31, 2022
	$ 295 $ 295		150 150

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

As of at December 31, 2023 and 2022, details of the Company's remeasurements of net defined benefit liabilities under other comprehensive profit and loss was as follows:

For the years ended December 31, 2023 Accumulated balance on January 1 $ (16,859) Current recognition The Company 8,311 Subsidiaries (6,400) Accumulated balance on December 31 $ (14,948)	For the years ended December 31, 2023 Accumulated balance on January 1 $ (16,859) Current recognition The Company 8,311 Subsidiaries (6,400) Accumulated balance on December 31 $ (14,948)	For the years ended December 31, 2022 (27,739) 6,450 4,430 (16,859)	For the years ended December 31, 2022 (27,739) 6,450 4,430 (16,859)

	$ (14,948)		(16,859)

(6) Actuarial assumptions

Details of actuarial assumptions used to decide defined benefit obligation at the end of reporting date as follows:

Discount rate Increase on future payroll	December 31, 2023 1.625% 3.000%	December 31, 2022
		1.750% 5.500%

The Company has planned to appropriate in the amount of $790 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 12.40 years.

(vii) Sensitivity analysis

Details of the impact to current value of defined benefit obligation by using main actuarial assumption change of 0.25% for the years ended December 31, 2023 and 2022 was as follows:

December 31, 2023 Discount rate Increase on future payroll December 31, 2022 Discount rate Increase on future payroll	Impact to defined	benefit obligation Decrease by 0.25% 797 (747) 1,128 (889)
	Increase by 0.25% $ (771) 768 (1,088) 911

See accompanying notes to parent company only financial statements.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

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 allocates 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. Under this defined contribution plan, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligations. The Company’s pension costs under the defined contribution method were $24,587 thousand and $23,969 thousand for the years ended December 31, 2023 and 2022, respectively. Payment was made to the Bureau of Labor Insurance.

(15) Income taxes

a. Income tax expenses

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

follows:
For the years ended December 31, 2023 For the years ended December 31, 2022 Current tax expense Current period $ - 31,562 Prior period over-estimation (13,415) - Deferred income tax expenses (benefits) (7,033) (17,742) Income tax expenses $ (20,448) 13,820 (ii) Details of the amount of income tax expenses (benefits) recognized in other comprehensive income for the years ended December 31, 2023 and 2022 was as follows: For the years ended December 31, 2022 For the years ended December 31, 2021 Components of other comprehensive income that will be reclassified to profit or loss: Exchange differences on translation of foreign financial statements $ 11,365 (25,963)	For the years ended December 31, 2023	For the years ended December 31, 2022

	$ 11,365	(25,963)

See accompanying notes to parent company only financial statements.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

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

For the years ended December 31, 2023 Profit before income tax $ (286,991) Income tax using the Company’s domestic tax rate $ (57,398) Domestic investment benefit recognized under equity method 25,949 Permanent difference (20,445) Unrecognized temporary difference 39,011 Unrecognized tax loss 5,862 Prior period over-estimation (13,415) Others (12) $ (20,448)	For the years ended December 31, 2023	For the years ended December 31, 2022 239,139 47,827 17,868 - (51,748) - - (127) 13,820

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:

December 31, 2023 December 31, 2022 Aggregate amount of temporary differences related to investments in subsidiaries $ 1,643,813 1,448,762 Unrecognized amount of deferred tax liabilities$ 328,763 289,752 (ii) Unrecognized deferred tax assets As of December 31, 2023, the items not recognized as deferred tax assets are as follows: December 31, 2023 December 31, 2022 Tax loss $ 29,312 - The amount not recognized as deferred tax assets $ 5,862 -	December 31, 2023 $ 1,643,813	December 31, 2022
	$ 328,763

(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:

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Inventory valuation loss	Unrealized profit and loss between affiliated companies	Others	Total 12,971 8,520
	459 (82)	4,737 7,664
$ 8,713	377	12,401	21,491
	1,262 (803)	445 4,292	7,858 5,113
$ 7,775	459	4,737	12,971
Share of profit or loss of subsidiaries accounted for using equity method	Exchange differences on translation of foreign financial statements	Others	Total
	(23,084) - (11,365)	18,682 1,487 -	276,386 1,487 (11,365)
$ 280,788	(34,449)	20,169	266,508
	(49,047) - 25,963	31,311 (12,629) -	263,052 (12,629) 25,963
$ 280,788	(23,084)	18,682	276,386

b. Assessment of tax

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

(16) 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 common stocks were both 134,418 thousand shares.

(a) Common stock

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.

(b) Capital surplus

The balances of capital surplus were as follows:

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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		December 31, 2022
	$ 756,155 3,831 105,197 13,978 30,378 71,065 12,666 $ 993,270		756,155 3,831 100,542 13,978 30,378 71,065 12,666 988,615

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 Note 6(5) and 6(12) for other changes in capital surplus.

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.

The Company’s dividend appropriation plan is based on current earning, with the principle of stabilizing share interest, and for adaptation with this matured industry and company capital structure. As for the distribution plan, cash dividends shall not be lower be 20% of combined share dividend and cash dividend. However, the shareholders’ meeting will review actual earning situation of the current year and future capital planning for any adjustment.

(i) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.

See accompanying notes to parent company only financial statements.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

(iii) 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 TWD/per share Amount $ 0.55 73,930	For the year ended December 31, 2021 TWD/per share Amount 1.50 201,594
		TWD/per share 1.50

c. Other equity

Balance at January 1, 2023 Exchange differences on foreign operations Gains or losses on disposals of foreign operations reclassified 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) (70,183) 21,729	Subsidiary property revaluation increments
	$ (140,790)
	$ (196,187) 103,851
	$ (92,336)

(17) Earning 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 common stocks 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 shares of interest expenses of convertible bonds Profit (loss) attributable to ordinary shareholders of the	For the year ended December 31, 2023 $ (266,543)	For the year ended December 31, 2022 225,319
	134,418	134,406
	$ (1.98)	1.68
	$ (266,543) -	225,319 17,167
	$ (266,543)	242,486

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Company (diluted) Weighted average number of common stocks outstanding (basic) Effect of dilutive potential common stocks Effect of remuneration to employees in stock Effect of conversion of convertible Company bonds Weighted average number of common stocks outstanding (diluted)(shares in thousands) Diluted earnings per share(dollar) (Note)	For the year ended December 31, 2023 134,418 - -	For the year ended December 31, 2022 134,406 1,147 12,360 147,913 1.64
	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.

(18) Revenue from contracts with customers

a. Disaggregation of revenue

Primary geographical markets: Taiwan China Other countries Total Major products/services lines: Connectors Connector accessories Others ntract balances Notes receivable Account receivable (including related parties) Less: Loss allowance Total	For the year ended December 31, 2023 For the year ended December 31, 2022 $ 617,794 782,215 2,030,704 2,255,705 441,820 408,972 $ 3,090,318 3,446,892 $ 2,531,562 2,823,024 62,232 82,978 496,524 540,890 $ 3,090,318 3,446,892 December 31, 2023 December 31, 2022 $ 122 42 884,746 955,890 (1,668) (2,413) $ 883,200 953,519	For the year ended December 31, 2023 For the year ended December 31, 2022 $ 617,794 782,215 2,030,704 2,255,705 441,820 408,972 $ 3,090,318 3,446,892 $ 2,531,562 2,823,024 62,232 82,978 496,524 540,890 $ 3,090,318 3,446,892 December 31, 2023 December 31, 2022 $ 122 42 884,746 955,890 (1,668) (2,413) $ 883,200 953,519

	$ 122 884,746 (1,668) $ 883,200

b. Contract balances

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

(19) 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

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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 Company incurred loss in the year ended December 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 parent company only 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”.

(20) Non-operating income and expenses

a. Other gains and losses

Details of other gains and losses of the Company for the years ended December 31, 2023 and 2022 were as follows:

Foreign exchange gains Gains (losses) on disposals of property, plant and equipment Gains on lease modification Losses on disposals of investments Gains (losses) on financial assets at fair value through profit or loss Other losses	For the year ended December 31, 2023 $ 11,283 (907) 48 (26,725) 14,034 (4,151)	For the year ended December 31, 2022 63,196 (75) - - (37,358) (2,045) 23,718
	$ (6,418)

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(2) and 6(21) for details.

The dissolution and liquidation of the subsidiaries of the Company, ACES (HONG KONG) ELECTRONIC CO., LTD, have been resolved by the board of directors on October 2, 2023, and the relevant procedures have been completed on November 10, 2023. As of December 31, 2023, the Group has recovered distribution of liquidated remaining properties of $14,860 thousand, and recognized losses on disposals of investments of $26,725 thousand, which were presented in “other gains and losses.”

b. Finance costs

Details of finance costs of the Company for the years ended December 31, 2023 and 2022 were as follows:

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Bank loan interest Lease liabilities interest Convertible company bond interest		For the year ended December 31, 2023 $ 46,563 330 22,296 $ 69,189	For the year ended December 31, 2022
			28,073 298 21,458 49,829

(21) Financial instruments

a. Credit risk

(i) Credit risk exposure

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

(ii) Concentration to credit risk

The customers of the Company has a significant concentration on hi-tech industry. As of December 31, 2023 and 2022, the balance of accounts receivable had 55% and 61% from 7 and 7 customers respectively. This has presented high concentration of credit risk for the Company. In order to reduce accounts receivable credit risk, the Company continues to assess financial status of its customers.

b. 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 year	2-5 years	Over 5 years
	1,144,752 1,868 1,008,631 578,202 382,918 10,223 1,925,467	1,144,752 1,868 1,008,631 578,202 382,918 4,314 224,867	- - - - - 5,909 1,700,600	- - - - - - -
$ 4,973,080	5,052,061	3,345,552	4,394,065	-
	664,365 518 930,392 600,000 423,707 10,157 1,764,926	664,365 518 930,392 - 423,707 8,804 1,132,344	- - - 600,000 - 1,353 632,582	- - - - - - -
$ 4,295,083	4,394,065	3,160,130	4,064,321	-

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) Exposure to foreign currency risk

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

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Currency: expressed in thousands of dollars December 31, 2023 December 31, 2022 Foreign currency Exchange rate (dollar) NTD Foreign currency Exchange rate (dollar) NTD $ 45,903 30.705 1,409,451 41,161 30.710 1,264,054 34,395 30.705 1,056,098 29,657 30.710 910,766	Currency: expressed in thousands of dollars December 31, 2023 December 31, 2022 Foreign currency Exchange rate (dollar) NTD Foreign currency Exchange rate (dollar) NTD $ 45,903 30.705 1,409,451 41,161 30.710 1,264,054 34,395 30.705 1,056,098 29,657 30.710 910,766	Currency: expressed in thousands of dollars December 31, 2023 December 31, 2022 Foreign currency Exchange rate (dollar) NTD Foreign currency Exchange rate (dollar) NTD $ 45,903 30.705 1,409,451 41,161 30.710 1,264,054 34,395 30.705 1,056,098 29,657 30.710 910,766	Currency: expressed in thousands of dollars December 31, 2023 December 31, 2022 Foreign currency Exchange rate (dollar) NTD Foreign currency Exchange rate (dollar) NTD $ 45,903 30.705 1,409,451 41,161 30.710 1,264,054 34,395 30.705 1,056,098 29,657 30.710 910,766	Currency: expressed in thousands of dollars December 31, 2023 December 31, 2022 Foreign currency Exchange rate (dollar) NTD Foreign currency Exchange rate (dollar) NTD $ 45,903 30.705 1,409,451 41,161 30.710 1,264,054 34,395 30.705 1,056,098 29,657 30.710 910,766
Foreign currency	Exchange rate (dollar)	NTD	Foreign currency	Exchange rate (dollar)
$ 45,903 34,395	30.705 30.705	1,409,451 1,056,098	41,161 29,657	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. As of December 31, 2023 and 2022, 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 $17,668 thousand and $17,665 thousand for the years ended December 31, 2023 and 2022, respectively. The method of analysis remains the same for both periods.

(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 $11,283 thousands and $63,196 thousands, respectively.

iv. 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 $29,915 thousand and $23,745thousand 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:

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

	December 31, 2023	December 31, 2023	December 31, 2023
Carrying amount $ 71,866		Fair value		Total 71,866
	Level 1 -	Level 2 -	Level 3 71,866
71,866	-	-	71,866	71,866
$ 472,031 122 883,078 250,987	- - - -	- - - -	- - - -	- - - -
1,606,218	-	-	-	-
$ 1,678,084	-	-	71,866	71,866
$ 1,120,000 1,868 1,008,631 578,202 382,918 9,987 1,871,474	- - - - - - -	- - - - - - -	- - - - - - -	- - - - - - -
4,973,080	-	-	-	-
$ 4,973,080	-	-	-	-
	December 31, 2022
Carrying amount $ 71,070 62		Fair value		Total 71,070 62
	Level 1 - -	Level 2 - 62	Level 3 71,070 -
71,132	-	62	71,070	71,132
866,194 42 953,477 60,737	- - - -	- - - -	- - - -	- - - -
1,880,450	-	-	-	-
$ 1,951,582	-	62	71,070	71,132
$ 650,000 518 930,392 555,906 423,707 10,060 1,724,500	- - - - - - -	- - - - - - -	- - - - - - -	- - - - - - -
4,295,083	-	-	-	-
$ 4,295,083	-	-	-	-

ACES Electronics Co., Ltd.

Notes to the Parent Company Only 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.

Notes to the Parent Company Only 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 management

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.

Notes to the Parent Company Only 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 line were amounted to $3,646,482 and $1,779,550, 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.

(i) 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 currencies used in these transactions are the US dollar (USD).

(ii) 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.

(iii) 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.

(23) 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 common stocks’ dividend value.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

Name of related parties

Relationship with the Company

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:

Total liabilities Less: cash and cash equivalents Net liabilities Total equity Debt-to-equity ratio	December 31, 2023	December 31, 2022 4,651,294 (866,194) 3,825,224 5,637,120 67.86%
	$ 5,290,727 (472,031) $ 4,818,696 $ 5,254,759 91.70%

(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 common stocks, please refer to Note 6(16) for details.

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

Long-term borrowings (including current portion) Short-term borrowings Lease liabilities Bonds payable (including current portion) Total liabilities from financing activities Long-term borrowings (including current portion) Short-term borrowings Lease liabilities Bonds payable (including current portion) Total liabilities from financing activities	January 1, 2023 Cash flow Non-Cash changes December 31, 2023 $ 1,724,500 144,000 2,974 1,871,474 650,000 470,000 - 1,120,000 10,060 (12,537) 12,464 9,987 555,906 - 22,296 578,202
	$ 2,940,466 601,463 37,734 3,579,663
	January 1, 2022 Cash flow Non-Cash changes December 31, 2022 $ 1,679,507 45,000 (7) 1,724,500 260,000 390,000 - 650,000 24,706 (15,130) 484 10,060 535,452 - 20,454 555,906
	$ 2,499,665 419,870 20,931 2,940,466

7. Related-party transactions

(1) Names and relationship with related parties

Name of related parties Relationship with the Company ACECONN ELECTRONIC CO., LTD. Subsidiary ACES PRECISION INDUSTRY PTE LTD. Subsidiary ACESCONN HOLDINGS CO., LTD. Subsidiary WEI HONG INTERNATIONAL INVESTMENT CO., Subsidiary LTD.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Name of related parties	Relationship with the Company
ACES (HONG KONG) ELECTRONIC CO., LTD. (Note 1) Subsidiary MEC IMEX INC. Subsidiary ACES JAPAN CO., LTD. Subsidiary ACES INTERCONNECT (USA), INC. Subsidiary COMPUPACK TECHNOLOGY CO., LTD. Subsidiary ACES Precision Machinery Co., Ltd. Subsidiary KUNSHAN ACES TRADING CO., LTD. Subsidiary DONGGUAN ACES ELECTRONIC CO., LTD. Subsidiary KUNSHAN ACES ELECTRONIC CO., LTD.. Subsidiary CHONGQING HONG GAO ELECTRONIC CO., LTD. Subsidiary KUANG YING COMPUTER EQUIPMENT CO., LTD. Subsidiary KUNSHAN CHENGGANG ELECTRONIC TECHNOLOGY CO., LTD. Subsidiary ASIA CENTURY INVESTMENT LTD. Subsidiary GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU Subsidiary ACES ZHUHAI TECHNOLOGY LTD Subsidiary ACES Surface Treatment Co., Ltd. Subsidiary MEC INTERNATIONAL COMPANY LTD. Subsidiary MEC ELECTRIC SOLUTIONS GMBH Subsidiary MEC ULTRAMAX (H.K.) COMPANY LIMITED Subsidiary MEC BEST KNOWN COMPANY LIMITED Subsidiary MEC ELECTRONICS (HK) COMPANY LIMITED Subsidiary MEC ELECTRONICS PHILIPPINES CORPORATION Subsidiary MEC ELECTRONICS (SUZHOU) CO., LTD. Subsidiary SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. Subsidiary HOMEPRIDE TECHNOLOGY LIMITED Subsidiary HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED. Subsidiary MEC IMEX (USA), INC. Subsidiary MEC SUZHOU ELECTRONICS CO., LTD. Subsidiary MICON PRECISE CORP. Subsidiary GLOBAL ACUMEN LIMITED (Note 1) Subsidiary DONGGUAN COMPUPACK TECHNOLOGY CO., LTD. Subsidiary Aces Precision Corporation Subsidiary INFOMIGHT INVESTMENTS LIMITED Subsidiary

Name of related parties

Relationship with the
Company

ACES (HONG KONG) ELECTRONIC CO., LTD.
(Note 1)
Subsidiary
MEC IMEX INC.
Subsidiary
ACES JAPAN CO., LTD.
Subsidiary
ACES INTERCONNECT (USA), INC.
Subsidiary
COMPUPACK TECHNOLOGY CO., LTD.
Subsidiary
ACES Precision Machinery Co., Ltd.
Subsidiary
KUNSHAN ACES TRADING CO., LTD.
Subsidiary
DONGGUAN ACES ELECTRONIC CO., LTD.
Subsidiary
KUNSHAN ACES ELECTRONIC CO., LTD..
Subsidiary
CHONGQING HONG GAO ELECTRONIC CO.,
LTD.
Subsidiary
KUANG YING COMPUTER EQUIPMENT CO.,
LTD.
Subsidiary
KUNSHAN CHENGGANG ELECTRONIC
TECHNOLOGY CO., LTD.
Subsidiary
ASIA CENTURY INVESTMENT LTD.
Subsidiary
GALIS ACCURATE SMITHCRAFT PRODUCTS
CO., LTD. OF SUZHOU
Subsidiary
ACES ZHUHAI TECHNOLOGY LTD
Subsidiary
ACES Surface Treatment Co., Ltd.
Subsidiary
MEC INTERNATIONAL COMPANY LTD.
Subsidiary
MEC ELECTRIC SOLUTIONS GMBH
Subsidiary
MEC ULTRAMAX (H.K.) COMPANY LIMITED Subsidiary
MEC BEST KNOWN COMPANY LIMITED
Subsidiary
MEC ELECTRONICS (HK) COMPANY
LIMITED
Subsidiary
MEC ELECTRONICS PHILIPPINES
CORPORATION
Subsidiary
MEC ELECTRONICS (SUZHOU) CO., LTD.
Subsidiary
SUZHOU HANTENG ELECTRONICS
TECHNOLOGY CO., LTD.
Subsidiary
HOMEPRIDE TECHNOLOGY LIMITED
Subsidiary
HOMEPRIDE ELECTRONICS (DONGGUAN)
COMPANY LIMITED.
Subsidiary
MEC IMEX (USA), INC.
Subsidiary
MEC SUZHOU ELECTRONICS CO., LTD.
Subsidiary
MICON PRECISE CORP.
Subsidiary
GLOBAL ACUMEN LIMITED (Note 1)
Subsidiary
DONGGUAN COMPUPACK TECHNOLOGY
CO., LTD.
Subsidiary
Aces Precision Corporation
Subsidiary
INFOMIGHT INVESTMENTS LIMITED
Subsidiary

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Name of related parties	Relationship with the Company
BELTA INTERNATIONAL LIMITED CERTILINK INTERNATIONAL LIMITED ACCURATE GROUP LIMITED DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD.. SUZHOU KUANG YING ELECTRIC CO., LTD. GENESIS ELECTROMECHANICAL LIMITED GENESIS INNOVATION GROUP LIMITED GENESIS HOLDING COMPANY GENESIS TECHNOLOGY USA, INC. JASON TECHNOLOGY LIMITED. GENESIS TECHNOLOGY(NINGBO) INC. SHENZHEN JINO ELECTRONIC CO., LTD. (Note 1) GENESIS INTERCONNECT CO., LTD. (Note 1) GENESIS GUIZHOU TECHNOLOGY CO., LTD. (Note 2) DONGGUAN POLIXIN ELECTRIC CO., LTD. Wei Chi Investment Co., Ltd. Hsu Chang-Fei Nantong Dadi Electric Co., Ltd. Kung Shan Ching Zhi Electric Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Legal persons as corporate director Director Affiliated company Affiliated company

Name of related parties

Relationship with the
Company

BELTA INTERNATIONAL LIMITED
CERTILINK INTERNATIONAL LIMITED
ACCURATE GROUP LIMITED
DONGGUAN KUANGYING HARDWARE
PLASTIC PRODUCT CO., LTD..
SUZHOU KUANG YING ELECTRIC CO., LTD.
GENESIS ELECTROMECHANICAL LIMITED
GENESIS INNOVATION GROUP LIMITED
GENESIS HOLDING COMPANY
GENESIS TECHNOLOGY USA, INC.
JASON TECHNOLOGY LIMITED.
GENESIS TECHNOLOGY(NINGBO) INC.
SHENZHEN JINO ELECTRONIC CO., LTD.
(Note 1)
GENESIS INTERCONNECT CO., LTD. (Note 1)
GENESIS GUIZHOU TECHNOLOGY CO., LTD.
(Note 2)
DONGGUAN POLIXIN ELECTRIC CO., LTD.
Wei Chi Investment Co., Ltd.
Hsu Chang-Fei
Nantong Dadi Electric Co., Ltd.
Kung Shan Ching Zhi Electric Co., Ltd.

Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary

Subsidiary
Subsidiary
Legal persons as corporate director
Director
Affiliated company
Affiliated company

Note 1: The company completed liquidation during the year of 2023. Note 1: The company was sold during the year of 2023.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

(2) Significant related party transactions

a. The amounts of significant sales, services provide, and balance due from the Company to related parties were as follows:

Sales and services provided	Sales and services provided	Receivables from related parties December 31, 2023 December 31, 2022 75,447 100,973 9,058 10,601 22,922 19,805 13,502 17,510 120,929 148,889
For the year ended December 31, 2023	For the year ended December 31, 2022	December 31, 2023 75,447 9,058 22,922 13,502
$ 207,962 18,117 44,027 1,622 $ 271,728	222,864 24,297 43,289 3,083 293,533
		120,929

Selling price and sales term to subsidiaries is not significantly different from general sales. . The terms for receivables from related parties were O/A 90 to 120 days while it's 90 to 150 day to ordinary customers.

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 amount and balance due from the Company to related parties as follows:

Purchase	Purchase	Payables to Related Parties	Payables to Related Parties
For the year ended December 31, 2022	For the year ended December 31, 2021	December 31, 2022	December 31, 2021
$ 953,332 530,026 102,283 $ 1,585,641	1,047,571 702,196 83,358 1,833,125	485,752 301,777 41,866 829,395	400,142 333,913 29,814 763,869

The Company did not purchase the same type of products from other supplier; therefore there is no comparison. The terms for payables to related parties were 90 to 120 days while it's 90 to 150 days to ordinary suppliers.

c. Service provided by related parties and balance due as follows:

Subsidiaries	Transaction amount	Transaction amount	Transaction amount		Other payable	-	related parties
	For the year ended December 31, 2023		For the year ended December 31, 2022		December 31, 2023		December 31, 2022
	$ 14,016		11,847		1,621		2,020

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

d. Property transactions

(i) The disposals of equipment to related parties and balance due are summarized as follows:

follows:
Subsidiaries	Transaction amount		Gain(loss)	on disposal	Other receivables – related parties December 31, 2023 December 31, 2022 414 456
	For the year ended December 31, 2023 $ 421	For the year ended December 31, 2022	For the year ended December 31, 2023 67	For the year ended December 31, 2022 71	December 31, 2023 414
		465

(ii) 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 Company 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.

e. Endorsement

The Company has endorsed its subsidiaries for taking out loans from banks for the years of 2023 and 2022, and the actual amount used as guarantee were $15,000 thousand and $127,840 thousand respectively.

f. Leases

The Company has rented buildings and land from related parties, and signed 4 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 lease payments were $12,938 thousand and $13,710 for the year of 2023 and 2022 respectively. And as of the end of December 31, 2023 and 2022, the balances of lease liabilities were $7,762 and $6,826 respectively.

g. Others

As of December 31, 2023 and 2022, other receivables from collection and payment on behalf of. another party, various expenses and other expenditures between the Company and related parties were $4,325 thousand and $4,810 thousand respectively. Other payables were $56,131 thousand and $94,609 respectively.

(3) Key management personnel transactions

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits	For the year ended December 31, 2023 $ 36,662 1,107	For the year ended December 31, 2022 43,960 1,199
	$ 37,769	45,159

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

8. Assets pledged as security:

pledged as security:
Asset name	Pledge or Mortgage underlying subject	December 31, 2023 $ 148,338 134,798	December 31, 2022 - - -
Property, plant and equipment Land Buildings and structures	Bank loan and credit limit guarantee `〃`
		$ 283,136

9. Significant Commitments and contingencies:

(1) Unrecognized commitments of the Company:

Acquisition of property, plant and equipment Acquisition of intangible assets Total	December 31, 2023		December 31, 2022
	$ 672,009 16,147 $ 688,156		675,102 27,174 702,276

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.

Promissory note issued by the Company for credit limit:

pany for credit limit:
December 31, 2023 $ 6,429,525	December 31, 2022
	4,973,550

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

December 31, 2023 $ 4,000	December 31, 2022
	4,000

10. Due to Major Disasters: None.

11. Significant Subsequent Events: 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 Remuneration of directors Other employee benefits Depreciation Amortization	167,671 19,191 7,627 - 15,983 164,277 63	339,937 32,743 17,255 8,248 20,879 42,246 25,841	507,608 51,934 24,882 8,248 36,862 206,523 25,904	163,457 18,732 7,831 - 19,376 164,125 173	350,325 31,344 16,288 14,580 19,789 36,993 24,919	513,782 50,076 24,119 14,580 39,165 201,118 25,092

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

b. The additional information of number of employees and employee benefits in the year 2023 and 2022 was as follows:

2022 was as follows:
Number of employees Number of non-employee directors Average employee benefits Average employee salary Adjustment of average employee salary Supervisor’s remuneration	For the year ended December 31, 2023 671	For the year ended December 31, 2022 683 7 928 760 (1.17)%
	7
	$ 936
	$ 764
	0.53% $ -

c. The Company’s remuneration policy including directors, supervisors, managers, and

employees is stated below:

The remuneration for the Company's directors and supervisors are mainly consisted of travel allowance and remuneration. Travel allowance is in accordance with market related amount and remuneration is in accordance with Articles of Incorporation of the Company. It shall not be higher than 3% of the current annual revenue and it has to in resolution of the board of directors and reported in the shareholders’ meeting. The remuneration is determined by the performance of directors of the Company, taken into consideration of the overall operating result, future industry operating risks and development.

Actual absence in board meetings, individual performance and contribution to the company's performance were taken into consideration for determining reasonable remuneration. The remuneration of the Company's managers includes salary, bonus, special disbursement, and employees remuneration. The Article of Incorporation stipulated that more than 1% of the year's profit shall be allocated to employees remuneration. Manager's remuneration is determined based on his or her position and contribution to the Company and with reference to the industry standard. The reasonableness of relevant remuneration has been approved by the Committee of Salary Remuneration in order to make sure balance of continuous business and risk control.

Salary policy of the employees is following the rules set forth by salary management procedures. Employees grade, promotion and salary all have procedures to follow with. Salary is mainly consist of fixed salary, various allowance and overtime payment. Bonus systems such as performance bonus, year-end bonus and remuneration distribute operating profits to employees according to individual performance. Hence the salary of employees will grow with the Company.

13. Other disclosures

(1) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the years ended December 31, 2023.

a. Lending to other parties:

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

No.	Name of lender	Name of borrower	Account name	Relat ed party	Highest balance of financin g to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 8)	Transa ction amoun t for busine ss betwee n two parties	Reasons for short-term financing	Allowa nce for bad debt amount	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing	Note
													Item	Valu e
1 1 2 3 4 4 4 5 6 6 6 7 7 8 9	KUNSHAN ACES ELECTRONIC CO., LTD.. KUNSHAN ACES ELECTRONIC CO., LTD.. ASIA CENTURY INVESTMENTLT D ACES PRECISION INDUSTRY PTELTD MEC IMEX INC. MEC IMEX INC. MEC IMEX INC. MEC BEST KNOWNCOMPAN Y 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	GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU KUNSHAN CHENGGANG ELECTRONIC TECHNOLOGY CO., LTD. MEC INTERNATION AL COMPANY LTD MEC INTERNATION AL COMPANY LTD SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED. MEC SUZHOU ELECTRONICS CO., LTD. SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED. HOMEPRIDE TECHNOLOGY LIMITED MEC INTERNATION AL COMPANY LTD SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED. SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. MEC INTERNATION AL COMPANY	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 Other receivables	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	323,700 133,350 21,076 32,425 92,250 32,270 182,700 45,395 17,780 29,183 6,485 40,005 26,670 44,450 37,289	129,810 - 19,958 30,705 - - 92,115 - 17,308 27,635 6,141 25,962 - - 35,311	64,905 - 19,958 30,705 - - 92,115 - 17,308 15,353 6,141 - - - 35,311	2.10% 0.00% 2.95% 4.96% 0.00% 0.00% 3.80% 0.00% 1.30% 1.00% 3.05% 0.00% 0.00% 0.00% 2.95%	2 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 Operation requirements	- - - - - - - - - - - - - - -	None None None None None None None None None None None None None None None	- - - - - - - - - - - - - - -	2,660,943 2,660,943 160,904 53,309 224,451 224,451 224,451 128,961 122,820 122,820 122,820 129,810 129,810 10,250 165,297	2,660,943 2,660,943 160,904 53,309 224,451 224,451 224,451 128,961 122,820 122,820 122,820 129,810 129,810 10,250 165,297	Note 3, 4 `〃` `〃` `〃` Note 4, 5 `〃` `〃` Note 6 Note 8 `〃` `〃` Note 7 `〃` Note 10 Note 11

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

No.	Name of lender	Name of borrower	Account name	Relat ed party	Highest balance of financin g to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 8)	Transa ction amoun t for busine ss betwee n two parties	Reasons for short-term financing	Allowa nce for bad debt amount	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing	Note
													Item	Valu e
10 11 11 11 11 11 12 12 12	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 GENESIS ELECTRO-MECH ANICAL LIMITED GENESIS INNOVATION GROUP LIMITED GENESIS INNOVATION GROUP LIMITED	LTD Aces Precision Industry Pte Ltd. GENESIS INNOVATION GROUP LIMITED GENESIS TECHNOLOGY USA, INC. MEC ELECTRONICS PHILIPPINES CORP. MEC INTERNATION AL COMPANY LTD MEC IMEX INC. MICON PRECISE CORP. DONGGUAN POLIXIN ELECTRIC CO., LTD. Aces Precision Industry Pte Ltd.	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	32,425 87,173 48,638 32,425 16,213 64,850 64,850 97,275 179,700	30,705 - 46,058 30,705 15,353 61,410 61,410 92,115 100,000	30,705 - 46,058 30,705 15,353 61,410 61,410 92,115 100,000	2.04% 0.00% 1.20% 1.20% 3.85% 3.85% 1.20% ~3.50% 3.85% 1.58%	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	- - - - - - - - -	None None None None None None None None None	- - - - - - - - -	56,825 656,631 656,631 656,631 656,631 131,326 686,815 686,815 137,363	56,825 656,631 656,631 656,631 656,631 131,326 686,815 686,815 137,363	Note 4, 5 Note 9 `〃` `〃` `〃` `〃` `〃` `〃` Note 9

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.. and ASIA CENTURY INVESTMENT LTD 及 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 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 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 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 5: According to ‘Procedures for Lending Funds to Others’ of subsidiaries 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 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: Methods on how to fill in nature of the loan below:
(i) Fill in “1” for business transactions.
(ii) Fill in “2” for necessary short-term working capital.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:	b. Endorsement for others:
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for an enterprise individual (Note 1, 3, 4, 6)	Highest balance for guarantees and endorseme nts during the period	Balance of guarantees and endorseme nts as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorseme nts (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net equity of the latest financial statements	Maximum amount for guarantees and endorsements (Note 2, 3, 4, 6)	Endorseme nts/guarant ees by parent company	Subsidiary endorsemen ts/guarante es by a subsidiary	Endorsem ents/guar antees to a subsidiary in Mainland China
		Name	Relations hip (Note 5)
0 0 0 1 2 2 3 3	The Company The Company The Company MEC IMEX INC. DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD.. DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD.. SUZHOU KUANG YING ELECTRIC CO., LTD. SUZHOU KUANG YING ELECTRIC CO., LTD.	KUNSHAN ACES ELECTRONIC CO., LTD.. Aces Precision Industry Pte Ltd. ACES Precision Machinery Co., Ltd. MEC INTERNATIO NAL COMPANY LTD. KUANG YING COMPUTER EQUIPMENT CO., LTD. KUNSHAN ACES ELECTRONIC CO., LTD.. KUANG YING COMPUTER EQUIPMENT CO., LTD. DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD..	2 2 2 2 3 2 3 2	5,254,758 5,254,758 5,254,758 561,127 128,654 128,654 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	- - - - - - - -	- % 2.92% 0.95% 19.15% 3.06% 3.06% 125.30% 125.30%	5,254,758 5,254,758 5,254,758 561,127 128,654 128,654 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

Note 1: 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.
Note 2: 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.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

c. Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

(Shares in thousands)

==> picture [446 x 151] intentionally omitted <==

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

Relationship
Type and Name of with the
December 31, 2022
Marketable Securities Securities
Issuer
Financial Percentage
Carrying
Name of Holder Statement Shares of Fair value Note
amount
Account ownership
The Company SPECTRA SPC - Financial 380 - - % - Note 1
POWERFUND assets at
FVTPL －
current
The Company Fund: China - Financial - 71,866 1.54% 71,866 -
Development assets at
Advantage Venture FVTPL －
Capital Limited non-current
Partnership.
----- End of picture text -----

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:

											(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 relatio	information on nship	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	Paid in full 156,819	Hsu, Chang-Fei t	Director of he 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	Relationship	Transaction details	Transaction details	Transaction details	Transaction details	Unusual transaction details	Unusual transaction details	Notes and accounts receivables (payables)	Notes and accounts receivables (payables)	Note
			Sales/purchase	Amount	Percentage of total purchases/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.	Subsidiary Subsidiary Affiliates Affiliates 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%

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Note 1: 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:

Name of company	Related party	Relationship	Balance of amounts receivable from related parties	Turnover rate	Overdue	Overdue	Accounts received in subsequent period	Allowance for bad debt
					Amount	Action taken
KUNSHAN ACES ELECTRONIC CO., LTD.. DONGGUAN ACES ELECTRONIC CO., LTD. DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD.. GENESIS INNOVATIONGROUP LIMITED	The Company The Company KUANG YING COMPUTER EQUIPMENT CO., LTD. MEC IMEX INC.	Sub-subsidiary Sub-subsidiary Affiliates Affiliates	484,732 304,537 195,025 100,185	3.90 3.45 4.83 -	- - - -	- - - -	175,056 44,299 74,961 -	- - -

Note 1: Loan and interest receivables.

i. Trading in derivative instruments: None.
(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	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of ownership	Carrying amount
The Company The Company The Company The Company The Company The Company 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. WEI HONG INTERNATIONAL INVESTMENT CO., LTD. MEC IMEX INC. ACES JAPAN CO., LTD. ACES INTERCONNECT (USA), INC. COMPUPACK TECHNOLOGY CO., LTD. KUANG YING	SAMOA SAMOA Singapore SAMOA Taiwan Taiwan Japan USA Taiwan Taiwan	Investment holding Connectors sales Connectors sales business Investment holding Investment business Connector cable set sales business Connector developmen t business Connectors sales industry Electronic component sales business Electronic	771,665 - 208,410 351,112 25,000 928,939 15,137 9,711 287,237 198,697	621,315 9,579 208,410 351,112 25,000 809,032 15,137 9,711 277,237 198,697	24,800 - 8,162 12,000 2,500 47,582 4.5 300 21,500 25,906	100.00% - % 100.00% 100.00% 100.00% 99.86% 100.00% 100.00% 100.00% 99.66%	4,026,48 - 53,30 160,90 27,78 530,85 14,17 9,54 223,65 294,02	10,061 1,506 1,630 (26,709) (188) (130,721) 1,078 (142) (37,892) 47,272	8,828 1,506 1,630 (26,709) (188) (130,261) 1,078 (142) (32,703) 48,550	Note 3

ACES Electronics Co., Ltd.

Notes to the Parent Company Only 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	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of ownership	Carrying amount
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. MEC ELECTRONI CS PHILIPPINE S CORPORATI ON MEC ELECTRONI CS (HK) COMPANY LIMITED COMPUPACK TECHNOLOGY CO., LTD. COMPUPACK TECHNOLOGY CO., LTD.	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 MEC IMEX (USA), INC. HOMEPRIDE TECHNOLOGY LIMITED MICON PRECISE CORP. GLOBAL ACUMEN LIMITED	Taiwan Cayman USA Hong Kong SAMOA Taiwan British Virgin Islands Germany Hong Kong Hong Kong Hong Kong Philippin es USA Hong Kong Taiwan Belize	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 Connector cable set sales business Investment holding Electronic component sales business Electronic component sales business	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 12,544 230,261 333,845 1,497	130,000 589,118 20,104 - 351,112 - 992,350 3,179 313,435 122,400 157,515 54,085 12,544 182,331 333,845 1,497	13,000 27,778 1.5 5,000 9,150 700 31 1 118,250 30,000 510 8,000 4 56,750 12,950 -	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% 99.61% - %	75,37 703,93 166,29 8,73 160,90 6,29 335,21 2,84 9,20 80,80 109,95 265,28 17,55 49,13 (2,03	(15,143) 38,901 (37,708) 442 (26,709) (1,391) (114,061) (641) (4,403) 1,102 13,344 6,924 (213) 16,699 1 (39,142) 13,770	(15,143) 15,096 (37,708) (1,628) (26,709) (2,703) (114,061) (641) (4,403) 1,102 13,344 6,924 (213) 16,699 (38,785) 13,770	Note 2 Note 1 Note 3

ACES Electronics Co., Ltd.

Notes to the Parent Company Only 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	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee	Note
				December 31, 2023	December 31, 2022	Shares	Percentage of ownership	Carrying amount
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	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	Vietnam SAMOA British Virgin Islands British Virgin Islands SAMOA Hong Kong Hong Kong	Electronic component manufacturi ng and sales business Investment holding Investment holding Sales business Investment holding Investment holding Investment holding	336,292 285,904 52,349 1,605 131,588 228,280 268,229	336,292 285,904 52,349 1,605 131,588 228,280 268,229	- 7,980 4 50 4,100 8,000 9,400	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(6,08 192,92 152,52 (4,41 41,32 343,40 328,31	1 (38,316) 32,740 30,117 1 (14) 2,623 36,439 (23,986)	(38,316) 32,719 30,117 (14) 2,623 36,439 (23,986)

Note 1: The Company’s subsidiary MEC IMEX INC. set up a German subsidiary during the year of 2022. Note 2: 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 3: 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	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 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.	Connector manufacturi 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	115,301 629,475 9, 087 173,985 256,682 527,084	(2) (2) (2) (2) (2) (2)	115,301 163,447 9,087 188,086 351,112 -	- - - - - -	- - - - - -	115,301 163,447 9,087 188,086 351,112 -	(20,168) 22,974 687 1,622 (27,235) (4,712)	100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(20,168) 22,974 687 1,622 (27,235) (4,712)	452,479 2,660,943 47,105 1,362 139,699 507,683	451,444 452,925 - - - -	Note 7

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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	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
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.	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	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) (3) (3) (2) (2) (2) (1) (2) (2) (2) (2) (2) (3) (2) (2)	- - - 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 - - - - - - - -	- - - - - - - - - - - - - - -	150,350 - - 301,403 369,705 121,258 272,030 10,477 129,711 153,819 56,432 161,665 228,805 168,495	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% 19.31% 30.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% -% -% 100.00% 100.00% -%	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	149,124 408,015 20,455 75,937 8,907 64,315 3,417 13,022 150,707 3,676 - - 6,474 44,075 -	- - - - - - - - - - - - - - -	Note 11 Note 3 Note 10 Note 4 Note 4 Note 4 Note 4 Note 5 Note 6 Note 6 Note 12 Note 13 Note 8 Note 9 Note 12

(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): The recognition basis for gain or loss from investment is based on the financial report audited by auditors from parent company in Taiwan.

(Note 3): Direct investment of KUNSHAN ACES ELECTRONIC CO., LTD. in the amount of RMB43,397 thousand.

(Note 4): Indirect investment of MEC IMEX INC.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

(Note 5): Direct investment of COMPUPACK TECHNOLOGY CO., LTD. in the amount of USD350 thousand.
(Note 6): Indirect investment of KUANG YING COMPUTER EQUIPMENT CO., LTD.
(Note 7): Direct investment of ACECONN ELECTRONIC CO., LTD. In the amount of RMB120,322 thousand.
(Note 8): Indirect investment of GENESIS INNOVATION GROUP LIMITED.
(Note 9): Indirect investment of GENESIS ELECTRO-MACHANICAL LIMITED.
(Note 10): Direct investment of KUNSHAN ACES ELECTRONIC CO., LTD. in the amount of RMB3,750 thousand.
(Note 11): The Company set up ACES ZHUHAI TECHNOLOGY LTD on February 1, 2023, which is included into the Group since that day.
(Note 12): 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 13): The subsidiary of the Company, GENESIS GUIZHOU TECHNOLOGY CO., LTD., has been sold in 2023.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

b. Limitation on investment in Mainland China:

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
1,592,780 (USD 53,316 thousand)	2,885,782 (USD 93,984 thousand) (Note 2)	3,159,779

(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.

c. Significant transactions:

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

(4) Major shareholders:

Shareholding Shareholder’s Name	Shares	Percentage
Wan Ding Yuan	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:

Please refer to the consolidated financial statements for the year ended December 31, 2023.

ACES Electronics Co., Ltd.

Statement of cash and cash equivalents

December 31, 2023

(Expressed in thousands of New Taiwan dollars)

Item Cash on hand Current and cheque deposits	Description NTD USD: 12,104 thousand Others (less than 5%) Subtotal	Amount $ 279 91,638 371,667 8,447 471,752 $ 472,031

Note: Foreign currency was exchanges based on the spot rate on December 31, 2023. USD:NTD ＝ 30.705:1

Statement of account receivables

Item S`－`U S`－`T S`－`H S`－`I S`－`M S`－`W S`－`V Others (less than 5%) Less: Loss allowance Total	Amount $ 47,169 85,833 39,247 99,143 40,769 45,929 59,888 345,839 (1,668) $ 762,149

ACES Electronics Co., Ltd.

Statement of inventories

December 31, 2023

(Expressed in thousands of New Taiwan dollars)

Item Raw materials Semi-finished goods Work-in-progress Finished goods Merchandise Subtotal Less: allowance to reduce inventory to market and loss on obsolescence Total	Amount Cost: Net realizable value $ 109,493 123,317 45,871 40,078 1,827 - 165,893 185,150 34,850 40,697 357,934 (43,565) $ 314,369	Note
	Cost: $ 109,493 45,871 1,827 165,893 34,850
		Note Current value as net realizable value
	357,934 (43,565)
	$ 314,369

Note: The purpose of work-in-progress is for manufacturing finished goods. Due to the fact that the net realizable value of finished goods is higher than cost, therefore the net realizable value of work-in-progress shall be higher than cost as well.

ACES Electronics Co., Ltd.

Statement of changes in investments accounted for using the equity method

January 1 to December 31, 2023

(Expressed in thousands of New Taiwan dollars)/thousand shares

Decrease (Note 2) Shares Amount - - 300 14,424 - - - - - - - - - - - - 9,984 Note 3 - - - - - - - - - - 14,424	Share of profit (loss) of subsidiaries/ass ociates and joint ventures accounted for using equity method 8,828 1,506 1,630 (26,709) (142) 1,078 (188) (1,628) (130,261) (32,703) 48,550 15,096 (37,708) (15,143)	Ending Balance
		Percentage

		100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 99.86% 100.00% 99.66% 100.00% 100.00% 100.00%
14,424	(167,794)

(Note 1) The increase in the current period was from cash paid-in investment.

(Note 2) The decrease in the current period was from liquidation of investees.

(Note 3) The decrease in the current period was from Capital reduction to write off accumulated losses.

ACES Electronics Co., Ltd.

Statement of short-term borrowings

December 31, 2023

(Expressed in thousands of New Taiwan dollars)

Credit Limit 381,410 400,000 200,000 92,115 200,000 300,000 300,000 300,000	Credit Limit 381,410 400,000 200,000 92,115 200,000 300,000 300,000 300,000	Collateral
		None `〃` `〃` `〃` `〃` `〃` `〃` Amount 37,427 28,626 19,331 14,721 79,131 179,236
2,173,525

	$
	$

ACES Electronics Co., Ltd.

Statement of long-term borrowings

December 31, 2023

(Expressed in thousands of New Taiwan dollars)

Type	Creditor	Creditor	Due within 1 year $ - - - - - - - - - - 37,500 150,000 $ 187,500	Due over 1 year 228,496 117,737 163,746 135,000 135,000 80,843 80,843 163,746 163,746 80,843 259,857 74,117	Contract period 2023/08/04~2028/08/04 " " " " " " " " " 2021/9/27-2026/9/15 2020/6/10-2025/7/12	Interest rate		Credit Limit 584,050 322,086 423,006 350,000 350,000 208,282 208,282 423,006 423,006 208,282 300,000 756,000	Collateral
Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan	E.SUN BANK Yuanta Bank MEGA INTERNA TIONAL COMMER CIAL BANK CHANG HWA COMMER CIAL BANK, LTD. The Shanghai Commercial & Savings Bank Taishin Internationa l Bank Cathay United Bank Huan Nan Commercial Bank Agricultural Bank of Taiwan Taiwan Cooperative Bank E.SUN BANK MEGA INTERNA TIONAL COMMER CIAL BANK					1.9229%-2.2119% " " " " " " " " " 1.525%~1.650% 1.225%-1.400%			Yes " " " " " " " " " None "
				1,683,974				4,556,000

ACES Electronics Co., Ltd. Statement of Operating Cost

January 1 to December 31, 2023

(Expressed in thousands of New Taiwan dollars)

Item
Merchandise
Merchandise, January 1
Add: Purchase
Transfer into operating expenses
Less: Merchandise, December 31
Transfer into other operating costs
Transfer into write-off loss
Cost of merchandise sold
Raw materials
Raw materials, January 1
Add: Purchase
Transfer into other operating costs
Less: Raw materials, December 31
Transfer into operating expenses
Transfer into write-off loss
Raw materials consumed during current period
Direct labor
Manufacturing expenses
Mold cost allocation
Construction cost allocation
Transfer into other operating costs
Manufacturing costs
Add: Semi-finished goods and work-in-progress, January 1
Semi-finished goods purchased in current period
Less: Semi-finished goods and work-in-progress, December 31
Transfer into other operating costs
Transfer into operating expenses
Transfer into write-off loss
Cost of finished goods
Add: Finished goods, January 1
Purchase of finished goods in current period
Less: finished goods, December 31
Transfer into other operating costs
Transfer into operating expenses
Transfer into write-off loss
Cost of goods sold - finished products
Other operating costs
Inventory related expenses
Operating costs

Amount
$ 28,843
408,238
(474)
(34,850)
3
(955)
400,805
53,679
198,202
452
(109,493)
(10,967)
(1,355)
130,518
90,502
376,443
(29,874)
(38)
(36,510)
531,041
76,795
35,956
(47,698)
(14)
(1,225)
(4,063)
590,792
184,164
1,286,038
(165,894)
(125)
(4,307)
(3,410)
1,887,258
44,351
66,669
$
2,399,083

ACES Electronics Co., Ltd.

Statement of Operating Expenses

January 1 to December 31, 2023

(Expressed in thousands of New Taiwan dollars)

Item Salary and wages expenses Transportation expenses Depreciation Service expenses Insurance expenses Royalty Various amortizations Others (less than 5%)	Marketing expenses $ 58,684 34,636 1,654 2,397 6,003 10,383 - 46,912	Administrativ e expenses 147,740 36 26,615 15,823 17,151 - 8,905 84,648	Research and Development expenses 133,367 215 13,978 7,597 13,876 - 16,937 109,700	Total 339,791 34,887 42,247 25,817 37,030 10,383 25,842 241,260 757,257
	$ 160,669	300,918	295,670

Please refer to Note 6(7) of the consolidated financial statements for statement of changes for property, plant and equipment.

Please refer to Note 6(7) of the consolidated financial statements for statement of accumulated depreciation for property, plant and equipment.

Please refer to Note 6(9) of the consolidated financial statements for statement of changes for intangible assets.

Please refer to Note 6(8) for statement of changes for right-of-use asset.

Please refer to Note 6(8) for statement of accumulated depreciation for right-of-use asset. Please refer to Note 6(15) for statement of deferred income tax assets.

Please refer to Note 6(15) for statement of deferred income tax liabilities.

Please refer to Note 6(18) for statement of operating revenue.

Please refer to Note 6(20) for statement of non-operating revenue and expenses.

AI assistant

ACES — Annual Report 2023

52353_rns_2023-11-07_1051daec-3159-45d1-be2d-252190c0839a.pdf

ACES ELECTRONICS CO., LTD. Parent Company Only Financial

Statements

With Independent Auditors’ Report

Independent Auditors’ Report

Opinion

Basis for Opinion

Description of key audit matter

2. Valuation of inventory

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

Auditors’ Responsibilities for the Audit of the Parent Only Financial Statements

KPMG

Notes to Readers

ACES ELECTRONICS CO., LTD.

Balance Sheets

December 31, 2023 and 2022

(Expressed in thousands of New Taiwan dollars)

ACES ELECTRONICS CO., LTD. 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. Statements of Changes in Equity For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan dollars)

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

ACES Electronics Co., Ltd.

1. Organization

2. The Authorization of Financial Statements

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

ACES Electronics Co., Ltd.

4. Summary of Significant Accounting Policies

ACES Electronics Co., Ltd.

a. Financial assets

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

(v) Impairment of financial assets

ACES Electronics Co., Ltd.

(vi) Derecognition of financial assets

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

6. Description of Significant Accounts

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

(4) Inventories

a. Details as follows:

(i) MEC IMEX INC.

(ii) COMPUPACK TECHNOLOGY CO., LTD.

ACES Electronics Co., Ltd.

(iii) MICON PRECISE CORP.

(iv) ACECONN ELECTRONIC CO., LTD.

ACES Electronics Co., Ltd.

(7) Property, plant and equipment

a. Guarantee

b. Prepayment for land

ACES Electronics Co., Ltd.

(9) Intangible assets

ACES Electronics Co., Ltd.

(10) Short-term borrowings

(11) Long-term borrowings

ACES Electronics Co., Ltd.

(12) Bonds payable

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

ACES Electronics Co., Ltd.

ACES Electronics Co., Ltd.

(13) Lease liabilities

ACES Electronics Co., Ltd.

(iii) Movements on fair value of plan assets

ACES Electronics Co., Ltd.

(iv) Expenses recognized in profit or loss

(6) Actuarial assumptions

ACES Electronics Co., Ltd.

b. Defined contribution plans

(15) Income taxes

a. Income tax expenses

ACES Electronics Co., Ltd.

ACES Annual Report 2023