ACES — Annual Report 2023

Jul 9, 2024

Stock Code: 3605

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ACES ELECTRONICS CO., LTD.

2023 Annual Report

Printed on May 10, 2024

Annual report is available at MOPS Website ： https://mops.twse.com.tw ACES’s Website: https://www.acesconn.com

1.

Spokesman: Fu Da-Gui Acting spokesman: Yang Tsung-Lin Title: Senior Director of Administration Title: Corporate Research & Development officer Tel: (03)463-2808 Tel: (03)463-2808 Email: ir@acesconn.com Email: ir@acesconn.com

2. Addresses and telephone numbers of the head office, branch office, and plant

Head office: No. 13, Dongyuan Road, Zhongli District, Taoyuan City Plant: No. 530-6, Sec. 2, Guoling Rd., Zhongli Dist., Taoyuan City Tel: (03) 463-2808 Branch office: Nil

3. Name, address, website, and telephone number of the stock transfer agency

Name: KGI Securities Co., Ltd., Transfer Agency Department Address: 5F, No.2, Sec.1, Chongqing S. Rd., Taipei City, Taiwan Website: https://www.kgi.com.tw Tel:(02)2389-2999

4. Name, firm, address, website, and phone number of CPAs certifying the latest financial statements

Accountants: Accountant Heng-Sheng Lin and Accountant Zheng-Xue Chen Name of CPA firm: KPMG Address: 68F, No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City Website: http://www.kpmg.com.tw Tel: (02) 8101-6666

5. Venue for trading the Company’s listed overseas securities and inquiry method for such overseas securities: Nil

6. Company website: https://www.acesconn.com

Index

		Page
1.	Letter to Shareholders．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	1
2.	Company Profile．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	3
	(1) Establishment date．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	3
	(2) Company history．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	3
3.	Corporate Governance Report．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	6
	(1) Organization System．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	6
	(2) Directors, General Manager, Deputy General Manager, Assistant Manager, Department Heads, and Branch Managers．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	8
	(3) Remuneration of Directors, General Manager, Deputy General Manager, etc. for the most recent fiscal year．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	14
	(4) Implementation of Corporate Governance．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	18
	(5) Information on the remuneration of the CPAs．．．．．．．．．．．．．．．．．．．．．．．．．．．．	66
	(6) Information on changing CPAs．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	66
	(7) The Chairman of the Board, General Manager, and managers responsible for
	finance or accounting affairs of the company who have worked at the accounting
	firm or its affiliated companies of the signing accountant within the past year
	shall disclose their names, titles, and periods of employment at the accounting
	firm or its affiliated companies．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	66
	(8) Changes in equity transfer and pledge of directors, managers, and shareholders
	holding more than 10% of shares in the most recent year and up to the date of
	publication of the annual report．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	66
	(9) Information on the relationships between the top ten shareholders in terms of
	shareholding percentage, who are related parties or have family relationships
	within the second degree of kinship, including spouses．．．．．．．．．．．．．．．．．．．．．．	68
	(10) The number of shares held by the company, its directors, managers, and
	enterprises directly or indirectly controlled by the company in the same
	reinvested enterprise, and the consolidated shareholding ratio．．．．．．．．．．．．．．．．	69
4.	Information On Capital Raising activities．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	71
	(1)Capital and shares．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	71
	(2) Issuance of corporate bonds．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	75
	(3) Status of preferred shares．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	77
	(4) Status of oversea depositary receipts．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	77
	(5) Status of employee stock warrant．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	77
	(6) Status of new restricted employee shares．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	77
	(7) Issue of new shares in connection with any acquisition of shares of another	77
	company．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．
	(8) Execution status of capital utilization plan．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	77
5.	An Overview of Operations．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	79
	(1) A description of the business．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	79
	(2) Market and sales overview．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	93
	(3) Information of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report．．．．．．．．．	108
	(4) Environmental expenditure information．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	108
	(5) Labor relations．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	109
	(6) Cyber security management．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	113

	Page
(7) Important contracts．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	117
6. An overview of the company's financial status．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	118
(1) Condensed balance sheets and statements of comprehensive income for the past 5 fiscal years．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	118
(2) Financial analyses for the past 5 fiscal years．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	123
(3) Audit committee's report on the financial statement of the latest fiscal year．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	126
(4) Financial statement for the most recent fiscal year．．．．．．．．．．．．．．．．．．．．．．．．．．	127
(5) A parent Company only financial statement for the most recent fiscal year, certified by a CPA．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	197
(6) If the Company or its affiliates have experienced financial difficulties in the most
recent fiscal year or during the current fiscal year up to the date of publication of
the annual report, the annual report shall explain how said difficulties will affect
the company's financial situation．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	270
7. A review and analysis of the company's financial position and financial performance, and a listing of risks．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	271
(1) Financial position．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	271
(2) Financial performance．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	272
(3) Cash flow．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	272
(4) The effect upon financial operations of any major capital expenditures in the most recent fiscal year.．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	273
(5) The Company's reinvestment policy for the most recent fiscal year, the main
reasons for the profits/losses generated thereby, the plan for improving
re-investment profitability, and investment plans for the coming
year．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	273
(6) Risk analysis．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	274
(7) Other important matters．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	278
8. Other items deserving special mention．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	279
(1) information related to the company's affiliates．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	279
(2) Execution status and disclosure items for the Company has carried out a private
placement of securities during the most recent fiscal year or during the current	299
fiscal year up to the date of publication of the annual report．．．．．．．．．．．．．．．．．．
(3) Holding or disposal of shares in the company by the company's subsidiaries
during the most recent fiscal year or during the current fiscal year up to the date	300
of publication of the annual report．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．
(4) Other matters that require additional description．．．．．．．．．．．．．．．．．．．．．．．．．．．	300
(5) If any of the situations listed in Article 36, paragraph 3, subparagraph 2 of the
Securities and Exchange Act, which might materially affect shareholders' equity
or the price of the company's securities, has occurred during the most recent fiscal
year or during the current fiscal year up to the date of publication of the annual
report．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．．	300

I. Letter to Shareholders

First of all, on behalf of the management team of ACES Electronics Co., Ltd., I would like to express our sincere gratitude for all shareholders for the unwavering support and concern for the company over the years. Looking back on the past year, due to ongoing geopolitical tensions worldwide, high interest rates, high inflation, and the slowdown of the Chinese economy, global demand for end products has weakened. However, there have been changes globally and within the electronics industry driven by the acceleration of AI digitalization, 5G communication transmission driving server demand, and the development of automotive electronics driven by electric vehicles.

In response to changes in the industry, the Company has gradually shifted our focus from traditional product design and manufacturing to joint design and development of systems and modules with customers in the development layout of connectors and connecting lines; at the same time, by integrating the technical capabilities of the group, we aim to acquire more growth momentum in the future. This transformation will have a significant impact on our future industrial competitiveness.

Looking ahead, the global macro economy is predicted to remain fluctuating drastically this year. The Company will pay close attention to changes in the industrial environment, face the challenges prudently, and continue to enhance market competitiveness in the future.

In terms of implementation results of the business plan

In terms of consolidated financial statements for 2023, the consolidated net operating revenue amounted to NT$8.486 billion, consolidated operating net profit was (NT$0.331) billion, consolidated pre-tax net profit was (NT$0.27) billion, and consolidated net profit for the current period was (NT$0.267) billion (attributable to the net profit of the parent company's shareholders), translating to basic earnings per share after tax of (NT$1.98).

			Unit: NTDthousands
Item	2023	2022	YoY Growth/Decrease Rate
Consolidated NetRevenuefromOperations	8,486,228	10,392,504	(18.34%)
Consolidated Profit fromOperations	(330,729)	56,747	(682.81%)
Consolidated Profit before Income Tax	(269,692)	315,063	(185.60%)
Consolidated Profit for theyear	(268,188)	223,333	(220.08%)
Net Profit Attributable to Shareholders of the Parent	(266,543)	225,319	(218.30%)

The Company did not formally prepare financial forecasts for 2023. However, based on the Company's internal operating plan, the actual shipment amount for 2023 achieved 65% of the original target, and the overall revenue decreased by 18% compared to the previous year.

In terms of financial balance and profitability

In terms of financial balance and profitability	In terms of financial balance and profitability
Item		2023	2022
Return on Assets		(1.43%)	2.28%
Return on Equity		(4.89%)	4.04%
Profit Ratio of Paid-up Capital	ProfitfromOperations	(24.60%)	4.22%
	Profit beforeIncomeTax	(20.06%)	23.43%
Net Profit Margin		(3.14%)	2.16%
Earningsper Share(NT$)		(NT$1.98)	NT$1.68

1

In terms of research and development

In response to market demand trends, in terms of connector development, the Company continues to develop high-end connectors with fine-pitch, low-profile, high-frequency, and high-power. In terms of cable development, the Company is focusing on high-speed transmission cables for server internal cables and data center external cables, and chassis for data centers, auxiliary driving systems for automotive electronics, intelligent cabins, car networking, etc., as well as the assemblies of professional cables with high current and high power for industrial use. The Company has rapid development capabilities in product R&D and design, which shortens product development time, and can provide customized connectors and cable products according to customer needs; meanwhile, with the support of the overseas marketing network, the Company promotes new designs and new products to large international customers to meet their comprehensive needs and continue to achieve high growth goals.

This year's business plan, business policy, and future outlook

The Company has always adhered to the concept of "knowledge, vision, value, attitude, commitment, and execution", operates with integrity, and strives to improve the operating efficiency of the group. In order to meet the long-term strategic development needs and promote the maximum value and efficiency of each business entity, and focus on overseas markets and the mainland market. The Company's overseas sales bases cover the United States, Japan, Germany, Philippines, Vietnam, and Singapore. Deeply cultivating regional industrial development and enhancing penetration rates to target customers, providing connectors, cables, electromagnetic shielding covers, internal mechanical components, external casings, and complete assembly and testing services needed for consumer electronics, automotive electronics, cloud servers, industrial control industries, etc., to provide higher value-added products and services and increase growth momentum.

In terms of production and manufacturing, the Company has built a research and development headquarters building in Taoyuan, Taiwan for long-term development since April 2022. The construction is expected to complete in the first half 2024, expanding the production capacity of Taiwan's product line in the future and enhance the group's competitiveness. The Company has also established strong production capacity in Asia with manufacturing factories located in Taiwan, mainland China (Kunshan, Dongguan), Philippine and Vietnam. We will continue to implement the process lean plan and optimize the cost structure by increasing the proportion of automated production, and strive to reach the goal of becoming the preferred supplier for international customers.

Looking forward to this year (2024), we are still facing a market environment full of variables and fierce competition. The Company will continue to adopt a pragmatic attitude, face future challenges prudently, maintain our existing competitive advantages, and strive to achieve this year's operational growth goals. We hope to gradually become a leading brand in the connectivity industry in the future.

Finally, we hope that all shareholders can continue to give encouragement and guidance to the management team by upholding the love and support for the Company in the future.

Wishing you all good health and all the best.

Chairman: Yuan Wan-Ting General Manager: Huang Tien-Fu Accounting Supervisor: Lee Shu-Yun

2

II. Company Profile

(1) Establishment date

November 7th, 1996

• (2) Company history

1996	 In November, ACES ELECTRONICS CO., LTD. was established with a paid-in capital of NTD 5 million. Its main business is the design, development, manufacturing,and sales of electronic connectors.
1997	 In September, a cash capital increase of NTD 5 million was conducted, raising the paid-in capital to NTD 10 million.
2000	 ISO 9001 internationalqualitysystem certificationwas approved.
2001	 A cash capital increase of NTD 19.5 million was conducted, raising the paid-in capital to NTD 29.5 million.  Successfully developed and completed the "0.5mm pitch board-to-board connector" for notebook computers.
2002	 A cash capital increase and capitalization of retained earnings totaling NTD 30.5 millionwere conducted,raisingthepaid-in capital toNTD60million.
2003	 A cash capital increase of NTD 60 million was conducted, raising the paid-in capital toNTD 120million.
2004	 In September, the capitalization of retained earnings of NTD 13.2 million and the first cash capital increase of NTD 51.45 million was conducted. In addition, ACCESS ELECTRONIC CO., LTD. was merged and the reference date was November 5th, 2004. New shares totaling NTD 20 million were issued for the merger, raising the paid-in capital to NTD 204.65 million.  Passed the UL ISO 14001 international environmental quality system certification.  Successfully developed and completed the Pitch 0.5mm MXM Card high-frequency connector.  Successfully developed and completed the "0.3mm pitch FPC connector" for mobile phones and consumer electronic products.  Acquired equity in ACECONN ELECTRONIC CO., LTD. for USD 2 million, and was approved by the Investment Commission of the Ministry of Economic Affairs to make investments in DONGGUAN ACES ELECTRONIC CO., LTD. and KUNSHAN ACES ELECTRONIC CO., LTD. through a transfer of investment.  Established ACES (HONG KONG) ELECTRONIC CO., LTD. and WELL PLAN GROUP LIMITED, mainly engaged in the business of connector trading.  In December, the second cash capital increase of NTD 136.05 million was conducted,raisingthepaid-in capital to NTD 340.7 million.
2005	 Established the group headquarters and relocated to the Zhongli Industrial Zone in Taoyuan.  Successfully developed the "Precision Insert Molding" technology.  Successfully developed the "0.4mm pitch board-to-board connector".  Successfully developed the "Push-Push type Express Card connector" for notebook computers.
2006	 In February, acquired a 60% stake in ACES Precision Industry Pte Ltd.  In May, a cash capital increase of NTD 12.3 million was conducted, raising the paid-in capital to NTD 353 million.  In August, a cash capital increase of NTD 30.5 million, capitalization of retained earnings of NTD 222.38 million, and capitalization of employee bonuses of NTD 3 million were conducted,raisingthepaid-in capital to NTD 608.88 million.
2007	 In June, capitalization of retained earnings of NTD 91.33 million and capitalization of employee bonuses of NTD 5 million were conducted, raising the paid-in capital to NTD 705.21 million.  On November 26th, approval was granted for the public issuance of stocks.  On December 28th, the Taipei Exchange approved the stock registration for the EmergingStock Market.

3

2008	 In July, invested USD 300,000 through the subsidiary Aceconn Electronic Co., Ltd. 100% investment in KUNSHAN ACES TRADING CO., LTD.  In October, capitalization of retained earnings of NTD 70.52 million and capitalization of employee bonuses of NTD 5 million were conducted, raising the paid-in capital toNTD 780.73million.
2009	 In March, a pre-IPO cash capital increase of NTD 78.8 million was conducted, raising the paid-in capital to NTD 859.53 million.  On March 26th, the stocks were listed for trading on the TWSE.  In July, acquired 100% of the shares of ACES PRECISION INDUSTRY PTE LTD.  In September, capitalization of retained earnings of NTD 88.28 million was conducted, raising the paid-in capital to NTD 947.82 million.  In September, the company was selected as one of the top 200 best SMEs in Asia byForbes Asia magazine.
2010	 In March, employee stock options were converted for NTD 37.9 million, raising the paid-in capital to NTD 951.61 million.  In July, CHONGQING HONG GAO ELECTRONIC CO., LTD. was established.  In August, the company issued its first unsecured convertible corporate bond in Taiwan, raising NTD 800 million.  In August, employee stock options were converted for NTD 0.2 million, raising the paid-in capital to NTD 951.81 million.  In September, capitalization of retained earnings of NTD 284.35 million was conducted, raising the paid-in capital to NTD 1,236.16 million.  In September, the company was again selected as one of the top 200 best SMEs in Asia byForbes Asia magazine.
2011	 In April, employee stock options were converted for a total of NTD 40.9 million, increasing the paid-in capital to NTD 1.24025 billion.  In June, the company was rated as "Grade A" in the 8th evaluation of information disclosure for listed andOTCcompanies bytheSecurities and Futures Institute.
2012	 In January, the ACES PEC was completed.  In March, employee stock option certificates were converted for a total of NTD 3.23 million, increasing the paid-in capital to NTD 124.348 million.  In August, employee stock option certificates were converted for NTD 440,000, increasing the paid-in capital to NTD 1,243.92 million.  Established ACESCONN HOLDINGS CO., LTD., which acquired 100% equity of ASIA CENTURY INVESTMENT LTD. and indirectly acquired 100% equity of GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU.  Established ACES JAPAN CO.,LTD.
2013	 In August, employee stock option certificates were converted for NTD 0.9 million, increasing the paid-in capital to NTD 1,244.01 million.  In October, the Company was awarded the "Outstanding Enterprise" award in the 10th National Brand Yushan Awards.
2014	 In May, 5.01 million NTD worth of treasury shares were canceled, and the paid-in capital was reduced to 1,239 million NTD.  In August, 11 million NTD worth of new restricted employee shares were issued, and the paid-in capital increased to 1,250 million NTD.  In November, 9.24 million NTD worth of treasury shares were canceled, and the paid-in capital was reduced to NTD 1,240.76 million.  Received the "Top 10 Outstanding Enterprises of the Year" award in the large enterprise categoryat the 16thGolden Peak Award organized bytheOEMA.
2015	 In May, canceled restricted employee stock options and reduced capital by NTD 1 million, bringing the paid-in capital to NTD 1,239.76 million.  In August, won the "Corporate Citizen Award for Small and Medium Enterprises" at the 2015 Business Next Magazine's Business Citizen Awards.  In August, canceled restricted employee stock options and reduced capital by NTD 2 million, bringing the paid-in capital to NTD 1,239.56 million.  InOctober,completed the acquisition of a 70%equityinterest in MECIMEX INC.

4

	(formerly known as Wei Han Industrial Co., Ltd.) through a public tender offer, making it a subsidiary of the Company.  In October, established Aces Interconnect (USA), Inc. and injected capital in January 2016.  In December, canceled restricted employee stock options and reduced capital by NTD 540,000,bringingthepaid-in capital to NTD 1,239.02 million.
2016	 In April, canceled restricted employee stock options by NTD 180 thousand, bringing the paid-in capital to NTD 1,238.84 million.  In August, won the "Corporate Citizen Award for Small and Medium Enterprises" at the 2016 Business Next Magazine's Business Citizen Awards.  In September, canceled restricted employee stock options and reduced capital by NTD5.28million,bringingthepaid-in capital toNTD 1,233.56million.
2017	 In July, we completed the acquisition of a 90% equity interest in COMPUPACK TECHNOLOGY CO., LTD. making it a subsidiary of the Company.  In December, we canceled 960 thousand shares bought back due to objections to the merger proposal, with a cancellation amount of NTD 9.6 million, and the paid-in capital decreased to NTD 1,223.96 million.
2018	 In November, we were honored to receive the National Brand Yushan Award in the Outstanding Enterprise category, the top prize in the country, at the 15th annual awards ceremony.
2019	 In July, the Company acquired an 89.53% equity interest in KUANG YING COMPUTER EQUIPMENT CO., LTD. and made it a subsidiary of the Company.  In August, the Company established ACES Precision Machinery Co., Ltd.  In October, the Company established Kunshan Chenggang Electronic Technology Co.,Ltd.through its subsidiaryAceconn ElectronicCo.,Ltd.bycash investment.
2020	 In December, the Board of Directors approved a cash investment to acquire 100% equity of Genesis Technology USA, Inc. and Genesis Holding Company (hereafter collectivelyreferred to as "Genesis").
2021	 In April, the acquisition of 100% equity interest in Genesis Technology USA, Inc. and Genesis Holding Company (hereinafter referred to as "Genesis") was completed, and Genesis became a subsidiary of the Aces group.  In July, the acquisition of 100% equity interest in JASON TECHNOLOGY LIMITED was completed, and JASON TECHNOLOGY LIMITED became a subsidiary of the Aces group.  In November, the second unsecured convertible corporate bonds were issued, raising NTD 600 million.  In November, the Aces group won the top prize in the "Outstanding Enterprises" category of the 18th National Brand Yushan Awards.  In December, a cash capital increase of NTD 120 million was conducted, and the paid-in capital increased to NTD 1,343.96 million.
2022	 In July, convertible bonds were converted into 21,825 shares, and the paid-in capital increased to NTD 134,418 million.  In November, the Company was awarded the Platinum Award in the Verification Assessment Program (VAP) of the Responsible Business Alliance (RBA).  In December, the Company was awarded the 10th Outstanding Taiwan Businessman Award for DomesticSales Model in MainlandChina in 2022.
2023	 In February, the Company established ACES ZHUHAI TECHNOLOGY LTD. through its subsidiary Aceconn Electronic Co., Ltd. with cash investment.  In September, the Company was honored with the "Excellent Enterprise Management Award" and "Excellent Enterprise Leader Award" at the 17th Asia Pacific Enterprise Awards(APEA).

5

III. Corporate Governance Report

(1) Organization System

• A. Organizational Structure

==> picture [526 x 344] intentionally omitted <==

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

Shareholders' Meeting
Board of Directors Audit Committee
Remuneration Committee
Chairman Audit Office
Chairman's Office
Group Research and
Development Operations General Manager Group Manufacturing and Supply
Chain Operations
General Manager's
Office
Marketing Department General Administration Department
Connector Business Group Wire Business Group Metal Products Business Genesis Business Group
Group
----- End of picture text -----

6

B. The business activities of the main departments

Name	Main Functions and Responsibilities
Chairman’s Office	Analysis and formulation of business strategies
Audit Office	1. Audit and evaluate the Company's budget, finance, business, and internal control systems. 2. Audit the operation of the Company.
General Manager’s Office	Analysis and research of operational strategy projects.
Group Manufacturing and Supply Chain Operations	1. Integration of the Croup's supply chain resources across various business groups. 2. Supervision to ensure that each business group effectively executes and achieves its objectives.
Group Research and Development Operations	1. Integration of technical development and product blueprints across various business groups within the Company. 2. Supervision to ensure that each business group effectively executes and achieves its objectives.
Marketing Department	1. Responsible for product sales promotion to achieve sales targets. 2. Development of customer value and understanding of market trends. 3. Matters related to product orders and domestic and international sales business.
General Administration Department	1. Integrate various strategies and executions of the Company's finance, information, and human resources administration. 2. Supervise each business group to effectively execute and achieve objectives. 3. Coordinate the Company's equity operations, board of directors, and shareholder meetingarrangements.
Connector Business Group	1. Design, product development, manufacturing technology, production equipment development, sales technical support, and assistance in solving customer technical issues related to connector products. 2. Production and manufacturingof connector-relatedproducts.
Wire Business Group	1. Design, product development, manufacturing technology, production equipment development, sales technical support, and assistance in solving customer technical issues related to wire products. 2. Production and manufacturingof wire-relatedproducts.
Metal Products Business Group	1. Design, product development, manufacturing technology, production equipment development, sales technical support, and assistance in solving customer technical issues related to metal products. 2. Production and manufacturingof metal-relatedproducts.
Genesis Business Group	1. Design, product development, sales technical support, and assistance in solving customer technical issues related to high-speed connectors and cables. 2. Marketingand business development in USA.

7

(2) Directors, general managers, deputy general managers, managers, department heads, and branch managers A. Directors

April 27, 2024

Title	Nationality	Name	Gender Age	Date Elected	Term (years)	Date First Elected	Shareholding when Elected (Note 1)	Shareholding when Elected (Note 1)	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Main education and work experience.	Current positions held in the Company and other companies	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Remark (Note 3)
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
Chairman	R.O.C	Yuan Wan-Ting	Male 51~60	2022.6.29	3 years	1998.5.26	8,256,380	6.75%	8,863,487	6.59%	6,128,631	4.56%	0	0	Executive MBA, National Central University EMBA, Guanghua School of Management, Peking University, China Manager, MOLEX Taiwan Ltd.	Director, Weiji Investment Co., Ltd. Independent director, Young Optics Inc. Director and Chairman of ACES’s affiliated companies (Note 2)	Director	Hsu Chang- Fei	spouse	Nil
Director	R.O.C	Weiji Investment Co.,Ltd.		2022.6.29	3 years	2010.6.8	5,200,764	4.25%	5,583,185	4.15%	0	0	0	0			Nil	Nil	Nil	N/A
	R.O.C	Weiji Investment Co., Ltd. Representative: Huang Wen-Cheng	Male 61~70	2022.6.29	3 years	2007.9.18	0	0	0	0	0	0	0	0	Bachelor of Mechanical Engineering, National Cheng Kung University MBA, National Chengchi University President, China Motor Corporation Vice CEO, Yulon-group Co., Ltd. Chairman, Automotive Research & Testing Center	Chairman, Global Fortune Investment Co., Ltd. Chairman, Global Fortune Management Co., Ltd. Independent Director, Entire Technology Co., Ltd. Director, eLAND Information Co., Ltd. Supervisor, ezTravel Co., Ltd. Supervisor, ezTravel Travel Service Co., Ltd. Director, Kuo-Fu Fortune Investment Co., Ltd. Director, Phoenix Innovation Investment Corporation Director, Phoenix II Innovation Investment Corporation Director, Conserve & Associates, Inc Director of ACES’s affiliated companies(Note 2)	Nil	Nil	Nil	N/A
Director	R.O.C	Hsieh Han-Chang	Male 61~70	2022.6.29	3 years	2019.6.28	0	0	0	0	0	0	0	0	EMBA of National Chengchi University VCEO of Yeangder Group President of Shihlin Electric and Engineering Corp President of the Ambassador Hotel	VCEO of Yeangder Group MD & President of Shihlin Electric and Engineering Corp Director of the Ambassador Hotel Ltd Director of HCT LOGISTICS CO., LTD. Supervisor of Yeangder Invested Company Chairman of Hsin Ling Electric and Engineering Corp. Director of Chuan Lin	Nil	Nil	Nil	N/A

8

Title	Nationality	Name	Gender Age	Date Elected	Term (years)	Date First Elected	Shareholding when Elected (Note 1)	Shareholding when Elected (Note 1)	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Main education and work experience.	Current positions held in the Company and other companies	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Remark (Note 3)
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
																Scien-Technical Corp. Director of Ruei Lin Electric & Engineering Corp. Director of Yeangder Entertainment Co., Ltd. Director of Yeang-der Senior High School Director of SEEC International Holdings Ltd. Director of Shihlin Electric (Suzhou) Power Equipment Co., Ltd. Director of Yeangder Culture and Education Foundation Vice CEO of the Memorial Foundation of Mr.Ching Teh Hsu Independent Director of Flytech Technology Co., Ltd. Supervisor of Yeangder Safety Consultant Corp. Director of Sankyo Company Ltd. Director of Mec Imex Inc.
Director	R.O.C	Hsu Chang-Fei	Female 51~60	2022.6.29	3 years	2015.6.30	5,708,849	4.66%	6,128,631	4.56%	8,863,487	6.59%	0	0	Bachelor of Foreign Languages and Literatures, National Chung Hsing University Supervisor, Aces Electronics Co., Ltd.	Nil	Chairman	Yuan Wan- Ting	spouse	N/A
Independent director	R.O.C	Lee An-Chen	Male 61~70	2022.6.29	3 years	2012.6.6	0	0	0	0	0	0	0	0	Master of Power Mechanical Engineering, National Tsing Hua University Ph.D. in Mechanical Engineering, University of Wisconsin-Madison, USA	Lifetime Chair Professor, Mechanical Engineering, National Yang-Ming Chiao Tung University	Nil	Nil	Nil	N/A
Independent director	R.O.C	Liaw Dar-Lii	Male 71~80	2022.6.29	3 years	2013.6.20	0	0	0	0	0	0	0	0	Bachelor of Accounting, National Chengchi University President of the Division, Hong Tai Electric Industrial Co., Ltd.	Nil	Nil	Nil	Nil	N/A

9

Title	Nationality	Name	Gender Age	Date Elected	Term (years)	Date First Elected	Shareholding when Elected (Note 1)	Shareholding when Elected (Note 1)	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Main education and work experience.	Current positions held in the Company and other companies	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Executives, Directors, or Supervisors who are spouses or within two degrees of kinship	Remark (Note 3)
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
Independent director	R.O.C	Sheen Gwo-Ji	Male 61~70	2022.6.29	3 years	2022.6.29	0	0	0	0	0	0	0	0	Ph.D., Industrial Engineering, University of Wisconsin-Madison, USA Dean of the College of Management and Director of the Graduate Institute of Industrial Management at National Central University Chairman of the Chinese Enterprise Resource Planning Society Assistant Professor in the Department of Mechanical Engineering at the University of Illinois at Chicago,USA.	Professor, Department of Business Administration and Graduate Institute of Industrial Management, National Central University Executive Director of the Chinese Enterprise Resource Planning Society	Nil	Nil	Nil	N/A

Note 1: Excluding the number of shares held in trust with no decision-making power.

Note 2: Please refer to the relevant information of related companies (pages 289 ~295).

Note 3: If the Chairman and General Manager or equivalent position (the highest executive officer) of the Company are the same person, spouse, or first-degree relative, the reasons, rationality, necessity, and corresponding measures (such as increasing the number of independent directors, and ensuring that the majority of the directors are not concurrently serving as employees or executives) should be explained with relevant information.

10

(A) Major shareholders of the institutional shareholders

April 27, 2024

	April 27,2024
Name of institutional shareholder	Major shareholders (ownership percentage) of institutional shareholders
Weiji Investment Co., Ltd.	Yuan Wan-Ting(49%)、Hsu Chang-Fei (25%) Yuan Chen-Ting(13%)、Yuan Ju-Hsuan(13%)

(B) Professional Qualifications and Independence Analysis of the Directors:

Criteria Name	Professional Qualifications and Experience	Independence Criteria	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
Chairman Yuan Wan-Ting	1. For professional qualifications and experience, please refer to pages 8-10 of this annual report for information on directors . 2. All directors have not been involved in any of the circumstances listed in Article 30 of the Company Act.	N/A	1
Director HuangWen-Cheng			1
Director Hsieh Han-Chang			1
Director Hsu Chang-Fei			0
Independent director Lee An-Chen		All independent directors of the Company comply with the requirements outlined in Article 3, Paragraph 1 of the "Regulations Governing the Appointment of Independent Directors of Public Companies" (Note 1).	0
Independent director Liaw Dar-Lii			0
Independent director Sheen Gwo-Ji			0

Note 1: There have been no occurrences of the following situations within the two years before the appointment and during the period of service:

• (1) Being an employee of the Company or its affiliated enterprises.

• (2) Being a director or supervisor of the Company or its affiliated enterprises (except for independent directors appointed in accordance with this Act or local laws and regulations who concurrently serve as directors of a parent company, subsidiary, or a subsidiary of the same parent company).

• (3) The individual, their spouse, minor children, or natural person shareholders who hold more than 1% of the total issued shares or are among the top ten shareholders of the Company under another person's name.

• (4) The manager listed in (1), relatives within the second degree of kinship, direct lineal blood relatives within the third degree of kinship, or spouses of the personnel listed in (2) and (3).

• (5) Being a director, supervisor, or employee of a corporate shareholder that directly holds more than 5% of the total issued shares, is among the top five shareholders, or has appointed a representative in accordance with Article 27, Paragraph 1 or 2 of the Company Act to serve as a director or supervisor of the Company (except for independent directors appointed in accordance with this Act or local laws and regulations who concurrently serve as directors of a parent company, subsidiary, or a subsidiary of the same parent company).

• (6) Being a director, supervisor, or employee of another company or institution where the same individual controls over half of the Company's voting rights or where over half of the company's board seats or voting rights are held by the same individual (except for independent directors appointed in accordance with this Act or local laws and regulations who concurrently serve as directors of a parent company, subsidiary, or a subsidiary of the same parent company).

• (7) Being a director, supervisor (auditor), or employee of another company or institution where the chairman of the board, general manager, or a similar position of the Company and the individual or their spouse hold the same position or where the director-general or a similar position of the Company and the individual or their spouse are directors (supervisors), supervisors (auditors), or employees (except for independent directors appointed in accordance with this Act or local laws and regulations who concurrently serve as directors of a parent company, subsidiary, or a subsidiary of the same parent company).

• (8) Being a director, supervisor (auditor), manager, or shareholder who holds more than 5% of the shares of a specific company or institution with financial or business dealings with the Company.

• (9) Being a professional, sole proprietor, partner, company, or institution that provides relevant services such as auditing, legal, financial, or accounting services to the Company or its affiliated enterprises and has not received cumulative compensation of more than NTD 500,000 in the past two years, as well as their spouses, owners, partners, directors, supervisors (auditors), and managers. However, this does not apply to members of the remuneration committee, public tender offer review committee, or merger and acquisition special committee who perform their duties in accordance with the Securities Exchange Act or the Company Mergers and Acquisitions Act.

11

• (C) Board Diversity and Independence:

a. Board Diversity

According to Article 20 of the Corporate Governance of the Company, the board of director structure should consider the Company's business development scale and the shareholding situation of its major shareholders, and take into account practical operational needs to determine an appropriate number of directors of five or more.

The composition of the board of directors should consider diversity and develop appropriate diversity policies based on its operations, business models, and development needs, including but not limited to the following two major aspects:

• (a) Basic conditions and values: Gender, age, nationality, culture, etc.

• (b) Professional knowledge and skills: Professional background (such as law, accounting, industry, finance, marketing, or technology), professional skills, industry experience, etc.

Board members should generally possess the knowledge, skills, and qualities necessary to perform their duties. To achieve the ideal goal of corporate governance, the overall abilities that the board should possess are as follows:

• (a) Operational judgment ability.

• (b) Accounting and financial analysis abilities.

• (c) Business management abilities.

• (d) Crisis management abilities.

• (e) Industry knowledge.

• (f) International market perspective.

• (g) Leadership abilities.

• (h) Decision-making abilities.

Diversity policies and implementation status of current board members are as follows:

Core elements of diversity Job title Name	Basic composition	Basic composition	Basic composition	Professional background	Professional background	Professional background	Professional background	Professional background			Industryexperience	Industryexperience
	Nationality	Gender	Age	Business management	Engineering	Finance / Accounting	Foreign languages	Education	Business	Information /Technology	Finance / Accounting	Social engagement	Education	Operation management
Chairman Yuan Wan-Ting	R.O.C	Male	51~60											
Director HuangWen-Cheng	R.O.C	Male	61~70											
Director Hsieh Han-Chang	R.O.C	Male	61~70											
Director Hsu Chang-Fei	R.O.C	Female	51~60										
Independent director Lee An-Chen	R.O.C	Male	61~70							
Independent director Liaw Dar-Lii	R.O.C	Male	71~80											
Independent director Sheen Gwo-Ji	R.O.C	Male	61~70											

Our current board of directors consists of 7 members, including 3 independent directors, with expertise in various professional fields such as industry, finance, accounting, and technology. Collectively, they possess abilities in operational judgment, business management, crisis management, industry knowledge, international market perspective, leadership, and decision-making.

All of our current board members are citizens of the Republic of China, and independent directors account for 43% of the board. The age distribution includes 2 directors in the 51-60 age range, 4 directors in the 61-70 age range, and 1 director in the 71-80 age range. There is one female director. The Company places importance on gender equality in the composition of the board of directors and aims to increase the proportion of female board members to one-third. Efforts will be made in the future to increase the number of female board members to achieve this goal.

• b. Independence of the board of directors

Our current board of directors has 7 members, including 3 independent directors. 2 directors are relatives within the second degree of kinship. However, among the independent directors or between the independent directors and the directors, there are no spouses or relatives within the second degree of kinship, which complies with the provisions of Article 26-3, paragraphs 3 and 4 of the Securities and Exchange Act.

12

B. General Manager, Deputy GM, Associate, and Supervisors of each department and branch:

													April 27,2024	April 27,2024	April 27,2024	April 27,2024
Title	Nationality	Name	Gender	Date Effective (Note 1)	Shareholding		Spouse & Minor Child Shareholding		Shareholding by Nominee Arrangement		Experience (Education)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship			Remark (Note 3)
					Shares	%	Shares	%	Share s	%			Title	Name	Relation
General Manager	R.O.C	Huang Tien-Fu	Male	2023/7/10	100,000	0.07%	0	0	0	0	Doctor of Power Mechanical Engineering, National Tsing Hua University Head of Advanced Precision Technology Research Group, Material and Chemical Research Laboratories, Industrial Technology Research Institute (ITRI) Director, Greenhouse System Technology Center, Industrial Technology Research Institute(ITRI)Eastern Division	General Manager of ACES’s affiliated companies (Note 2)	Nil	Nil	Nil	Nil
Chief Operating Officer	R.O.C	Lin Wan-fu	Male	2023/8/11	102,470	0.08%	26,000	0.02%	0	0	Master of Business Administration, Royal University of Canada Vice President, Global Shared Factory, MOS Technology Inc., Taiwan	Director, and General Manager of ACES’s affiliated companies (Note 2)	Nil	Nil	Nil	Nil
Chief Operating Officer	R.O.C	Yang Tsung-Lin	Male	2007/5/18	100,182	0.1%	0	0	0	0	Graduate Institute of Applied Mechanics, National Taiwan University Director of Qualibond Technology Co., Ltd. Supervisor of Product Design, MOLEX Taiwan Ltd. General Manager of ACES	Director, and General Manager of ACES’s affiliated companies (Note 2)	Nil	Nil	Nil	Nil
Deputy General Manager	R.O.C	Lee Shu-Yun	Female	2014/3/21	578	0.00%	0	0	0	0	Master's degree in Finance Management from National Central University Assistant Manager in the Underwriting Department at Yuanta Securities Co., Ltd. Special Assistant to the Chairman at Aces Electronic Co., Ltd.	Director andSupervisor, of ACES’s affiliated companies (Note 2)	Nil	Nil	Nil	N/A

Note 1: The appointment date of insiders or the date of declaration of assuming office.

Note 2: Please refer to the information on related corporates (pages 289-295).

Note 3: When the general manager or equivalent position (highest management person) and the chairman are the same person, are spouses, or are first-degree relatives, the reason, rationale, necessity, and corresponding measures (such as increasing the number of independent directors and ensuring that over half of the directors do not concurrently serve as employees or management personnel, etc.) should be disclosed.

13

• (3) The remuneration of directors, general manager, deputy general managers, etc. in the most recent fiscal year: A. Remuneration of general directors and independent directors

Unit: NT$ thousand

Title	Name	Director remuneration	Director remuneration	Director remuneration	Director remuneration	Director remuneration	Director remuneration	Director remuneration	Director remuneration	The sum of A, B, C, and D as a percentage of after-tax net profit	The sum of A, B, C, and D as a percentage of after-tax net profit	Remuneration from otherjobs	Remuneration from otherjobs	Remuneration from otherjobs	Remuneration from otherjobs	Remuneration from otherjobs	Remuneration from otherjobs	Remuneration from otherjobs	Remuneration from otherjobs	The sum of A, B, C, D, E, F, and G as a percentage of after-tax net profit	The sum of A, B, C, D, E, F, and G as a percentage of after-tax net profit	Remuneration from reinvested businesses other than subsidiaries
		Remuneration (A)		Retirement pensio (B) (Note 1)		n Director remuneration (C)		Business execution expenses (D) (Note 2)				Remuneration, bonus, and special fees (E)		Retirement pension (F) (Note 1)		Employee remuneration (G)
		The Company	All companies in the consolidated financial statements	The Company	All companies in the consolidated financial statements	The Company	All companies in the consolidated financial statements	The Company	All companies in the consolidated financial statements	The Company	All companies in the consolidated financial statements	The Company	All companies in the consolidated financial statements	The Company	All companies in the consolidated financial statements	The Company		All companies in the consolidated financial statements		The Company	All companies in the consolidated financial statements
																Cash	Stock	Cash	Stock
Chairman	Yuan Wan-Ting	7,293	7,293	0	0	0	0	829	829	8,122 (3.05%)	8,122 (3.05%)	0	0	0	0	0	0	0	0	8,122 (3.05%)	8,122 (3.05%)	Nil
Director	Weiji Investment Co., Ltd.
	Weiji Investment Co., Ltd. Representative: Huang Wen-Cheng
Director	Hsieh Han-Chang
Director	Hsu Chang-Fei
Independent director	Lee An-Chen	0	0	0	0	0	0	112	112	112 (0.04%)	112 (0.04%~~)~~	0	0	0	0	0	0	0	0	112 (0.04%~~)~~	112 (0.04%)	Nil
Independent director	Liaw Dar-Lii
Independent director	Sheen Gwo-Ji
1. The policy, system, standards, and structure of remuneration payment for independent directors, as well as the correlation between the responsibilities, risks, input time, and the amount of remuneration paid: The remuneration of the directors and supervisors of the Company is determined in accordance with the provisions of the company's articles of association. As independent directors are also members of the board of directors, their remuneration is included in the remuneration of directors and supervisors and is handled in accordance with the Company's articles of association. In addition, the articles of association also stipulate that the Company shall allocate an amount not exceeding 3% of its annual profit as remuneration for directors and supervisors. The payment of remuneration to independent directors is handled in accordance with the "Principles for the Payment of Remuneration to Directors and Supervisors" of the Company. Moreover, if an independent director serves as a member of a functional committee of the board of directors, such as the audit committee, remuneration, and remuneration committee, etc., the actual expenses incurred in carrying out their duties, in addition to transportation expenses, are reimbursed on an actual expense basis. 2. In addition to the disclosure in the above table, the remuneration received by the Company's directors for providing services (such as serving as a consultant to non-employee subsidiaries/financial reporting of all companies/venture businesses) in the most recent fiscalyear was None.

Note 1: The Company has not made any actual payments of retirement benefits to directors or made any provision for retirement benefit expenses.

Note 2: Refers to the relevant business execution expenses of directors in the current fiscal year (including travel expenses, special allowances, various subsidies, dormitories, vehicle allocations, and other tangible benefits provided).

14

Range of Remuneration

	Range of Remuneration	Range of Remuneration	Range of Remuneration	Range of Remuneration
Remuneration levels for each director of our company	Director's name
	Total amount of the first four remuneration levels (A+B+C+D)		Total amount of the first seven remuneration levels (A+B+C+D+E+F+G)
	The Company	All companies in the financial report	The Company	All companies in the financial report
Below NT$ 1,000,000	Weiji Investment Co., Ltd., Huang Wen-Cheng, Hsieh Han-Chang, Hsu Chang-Fei, Lee An-Chen, Liaw Dar-Lii, Sheen Gwo-Ji	Weiji Investment Co., Ltd., Huang Wen-Cheng, Hsieh Han-Chang, Hsu Chang-Fei, Lee An-Chen, Liaw Dar-Lii, Sheen Gwo-Ji	Weiji Investment Co., Ltd., Huang Wen-Cheng, Hsieh Han-Chang, Hsu Chang-Fei, Lee An-Chen, Liaw Dar-Lii, Sheen Gwo-Ji	Weiji Investment Co., Ltd., Huang Wen-Cheng, Hsieh Han-Chang, Hsu Chang-Fei, Lee An-Chen, Liaw Dar-Lii, Sheen Gwo-Ji
NT$ 1,000,000(included)～NT$ 2,000,000(excluded)	Nil	Nil	Nil	Nil
NT$ 2,000,000(included)～NT$ 3,500,000(excluded)	Nil	Nil	Nil	Nil
NT$ 3,500,000(included)～NT$ 5,000,000(excluded)	Nil	Nil	Nil	Nil
NT$ 5,000,000(included)～NT$ 10,000,000(excluded)	Yuan Wan-Ting	Yuan Wan-Ting	Yuan Wan-Ting	Yuan Wanding
NT$ 10,000,000(included)～NT$ 15,000,000(excluded)	Nil	Nil	Nil	Nil
NT$ 15,000,000(included)～NT$ 30,000,000元(excluded)	Nil	Nil	Nil	Nil
NT$ 30,000,000(included)～NT$ 50,000,000(excluded)	Nil	Nil	Nil	Nil
NT$ 50,000,000(included)～NT$ 100,000,000(excluded)	Nil	Nil	Nil	Nil
Above NT$100,000,000	Nil	Nil	Nil	Nil
Total	7	7	7	7

15

B. Remunerations of General Manager and Deputy GM

												Unit: NT$thousand;thousand shares	Unit: NT$thousand;thousand shares	Unit: NT$thousand;thousand shares
Title	Name	Salary (A)		Retirement pension (B) (Note 1)		Bonus and special fees (C) (Note 2)		Employee remuneration (D)				Percentage of the total amount and post-tax net profit attributable to A, B, C, and D (%)		Remuneration from reinvested businesses other than subsidiaries
		The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company		Companies in the consolidated financial statements		The Company	Companies in the consolidated financial statements
								Cash	Stock	Cash	Stock
General Manager	Huang Tien-Fu	11,295	11,295	377	377	941	941	0	0	0	0	12,613 (4.73%)	12,613 (4.73%)	None
Chief Operating Officer	Lin Wang-Fu
Chief Operating Officer	Yang Tsung-Lin
Deputy General Manager	Lee Shu-Yun

Note 1: The provision for retirement benefits represents the expenses associated with the Company's defined benefit retirement plans. Note 2: The amounts disclosed shall include various bonuses, incentives, travel expenses, special allowances, various subsidies, dormitories, vehicle allocations, and other tangible benefits provided to the general manager and deputy general manager for the most recent fiscal year. When providing housing, vehicles, and other transportation or personal expenses, the nature and cost of the assets provided, the actual rent or rent calculated based on fair market value, fuel costs, and other benefits shall be disclosed.

The range of remuneration paid to General Manager and DeputyGeneral Manager in the Company	Name of General Manager and DeputyGeneral Manager	Name of General Manager and DeputyGeneral Manager
	The Company	All companies in the financial report
Below NTD 1,000,000	None	None
NTD 1,000,000(included)～NTD 2,000,000(excluded)	None	None
NTD 2,000,000(included)～NTD 3,500,000(excluded)	HuangTien-Fu、YangTsung-Lin、Lee Shu-Yun	HuangTien-Fu、YangTsung-Lin、Lee Shu-Yun
NTD 3,500,000(included)～NTD 5,000,000(excluded)	Lin Wang-Fu	Lin Wang-Fu
NTD 5,000,000(included)～NTD 10,000,000(excluded)	None	None
NTD 10,000,000(included)～NTD 15,000,000(excluded)	None	None
NTD 15,000,000(included)～NTD 30,000,000(excluded)	None	None
NTD 30,000,000(included)～NTD 50,000,000(excluded)	None	None
NTD 50,000,000(included)～NTD 100,000,000(excluded)	None	None
More than NTD 100,000,000	None	None
Total	4	4

16

• C. Comparison and explanation of the analysis of the ratio of total remuneration (paid to the Directors, Supervisors, General Manager, and Deputy General Managers of the Company by the Company and all the companies in the consolidated statements in the last two years) to net profit after tax and the correlation among the remuneration payment policy, standards, and combinations, the procedures for setting the remuneration, the business performance and future risks

• (A)Analysis of the ratio of the total remuneration paid by the Company and Companies in the consolidated financial report to its Directors, Supervisors, General Manager, and Deputy General Managers in the last two years to net profit after tax on parent company only or consolidated financial reports is as follows:

Title	Remuneration to	Remuneration to	Net Income Ratio	Net Income Ratio
	2022		2023
	The Company	All companies within the consolidated financial statements	The Company	All companies within the consolidated financial statements
Director	6.24%	6.24%	(3.09%)	(3.09%)
Supervisor	0.24%	0.24%	Note	Note
General Manager & Deputy General Manager	5.65%	5.65%	(4.73%)	(4.73%)

Note: On June 29, 2022, the shareholders' meeting elected three independent directors to establish an audit committee to replace the duties of the supervisor.

• (B) The Company's policy, standards, and composition of remuneration, the establishment of remuneration procedures, and the correlation with operational performance and future risks.

Director remuneration of the Company is governed by Article 24 of the Company's Articles of Association, which allows for remuneration of directors within the limit of not exceeding 3% of the profit for the year. The procedure for determining remuneration follows the assessment of the performance of the company's directors. This assessment considers not only the overall operational performance of the company, industry future operating risks, and development trends but also factors such as individual attendance at board meetings, personal performance achievement rates, and contributions to the Company's performance. It also takes into account industry standards to provide reasonable compensation and nomination for reelection.

Article 24 of the Company's Articles of Association sets a profit threshold of not less than 1% for employee remuneration for the year. The remuneration of company managers is evaluated based on the scope of responsibilities within the Company and their contributions to operational performance. The "Performance Appraisal Management Measures" of the company are used as a reference for evaluation. In addition to considering the overall operational performance of the company and the results of individual performance evaluations, factors such as managers' target achievement rates, profitability, operational efficiency, and contribution levels are considered to calculate their remuneration proportion, aiming to provide reasonable compensation.

The Company will review the remuneration system for directors and managers in a timely manner based on actual operating conditions and relevant laws and regulations. The reasonableness of related compensation is subject to review by the Compensation Committee to balance the Company's sustainable operation and risk management.

17

(4) Implementation of Corporate Governance

A. Operation of the board meeting

• (A) In the past fiscal year (2023), the board of directors held 7(A) meetings. The attendance of directors and supervisors is as follows:

Title	Name	Actual no. of meetings attended (B)	No. of meetings with entrusted attendance	Actual attendance rate (%) [B/A]	Remarks
Chairman	Yuan Wan-Ting	7	0	100%
Director	Weiji Investment Co., Ltd. Representative: HuangWen-Cheng	7	0	100%
Director	Hsieh Han-Chang	5	2	71%
Director	Hsu Chang-Fei	7	0	100%
Independent director	Lee An-Chen	7	0	100%
Independent director	Liaw Dar-Lii	7	0	100%
Independent director	Sheen Gwo-Ji	7	0	100%
Other matters to be recorded: 1. The operation of the board of directors should be disclosed if any of the following situations occur, including the date and term of the board meeting, the content of the resolution, the opinions of all independent directors, and the Company's handling of the opinions of the independent directors: (1) Matters listed in Article 14-3 of the Securities and Exchange Act. The Company has established an audit committee and is not subject to the provisions of Article 14-3 of the Securities and Exchange Act. For related information, please refer to the operation of the audit committee on page 20 of this annual report. (2) Except for the above items, there were no other board meeting resolutions that the independent directors opposed or reserved their opinions on, and had records or written statements: None. 2. Disclosure of the execution status of directors' recusal from interested transactions shall include the names of the directors, the contents of the transactions, the reasons for the recusal, and the voting participation status: None. 3. The assessment cycle and period, scope, method, and content of the board of directors' self-assessment (or peer evaluation) should be disclosed: Please refer to page 19 of this year's annual report for information on the execution of the board of directors' self-evaluation. 4. Assessment of the achievement of the goals to strengthen the functions of the Board of Directors during the current and recent fiscal years (such as the establishment of an audit committee, enhancement of information transparency, etc.): (1)The Company has established the "Board of Directors Performance Evaluation Procedure" which evaluates the performance of the board of directors, individual directors, and functional committees at the end of each fiscal year. The evaluation results are submitted to the most recent board of directors for review and improvement and are publicly disclosed on the company's website. The results of the 2023 fiscal year's board of directors' performance evaluation will be reported to the board on January 19, 2024, and publicly disclosed on the Company's website. (2)The Company purchases liability insurance for all directors and supervisors on a regular basis every year to reduce and distribute the risk of significant damages caused to the company and shareholders due to errors or omissions of the directors. We regularly review the policy content to ensure that the insurance compensation amount and coverage are suitable for our needs, and the latest report was presented to the most recent board of directors after the insurance waspurchased.

18

(B) The execution and results of the board evaluation for the year 2023 are as follows:

Evaluation cycle	Internal performance evaluations are conducted annually at the end of each fiscal year, and the evaluation results are submitted to the board for review and improvement by the end of March of the following fiscal year.
Evaluation period	2023/1/1~2023/12/31
Evaluation scope	The Board of Directors, individual board members, and functional committees.
Evaluation method	Internal self-assessment of the Board of Directors, individual self-assessment of board members, and internal self-assessment of each functional committee.
Evaluation content	1. Board of Directors performance evaluation items: (1) Participation in company operations. (2) Improving the quality of board decisions. (3) Board composition and structure. (4) Selection and continuous education of directors. (5) Internal controls. 2. Individual board member performance evaluation items: (1) Understanding of company goals and missions. (2) Understanding of board responsibilities. (3) Participation in company operations. (4) Management of internal relationships and communication. (5) Professionalism and continuous education of directors. (6) Internal controls. 3. The measurement items for the performance evaluation of functional committees include the following five aspects: (1) Degree of participation in company operations (2) Understanding of the responsibilities of functional committees (3) Enhancement of the decision-making quality of functional committees (4) Composition and appointment of members of functional committees (5)Internal controls
Evaluation Results and Improvement Measures	(1) Performance Evaluation Results: 1. Board of Directors: The overall average score is 4.70 (out of 5), with slightly lower scores in the aspects of "participation in company operations" and "selection and continuing education of directors" compared to other aspects. The Company will continue to improve in these areas. 2. Individual Board Members: The overall average score is 4.81 (out of 5), with slightly lower scores in the aspects of "participation in company operations" and "internal control" compared to other aspects. The company will continue to improve in these areas. 3. Functional Committees: The company currently has two functional committees, namely the "Remuneration Committee" and the "Audit Committee." A. The overall average score for the Remuneration Committee is 4.86 (out of 5), with slightly lower scores in the aspect of "understanding of committee responsibilities" compared to other aspects. The company will continue to improve in this area. B. The overall average score for the Audit Committee is 4.94 (out of 5), with slightly lower scores in the aspect of "enhancement of decision-making quality" compared to other aspects. The company will continue to improve in this area. (2) Improvement Measures: Regarding the areas with lower scores mentioned above, the company's future improvement directions are as follows: 1. Organize important meetings periodically to invite directors and committee members to participate, in order to increase communication opportunities between the management team and directors/committee members. This will help directors/committee members understand their responsibilities, familiarize themselves with the company's operations and environment, and understand the scope of existing or potential risks, thereby enabling them to effectively evaluate and supervise internal control systems and risk management. This will also enable timely and appropriate supervision and guidance. 2. Strengthen the completeness and timeliness of providing agenda materials to the board of directors and functional committees. 3. Measure the time allocated for agenda discussions to ensure sufficient time for discussion, and if necessary, convene meetings earlier. (3) Conclusion: In conclusion, the overall operation of the Company's board of directors and functional committees is good, meeting corporate governance requirements, and effectively enhancing the functions of the board of directors.
Reporting date to the Board of Directors.	2024/1/19

19

B. The operation of the Audit Committee: The Audit Committee held 6 meetings during the most recent fiscal year (A), and the attendance of independent directors is as follows:

Title	Name	Actual no. of meetings attended (B)	No. of meetings with entrusted attendance	Actual attendance rate (%) (B/A)	Remark
Independent Director	Liaw Dar-Lii	6	0	100%
Independent Director	Lee An-Chen	6	0	100%
Independent Director	Sheen Gwo-Ji	6	0	100%
Other matters to be recorded: 1. If the Audit Committee encounters any of the following situations in its operation, the date and session of the Audit Committee meeting, the content of the agenda, the independent directors' dissenting opinions, reservations, or significant recommendations, the Audit Committee's decision, and the company's handling of the Audit Committee's opinions should be disclosed: A. The items listed in Article 14-5 of the Securities and Exchange Act. Date of Audit Committee Meeting (Session) Agenda Content of dissenting opinions, reservations, or significant recommendations made by independent directors Audit Committee decision The Company's handling of the Audit Committee's opinions. 2023/1/13 (1st Session of the 3rd Term) ●The Group ERP system replacement project. ●Acquisition of real estate usage rights assets from related parties by the Company. None The proposal was passed according to the case with no objections from all committee members present. Submitted for discussion at the Board of Directors and approved by all directors present. 2023/3/24 (1st Session of the 4th Term.) ●The Company's 2022 annual operating report and financial statements. ●The Company's 2022 profit distribution proposal. ●The Company's 2023 appointment of auditors and evaluation of auditor independence and qualifications. ●Revision of the Company's management procedures for the financial statement compilation process. ●Subsidiary ACES ZHUHAI TECHNOLOGY LTD's acquisition of land. ●The Company's acquisition or disposal of machinery and equipment for business use from related parties. ●The Company's 2022 declaration of the internal control system. None The proposal was passed according to the case with no objections from all committee members present. Submitted for discussion at the Board of Directors and approved by all directors present. 2023/5/8 (1st Session of the 5th Term.) ●The Company's consolidated financial report for the first quarter of 2023. ●Company's appointment of KPMG to perform audit verification services for the 2023 financial report at public expense. ●The Company's joint credit application with Yuanta Commercial Bank for a total credit limit of NT$3.5 billion. ●The Company's proposed endorsement guarantee case. ●Company's acquisition or disposal of None The proposal was passed according to the case with no objections from all committee members present. Submitted for discussion at the Board of Directors and approved by all directors present.

20

	machinery and equipment for business use from relatedparties.
2023/8/11 (1st Session of the 6th Term.)	●The Company's 2023 second quarter consolidated financial report case. ●The Company's participation in the cash increase of subsidiary Longhan Technology Co., Ltd. ●The Company's acquisition or disposal of machinery and equipment for business use from related parties. ●Revision of the Company's organizational chart. ●Revision of "Group Organizational Operation Management Procedures." ●Revision of the Company's "Decision-MakingAuthorityMatrix."	None	The proposal was passed according to the case with no objections from all committee members present.	Submitted for discussion at the Board of Directors and approved by all directors present.
2023/9/8 (1st Session of the 7th Term.)	●The Company's acquisition of real estate from related parties case. ●Change in the Company's acquisition of property usage rights assets from related parties.	None	The proposal was passed according to the case with no objections from all committee members present.	Submitted for discussion at the Board of Directors and approved by all directors present.
2023/11/7 (1st Session of the 8th Term.)	●The Company's 2023 third quarter consolidated financial report case. ●Subsidiary ACES ZHUHAI TECHNOLOGY LTD.'s construction of factory and office building case. ●The Company's investment of USD 9 million in subsidiary ACES ZHUHAI TECHNOLOGY LTD. ●The Company's application for medium to long-term secured credit limits from financial institutions. ●Evaluation of the independence of the Company's signing auditors. ●The Company's acquisition or disposal of machinery and equipment for business use from related parties. ●The Company's acquisition of property usage rights assets from related parties. ●Submission of the Company's 2024 auditplan.	None	The proposal was passed according to the case with no objections from all committee members present.	Submitted for discussion at the Board of Directors and approved by all directors present.

• B. Other resolutions that have been passed with the approval of more than two-thirds of all directors but have not been approved by the Audit Committee: None.

• The execution status of independent directors' abstention from voting on matters involving conflicts of interest should be disclosed, including the name of the independent director, the content of the agenda, the reasons for abstention due to potential conflicts of interest, and the voting participation status: None.

• The communication status between independent directors the head of the internal audit and the accountant (including significant matters, methods, and results of communication on the company's financial and business conditions).

• (1) The communication methods between independent directors and the internal audit supervisor and accountant: A. The head of the internal audit and the accountant may contact independent directors directly as needed during normal times.

• B. In addition to receiving audit reports monthly, our company's independent directors are also briefed on the important business conditions of our company and its subsidiaries by the head of the internal audit at the annual meeting. They have a full understanding of the execution status and effectiveness of the auditing business.

• C. The accountant reports on the results of financial statement audits and discoveries at the annual meeting to the independent directors.

21

(2) The communication status between independent directors and the head of the internal audit and the accountant during the year 2023 is as follows:

Date	Reported and communicated matters	Description	Suggestion and res
2023/8/23	1. Accountant: Communication matters with the Company's governance unit.	1. Independence. 2. Second quarter review results. 3. Audit planning for fiscal year 2023. 4. Updates on significant regulations governing securities	Accountants and internal auditors have properly responded to and addressed the suggestions made by independent directors.
	2. Audit report.	1. Execution of the 2023 Group Audit Plan. 2. Operations related to funding loans, endorsement guarantees, and derivatives financial products. 3. Strengthening information security. 4. Implementation status of significant issues directed by regulatory authorities.	No objections
2023/11/27	Accountants communicate separately with the audit committee.	1. Recent financial statement disclosure for Q3 2023. 2. Audit planning for 2023 3. Opinions and feedback from the audit committee 4. Directions given by the audit committee concerning audit and review tasks	Accountants have properly responded to and addressed the suggestions made by the independent directors.

• Note 1: If any independent directors have resigned before the end of the fiscal year, their resignation date should be noted in the remarks column, and their actual attendance rate (%) should be calculated based on the number of audit committee meetings held during their tenure and their actual attendance.

• Note 2: If any independent directors have been newly elected or re-elected before the end of the fiscal year, both the previous and current independent directors should be listed, and it should be noted in the remarks column whether the independent director is a previous, new, or re-elected member and the date of the election. The actual attendance rate (%) should be calculated based on the number of audit committee meetings held during their tenure and their actual attendance.

22

C. Corporate Governance Status, Differences with Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and Reasons:

			Implementation Status	Deviations from “the Corporate
				Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description	for TWSE/TPEx Listed Companies”
				and Reasons
1. Does the company follow the Corporate Governance Best			The Company has established the Corporate Governance Best Practice	In compliance with the Corporate
Practice Principles for TWSE/GTSM Listed Companies, and has			Principles in accordance with the Corporate Governance Best Practice	Governance Best Practice Principles
the company established and disclosed its own Corporate			Principles for Listed Companies. It’s disclosed on the company's	for Listed Companies.
Governance Best Practice Principles?			official website and Market Observation Post System.
2. The company's shareholding structure and shareholders' equity				In compliance with the spirit of the
(1) Has the company set up internal operating procedures to			(1) The Company has established a spokesperson mailbox, a	Corporate Governance Best-Practice
handle shareholder proposals, doubts, disputes, and			reporting system on its website, and procedures for handling cases	Principles for Listed Companies.
litigation matters and followed the procedures?			of illegal, unethical, or dishonest behavior. There is dedicated
			personnel to handle shareholder proposals or disputes.
(2) Does the company have a list of its major shareholders and			(2) A person is in charge of managing relevant information and can
the ultimate controllers of the major shareholders?			access the list of major shareholders and their ultimate controllers
			at any time.
(3) Has the company established and implemented risk			(3) The Company has established "Group Organization Operation
management and firewall mechanisms with its affiliates?			Management Procedures," "Supervision and Management
			Procedures for Subsidiaries," "Transaction Procedures for Group
			Enterprises, Specific Companies, and Related Parties," and
			"Regulations on Financial and Business Operations Among
			Related Parties." There are clear regulations for the management,
(4) Has the company set up an internal standard to prohibit the			business, and financial transactions with related enterprises,
insiders’ use of private information to trade securities?			achieving a risk control mechanism.
			(4) The Company has established procedures for processing internal
			important information and preventing insider trading. Relevant
			regulations are communicated to internal personnel in a timely
			manner, and internal personnel are prohibited from buying or
			sellingsecurities usingundisclosed information on the market.
3. The composition and duties of the board of directors				In compliance with the spirit of the
(1) Has the board of directors formulated a diversified			(1) The Company has established a policy on the diversified	Corporate Governance Best-Practice
approach based on the composition of its members and			composition of the Board of Directors in accordance with	Principles for Listed Companies.
implemented it?			"Corporate Governance".
			The current Board of Directors consists of 7 members, including 3
			independent directors, with expertise in various fields such as
			industry, finance, accounting, and technology. They possess the
			ability to make operational judgments, manage the business,
			handle crises, and possess industry knowledge, international
			market perspectives, and leadership decision-making skills.
			All members of the Board of Directors are citizens of the
			Republic of China, and independent directors account for 43% of
			the board. The age distribution includes 2 directors in the 51-60
			age range, 4 directors in the 61-70 age range, and 1 director in the
			71-80 age range,with 1 female director. The Company

23

	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
				Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description	for TWSE/TPEx Listed Companies”
				and Reasons
			emphasizes gender equality among board members, aiming to
			increase female director seats to one-third, and will strive to
			increase female director seats in the future to achieve this goal.
			The policy and implementation of the diversified composition of
			the current Board of Directors are detailed onpage 12.
(2) Has the company set up other types of functional			(2) The company has only established the remuneration committee	The company has not set up any other
committees voluntarily in addition to the Remuneration			and the audit committee in compliance with legal requirements	functional committees at present and
committee and the audit committee according to law?			and has not established any other functional committees. The need	will evaluate the need for such
			for future committees will be evaluated based on the company's	committees in the future.
			needs.
(3) Has the company set up a performance appraisal method			(3) The company has established the "Board of Directors Performance	In compliance with the spirit of the
and an assessment method for the board of directors and			Evaluation Procedure" which conducts an annual performance	Corporate Governance Best-Practice
conducted performance appraisals on a regular basis every			evaluation of the Board of Directors, including both the overall	Principles for Listed Companies.
year?			performance of the board and the individual performance of its
			members. The results are quantified based on evaluation indicators
			and submitted to the latest Board of Directors meeting for
			reporting.
			The compensation of the Board of Directors is determined in
			accordance with Article 24 of the company's articles of
			association, which states that the remuneration of directors shall
			not exceed 3% of the profits earned during the fiscal year. The
			procedure for determining the remuneration is based on the
			performance evaluation of the Board of Directors, which
			considers both the overall operating performance of the company
			and the future business risks and trends in the industry.
			Additionally, it also takes into account the individual director's
			actual attendance rate, personal performance achievement rate,
			and contribution to the company's performance, and takes into
			account industry standards and gives reasonable compensation
			and nomination for re-election accordingly.
			Article 24 of the Company's articles of association stipulates that
			employee compensation shall not be less than 1% of the annual
			profits. The compensation of our company's executives is
			evaluated based on their job responsibilities and contribution to
			the company's operational performance. Our "Performance
			Appraisal Management Regulations" are used as a reference for
			evaluation, and we consider the overall operational performance
			of the company, individual performance evaluations, as well as the
			target achievement rate, profit margin, operational efficiency, and
			contribution of the directors and executives, and taking into
			account industry standards. We calculate their compensation ratio

24

	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
				Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description	for TWSE/TPEx Listed Companies”
				and Reasons
			accordingly and provide reasonable compensation.
			The Company reviews the director and executive compensation
			system periodically in accordance with the actual business
			situation and relevant laws and regulations, to ensure the balance
			between sustainable business operations and risk management. All
			related compensation is reviewed and approved by the
			Remuneration Committee.
(4) Does the company regularly assess the independence of the			(4) The Company conducts an annual assessment of the independence
audit firm?			and suitability of the audit firm, and the evaluation process is as
			follows:
			1. Reviewing the personal qualifications of the auditor.
			2. The auditor issues a statement of independence.
			3. Evaluating relevant independence standards based on the Code
			of Ethics for Professional Accountants No. 10 " Independence
			in Auditing and Review Services." The main independence
			standards evaluated include whether the auditor is a director,
			shareholder, or other related parties of the Company, confirming
			that there is no financial interest or business relationship with
			stakeholders. In addition, the rotation of auditors is also carried
			out in compliance with relevant laws and regulations.
			In 2023, the audit quality indicators (AQIs) provided by the
			reference auditor were evaluated based on 5 dimensions and 13
			indicators, including professionalism, quality control,
			independence, supervision, and innovation. The auditor and the
			audit firm were evaluated on their auditing experience, training
			hours, turnover rate, professional support, quality control review,
			and quality control support capabilities. The results showed that
			both the auditor's and the audit firm's capabilities were
			comparable to or better than those of their peers. In recent years,
			they have also been promoting digital innovation tools in auditing
			to enhance efficiency and quality.
			According to the above evaluation of the auditor's independence
			and Audit Quality Indicators (AQI), the auditor engaged by the
			Company complies with the independence and competence
			requirements, and the matter has been submitted for review and
			approval by the Audit Committee and the Board of Directors On
			March 24th,2023.
4. Is the listed company equipped with sufficient and appropriate			The Company has established a corporate governance unit as the	In compliance with the spirit of the
corporate governance personnel and designates a corporate			General Administration Department. On March 24th, 2023, the board	Corporate Governance Best-Practice
governance officer to be responsible for corporategovernance			of directorspassed a resolution to establish theposition of Corporate	Principles for Listed Companies.

25

	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
					Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description		for TWSE/TPEx Listed Companies”
					and Reasons
matters (including but not limited to providing necessary			Governance Officer, which will be concurrently held by the Deputy
information for the directors and supervisors to perform their			General Manager of the Finance Department of the company. The
duties, assisting the directors and supervisors in complying with			incumbent has over three years of experience in executive positions
laws and regulations, handling matters related to board			related to finance, equity, and corporate governance in publicly traded
meetings and shareholder meetings in accordance with the law,			companies.
preparing minutes of board meetings and shareholder meetings,			The corporate governance unit of our company is responsible for the
etc.)?			following corporate governance matters:
			1. Handle matters related to the board of directors and shareholders'
			meetings in accordance with the law.
			2. Prepare minutes of the board of directors and shareholders'
			meetings.
			3. Assist directors and supervisors in their appointment and continuous
			education.
			4. Provide information necessary for directors and supervisors to carry
			out their duties.
			5. Assist directors and supervisors in complying with laws and
			regulations.
			6. Report to the board of directors on the review results of the
			qualifications of independent directors in nomination, appointment,
			and during their tenure in compliance with relevant laws and
			regulations.
			7. Handle matters related to changes in the board of directors.
			8. Other matters as stipulated in the company's articles of incorporation
			or contracts.
5. Has the company established a communication channel with			A dedicated section for stakeholders has been set up on the Company's		In compliance with the spirit of the
interested parties (including but not limited to shareholders,			website, and the company has responded appropriately to important		Corporate Governance Best-Practice
employees, customers, and suppliers), set up an interested party			corporate social responsibility issues that stakeholders are concerned		Principles for Listed Companies.
page on the company's website, and responded appropriately to			about.
interested parties concerning important corporate social
responsibilityissues?
6. Does the company appoint a professional stock agency to			The Company has appointed a professional share agent, KGI Securities		In compliance with the Corporate
handle shareholders’ meeting-related affairs?			Co., Ltd. Share Agent Department, to handle the company's shareholder		Governance Best-Practice Principles
			meetings and other share-related matters.		for Listed Companies.
7. Information disclosure					In compliance with the Corporate
(1) Has the company set up a website to disclose financial and			(1) 1. The Company has established an online filing system for public		Governance Best-Practice Principles
corporate governance information?			information and designated a dedicated person to collect and		for Listed Companies.
			disclose company information. The company has also
			established a spokesperson system with a spokesperson and
			proxy spokesperson to improve the accuracy and timeliness of
			major information disclosure.
			2. The Companyhas set upa website and established an "Investor

26

	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
				Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description	for TWSE/TPEx Listed Companies”
				and Reasons
			Relations" section to regularly disclose financial and
			business-related information as well as corporate governance
			information for the reference of investors.
(2) Does the company adopt other information disclosure			(2)1. A designated person is responsible for the collection and	In compliance with the Corporate
methods (such as setting up an English website, appointing			disclosure of information: The shareholder services unit and	Governance Best-Practice Principles
a dedicated person responsible for the collection and			finance department of the Company are responsible for	for Listed Companies.
disclosure of company information, implementing the			information collection and disclosure, and the operation is
spokesman system, and posting the company's corporate			smooth.
briefing process on the website, etc.)?			2. The spokesperson system is implemented: The Company has
			designated the vice president of the finance department as the
			spokesperson.
			3. Corporate briefing information is posted on the Company
			website.
(3) Has the company announced and filed its annual financial			(3) The Company has many subsidiaries that are included in the	In compliance with the Corporate
report within two months after the end of the accounting			consolidated financial statements, which require more time for	Governance Best-Practice Principles
year, and provided early announcement and filing of its			verification. Therefore, we are unable to announce and file the	for Listed Companies.
first, second, and third quarterly financial reports and			annual financial report within two months after the end of the
monthly operational results within the prescribed deadline?			accounting year and to announce and file the quarterly financial
			reports and monthly operational information ahead of the
			prescribed deadline.
8. Does the Company have any other important information			(1) Employee equity and employee care	In compliance with the Corporate
(including but not limited to employees' rights, employee care,			Through the convening of labor-management coordination	Governance Best-Practice Principles
investor relations, supplier relationship, equity of interested			meetings, the Company can prioritize employee rights and express	for Listed Companies.
parties, training for directors and supervisors, implementation			care for our employees. We have established an employee
of risk management policies and risk measurement standards,			complaint mailbox which is handled by dedicated personnel who
implementation of customer policies, the Company’s purchase			deal with employee feedback. We also hold quarterly employee
of liability insurance for directors and supervisors, etc.)?			meetings where employee opinions can be expressed and the
			Company can respond and communicate explanations. In addition,
			we organize expert lectures and health seminars to make our
			functions more diverse and enriching. We hold monthly birthday
			parties to allow employees to relax and strengthen their sense of
			belonging to the Company. The employee welfare committee
			organizes various activities for employees to benefit their physical
			and mental health, and also participates in donations to
			disadvantaged groups. We prioritize employee workplace safety
			and health issues and hold regular environmental and safety
			inspection meetings each month with the goal of continuous
			improvement. Outstanding colleagues who perform well at work
			are recognized and rewarded eachyear through a selectionprocess

27

	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
				Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description	for TWSE/TPEx Listed Companies”
				and Reasons
			for outstanding employees. We also promote various forms of
			public welfare activities under the name of outstanding
			employees. This motivational approach towards our employees
			instills a sense of satisfaction and happiness, allowing them to
			work smarter and live healthier lives.
			In addition, the Company has established an employee retirement
			policy in accordance with the Labor Standards Act and formed a
			Labor Retirement Preparation Fund Supervision Committee. We
			allocate 2% of the total monthly salary amount to set aside for the
			Labor Retirement Preparation Fund, which is deposited in a
			special account at the Bank of Taiwan. This fund is intended for
			future payment of employee retirement benefits. Starting from
			July 1, 2005, the Company has established a retirement policy
			based on the Labor Pension Act, and for those employees who
			choose to apply for the Labor Pension Act, we contribute no less
			than 6% of their monthly salary to their account with the Bureau
			of Labor Insurance. Retirement benefits are paid out as either
			monthly installments or a lump sum payment, based on the
			amount accumulated in the employee's retirement account and
			accrued earnings. All regulations and measures related to
			labor-management relations in the Company are implemented in
			compliance with relevant laws, and any new or revised measures
			related to labor-management relations are only established after
			sufficient consultation and agreement between labor and
			management. The Company regularly sends employees to
			participate in safety and health lectures, as well as providing
			pre-employment education and training, management courses,
			professional skills, self-improvement, and other training
			programs. We aim to provide a comfortable and safe working
			environment for our employees and to support their ongoing
			learning and development within the organization.
			(2) Investor Relations
			The Company adheres to the principles of fairness and
			transparency in dealing with all shareholders. Every year, we
			convene a shareholders' meeting in accordance with the Company
			Act and relevant laws and regulations and notify all shareholders
			to attend the meeting in accordance with the relevant rules. We
			encourage shareholders to actively participate in the election of
			directors and supervisors and the amendment of the Company's
			articles of association, as well as to be informed of major financial
			transactions such as the disposal of assets. We alsoprovide

28

	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
				Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description	for TWSE/TPEx Listed Companies”
				and Reasons
			shareholders with ample opportunities to ask questions or make
			proposals to achieve balance and fairness. The Company has
			established rules for shareholder meetings in accordance with the
			law, properly preserves the minutes of shareholder meetings, and
			discloses relevant information on the Market Observation Post
			System (MOPS). To ensure that shareholders have the right to be
			fully informed, participate, and make decisions on important
			matters of the company, the Company has established the position
			of spokesperson and proxy spokesperson. We also have dedicated
			personnel to handle shareholder suggestions, questions, and
			disputes.
			Since its public listing, the Company has upheld the principle of
			information transparency and has disclosed information in
			accordance with the regulations of the Public Offering Company's
			Disclosure Checklist and the Taiwan Stock Exchange's
			Verification and Disclosure Procedure for Major Information of
			Listed Companies. We have established an online system for
			reporting and disclosing public information, and have assigned
			personnel to be responsible for collecting and disclosing company
			information. After the relevant departmental managers review and
			confirm the information, we promptly announce and report
			relevant information, providing timely and comprehensive
			information to investors that may impact their investment
			decisions.
			(3) Respect for Stakeholders’Rights and Interests
			The Company complies with the law and regulations to honestly
			and openly disclose company information, to safeguard the basic
			rights and interests of investors. We maintain open
			communication channels with our banks, employees, consumers,
			and suppliers, and respect and uphold their legal rights and
			interests. We have spokespersons and proxy spokespersons to
			answer investor questions and provide high levels of transparency
			in our financial and business information for investors and
			stakeholders. In addition, the Company has established procedures
			for group organizational management, supervision and
			management of subsidiaries, and management of related-party
			transactions. All transactions between related companies are
			carried out in accordance with these procedures. Furthermore, we
			have explained the restrictions on the competitive activities of our
			directors in the shareholders’meeting.

29

	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
				Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description	for TWSE/TPEx Listed Companies”
				and Reasons
			(4) The Company purchases liability insurance for all directors and
			supervisors on a regular basis every year. This is done to reduce
			and distribute the risks associated with errors or omissions
			committed by directors, which could potentially cause significant
			damage to the company and its shareholders. We periodically
			review the content of the insurance policy to ensure that the
			coverage and compensation amount are sufficient and meet our
			needs. The most recent report on the board of directors was made
			after the purchase of insurance.
			(5) Succession Planning for Board Members and Key Management
			Personnel
			The purpose of succession planning is to ensure that the company
			has a pool of talented individuals to succeed in key management
			positions, thereby maintaining depth in the management bench
			and meeting the long-term human resource needs of the
			organization. In planning for succession, the Company evaluates
			candidates based not only on their professional skills and
			execution capabilities, but also on their fit with the company's
			culture, work values, and personal qualities. A candidate with
			cross-functional experience is preferred to ensure a broad
			perspective on the business.
			1. Succession Planning and Implementation for Board Members:
			The Company has a Board of Directors consisting of 7
			members (including 3 independent directors) who possess
			expertise in management, finance, and R&D. The future
			composition and member background of the board of directors
			will continue to follow the current structure. We have a strong
			network of connections and will also seek suitable talent from
			external sources to assume positions as needed. In addition,
			independent directors are required by law to have work
			experience in business, R&D, legal, accounting, or corporate
			affairs. Therefore, the direction of future succession planning
			will focus on professionals with expertise in each field.
			2. Succession Planning and Implementation for Key Management
			Personnel:
			The Company's succession plan is currently in progress. The
			general managers of the Company and its subsidiaries are the
			successors to the general manager and chairman. Through
			managing the Company, they cultivate their succession
			capabilities. The group's various company executives are all
			professional staff who fullyendorse the company's business

30

	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
				Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description	for TWSE/TPEx Listed Companies”
				and Reasons
			philosophy, understand its vision, share its values, and have a
			certain amount of seniority within the group. Their
			performance, professional expertise, and business acumen have
			all been recognized. Some of the designated successors are
			already members of the board of directors of various companies
			within the group, and they are expected to learn about the
			operations of the board of directors in the coming years. The
			goal is for them to take over leadership positions in 8 to 10
			years. The Company's succession plan is not limited to senior
			management, but will also be extended to lower levels to ensure
			that each level has qualified successors. The Company will also
			cultivate successors for departmental senior managers through
			its proxy system, job rotation, and functional training. The
			selection of suitable successors will be evaluated through
			on-the-job learning, self-study, job experience, and the
			Company's existing performance appraisal system. The
			retention rate of key talents will be used as an important
			performance indicator for the management department on a
			monthly basis.
			In addition, the Company conducts job rotations and
			promotions for key talents based on future development
			strategies, investment plans, technology roadmaps, employee
			performance evaluations, and retirement situations, to
			effectively transfer professional experiences and cultivate
			suitable management talent for succession.
			(6) The Company provides at least one training session per year to
			our directors, managers, and employees on the prevention of
			insider trading in accordance with relevant laws and regulations.
			The company provides education and promotion on the prevention
			of insider trading at least once a year to directors, managers, and
			employees. The education and training also cover new employees
			and include topics such as the definition of insider trading,
			internal significant information, and its public disclosure,
			prohibition of insider trading, and penalties for violations. The
			Company conducted relevant education on preventing insider
			trading to current directors and managers on December 19th,
			2023, and made the course materials available for employees to
			refer to at any time via the Company's internal system.
			The Company will notify directors and managers by email that
			trading in the company's stock is prohibited during the blackout
			periods,which begin two weeks before the announcement of the

31

	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate
								Governance Best Practice Principles
Evaluation Item
	Yes	No	Summary Description					for TWSE/TPEx Listed Companies”
								and Reasons
			annual and quarterly financial reports. The blackout periods are
			defined as the 30 days before the announcement of the annual
			financial report and the 15 days before the announcement of each
			quarterly financial report.
			The education and promotion of relevant laws and regulations on
			preventing insider trading for employees w			ere carried out in the
			year 2023 as follows:
				Item	Participants	Hours
				Prevent insider trading	196	0.5
				Total	196	98
9. Please explain the improvement made based on the corporate governance evaluation results released by the Corporate Governance Center of Taiwan Stock Exchange Corporation for the latest
fiscal year, and propose priority areas and measures for those who have not yet improved. (Companies that have not been evaluated need not be filled in.)
We have made the following improvements based on the corporate governance evaluation results released in the 10th assessment (the fiscal year 2023):
1. We have established internal rules that prohibit our directors, employees, and other insiders from using non-public information to profit from the market. We have disclosed these rules on
our company's website and ensured their implementation.
In the fiscal year 2024, we will prioritize the following areas for further strengthening:
1. Invited(self-initiated)to hold at least two corporate briefings,with the first and last briefings of the evaluatedyear spaced more than three months apart.

32

• D. The composition and operation of the Company's remuneration committee are as follows: (A) On December 29, 2011, the board of directors of the Company approved the establishment of a remuneration committee. The members of the current remuneration committee are independent directors Mr. Liaw Dar-Lii, Mr. Lee An-Chen, and Mr. Chu Ming-Ching. Their term of office is from August 10, 2022, to June 28, 2025. Mr. Liaw Dar-Lii, an independent director, serves as the convener of the committee.

• (B) The professional knowledge and independence of the members of the current remuneration committee are as follows:

Term Identity (Note1) Name	Term Identity (Note1) Name	Professional qualifications and experience (Note 2)	Independence status (Note 3)	The number of remuneration committee memberships held concurrently in other publicly listed companies.
Independent director	Liaw Dar-Lii	For professional qualifications and experience, please refer to pages 8-10 of this year's annual report for information on the directors.	All members of the Company's remuneration committee comply with the provisions of Article 6, Paragraph 1 of the "Regulations Governing the Establishment and Exercise of Powers of the Compensation Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter at Securities Firms"(Note 1).	0
Independent director	Lee An-Chen			0
Other	Chu Ming-Ching	Education: Agricultural Machinery Department, National Chung Hsing University Experience: Manager, Sales Unit, Cathay Life Insurance Co., Ltd.		0

• Note 1: In the two years before the appointment and during the term of office, the member shall not have any of the following circumstances:

• (1) An employee of the Company or its affiliated enterprises.

• (2) Director or supervisor of the company or its affiliated enterprises (except for independent directors appointed mutually by the company and its parent company, subsidiary, or subsidiary of the same parent company according to this law or local laws and regulations).

• (3) The member, his/her spouse, minor children, or any natural person shareholder who holds 1% or more of the Company's issued shares or is among the top ten shareholders in the name of others.

• (4) Manager listed in (1) or spouse, relatives within two degrees of kinship, or direct blood relatives within three degrees of kinship of the personnel listed in (2) or (3).

• (5) Director, supervisor, or employee of the corporate shareholder who directly holds 5% or more of the total issued shares of the Company, is among the top five shareholders or is appointed as a director or supervisor of the company by the corporate shareholder according to Article 27, Paragraph 1 or 2 of the Company Act (except for independent directors appointed mutually by the company and its parent company, subsidiary, or the subsidiary of the same parent company according to this law or local laws and regulations).

• (6) Director, supervisor, or employee of another company or organization that controls more than half of the seats or voting rights of the Company's board of directors, but not including independent directors appointed mutually by the Company or its parent company, subsidiary, or the subsidiary of the same parent company according to this law or local laws and regulations.

• (7) Director (trustee), supervisor (supervisor), or employee of another company or organization, who is the same person or spouse of the company's chairman, general manager, or equivalent position (except for independent directors appointed mutually by the Company and its parent company, subsidiary, or the subsidiary of the same parent company according to this law or local laws and regulations).

• (8) Director (trustee), supervisor (supervisor), manager, or shareholder holding 5% or more of the shares of a specific company or organization that has financial or business dealings with the Company.

• (9) Professional, sole proprietor, partnership, company, or organization providing related services in commerce, law, finance, accounting, and other fields to the company or its affiliated enterprises, and whose total remuneration received in the past two years does not exceed NT$500,000, as well as their spouses, enterprise owners, partners, directors (trustees), supervisors (supervisors), managers, and their spouses. However, members of the remuneration committee, public tender offer review committee, or merger special committee who perform duties in accordance with the Securities and Exchange Act or the Company Merger and Acquisition Act are not subject to this restriction.

33

• (C) Information on the operation of the remuneration committee

• a. The remuneration committee of our company consists of three members.

• b. The term of office for the current committee is from August 10, 2022, to June 28, 2025. In the most recent fiscal year, the remuneration committee held two meetings (A), and the qualifications and attendance of the members were as follows:

	Title	Name	Actual no. of meetings attended (B)	No. of meetings with entrusted attendance	Actual attendance rate (%) (B/A)	Remarks
	Convener	Liaw Dar-Lii	2	0	100%
	Member	Lee An-Chen	2	0	100%
	Member	Chu Ming-Ching	2	0	100%
	Other matters to be recorded:: 1. If the board of directors did not adopt or amend the suggestion of the remuneration committee, please indicate the date and session number of the board meeting, the contents of the motion, the result of the resolution, and the company’s handling of the suggestion of the remuneration committee (if the remuneration passed by the board is better than the suggestion of the remuneration committee, please state the difference and the reasons): Nil. 2. If any member had objections or reservations about the resolution of the remuneration committee and there is a record or a written statement, please indicate the date and session number of the remuneration committee meeting, the contents of the motion, all the opinions of the members and how the opinions were handled: (1) Resolutions of the Remuneration Committee for the fiscal year 2023 are as follows: Date of the Remuneration Committee Tenure Agenda Resolution 2023/1/16 The 2nd meeting of the 5th Remuneration Committee. 1. Annual bonus payment for managers. 2. Distribution of employee compensation and director/supervisor remuneration for the fiscal year 2022. The proposal was passed according to the case with no objections from all committee members present. 2023/8/23 The 3rd meeting of the 5th Remuneration Committee. 1. Payment of employee compensation for managers. 2. Payment of director/supervisor remuneration for the fiscal year 2022. 3. Submit the list of managers and approve the salary conditions. The proposal was passed according to the case with no objections from all committee members present. (2) Items decided by the compensation committee, with members having recorded or written dissenting or reserved opinions: None. 3. Duties of the Remuneration Committee: The functions of the Company's Remuneration Committee are regulated by relevant laws and regulations. The committee takes a professional and objective stance to evaluate the compensation policies and systems for our company's directors and managers. Generally, the committee holds at least two meetings per year and may convene additional meetings as necessary. The committee also submits proposals to the board of directors for reference in decision-making. (1)Duties of the RemunerationCommittee:

34

• a. Regularly review and propose amendments to the organization regulations of the committee.

• b. Establish and regularly review the performance evaluation criteria for directors and managers, as well as the policies, systems, standards, and structures for compensation and benefits. The evaluation criteria should be disclosed in the annual report.

• c. Regularly assess the achievement of performance goals for directors and managers and determine individual compensation and benefits based on the evaluation results.

• (2) When fulfilling its duties, the Remuneration Committee adheres to the following principles:

• a. The performance evaluation and compensation and benefits for directors and managers should reference the industry's standard compensation practices for similar-sized companies and take into consideration their performance, the company's operating performance, and the future risk implications.

• b. The committee should not encourage directors and managers to engage in activities that exceed the company's risk appetite for the sake of compensation and benefits.

• c. The proportion of short-term incentive compensation and the timing of payment of variable compensation for directors and senior managers should be determined based on industry characteristics and the company's business nature.

• d. Committee members should recuse themselves from discussing and voting on any matters related to their compensation and benefits to ensure fairness and objectivity.

35

E. The implementation status of sustainable development promotion

1. The implementation status of sustainable development promotion and the differences between the sustainable development best practice principles for TWSE/TPEx listed companies, as well as the reasons for these differences.

			Execution status	Execution status	Execution status	Differences and reasons for the
						implementation of sustainable development
Item						practices compared to the best practice
	Yes	No	Description
						principles for TWSE/TPEx listed
						companies
1. Has the company established a governance framework for			The Company focuses on sustainability issues and has established the			Complies with the Sustainable
promoting sustainable development, set up a dedicated department			"Sustainability Committee" as a dedicated unit for promoting			Development Best Practice Principles for
for promoting sustainable development, and authorized senior			sustainability. The chairman serves as the chairperson, actively			TWSE/TPEx Listed Companies.
management to handle it, and is the board of directors supervising			promoting "corporate governance," "environmental sustainability,"
the situation?			"social involvement," and "green products." The Company also
			enhances employee awareness of sustainability, identifies and
			analyzes significant issues concerning relevant stakeholders,
			establishes related risk management policies and objectives, builds
			consensus, and collaborates toward sustainability efforts.
			Currently, the Taiwan plant has completed greenhouse gas inventory
			and verification, and will actively promote this to various plants in
			the group to complete greenhouse gas inventory verification and set
			carbon reduction targets, actively promoting energy-saving and
			carbon reduction actions.
			The "Sustainability Development Committee" reports on related
			plans, implementation effectiveness, and corresponding strategies at
			the last board meeting of each year. The board must assess the
			likelihood of success of these strategies, review their progress, and
			urge adjustments when necessary.
2. Has the company conducted a risk assessment on environmental,			A. The Company has conducted a risk assessment on			Complies with the Sustainable
social, and corporate governance (ESG) issues related to its			sustainability-related by the "Sustainability Development			Development Best Practice Principles for
business operations in accordance with the principle of materiality,			Committee" issues in accordance with the significant principles.			TWSE/TPEx Listed Companies.
and developed relevant risk management policies or strategies?			Based on the evaluation of the		risks, the Company has formulated
			the following risk management		policies or strategies:
			Material issues	Risk assessment items	Risk management policies or strategies
			Corporate governance	Social and economic compliance with legal regulations	By establishing a governance structure and implementing internal control mechanisms, we ensure that all personnel and operations of our company comply with relevant laws and regulations.
				Information security and	Promote internal network security awareness, provide information security training,

36

				Execution status	Execution status	Differences and reasons for the
						implementation of sustainable development
Item						practices compared to the best practice
	Yes	No		Description
						principles for TWSE/TPEx listed
						companies
				occupational safety.	and establish effective reporting channels to ensure the safety of both information and employees.
			Personnel	Human Rights	Based on the international human rights conventions, the Company has formulated the " ACES Electronics Corporate Social Responsibility Policy", which includes policies on safeguarding human rights, including the "International Covenant on Economic, Social and Cultural Rights" and the "International Covenant on Civil and Political Rights", two United Nations human rights conventions. The Company adheres to the principles outlined in the "Universal Declaration of Human Rights", the "United Nations Guiding Principles on Business and Human Rights", the "United Nations Global Compact", and the "International Labour Organization", and respects internationally recognized basic human rights.
				Talent development	Collaborating with various mechanical engineering departments to establish industry-academia partnerships and arrange various training courses for excellent talents to graduate and join the workforce, so that employees can continue to improve and grow in their work.
			Environmental and Energy	Environmental protection	The Company is committed to environmental protection and advocates for green and clean production. In our production process, we have reduced pollution emissions and

37

				Execution status	Execution status	Differences and reasons for the
						implementation of sustainable development
Item						practices compared to the best practice
	Yes	No		Description
						principles for TWSE/TPEx listed
						companies
					minimized the impact on the environment. We regularly implement plans and programs that have been established and track and review the progress of each objective to ensure their achievement.
				Water resources management	Promote water resource conservation within the factory and implement water resource reuse. In the event of water supply interruption, products will be transferred to other factories for production. In addition, the company will continue to purchase saplings to ensure soil and water conservation and regulate the environment.
				Energy management	Promotion of energy management by guiding the use of air conditioning and compressed air equipment in the factory. The company has backup generators and regularly checks the inventory of diesel fuel. If a power outage occurs, the company will transfer production to other plants. Equipment replacement in the factory includes systems with variable frequency or energy-saving devices.
			Occupational health and safety	Occupational Safety	The Company obtained two international certifications in 2016, OHSAS 18001 Occupational Health and Safety Management System and ISO 14001 Environmental Management System. The environment, safety, and health departments in each of our factories conduct daily safety inspections and checks to further implement the

38

				Execution status	Execution status	Differences and reasons for the
						implementation of sustainable development
Item						practices compared to the best practice
	Yes	No		Description
						principles for TWSE/TPEx listed
						companies
					occupational safety and health management system. The companies within our group supervise and exchange experiences with each other. Regular fire drills and safety education and training are conducted every year to cultivate employees' emergency response and self-safety management abilities.
				Product Quality	The Company obtained the QC080000 Hazardous Substance Process Management System certification in 2014. All of our products comply with government regulations and meet the requirements of the EU RoHS directive, with no hazardous substances present. Through strict quality system management, we provide our customers with stable product quality. To ensure customer service quality and satisfaction, we conduct regular customer satisfaction surveys and strengthen our cooperation with customers.
			B. The Company adheres		to the principle of integrity and
			feedback to society, and in pursuing sustainable business
			and profits, we fulfill corporate social responsibility, value
			the rights and interests of stakeholders, and pay attention to
			environmental, social, and corporate governance issues,
			which are incorporated into our management policies and
			operations to achieve thegoal of sustainable management.
C. Environmental Issues						Complies with the Sustainable
(A) Has the company established an appropriate environmental			A. The Company's main environmental management measures			Development Best Practice Principles for
management system based on its industry characteristics?			include:			TWSE/TPEx Listed Companies.
			(A) Ensuring compliance with regulatory requirements for
			emissions of exhaustgas,wastewater,waste,noise,and

39

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
			chemical substances generated during the Company's
			processes.
			(B) Setting targets and managing the use of resources such as
			electricity, water, and air conditioning.
			(C) Submitting reports for the "Energy User Energy
			Conservation Audit System" as required by energy
			management regulations.
			(D) Having obtained certification for ISO 14001
			Environmental Management System, ISO 45001
			Occupational Health and Safety Management System,
			QC080000 Hazardous Substance Process Management
			System, and conducted an inventory and third-party
			verification of Scope 1, 2, and 3 greenhouse gas emissions
			under ISO 14064-1.
(B) Is the company committed to improving energy efficiency and			(B) The company actively maximizes the efficient use of resources,	Complies with the Sustainable
using low-impact renewable materials to reduce its environmental			uses environmentally-friendly materials that are pollution-free	Development Best Practice Principles for
footprint?			and non-toxic in all products produced during our processes and	TWSE/TPEx Listed Companies.
			improves our process and operation management to reduce
			waste and lower production costs. Regarding waste and
			defective products generated during the production process, we
			calculate the amount produced through effective management
			procedures and recycle them. The recycled waste and defective
			products are then handed over to qualified waste recyclers to be
			reported to the Environmental Protection Bureau and disposed
			of and recycled in accordance with the law.
(C) Has the company assessed the potential risks and opportunities of			(C) The Company continuously monitors the impact of climate	Complies with the Sustainable
climate change for its current and future operations, and taken			change on operational activities, adhering to the belief in	Development Best Practice Principles for
relevant measures in response?			"coexistence with nature and a people-centered approach" and	TWSE/TPEx Listed Companies.
			the spirit of "protecting the Earth and employee health."
			Additionally, referencing the recommendations for
			climate-related financial disclosures issued by the Financial
			Stability Board's Task Force on Climate-related Financial
			Disclosures (TCFD), the Company initially conducts risk
			analyses on the impacts of climate change and plans
			corresponding measures. Future communications will outline
			the company's climate change response plans within the TCFD
			framework. A preliminary identification of risks and
			opportunities related to climate change has already been
			completed. For detailed information, please refer to Note 1

40

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
			(P.51).
(D) Has the company calculated its greenhouse gas emissions, water			D. The Company's greenhouse gas emissions, water usage, and total	Complies with the Sustainable
usage, and total waste generation over the past two years, and			waste generation over the past two years are as follows:	Development Best Practice Principles for
developed policies for reducing greenhouse gas emissions, water			(A) Some of the Company's factories have conducted	TWSE/TPEx Listed Companies.
usage, or other waste management?			greenhouse gas inventories, and the data is as follows:
			a. The total greenhouse gas emissions for the year 2023
			were 5,985.338 metric tons of CO2 equivalent (CO2e).
			The total greenhouse gas emissions for the year 2022
			were 5,381.703 metric tons of CO2 equivalent (CO2e).
			2023's total greenhouse gas emissions increased by
			603.635 metric tons of CO2e compared to 2022,
			primarily due to increased production capacity and the
			inclusion of additional Scope 3 upstream transportation
			emissions this year.
			Starting in 2021, the Company has for the first time
			included some Scope 3 categories in our inventory and
			verification, including employee business travel,
			employee commuting, downstream transportation and
			distribution of goods, waste disposal, and upstream
			emissions from fuel and electricity. The Company's
			greenhouse gas inventory for fiscal year 2023 has been
			completed and has obtained third-party certification.
			(For detailed information, please refer to the ACES’s
			ESG Report)
			b. The target for total greenhouse gas emissions in 2023 is
			set based on the 2022 data, with a yearly reduction target
			of 1%, which will be achieved through the following
			aspects:
			(a) Air conditioning and lighting:
			i. Setting the temperature of the workplace and
			office at 26-28℃, with designated personnel
			responsible for turning on and turning off the air
			conditioning.
			ii. Lighting switches are subdivided and controlled
			by area. Time-controlled switches are used to
			manage lighting in public areas. All factory
			lighting fixtures have been replaced with LED
			lightingto reduce electricitywaste.

41

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
			(b) Electricity usage for air compressors:
			i. Regular inspections are conducted to check for
			air leaks in the company's air ducts and repairs
			are made promptly to avoid increasing the load
			on the air compressors due to air leaks, thus
			achieving energy savings in the use of air
			compressors.
			ii. The company has fully replaced its air
			compressors with variable frequency drives.
			(c) Optimizing the fuel consumption of official vehicles
			and making advance arrangements for carpooling.
			(d) Waste sorting is implemented within the factory, and
			all waste is processed by qualified vendors with
			clear records of the disposal process.
			(e) Energy management - Promoting environmental
			protection measures such as digital energy-saving,
			waste reduction, and recycling, and providing
			training and promotion on energy-saving and
			emission reduction measures.
			(B) Comparison and explanation of water usage and total waste
			generation:
			a. Comparison and explanation of water usage:
			Total water usage in 2023: 21,810 cubic meters
			Total water usage in 2022: 19,533 cubic meters
			Based on the statistics for the two fiscal years, the water
			usage in 2023 increased by 2,277 cubic meters compared
			to 2022. The primary reason is that an increase in
			production capacity led to a concurrent increase in water
			usage. (For more details, please refer to theACES’s ESG
			Report)
			b. Comparison and Explanation of Total Waste Generation:
			Total waste generated in 2023: 18.62 metric tons
			(municipal solid waste)
			Total waste generated in 2022: 20.4 metric tons
			(municipal solid waste)
			According to the statistics for the two years, waste
			generation decreased by 1.78 metric tons. (For more
			details, please refer to theACES’s ESG Report)

42

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
D. Social issues
(A) Does the company develop relevant management policies and			(A) The Company has developed the "Macroblock Electronic	Complies with the Sustainable
procedures in accordance with relevant laws and international			Corporate Social Responsibility Policy" by reference to the	Development Best Practice Principles for
human rights conventions?			International Bill of Human Rights, which includes policies to	TWSE/TPEx Listed Companies.
			protect human rights, including the International Covenant on
			Economic, Social, and Cultural Rights and the International
			Covenant on Civil and Political Rights, both of which are United
			Nations human rights conventions. In order to fulfill our
			corporate social responsibility and protect the basic human rights
			of all employees, customers, and stakeholders, we follow the
			principles outlined in the United Nations Universal Declaration
			of Human Rights, the United Nations Guiding Principles on
			Business and Human Rights, the United Nations Global
			Compact, and the International Labour Organization's human
			rights conventions, to respect internationally recognized basic
			human rights, including freedom of association, caring for
			vulnerable groups, prohibiting child labor, eliminating all forms
			of forced labor, eliminating employment and job discrimination,
			and complying with labor-related laws and regulations in the
			country or region where the company operates, to protect the
			legitimate rights and interests of employees, and establish
			appropriate management methods and procedures.
			(1) Provide employees with a reasonable salary and bonus
			system.
			(2) Provide employee education and training programs.
			(3) Implement insurance plans and leave systems.
			(4) Set aside retirement benefits in accordance with the law.
			In terms of labor-management communication, through the
			convening of labor-management coordination meetings, we can
			attach importance to employee rights and express concern for
			employees. We have also set up physical and online employee
			suggestion boxes to receive employee complaints and
			suggestions, and value two-way communication and
			coordination.
			In addition, the Company follows the international trend and
			adopts the Code of Conduct formulated by the Responsible
			Business Alliance (RBA) (formerly known as the Electronic
			Industry Citizenship Coalition (EICC)) as an important
			behavioral norm for the company. The companyadopts the

43

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
			code of conduct developed by the Responsible Business
			Alliance (RBA) (formerly known as the Electronic Industry
			Citizenship Coalition, EICC) as an important behavior norm for
			all its business activities. The basic principle of using this code
			of conduct is that all business operations must fully comply
			with the laws, regulations, and legal requirements of the
			countries in which they operate, and encourage participants to
			actively use internationally recognized standards to promote
			social and environmental responsibility, business ethics, and
			ensure the safety of the working environment for the entire
			supply chain and subcontractors, respect for each employee,
			and compliance with moral principles in business operations.
			The Company is committed to continuously self-checking its
			performance in labor, health, safety, environmental, and ethical
			aspects, accepting on-site audits by third-party verification
			agencies, and proactively requiring suppliers to adopt RBA
			tools and standards. To demonstrate this commitment and
			create a sustainable business environment, we will uphold an
			attitude and position of integrity and non-compromise, establish
			relevant RBA policies, and strive tirelessly for the rights and
			welfare of practitioners and communities in the electronics
			industry supply chain.
			The Company has also undergone the RBA Validated
			Assessment Program (VAP) in 2022, which involves a site audit
			conducted by an independent third-party organization. We are
			proud to have received a high score of 200 points (out of a
			maximum of 200) and have been awarded Platinum Status.
			The Company is committed to promoting human rights
			protection policies, and in addition to policy formulation, we
			have also implemented human rights assessments, risk
			mitigation measures, and related education and training.
			Measures to mitigate human rights risks:
			The Company is committed to ensuring that the human rights of
			its employees and those in its supply chain are respected and
			that their working environment is safe. To fulfill this
			commitment, the company has become a member of the
			Responsible Business Alliance and conducts a comprehensive
			investigationprocess to ensure that its code of conduct aligns

44

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
			with the RBA Code of Conduct.
			Human Rights Assessment:
			Every year, the Company conducts a hazard identification and
			risk assessment of labor ethics to control risks.
			Education and training on human rights protection:
			【Labor and Ethics Education and Promotion】
			New employees are provided with training on relevant legal
			compliance and promotion content, including the prohibition of
			forced labor, prohibition of child labor, anti-discrimination,
			anti-harassment, working hour management, and protection of
			humane treatment.
			【Sexual Harassment Prevention and Education】
			Sexual harassment prevention education includes understanding
			the concept of sexual harassment, preventing sexual
			harassment, and the company's handling procedures for sexual
			harassment incidents.
			【Provide a complete series of occupational safety training】
			The Company provides comprehensive occupational safety
			training for employees. We offer different safety training
			programs tailored to the specific needs of different employee
			categories and the situations they may encounter in the
			workplace. These programs include fire safety training,
			emergency response training, first aid training, general safety
			and health education training,and more.
(B) Does the company establish and implement reasonable employee			(B) The Company has established work rules and related personnel	Complies with the Sustainable
welfare measures (including salaries, leaves, and other benefits),			management regulations, covering basic wages, working hours,	Development Best Practice Principles for
and appropriately reflect the business performance or results in			leave, retirement benefits, labor, and health insurance benefits,	TWSE/TPEx Listed Companies.
employee compensation?			occupational accident compensation, etc., for the employed
			workers, and all related policies are in compliance with the
			relevant provisions of the Labor Standards Act. In addition, the
			company has also set up a labor welfare committee, which is
			operated by elected welfare commissioners to handle various
			welfare matters, such as employee travel.
			The Company's remuneration policy is based on individual
			abilities, contributions to the company, individual performance,
			and the correlation with the company's businessperformance.
(C) Does the company provide employees with a safe and healthy			(C)The Companyis committed toprovidinga safe and healthy	Complies with the Sustainable

45

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
working environment, and regularly conduct safety and health			working environment for employees. In addition to arranging	Development Best Practice Principles for
education for employees?			health checks for new employees, we also hold regular health	TWSE/TPEx Listed Companies.
			checks for existing employees. For direct personnel engaged in
			production line work, we arrange special health checks for
			occupational disease prevention under labor insurance. Before
			new employees start their jobs, we provide them with safety and
			health education and training and conduct related training in
			accordance with the Occupational Safety and Health Act.
			In addition, our company has established the "Precautions for
			Prevention and Handling of Sexual Harassment" and provided
			channels for complaints to maintain a healthy work environment.
			We also provide accident and medical insurance for employees to
			ensure their safety at work and to mitigate the company's
			management risks. Emergency response procedures are in place
			to carry out safety maintenance and disaster emergency response
			training. Every year, we invite local fire departments or
			professional fire consultants to provide fire training and drills.
			According to the regulations of the Occupational Safety and
			Health Act, we employ qualified nurses and contract
			occupational medicine specialists to provide on-site health
			services in compliance with legal requirements. The Company
			applied for ISO140001 and ISO45001 in 2015 and obtained the
			relevant certificates in January 2017, with annual verifications to
			date. There were no occupational accidents or fire incidents in
			2023.
(D)Does the company establish an effective career development training			(D) The company is committed to promoting continuous learning and	Complies with the Sustainable
program for employees?			self-improvement among employees through the motto "The	Development Best Practice Principles for
			Power of Knowledge," and spares no effort in investing in	TWSE/TPEx Listed Companies.
			employee training. A comprehensive training system has been
			established for new employees, including basic and professional
			training, to help them quickly adapt to the new environment and
			feel a sense of belonging. In-service employees can continuously
			challenge themselves and grow through various training
			channels, such as internal and external training, on-the-job
			training (OJT) provided by supervisors or peers, and monthly
			library reading. In addition, career planning and development are
			integrated through job series/levels planning, job rotation, project
			assignments, and overseas assignments, enabling colleagues to
			jointlyenjoythejoyof intellectualgrowth and create a better

46

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
			future.
			The Company has established an education and training
			management procedure to plan the training courses according to
			the professional and functional requirements of employees. This
			is to enhance the knowledge and skills of employees, improve
			their overall quality, and promote business performance. We
			provide leadership, organizational management, and teamwork
			training courses and activities for managerial staff to enhance
			their management and leadership capabilities. For marketing and
			sales staff, we offer a product or sales-related professional
			training to strengthen their marketing skills. For R&D staff, we
			offer specialized training courses such as product development
			and design, APQP, and problem analysis and resolution. As the
			company expands globally, language learning courses are also
			provided to strengthen language skills. With the advent of
			Industry 4.0 and smart manufacturing as a global trend, we have
			invited the Smart Manufacturing Research Center of National
			Central University to conduct a 25-week professional training
			program on engineering, data applications, information security,
			and management for our company. We execute the following
			relevant training courses in accordance with the annual education
			and training plan:
			(1) New employee pre-service training: includes company
			culture and regulations, intellectual property overview, basic
			operating system operations, quality management awareness,
			no harmful substance policy promotion, personal job
			responsibilities explanation, professional skills training, etc.
			Our company has a "New Employee Mentorship System",
			where new employees follow a plan to receive complete
			pre-service education and training, and with the guidance of
			a dedicated mentor, assist new employees in quickly
			familiarizing themselves with and integrating into their work
			positions.
			(2) Professional skills training:
			A. Internal Training: Department heads or senior staff
			members serve as instructors, and courses are arranged
			based on the technical and professional training needs of
			each functional unit to enhance employee personal value
			and sense of responsibility,correct work attitudes and

47

	Execution status	Execution status	Execution status	Execution status	Execution status	Execution status	Execution status	Differences and reasons for the
								implementation of sustainable development practices compared to the best practice principles for TWSE/TPEx listed companies
Item
	Yes	No	Description
			concepts, and strengthen professional skills. This
			improves current work productivity and efficiency and
			expands the diversity of career development
			opportunities.
			B. Every year, a budget is allocated for education and
			training, and employees are sent to professional training
			institutions to acquire external professional knowledge
			and skills. At the same time, employees are also
			encouraged to continue their education while working.
			(3) Quality consciousness:
			Through the "Knowledge Management Zone," we regularly
			update internal/external audit recommendations and
			improvement plans, as well as share and analyze common
			customer complaints. Through this quality information
			exchange channel, we help continuously improve internal
			operational processes and quality management capabilities.
			(4) ACES Academy:
			Constructing the "ACES Academy" digital learning
			platform, which provides diverse and rich learning content,
			including training categories such as management functions,
			sales, and marketing, research and development, production
			management, general education, language, etc., in a more
			flexible way to meet the needs of more employees with
			different learning styles.
			(5) The following is the statistical report on employee education
			and trainingin our companyfor theyear 2023:
				Item	Classes	Participants	Hours
				New Employee
					9	94	6,768
				Training
				Professional Skills
					117	218	4,927
				Training
				Total	126	312	11,695
(E) Does the company comply with relevant laws and international			(E) The Company has set up		a business contact person		and customer	Complies with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies.
standards regarding customer health and safety, customer privacy,			service hotline on our		company website to handle customer
marketing, labeling, and other related issues concerning our			complaints and is responsible for dealing with quality and
products and services, and have we developed policies and			customer service issues.
procedures to protect the rights and interests of consumers or			We comply with regulatory requirements and international
customers and handle complaints accordingly?			standards regardingcustomer health and safety,customerprivacy,

48

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
			marketing, and labeling for our products and services. We have
			also developed policies and procedures to protect consumer rights
			and handle complaints accordingly.
(F) Does the company have a supplier management policy that requires			(F) The Company has established a "Supplier Evaluation and Control	Complies with the Sustainable
suppliers to comply with relevant regulations and standards on			Procedure" which requires suppliers to complete a quality system	Development Best Practice Principles for
issues such as environmental protection, occupational health and			evaluation form before transacting with us. We also conduct	TWSE/TPEx Listed Companies.
safety, and labor rights, and monitors their implementation?			on-site evaluations of their compliance with environmental,
			safety, and health regulations. Their records and impacts on the
			environment and society are also important evaluation criteria.
E. Does the company refer to internationally recognized reporting			Since 2021, our company has prepared a sustainability report based	Complies with the Sustainable
standards or guidelines to prepare non-financial reports such as			on the GRI Standards and obtained moderate assurance according to	Development Best Practice Principles for
sustainability reports? Have these reports obtained confirmation or			Type 1 of the AA1000 through external verification by TUV	TWSE/TPEx Listed Companies.
assurance opinions from third-party verification units?			Rheinland Taiwan Ltd.
F. If the company has its sustainability guidelines based on the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies," please describe how these guidelines differ from
the company's operation and the established guidelines.
The Company's Board of Directors passed a revision on November 10th, 2022, to rename the "Corporate Social Responsibility Best Practice Principles" to "Sustainable Development Best Practice
Principles" and made amendments to some of its articles. This serves as our company's guiding principle for promoting CSR, and there are no major differences in its operation and the spirit and
principlesgoverned bythe "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies."
G. Other important information that helps to understand the implementation of sustainable development:
(A) Recognizing the importance of environmental protection measures, our company has taken the following actions to promote environmental and occupational health and safety:
a. Promotion of Restrictions of Hazardous Substances (RoHS) and Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) regulations.
The RoHS came into effect on July 1st, 2006, and prohibits the sale of products containing six hazardous substances, including lead, cadmium, mercury, hexavalent chromium, polybrominated
biphenyls, and polybrominated diphenyl ethers, to the EU. On July 22nd, 2019, four phthalates (DEHP, BBP, DBP, DIBP) were added to the list. Our company actively promotes green
production and procurement and has achieved compliance with hazardous substance-free products in our production process. We have also received recognition from our major customers for
meeting their requirements.
b. Resource recycling and waste reduction plan
The Company actively promotes the full and effective utilization of resources to reduce waste and production costs. In addition to improving processes and operational management to reduce
scrap material generation, we also develop and select non-polluting and low-polluting processes to minimize waste. Moreover, metal waste generated during production is calculated and
recycled through an effective management program. The recycled waste metal is then sold to waste recycling businesses, reducing the wastage of resources.
(B) The Company upholds the philosophy of taking from society and giving back to society, continuously contributing to society through participation in public welfare activities and fulfilling our
social responsibilities. Our achievements are as follows:
a. Based on the desire to let children in remote areas of Taiwan experience the joy of reading, the Company has been donating mobile book trucks to local governments with remote areas under
their jurisdiction in the name of outstanding employees since 2018. This effort aims to reduce the disparity in reading resources between urban and rural areas in Taiwan. In fiscal year 2023,
another mobile book truck was donated to Zhudong Town, Hsinchu County, hoping to inspire further public interest in philanthropy and enhance the reading capabilities of children in remote
areas.
b. With the hope of allowing children in remote areas throughout Taiwan to experience the joy of reading, our company has been donating mobile book trucks to county and city governments
since 2018 in the name of outstandingemployees. This is to helpreduce thegapin readingresources between urban and rural areas and fulfill our social responsibilities. As an example,in

49

	Execution status	Execution status	Execution status	Differences and reasons for the
				implementation of sustainable development
Item				practices compared to the best practice
	Yes	No	Description
				principles for TWSE/TPEx listed
				companies
2023, we plan to donate a total of three mobile book trucks t	o Miaoli County, Hsinchu County, and Pingtung County. The donation ceremony for Hsinchu County's mobile book truck will be
held on July 19th at the Jianshi Township Office, followed by the Miaoli County mobile book truck donation ceremony on November 2nd at the outdoor plaza of the Miaoli County
Government. The donation of the mobile book truck to Pingtung County is also expected to be completed in the first quarter of 2023, hoping to inspire more public welfare activities through
our efforts.
c. In response to World Oceans Day on June 8, the Company organized a beach cleaning event on June 10, 2023, led by the chairman and involving employees, their families, and friends to take
practical action for environmental protection. This effort contributed to sustainable development for the planet. On that day, we collected 1,273 kilograms of trash and reduced carbon
emissions by 2.622 tons! Following the beach cleaning, an internal memo was circulated across the entire group to promote environmental awareness and foster the belief that "everyone can
participate in environmental protection."
d. As Christmas approached in December of the year 2023, the Company continued its three-year collaboration with the well-known charity organization World Vision, launching a Christmas
Wish Gift drive within the Company. The event received enthusiastic responses from colleagues and gathered many gifts for children in orphanages and disadvantaged middle and elementary
school students, totaling over a hundred Christmas gifts. This year, the initiative also included the collection of nearly 30 "love red envelopes," helping families in difficulty have an
opportunity for change. Additionally, in the name of that year's three outstanding employees, scholarships were donated through charitable organizations like the Mustard Seed Mission to
several disadvantaged students in Taoyuan, aiming to provide them with peace of mind to focus on their studies.

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Note 1: ACES identifies the key risks associated with climate change.

	Climate change's main risks	Potential operational and financial impacts.	Strategic direction to response
	 Customers demanding process improvements and setting carbon reduction targets. If the company is unable to meet these requirements, it may impact its operational performance.  As consumer awareness of carbon reduction increases and the demand for low-carbon products grows, additional costs for product development and production are incurred.	 Increased operating costs  A decline in business performance  Changes in market demand	1. Choose suppliers that align with sustainability concepts to accelerate the company's progression towards low-carbon production. 2. Actively monitor market trends and conduct thorough market research to ensure products align with low-carbon sustainability concepts.
Market risk
	 Gradual limitation of greenhouse gas emissions by national policies  Regulations requiring power plants to use a certain proportion of renewable energy	 Increased operating costs  Increased R&D expenses	1. Actively cooperate with government policies, and set greenhouse gas reduction targets year by year. 2. Understanding the current renewable energy planning in Taiwan, setting an annual electricity saving target of 1%, and gradually increasing the usage rate of green electricity.
Policy and legal risks
	 Power shortage may cause the company unable to operate normally, affecting product production and increasing operating costs.  Typhoons, heavy rain, floods, and other climate change-related disasters may affect the shipment of raw materials or cause damage to the Company, resulting in the Company's unable to operate normally and increasing operating costs.	 Reduced operational efficiency  Increased operating costs  Decreased customer satisfaction  Employee safety concerns	1. Diversify the sources of raw materials to reduce risks. 2. Diversify the sources of raw materials to reduce risks. 3. Strengthen environmental safety and health education and training.
Extreme weather events

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Identification of major opportunities by ACES regarding climate change impacts.

The main opportunities of climate change.		Challenges and opportunities	Strategic direction to response
	 Customers have a high demand for products that are energy-efficient and have a low environmental impact.  Developing low-carbon products that meet market demand.	 Increase in revenue  Product innovation	Actively invest in developing low-carbon products.
Opportunities for market changes
	 The government has passed incentive measures to promote the use of alternative energy.	 Lower operating costs  Product innovation	Align with customer supply chain mentoring programs.
Policy and legal changes
	 Replacing outdated equipment  Improving resource efficiency to reduce environmental impact	 Cost reduction in product development  Establishment of corporate image	Monitor energy consumption of equipment and establish a plan to replace outdated devices. Develop and implement an energy-saving plan.
Resource efficiency.

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2. Climate-related information.

(1) Implementation status of climate-related information.

Item

Implementation status

1. Describe the board of directors and management's oversight and governance of climate-related risks and opportunities. 2. Detail how identified climate risks and opportunities impact the business, strategy, and finances (short-term, medium-term, long-term). 3. Describe the financial impacts of extreme weather events and transition actions. 4. Explain how the processes for identifying, assessing, and managing climate risks are integrated into the overall risk management

1. To strengthen the sustainability competence of the highest governance level, the board members have been participating in continuous education training on corporate sustainability and climate risk since 2022. In 2023, four directors completed a total of 24 hours in courses related to sustainable finance and climate change issues. Additionally, the sustainability development committee regularly (quarterly) reports the progress and promotion of climate-related issues to the board, with a total of four sustainability progress reports presented in 2023. 2. Identified climate risks and opportunities include risks—market risk, policy and legal risks, and extreme climate disasters; opportunities—market changes, policy and legal changes, and resource efficiency. Corresponding actions and financial impacts include short-term—trend compliance monitoring, energy-saving measures and the introduction of energy management systems, response to customers' low-carbon supply chains, and internal procedure management and optimization; mid-term—low-carbon manufacturing, increasing renewable energy ratios, low-carbon product research and development; long-term—establishing and optimizing a sustainable value chain, energy transition, and green products. 3. The Company has begun to assess the establishment of renewable energy and energy management systems to reduce the impact of climate risks. 4. In response to corporate sustainability development, the company plans to establish a sustainability office to assist and promote related activities by the sustainability development committee. Future issues such as climate risks will be incorporated into the company’s internal

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	system. 5. If scenario analysis is used to assess resilience to climate change risks, disclose the scenarios, parameters, assumptions, analytical factors, and primary financial impacts used. 6. If there is a transformation plan to manage climate-related risks, describe the plan's content, and the indicators and targets used to identify and manage physical and transition risks. 7. If internal carbon pricing is used as a planning tool, explain the basis for price setting. 8. If climate-related goals are set, explain the activities covered, scope of greenhouse gas emissions, planning period, and annual progress achieved; if carbon offsets or Renewable Energy	audit and existing risk systems for discussion by the sustainability development committee. 5. The company is currently conducting preliminary risk factor analysis based on the TCFD and plans to hold internal discussions on scenario analysis in 2024. 6. Policy regulations related to energy transition and operational costs represent one of the major climate risks for the company. In the short to medium-long term, the company adheres to environmental compliance, aiming to save 1% on annual electricity usage as a short-term goal. In the future, the ISO 50001 energy management system will be introduced as a management tool to reduce energy consumption, identify energy and carbon hotspots for measures and equipment replacement, and set feasible electricity saving and emission reduction targets. Additionally, according to the transition process, the use of renewable energy will gradually increase, with related quantitative targets to be set and discussed after system implementation and review. 7. The Company has not yet introduced an internal carbon pricing system, which will be developed and implemented in accordance with company policy by the sustainability development committee in the future. 8. Except for the Dongguan and Vietnam factories, all other locations of the company, including the Taiwan headquarters (covering scopes 1 to 3, with others covering scopes 1 and 2), have completed carbon inventory. Due to future business adjustments and strategic consolidation, other factories and subsidiaries are expected to conduct carbon inventory by 2025; the company’s carbon baseline year is 2021, with targets to reduce carbon emissions per unit

54

	Certificates (RECs) are used to meet these goals, detail the sources and quantities of carbon reduction or the number of RECs. 9. Greenhouse gas inventory and assurance situations, reduction targets, strategies, and specific action plans (to be filled in 1-1 and 1-2).)。	revenue by 5% by 2023 and 10% by 2025 compared to the baseline year. Currently, the company has not utilized carbon offsets or renewable energy certificates. 9. See sections 1-1 and 1-2 for details.

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1-1 Recent two fiscal years' greenhouse gas inventory and verification status

1-1-1 Greenhouse gas inventory information

Describe the greenhouse gas emissions for the past two years (tons of CO2e), intensity (tons of CO2e per million NTD), and the scope of the data covered. The company's organizational boundary-setting method is the "Operational control approach". the data coverage includes no. 13, Dongyuan Road, Zhongli District, Taoyuan (headquarters and factory), and no. 530-6, section 2, Guoling Road, Zhongli District, Taoyuan (factory). all emission sources disclosed by the Company's internal floor use are fully owned by the Company, and this method is used to summarize the facility-level greenhouse gas emissions and removals, covering the annual greenhouse gas emissions. In 2023, direct emissions were 238.4736 metric tons CO2e, energy indirect emissions were 4216.9170 metric tons CO2e, energy indirect emissions caused by transportation were 442.0590 metric tons CO2e, energy indirect greenhouse gas emissions generated by the organization's use of products were 839.1676 metric tons CO2e, energy indirect greenhouse gas emissions caused by the use of products from the organization were 248.7211 metric tons CO2e, totaling 5985.338 metric tons CO2e. the intensity was 1.44 metric tons CO2e. In 2022, direct emissions were 218.8880 metric tons CO2e, energy indirect emissions were 3900.4136 metric tons CO2e, energy indirect emissions caused by transportation were 416.2466 metric tons CO2e, energy indirect greenhouse gas emissions generated by the organization's use of products were 685.6718 metric tons CO2e, energy indirect greenhouse gas emissions caused by the use of products from the organization were 160.4830 metric tons CO2e, totaling 5381.703 metric tons CO2e. the intensity was 1.20 metric tons of CO2e.

Note 1: Direct emissions (Scope 1, directly from sources owned or controlled by the company), energy indirect emissions (Scope 2, from purchased electricity, heat, or steam resulting in indirect greenhouse gas emissions), and other indirect emissions (Scope 3, emissions generated by company activities that are not energy indirect emissions, but from sources owned or controlled by other companies).

Note 2: Greenhouse gas inventory standard: Greenhouse Gas Protocol (GHG Protocol) or the International Organization for Standardization (ISO) issued ISO 14064-1.

Note 3: The intensity calculation of greenhouse gas emissions is based on the sum of scope 1 and scope 2 emissions divided by the annual revenue of ACES Taiwan(in NT$ millions).

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1-1-2 Greenhouse gas assurance information

Describe the assurance situation for the two most recent years up to the date of the annual report publication, including the assurance scope, assurance institution, assurance standards, and assurance opinions.

The data verification institution for 2023 is DQS TAIWAN INC., based on the ISO 14064-1: 2018 standard. The verification scope covers No. 13, Dongyuan Road, Zhongli District, Taoyuan (headquarters and factory), and No. 530-6, Section 2, Guoling Road, Zhongli District, Taoyuan (factory). Under the condition of no reservations, the verification conclusion states that the assurance level of the audited data is reasonable for Category 1 and Category 2. The data verification institution for 2022 is Alphano International Co., Ltd., based on the ISO 14064-1: 2018 standard. The verification scope covers No. 13, Dongyuan Road, Zhongli District, Taoyuan City (headquarters + factory), and No. 530-6, Section 2, Guoling Road, Zhongli District, Taoyuan City (factory). Under the condition of no reservations, the verification conclusion states that the assurance level of the audited data is reasonable for Category 1 and Category 2.

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1-2 Greenhouse gas reduction targets, strategies, and specific action plans

Describe the baseline year and its data for greenhouse gas reduction, reduction targets, strategies, and specific action plans, as well as the achievement of

the reduction targets.

The Company has set the year 2021 as the emission baseline year, aiming to reduce carbon emissions per unit of revenue by 5% by 2023 and 10% by 2025 compared to the baseline year. Taking the emission baseline year 2021 as an example: direct emissions were 129.7515 metric tons CO2e, energy indirect emissions were 4214.9518 metric tons CO2e, energy indirect emissions caused by transportation were 204.6149 metric tons CO2e, energy indirect greenhouse gas emissions generated by the organization's use of products were 784.4948 metric tons CO2e, and energy indirect greenhouse gas emissions caused by the use of products from the organization were 277.5466 metric tons CO2e, totaling 5611.360 metric tons CO2e. To achieve these targets, specific energy-saving and carbon-reduction measures are implemented in the following areas:

A. Air conditioning and lighting:

a. Set the temperature of work and office spaces to 26-28°C, with a designated person responsible for managing the operation of air conditioning.

b. Lighting switches are controlled by specific areas, with time-controlled switches for public areas, and all factory lighting has been replaced with LED lights to reduce electricity waste. B. Energy use in air compressors:

a. Regularly check for and repair leaks in company air ducts to avoid increasing the load on air compressors, thereby saving energy used by air compressors.

b. The Company has completely replaced all air compressors with variable frequency models.

C. Optimize fuel usage in company vehicles by arranging carpool solutions in advance.

D. Implement waste sorting within the factory, with all waste processed by qualified vendors and recorded flow.

E. Energy management - promote digital energy saving, waste reduction, resource recycling, and other environmental measures. Conduct training and promotions related to energy saving and emission reduction.

In 2023, direct emissions amounted to 238.4736 metric tons CO2e, energy indirect emissions were 4216.9170 metric tons CO2e, energy indirect emissions caused by transportation were 442.0590 metric tons CO2e, energy indirect greenhouse gas emissions generated by the organization's use of products were 839.1676 metric tons CO2e, and energy indirect greenhouse gas emissions caused by the use of products from the organization were 248.7211 metric tons CO2e, totaling 5985.338 metric tons CO2e.

The total greenhouse gas emissions in 2023 increased by 373.978 metric tons CO2e compared to 2021. The main reasons for the increase include a rise in production capacity and the inclusion of additional scope 3 upstream transportation emissions this year.

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F. The state of the company's performance in the area of ethical corporate management, any deviation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such deviation

	Operation status	Operation status	Operation status	Differences and Reasons for Ethical
				Corporate Management Best Practice
Item
	Yes	No	Description	Principles for TWSE/TPEx Listed
				Companies.
1. Establishing a policy and plan for ethical business operations.				Compliant with the Ethical Corporate
(1) Does the company have a board-approved ethical corporate management			(1) The Company has established a code of ethical conduct that has	Management Best Practice Principles
policy and is it clearly stated in its rules and external documents, as well			been approved by the board of directors. When entering into	for TWSE/TPEx Listed Companies.
as actively implemented by the board and senior management?			important contracts or agreements with others, relevant
			departments or external professional organizations must be
			consulted to ensure ethical business practices. In terms of conflict
			of interest, directors, supervisors, and managers must abstain
			from decision-making or voting if there is a conflict of interest in
			any transaction or decision.
(2) Has the company established a risk assessment mechanism for unethical			(2) The Company strictly requires its managers and employees not to
behavior, regularly analyzing and evaluating business activities with a			provide, promise, request, or accept any improper benefits, or
higher risk of unethical behavior within its business scope, and			engage in other dishonest behaviors that violate integrity, law, or
formulating measures to prevent unethical behavior, covering at least the			entrusted obligations, during their business activities directly or
preventive measures for each item listed in Article 7, paragraph 2 of the			indirectly.
"Ethical Corporate Management Best Practice Principles for TWSE/TPEx
Listed Companies"?
(3) Does the company establish operational procedures, behavioral			(3) The company has established an "Employee reward and
guidelines, disciplinary measures for violations, and complaint			punishment management procedure" and "Employee work rules",
mechanisms in the anti-fraud plan, and effectively implement and			which include a system for rewards and punishments and have
periodically review and revise the aforementioned plan?			been posted on the company's internal website. Every new
			employee is required to sign a "Confidentiality agreement" upon
			entry.
2. Implementing ethical business practices				Compliant with the Ethical Corporate
(1) Does the company evaluate the integrity records of its counterparts, and			(1) The Company requires all suppliers to fill out a clean pledge	Management Best Practice Principles
include integrity clauses in contracts signed with them?			before conducting any transactions, which includes terms and	for TWSE/TPEx Listed Companies.
			conditions on ethical behavior for suppliers.
(2) Does the company establish a dedicated unit responsible for promoting			(2) The unit responsible for promoting corporate integrity
ethical corporate management under the Board of Directors, and report at			management within our company is the General Administration
least once a year to the Board of Directors on its ethical corporate			Office, which is tasked with formulating the integrity
management policy, anti-fraud measures, and monitoring and			management policy. The policy is then implemented by various
enforcement status?			units, with the Audit Office responsible for oversight. The
			General Administration Office reports the implementation status
			at the last board meeting of each year. The execution status of
			integrity management for the year 2023 was reported to the board
			of directors on November 7, 2023.
			The General Administration Office hasproposed to the Board of

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	Operation status	Operation status	Operation status	Differences and Reasons for Ethical
				Corporate Management Best Practice
Item
	Yes	No	Description	Principles for TWSE/TPEx Listed
				Companies.
			Directors the establishment of an "Ethical Corporate
			Management Best Practice Principles" and formulated the
			"Procedures for Handling Illegal, Unethical, or Dishonest Acts
			Reported" in accordance with the principles. The company
			encourages internal and external personnel to report any illegal,
			unethical, or non-compliant behavior with the Ethical Corporate
			Management Best Practice Principles, and this procedure has
			been announced on the company's website.
(3) Has the company established policies to prevent conflicts of interest,			(3) The company has established an employee feedback mailbox for
provided appropriate channels for disclosures, and implemented them?			employees to express their opinions.
(4) Has the company established an effective accounting system and internal			(4) The Company's accounting and internal control systems are
control system to implement ethical corporate management, and has the			established in accordance with the laws and regulations required
internal audit unit developed relevant audit plans based on the assessment			by the competent authority. The internal audit personnel will
of the risk of non-compliant behavior and audited the implementation of			regularly audit the implementation of the above-mentioned
the anti-non-compliant behavior plan accordingly, or commissioned an			systems.
accountant to perform an audit?
(5) Does the company hold regular internal and external education and			(5) To promote and advocate for integrity, the Company includes
training on ethical business practices?			lectures on employee professional ethics and integrity principles,
			covering both internal and external legal regulations, in the
			pre-job training courses for all new employees, whether office
			staff or field personnel. This initiative is aimed at strengthening
			education and training related to "integrity management." Each
			business unit also conducts outreach to business partners,
			ensuring they fully understand the company’s policies on
			integrity management, preventive measures, and the
			consequences of non-compliant behaviors.
			In 2023, a total of 669 people participated in the company's
			education and training on ethical corporate management,
			including the code of ethics, internal control, and intellectual
			property,totaling1,703 hours of training.
3. The operation of the company's whistleblowing system.				Compliant with the Ethical Corporate
(1) Does the company have a specific whistleblowing and reward system in			(1) The company has established the "Procedures for Handling	Management Best Practice Principles
place, establish convenient reporting channels, and assign appropriate			Illegal, Unethical, or Dishonest Acts Reported", which includes	for TWSE/TPEx Listed Companies.
dedicated personnel to handle reported cases?			the specific arrangements for reporting channels, the
			responsible unit for receiving reports, the investigation
			procedure, and the reward system.
(2) Does the company have established standard operating procedures for			(2) The Company has established the "Procedures for Handling
investigating reported cases, including the follow-up actions to be taken			Illegal, Unethical, or Dishonest Acts Reported," which includes
after the investigation is completed, and related confidentiality			the investigation standard operating procedures and relevant
mechanisms?			confidentialitymechanisms for the reported cases.

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	Operation status	Operation status	Operation status	Differences and Reasons for Ethical
				Corporate Management Best Practice
Item
	Yes	No	Description	Principles for TWSE/TPEx Listed
				Companies.
(3) Does the company take measures to protect whistleblowers from any			(3) In addition to establishing the "Procedures for Handling
improper treatment as a result of their reporting?			Reports of Illegal, Unethical, or Dishonest Conduct," the
			Company has also set up "Identity Protection and
			Anti-Retaliation Management Procedures." These procedures
			specify that reports should be handled confidentially and
			verified through independent channels to fully protect the
			whistleblowers. The identity of whistleblowers will be kept
			strictly confidential; if the whistleblower is an employee of the
			company, we guarantee that the employee will not suffer any
			improper treatment as a result of their report.
4. Enhancing information disclosure				Compliant with the Ethical Corporate
Does the company disclose the content and effectiveness of its established			The content of the Company's established Ethical Corporate	Management Best Practice Principles
Ethical Corporate Management Best Practice Principles on its website and			Management Best Practice Principles has been disclosed on the	for TWSE/TPEx Listed Companies.
the Market Observation Post System?			Company's website and the Market Observation Post System.
5. If the company has its ethical corporate management principles in accordance with the " Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies ", please describe the
differences in their operation and content:
The Company has established a sound management system for ethical corporate management, with the Management Center responsible for formulating policies, the Audit Department responsible for
supervision, and regular reporting to the Board of Directors. All directors, supervisors, managers, employees, and appointees of the company comply with legal requirements and follow internal control
procedures topromote ethical corporate management.
6. Other important information that helps understand the operation of the company's ethical management (such as the company's review and revision of its established ethical management principles,
etc.):
The "Ethical Corporate Management Best Practice Principles" of the Companyare disclosed on our website and the Market Observation Post System.

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• (G) If the company has established corporate governance rules and related regulations, it should disclose the inquiry methods on its website and other public disclosure platforms: The Company website has an "Investor Relations" section that includes a "Corporate Governance" area for investors to inquire about corporate governance-related regulations, important decisions of shareholders' meetings and board of directors, corporate social responsibility, internal audit, and other related content.

The Company’s website: http://www.acesconn.com.

• (H) Other important information that can enhance understanding of the company's corporate governance operations may also be disclosed:

• Please refer to the "Corporate Governance" section on our company website for information on our corporate governance practices and disclosures. Website: http://www.acesconn.com/tw/investors2_1

• (I) The following items should be disclosed regarding the implementation status of the internal control system:

• a. Internal Control Statement: Please refer to page 63 of this year's annual report.

• b. If the company has entrusted an accountant to conduct a special review of its internal control system, the accountant's review report should be disclosed: Not applicable.

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ACES ELECTRONICS CO., LTD. Internal Control System Statement

Date: March 12th, 2024

Based on our self-assessment, we hereby declare the following regarding the Internal Control System Statements of the Company for the fiscal year 2023:

1. The Company acknowledges that it is the responsibility of the Board of Directors and management to establish, implement, and maintain an internal control system. The Company has established such a system intending to achieve effective and efficient operations (including profitability, performance, and safeguarding of assets), reliable and timely reporting, transparency, and compliance with relevant regulations and laws. This is to provide reasonable assurance.

2. The internal control system has inherent limitations, and no matter how well designed, an effective internal control system can only provide reasonable assurance regarding the achievement of the three objectives mentioned above. Furthermore, due to changes in the environment or circumstances, the effectiveness of the internal control system may change. However, the Company's internal control system includes a mechanism for self-monitoring, and if any deficiencies are identified, corrective action will be taken.

3. The Company evaluates the effectiveness of the internal control system based on the "Regulations Governing the Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as the "Regulations"). The internal control system evaluation criteria used in the "Regulations" are based on the process of management control, which divides the internal control system into five components: 1. Control Environment, 2. Risk Assessment, 3. Control Activities, 4. Information and Communication, and 5. Monitoring. Each component includes several items. Please refer to the "Regulations" for details on these items.

4. The Company has already adopted the aforementioned internal control system evaluation criteria to assess the effectiveness of the design and implementation of the internal control system.

5. Based on the evaluation results mentioned above, the Company believes that its internal control system (including the supervision and management of subsidiaries) as of December 31st, 2023, is effective in terms of understanding the achievement of operational objectives in terms of efficiency and effectiveness, reliable and timely reporting, transparency, and compliance with relevant regulations and laws. Therefore, it can provide reasonable assurance in achieving the above-mentioned objectives.

6. This statement will become a major part of the Company's annual report and public disclosure document and will be made available to the public. If any of the above publicly disclosed content is found to be false, concealed, or involve illegal activities, it may incur legal liabilities under Securities and Exchange Act Articles 20, 32, 171, and 174.

7. This statement was approved by the Board of Directors of the Company on March 12th, 2024. Among the seven attending directors, there were no dissenting opinions, and all agreed to the contents of this statement. This statement is hereby declared.

ACES ELECTRONICS CO., LTD.

Chairman: Yuan Wan-Ting

General Manager: Huang Tien-Fu

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• (J) If there has been any legal penalty against the company or its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder equity or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement: Nil.

• (K) Material resolutions of a shareholders meeting or a board of directors meeting during the most recent fiscal year or the current fiscal year up to the date of publication of the annual report:

• a. The important resolutions adopted by the shareholders' meeting and their implementation status should be disclosed.

Date	Important resolutions	Implementation status
2023/6/27 (2023 Annual General Meeting of Shareholders)	1. Approved the financial and operating reports for the fiscal year 2022. 2. Approved the profit distribution for the fiscal year 2022.	(1) Ex-dividend date:2023/8/25. (2) Cash dividend payment date.: 2023/9/8. (Cash dividend per share of NT$0.55)

b. Important resolutions of the Board of Directors

Term of the Board of Directors	Date	Important resolutions
The first time in 2023	2023/1/13	1. Approval of the 2023 operating plan and budget. 2. Approval of the acquisition of real estate usage rights from relatedparties.
The second time in 2023	2023/3/24	1. Approval of the 2022 annual business report and financial statements. 2. Approval of the 2022 employee and director compensation distribution plan. 3. Approval of the 2022 profit distribution plan. 4. Approval of the appointment of the accountant and assessment of independence and suitability for the year 2023. 5. Approval of amendments to the "Company Articles of Association." 6. Approval to convene the 2023 annual shareholders' meeting and handle matters related to proposals from shareholders holding more than 1% of shares. 7. Approval of the appointment of a corporate governance officer. 8. Approval of the 2022 internal control system declaration.
The third time in 2023	2023/5/8	1. Approval of the consolidated financial statements for the first quarter of 2023. 2. Approval of the syndicated bank credit facility.
The fourth time in 2023	2023/7/10	1. Approval of the change in general manager. 2. Approval of the removal of non-compete restrictions for managers.
The fifth time in 2023	2023/8/11	Approval of the consolidated financial statements for the secondquarter of 2023.
The sixth time in 2023	2023/9/8	1. Approval of the acquisition of land property from related parties. 2. Approval of changes to the acquisition of real estate usage

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Term of the Board of Directors	Date	Important resolutions
		rights from relatedparties.
The seventh time in 2023	2023/11/7	1. Approval of the consolidated financial statements for the third quarter of 2023. 2. Approval of the construction of a factory and office building for the subsidiaryACES ZHUHAI TECHNOLOGY LTD. 3. Approval of a US$9 million investment in the subsidiary ACES ZHUHAI TECHNOLOGY LTD. 4. Approval of the acquisition of real estate usage rights from related parties. 5. Approval of the removal of non-compete restrictions for managers. 6. Approval of the auditplan for theyear 2024.
The first time in 2024	2024/1/19	Approval of the 2024 operating plan and budget.
The second time in 2024	2024/3/12	1. Approval of the 2023 annual business report and financial statements. and financial statements. 2. Approval of the 2023 profit distribution proposal. 3. Approval of the convening of the 2024 annual general shareholders' meeting and related matters concerning proposals from shareholders holding more than 1% of the shares. 4. Approval of the 2023 internal control system statement.
The third time in 2024	2024/5/10	1. Approval of the consolidated financial report for the first quarter of 2024. 2. Approval of the appointment of the KPMG accounting firm to handle the audit and certification of financial and tax reports for 2024 and the public expense case. 3. Approval of the issuance of the third unsecured convertible corporate bonds domestically. 4. Approval of the issuance of restricted employee rights new shares for 2024.

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

• (M) A summary of resignations and dismissals, during the most recent fiscal year or the current fiscal year up to the date of publication of the annual report, of the company's chairperson, general manager, chief accounting officer, chief financial officer, chief internal auditor, chief corporate governance officer, and chief research and development officer: Nil.

Position	Name	Date of Appointment	Date of Dismissal	Reason for Resignation or Dismissal
General anager	Yang Tsung-Lin	2010.10.28	2023.07.10	Job adjustment

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(5) Information on the remuneration of the CPAs

Information on the remuneration of the CPAs

Unit: NTD in thousands.

							Unit: NTD in thousands.
Accounting firm	Accountant	Auditor's engagement period		Audit fee	Non-audit fee	Total	Remark
			period
KPMG	Lin Heng-Sheng		2023	5,819	1,901	7,720	The non-audit fee - other includes transfer pricing and group master file reporting, project-related fees, and direct offset of business tax fees for joint business operators.
	Chen Zheng-Xue

• (A) When the company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons shall be disclosed: Nil.

• (B) When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 10 percent or more, the reduction in the amount of audit fees, reduction percentage, and reason(s) therefor shall be disclosed: Nil.

• (6) Information on changing CPAs: None.

• (7) The Chairman of the Board, General Manager, and managers are responsible for finance or accounting affairs of the company who have worked at the accounting firm or its affiliated companies of the signing accountant within the past year shall disclose their names, titles, and periods of employment at the accounting firm or its affiliated companies: Nil.

• (8) Changes in equity transfer and pledge of directors, managers, and shareholders holding more than 10% of shares in the most recent year and up to the date of publication of the annual report.

• (A) Changes in shareholding

		Unit: Shares	Unit: Shares	Unit: Shares	Unit: Shares
Title	Name	2023		As of May 10th, 2024
		Increase (decrease) in the number of shares held	Increase (decrease) in the number of pledged shares	Increase (decrease) in the number of shares held	Increase (decrease) in the number of pledged shares
Chairman	Yuan Wan-Ting			0	0
		0	0
Director	Weiji Investment Co., Ltd.				0
		0	0	0
Director					0
	Hsieh Han-Chang	0	0	0
Director					0
	Hsu Chang-Fei (Note 1)	0	0	0
Independent director	Lee An-Chen				0
		0	0	0
Independent director	Liaw Dar-Lii	0	0	0	0
Independent director	Sheen Gwo-Ji(Note 1)				0
		0	0	0
General Manager	Huang Tien-Fu	3,000	0	0	0
Chief Operating Officer					0
	Lin Wang-Fu	0	0	0
Chief Operating Officer					0
	Yang Tsung-Lin	0	0	(38,000)

66

Title	Name	2023	2023	As of May	10th, 2024
		Increase (decrease) in the number of shares held	Increase (decrease) in the number of pledged shares	Increase (decrease) in the number of shares held	Increase (decrease) in the number of pledged shares
Financial Supervisor	Lee Shu-Yun	0
			0	0	0

• (B) Relative parties involved in equity transfer: None.

(C) Relative parties involved in equity pledge: None.

67

• (9) Information on the relationships between the top ten shareholders in terms of shareholding percentage, who are related parties or have family relationships within the second degree of kinship, including spouses

					April 27,2024	April 27,2024	April 27,2024	April 27,2024	April 27,2024
Name	Shareholding		Shareholding of spouse and minor children		Shareholding of spouse and minor children		Specify the name of the entity or person and their relationship to any of the other top 10 shareholders with which the person is a related party or has a relationship of spouse or relative within the 2nd degree		Remarks
	Shares	%	Shares	%	Shares	%	Name of entity or individual	Relationship
Yuan Wan-Ting	8,863,487	6.59%	6,128,631	4.56%	0	0	Hsu Chang-Fei Yuan Hsiang-Feng Yuan Zhen-Ting	Spouse Second-degree relatives First-degree relatives
Keyan Investment Co., Ltd.	6,291,832	4.68%	N/A	N/A	N/A	N/A	Yuan Hsiang-Feng	Keyan Investment Director
Keyan Investment Co., Ltd. Representative: Sun Li-Zhen	5,000	0.00%					None	None
Hsu Chang-Fei	6,128,631	4.56%	8,863,487	6.59%	0	0	Yuan Wan-Ting Yuan Hsiang-Feng Yuan Zhen-Ting	Spouse Affinity of second degree First-degree relatives
Deutsche Bank Hosting Albula Investment Fund Limited Investment Account	5,950,000	4.43%	N/A	N/A	N/A	N/A	None	None
Weiji Investment Co., Ltd.	5,583,185	4.15%	N/A	N/A	N/A	N/A	Yuan Wan-Ting Hsu Chang-Fei	Weiji Investment Representative Weiji Investment Representative’s spouse
Weiji Investment Co., Ltd. Representative: Yuan Wan-Ting	8,863,487	6.59%	6,128,631	4.56%	0	0	Hsu Chang-Fei Yuan Hsiang-Feng Yuan Zhen-Ting	Spouse Second-degree relatives First-degree relatives
Yuan Hsiang-Feng	3,689,907	2.75%					Research investment Yuan Wan-Ting Hsu Chang-Fei	Keyan Investment Director Second-degree relatives Affinity of the second degree
Citibank Hosting First Securities (HK) Nominee Investment Account	3,614,929	2.69%	N/A	N/A	N/A	N/A	None	None
Helu Investment Co.,Ltd.	2,446,758	1.82%	N/A	N/A	N/A	N/A	None	None
Helu Investment Co., Ltd. Representative: Chen Kuan-Yu							None	None
Liao Ming-Shan	2,071,000	1.54%					None	None
Yuan Zhen-Ting	1,555,251	1.16%	0	0	0	0	Yuan Wan-Ting Hsu Chang-Fei	First-degree relatives First-degree relatives

68

• (10)The number of shares held by the company, its directors, managers, and enterprises directly or indirectly controlled by the company in the same reinvested enterprise, and the consolidated shareholding ratio

shareholding ratio
			December 31, 2023 Unit:thousand shares; %
Invested Businesses (Note)	Investment of the Company		Investment by directors, supervisors, managers, and businesses directly or indirectly controlled by the Company		Comprehensive investment
	Shares	Shareholding ratio	Shares	Shareholding ratio	Shares	Shareholding ratio
Aceconn Electronic Co.,Ltd.	24,800	100%	－	－	24,800	100%
ACES PRECISION INDUSTRY PTE LTD.	8,162	100%	－	－	8,162	100%
ACESCONN HOLDINGS CO.,LTD.	12,000	100%	－	－	12,000	100%
ASIA CENTURY INVESTMENT LTD.	－	－	9,150	100%	9,150	100%
ACES INTERCONNECT(USA),INC.	300	100%	－	－	300	100%
ACES JAPAN CO.,LTD.	4.5	100%	－	－	4.5	100%
DONGGUAN ACES ELECTRONIC CO.,LTD.	－	－	－	100%	－	100%
KUNSHAN ACES ELECTRONIC CO., LTD.	－	－	－	100%	－	100%
KUNSHAN ACES TRADING CO., LTD.	－	－	－	100%	－	100%
CHONGQING HONG GAO ELECTRONIC CO.,LTD.	－	－	－	100%	－	100%
GALIS ACCURATE SMITHCRAFT PRODUCTS CO.,LTD. OF SUZHOU	－	－	－	100%	－	100%
KUNSHAN CHENGGANG ELECTRONIC TECHNOLOGY CO., LTD.	－	－	－	100%	－	100%
ACES ZHUHAI TECHNOLOGY LTD.	－	－	－	100%	－	100%
NantongDadi Electric Co.,Ltd.	－	－	－	19.31%	－	19.31%
Kunshan Jingzhi Co.,Ltd.	－	－	－	30%	－	30%
WEI HONG INTERNATIONAL INVESTMENT CO.,LTD.	2,500	100%	－	－	2,500	100%
ACES Precision MachineryCo.,Ltd.	13,000	100%	－	－	13,000	100%
Hongyu Surface Treatment Co.,Ltd.	－	－	700	100%	700	100%
JASON TECHNOLOGY LIMITED	5,000	100%	－	－	5,000	100%
MEC IMEX INC.	47,582	99.86%	－	－	47,582	99.86%
MEC INTERNATIONAL COMPANY LTD.	－	－	33	100%	33	100%
MEC ELECTRONICS (HK) COMPANY LIMITED	－	－	510	100%	510	100%
MEC ULTRAMAX (H.K.) COMPANY LIMITED	－	－	30,000	100%	30,000	100%
MEC BEST KNOWN COMPANY LIMITED	－	－	118,250	100%	118,250	100%
HOMEPRIDE TECHNOLOGY LIMITED	－	－	56,750	100%	56,750	100%
MEC ELECTRONICS PHILIPPINES CORPORATION	－	－	8,000	100%	8,000	100%
MEC IMEX(USA),INC.	－	－	4	100%	4	100%
MEC ELECTRONICS (SUZHOU) CO., LTD.	－	－	－	100%	－	100%
SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO.,LTD.	－	－	－	100%	－	100%

69

Invested Businesses (Note)	Investment of the Company	Investment of the Company	Investment by directors, supervisors, managers, and businesses directly or indirectly controlled by the Company	Investment by directors, supervisors, managers, and businesses directly or indirectly controlled by the Company	Comprehensive investment	Comprehensive investment
	Shares	Shareholding ratio	Shares	Shareholding ratio	Shares	Shareholding ratio
HOMEPRIDE ELECTRONICS (DONGGUAN)COMPANY LIMITED	－	－	－	100%	－	100%
MEC SUZHOU ELECTRONICS CO., LTD.	－	－	－	100%	－	100%
COMPUPACK TECHNOLOGY CO., LTD.	21,500	100%	－	－	21,500	100%
MICON PRECISE CORP.	－	－	12,950	99.61%	12,950	99.61%
CONG TY TNHH CHINH XAC NGAN VUONG	－	－	－	100%	－	100%
DONGGUAN COMPUPACK TECHNOLOGY CO.,LTD.	－	－	－	100%	－	100%
KUANG YING COMPUTER EQUIPMENT CO.,LTD.	25,906	99.66%	－	－	25,906	99.66%
INFOMIGHT INVESTMENTS LIMITED	－	－	7,980	100%	7,980	100%
BELTA INTERNATIONAL LIMITED	－	－	4	100%	4	100%
CERTILINK INTERNATIONAL LIMITED	－	－	50	100%	50	100%
ACCURATE GROUP LIMITED	－	－	4,100	100%	4,100	100%
DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO.,LTD.	－	－	－	100%	－	100%
SUZHOU KUANG YING ELECTRIC CO.,LTD.	－	－	－	100%	－	100%
GENESIS TECHNOLOGY USA,INC.	1.5	100%	－	－	1.5	100%
GENESIS HOLDING COMPANY	27,778	100%	－	－	27,778	100%
GENESIS ELECTRO-MECHANICAL LIMITED	－	－	9,400	100%	9,400	100%
GENESIS INNOVATION GROUP LIMITED	－	－	8,000	100%	8,000	100%
GENESIS TECHNOLOGY(NINGBO) INC.	－	－	－	100%	－	100%
DONGGUAN POLIXIN ELECTRIC CO.,LTD.	－	－	－	100%	－	100%

Note: This represents a long-term investment accounted for using the equity method by the Company.

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IV. Information on capital raising activities

1. Capital and shares

(1) Capital source

A.Capital source

Unit: shares, NTD

Issue price (Per share par value)	Approved capital	Approved capital	Paid-in capital	Paid-in capital	Remark
	Share	Amount	Share	Amount
10	200,000,000	2,000,000,000	134,417,709	1,344,177,090	As of the year 2023 and up to May 10, 2024, there have been no changes to the approved andpaid-in capital.

Unit: share

				Unit: share
Type of share	Approved capital			Remark
	Outstanding shares (listed)	Unissued shares	Total
Registered common shares	134,417,709	65,582,291	200,000,000

B. Related information to offer and issue securities by shelf registration: Nil.

(2) Shareholder Composition

				April 27,2024; shares; personal	April 27,2024; shares; personal	April 27,2024; shares; personal
Shareholder composition Quantity	Government agencies	Financial institutions	Other legal entities	Individuals	Foreign institutions and foreign individuals	Total
No. of shareholders	0	0	175	32,974	86	33,235
No. of shares held	0	0	17,327,915	102,076,822	15,012,972	134,417,709
Shareholding ratio	0	0	12.89%	75.94%	11.17%	100%

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(3) Distribution of ownership

	NTD 10 parvalueper share;shares; personal;April 27,2024	NTD 10 parvalueper share;shares; personal;April 27,2024	NTD 10 parvalueper share;shares; personal;April 27,2024
	Number of Shareholders	Shareholding (shares)	Percentage (%)
	19,911	463,208	0.34%
	10,692	20,999,317	15.62%
	1,355	10,510,467	7.82%

	ip	ip	ip
	NTD 10 parvalueper share;shares; personal;April 27,2024
Class of Shareholding	Number of Shareholders	Shareholding (shares)	Percentage (%)
1 to 999	19,911	463,208	0.34%
1,000 to 5,000	10,692	20,999,317	15.62%
5,001 to 10,000	1,355	10,510,467	7.82%
10,001 to 15,000	426	5,328,102	3.96%
15,001 to 20,000	245	4,493,602	3.34%
20,001 to 30,000	220	5,589,486	4.16%
30,001 to 40,000	113	3,941,217	2.93%
40,001 to 50,000	65	2,883,303	2.15%
50,001 to 100,000	115	8,096,490	6.02%
100,001 to 200,000	47	6,572,675	4.89%
200,001 to 400,000	17	4,281,803	3.19%
400,001 to 600,000	4	2,107,661	1.57%
600,001 to 800,000	9	6,154,011	4.58%
800,001 to 1,000,000	2	1,926,456	1.43%
Above 1,000,001	14	51,069,911	38.00%
Total	33,235	134,417,709	100.00%

(4) List of major shareholders

List of major shareholders
	April 27,2024; shares
Shares Names of major shareholders	Shareholding (shares)	Percentage (% )
YuanWan-Ting	8,863,487	6.59
Keyan InvestmentCo.,Ltd.	6,291,832	4.68
HsuChang-Fei	6,128,631	4.56
Deutsche Bank Hosting Albula Investment Fund LimitedInvestmentAccount	5,950,000	4.43
Weiji Investment Co.,Ltd.	5,583,185	4.15
Yuan Hsiang-Feng	3,689,907	2.75
Citibank Hosting First Securities (HK) Nominee InvestmentAccount	3,614,929	2.69
Helu InvestmentCo.,Ltd.	2,446,758	1.82
Liao Ming-Shan	2,071,000	1.54
Yuan Zhen-Ting	1,555,251	1.16

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(5) Provide share prices for the past 2 fiscal years, together with the company's net worth per share, earnings per share, dividends per share, and related information

Item	Year	Year	2022	2023	Until May 10, 2024 (Note 8)
Share price (Note 1)	Highest(NTD)		56	35.5	44.75
	Lowest(NTD)		27.3	26.1	30.2
	Average(NTD)		39.34	30.49	38.67
Net worth per share (Note 2)	Before distribution(NTD)		41.94	39.09	39.96
	After distribution (NTD)		41.39	Unallocated	Unallocated
Earnings per share	Weighted average shares (in thousands)		134,406	134,418	134,418
	Earningsper share(Note 3)		1.68	(1.98)	0.02
Dividend per share	Cash dividend(NTD)		0.55	0	Unallocated
	Stock divide nds	Dividends from retained earnings	－	－	Unallocated
		Dividends from capital reserve	－	－	Unallocated
	Accumulated unpaid dividends(Note 4)		－	－	－
Return on investment analysis	Price/earnings ratio (Note 5)		23.42	(15.40)	Not calculated for incomplete fiscalyear
	Price/dividend ratio (Note 6)		71.53	N/A	Not calculated for incomplete fiscalyear
	Cash dividend yield (Note 7)		1.40	0	Not calculated for incomplete fiscalyear

Note 1: List the highest and lowest market price of common shares in each fiscal year and calculate the average market price by weighing transacted prices against transacted volumes in each respective fiscal year. Note 2: Calculate the net worth per share based on the number of outstanding shares at year-end. Calculate the amount of distribution based on the amount resolved by the board of directors or resolved in the next year's shareholders' meeting. Note 3: If retrospective adjustments are required because of the issuance of stock dividends, the earnings per share should be disclosed in the amounts before and after the retrospective adjustments.

• Note 4: If equity securities are issued with terms that allow undistributed dividends to be accrued and accumulated until the year the Company makes a profit, the amount of cumulative undistributed dividends up until the current year should be disclosed separately.

Note 5: Price/earnings ratio = average closing price per share for the year/earnings per share.

• Note 6: Price/dividend ratio = average closing price per share for the year/cash dividends per share.

Note 7: Cash dividend yield = cash dividend per share / average closing price per share for the year.

Note 8: Net worth per share and earnings per share are based on audited (auditor-reviewed) data as of the latest quarter before the publication date of the annual report. For all other fields, calculations are based on the data for the current year as of the date of publication of the annual report.

• (6) Company's dividend policy and implementation thereof

• A. Dividend policy as stipulated in the Company's articles of incorporation If the Company has profits in the annual financial statements, it shall first pay the taxes and make up for previous losses. 10% of the profits shall be appropriated as a legal reserve, except when the legal reserve has reached the amount of the paid-in capital. In addition, the company may set up special reserves according to its operating needs and legal regulations. If there are still profits remaining after setting aside reserves, the board of directors shall propose a profit distribution plan to the shareholders' meeting for approval, together with any undistributed profits from the previous year.

  • The above profit distribution plan authorizes the board of directors, with the attendance of two-thirds or more of the directors and the resolution of a majority of the attending directors, to distribute all or part of the dividends, statutory reserves, and capital reserves in the form of cash payments, in accordance with Article 241 of the Company Act, and report to the shareholders' meeting. The distribution of dividends by the company is based on the principle of stable dividends in accordance with the profit situation of the current year. Based on the company's future funding needs and long-term financial planning, the cash

73

dividends distributed from the above shareholder dividends shall not be less than 20% of the total dividends, but the shareholders' meeting may adjust it based on the actual profit situation and future financial planning of the current year.

• B. Specific and clear dividend policy: Based on the past dividend distribution and estimation for the next three years, the dividend policy is expected to be a total dividend amount not less than 30% of the after-tax net income of the current year, with cash dividends not less than 20% of the total dividend amount.

• C. Proposed dividend distribution for this shareholders' meeting For the fiscal year 2023, it is proposed not to distribute dividends, pending approval at the annual shareholders' meeting in 2024.

• D. Explanation of expected significant changes to the dividend policy: Not applicable.

• (7) The effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent shareholders' meeting: This shareholders’ meeting did not distribute any stock dividends, therefore it does not apply.

• (8) Profit-sharing compensation of employees, directors

• A. The percentages or ranges with respect to employee, director, and supervisor compensation, as set forth in the company's articles of incorporation: If the Company generates profits in any fiscal year (meaning pre-tax profits before deducting employee compensation and director remuneration), it shall allocate no less than 1% for employee compensation and no more than 3% for director remuneration. However, if the Company has accumulated losses, it shall reserve the amount needed to make up for the losses in advance. Employee compensation as mentioned above may be paid in stock or cash. If the Board of Directors decides to issue stock as employee compensation, it may also decide to issue new shares or repurchase shares at the same time. Director remuneration may only be paid in cash.

  • The above two items shall be decided by the Board of Directors and reported to the shareholders' meeting.

• B. The basis for estimating the amount of remuneration for employees and directors for calculating the number of shares to be distributed as stock bonuses, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period ：

In the fiscal year 2023, the Company incurred a pre-tax loss. According to Article 24 of the Company's articles of association, no employee remuneration or director and supervisor remuneration will be distributed for the fiscal year 2023.

• C. Information on any approval by the board of directors of the distribution of compensation:

• In the fiscal year 2023, the Company incurred a pre-tax loss. According to Article 24 of the Company's articles of association, no employee remuneration or director and supervisor remuneration will be distributed for the fiscal year 2023.

• D. The actual distribution of employee, director, and supervisor compensation for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between

74

the actual distribution and the recognized employee, director, or supervisor compensation, additionally the discrepancy, cause, and how it is treated.

The company's board of directors resolved on March 24, 2023, approving the calculation of employee compensation for the 2022 fiscal year in the amount of NT$10,776,341, and director and supervisor compensation for NT$6,408,091. All compensation was paid in cash, and the estimated and actual amounts distributed were the same.

(9) Status of a company repurchasing its shares: Nil.

2. Issuance of corporate bonds:

Issuance of corporate bonds

Type of corporate bonds	Domestic unsecured convertible corporate bond,2nd Issue(Bond code: 36052)
Issue(transaction)date	November 22,2021
Face value	NTD 100,000
Place of issue and trading	Taipei Exchange(TPEx)
Issueprice	Issued byface value
Issue amount	NTD 600,000,000
Coupon rate	The coupon rate is 0%
Issue(transaction)date	3-year term;Maturitydate: November 22,2024.
Guarantor	N/A
Trustee	Yuanta Commercial Bank Co.,Ltd.
Underwriter	Yuanta Securities Co.,Ltd.
Attestinglawyer	ChuangCheng-Kun Law Office,Lawyer ChuangCheng-Kun.
Attesting CPA	Accounting firm: KPMG, CPAs, Lin Heng-Sheng, Chen Pei-Chi, Certified Public Accountants.
Redemption method	Except for conversion into common shares of the Company according to the conversion method, the exercise of the put option, or early redemption, the principal of the bond shall be repaid in cash upon maturity according to the face value of the bond.
Unredeemed balance	NTD 598,900,000
Conditions for redemption or early redemption	(1) Beginning from the day after the third month from the issuance date and until forty days prior to the maturity date, if the closing price of the common shares of the Company on the centralized exchange market has exceeded 30% of the then current conversion price for thirty consecutive business days, the Company may, within thirty business days thereafter, send registered mail to the bondholders (based on the bondholder registry as of the fifth business day before the date of issuance of the "Notice of Bond Redemption"; provided, however, that for holders who acquire the bonds thereafter through purchase or for any other reason, the Company shall use public notice instead) to notify them of the redemption of bonds due to maturity within thirty days (the aforementioned period shall begin from the date of the Company's dispatch of the notice and end on the maturity date of the bonds to be redeemed, and such period shall not be deemed as the period for suspension of conversion of this convertible bond). The Company shall also request TPEx to make an announcement and shall redeem the convertible bonds held by the bondholders in cash at their face value within five business days after the bond redemption reference date. (2) If the outstanding balance of this convertible bond is less than 10% of the original issuance amount at any time between the day after the third month from the date of issuance and forty days before the expiration of the issuance period, the Company may, at any time thereafter, send a "Debt Repurchase Notice" to the bondholders by registered mail (based on the list of bondholders five business days prior to the mailing date of the "Debt Repurchase Notice," and for those who subsequently acquire this convertible bond due to purchase or other reasons, the Company shall announce it) with a thirty-day deadline (the aforementioned period shall be calculated from the day of issuance of the Company's mail, and the expiration date shall be the basis for debt repurchase, and the aforementioned period shall not be the period during which this convertible bond is suspended from conversion). The Company shall also request TPEx to make an announcement and shall repurchase the convertible bond in cash at face value within five business days after the debt repurchase deadline. (3)If a bondholder fails to respond in writingto the company's stock transfer agent

75

		by the bond redemption base date specified in the "Bond Redemption Notice," the company shall, within five business days after the bond redemption base date, redeem the conversion bonds held by the bondholder in cash at the face value of the bonds. (4) If the company executes the recall request, the deadline for bondholders to request conversion is the second business day after the termination of trading of this convertible corporate bond on TPEx.
Restriction clause		Please find the details of the domestic second unsecured convertible bonds issued bythe Companyand the conversion methods.
Name of the rating agency, date, and the result of the rating		N/A
Other rights	The monetary amount of common shares, global depositary receipts, or other securities already converted, exchanged, or subscribed up to the annual report publication date	Converted into NT$1,100,000.
	The issuance and conversion, exchange,or subscription rules	Please refer to the details of the issuance and conversion method of the Company's second unsecured convertible corporate bonds.
The possible dilution of shareholding and influence on shareholder equity caused by the issuance and conversion, exchange, or subscription rules and the terms of issuance.		1. Possible dilution of equity As of April 30, 2024, the outstanding balance of the Company's issued and outstanding convertible bonds, which are the domestic second unsecured convertible bonds, was NT$598,900,000 at a conversion price of NT$47.6. Assuming that all bondholders convert their bonds at the current conversion price, a total of 12,581,932 common shares of the Company (NTD 598,900,000/NTD 47.6) will be issued, resulting in a dilution of 8.56% based on the currently outstanding shares of 134,417,709. 2. Impact on shareholder benefits. To understand the potential dilution effect on shareholders' equity, the company's basic earnings per share (EPS) and diluted EPS for 2023 were NT$ (1.98) and NT$ (1.98), respectively. After accounting for potential common shares with dilutive effects, both were anti-dilutive, hence diluted EPS was not calculated (profit or loss). Therefore, the unconverted portion of the issued unsecured convertible bonds has notyet had a significant impact on shareholders' equity.
Name of the custodian institution of the exchangeable underlying		N/A

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Information on convertible corporate bonds

Corporate bond type	Corporate bond type	Domestic unsecured convertible corporate bond, 2nd Issue(Bond code: 36052)	Domestic unsecured convertible corporate bond, 2nd Issue(Bond code: 36052)	Domestic unsecured convertible corporate bond, 2nd Issue(Bond code: 36052)
Year Item		2022	2023	Until May 10, 2024
Convertible corporate bond	Highest	125	101.3	108.9
	Lowest	95.2	95	98.3
	Average	113.9	98.84	102.3
Conversion price		50.4 48.5	48.5 47.6	47.6
Issuance (Execution) Date and Conversion Price at the time of Issuance		November 22, 2021 NTD 51.3
Mode of fulfilling conversion obligation		Issuance of new shares

1. Status of preferred shares: Nil.

2. Status of oversea depositary receipts: Nil.

3. Status of employee stock warrant: Nil.

4. Status of new restricted employee shares. : Nil.

5. Issue of new shares in connection with any acquisition of shares of another company: Nil.

6. Execution status of capital utilization plan

7. For the period as of the quarter preceding the date of publication of the annual report, with respect to each uncompleted public issue or private placement of securities, and to such issues and placements that were completed in the most recent 3 years but have not yet fully yielded the planned benefits:

8. (1) The utilization plan and execution status of the securities issuance fund in this issue

   • A. The contents of the securities issuance plan for the issuance

     • (A) Approval date and reference numbers from the Financial Supervisory Commission, Executive Yuan: October 5, 2021, Ref. No. 1100357489 and Ref. No. 11003574891.

     • (B) Approval date and document number by the Taiwan OTC Exchange: November 16, 2021, Certificate of OTC Bond No. 11000128212.

     • (C) The required funding for this project: NTD 1,206,000,000.

     • (D) Source of funds and issuance conditions:

     • a. Issuance of 120 million common shares through a cash capital increase, with a par value of NT$10 per share and an issue price of NT$40 per share, for a total fund raised of NT$4.8 billion.

     • b. The company will issue a total of 6,000 unsecured convertible corporate bonds in Taiwan's domestic market, with each bond having a face value of NTD 100,000. The total issuance amount is NTD 600,000,000, and the bond will have a maturity of 3 years with a 0% coupon rate. The bonds will be issued through a public underwriting process using a price inquiry system,

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with an issuance price of 101% of the face value. The total fundraising amount is NTD 606,000,000.

c. The remaining NTD 120,000 thousand will be supported by self-owned funds or other means.

(E) Funding utilization plan, expected progress, and anticipated benefits:

Unit: NTD thousands

						Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands	Unit: NTD thousands
Item		scheduled completion date		Total funding required		Predetermined fund utilizationplan
						2021		2022					2023
						Fourth quarter		First quarter		Second quarter	Third quarter	Fourth quarter	First quarter	Second quarter
Construction of factory		Second quarter, 2023		1,206,000		100,000		210,000		220,000	200,000	220,000	150,000	106,000
Expected potential benefits		The entire amount of this fund utilization plan will be used to construct a factory building, with a land area of about 2,891 pings and a floor area ratio of 68.50%, allowing for the use of approximately 1,980 pings of land for the factory and related facilities. The plan is primarily to meet the future business expansion and operational needs of the company and was approved by the board of directors on August 12, 2021, to construct a factory building on the land for office, research, development, and production use. The rent for adjacent factory buildings is about NT$500-600 per ping. If the monthly rent for each ping of the 7,500-ping area is NT$550, the company can save NT$49,500thousandin rent expenses annually. In addition, the fund utilization plan for the construction of new factory buildings not only saves rental expenses, but also prepares for long-term development investment in production, research and development, and manpower, and improves overall management efficiency and the company's future operating performance.
	B. Status of implementation								Unit: NTD thousands Reasons for being ahead of or behind schedule and improvement plans The main reason is that the schedule for obtaining the building permit was later than expected, leading to a delay in the related tendering process. Additionally, due to the increase in raw material prices, the negotiation period with contractors was extended, along with various factors such as changes in factory design, resulting in a delayed start of construction. However, construction will continue according to plan in the future.
	Item		Execution status				As of the first quarter of 2024		Reasons for being ahead of or behind schedule and improvement plans
	Expansion of factory		Amount of disbursement		Scheduled		1,206,000		The main reason is that the schedule for obtaining the building permit was later than expected, leading to a delay in the related tendering process. Additionally, due to the increase in raw material prices, the negotiation period with contractors was extended, along with various factors such as changes in factory design, resulting in a delayed start of construction. However, construction will continue according to plan in the future.
					Actual		920,062
			Execution progress		Scheduled		100%
					Actual		76.29%

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V. An Overview of Operations

(1) A description of the business

A. Business scope

• (A) Principal activities of the company

The company is primarily engaged in the research, development, production, and sales of products such as connectors for laptops, computer peripherals, consumer electronics, automotive electronics, cloud servers, network communications, industrial equipment, medical devices, ultra-fine coaxial cable assemblies, high-speed transmission cable assemblies, wireless communication RF connector assemblies, metal stamping, and various components.

• (B) Operating ratio

Operating ratio
			Unit: NT$Thousands; %
Major products	2022		2023
	Net revenue	Operating ratio	Net revenue	Operating ratio
Connectors	4,998,562	48.10	4,634,491	54.61
Cable assemblies	2,083,856	20.05	1,579,243	18.61
Metalstamping parts	2,478,783	23.85	1,622,787	19.12
Otheroperatingrevenue	831,303	8.00	649,707	7.66
Total	10,392,504	100.00	8,486,228	100.00

• (C) Current product/service offerings of the company

The Company currently independently researches, manufactures, and sells main products including connectors, ultra-fine coaxial cable assemblies, high-speed transmission cable assemblies, wireless communication RF connector assemblies, metal stamping, and various components. Connectors and cable assemblies are used to connect independent subsystems or operational units at both ends, serving as devices for signal transmission to ensure the connected systems function properly. These are applied in various electronic products, with main applications including laptops and computer peripherals, consumer electronics, automotive electronics, cloud servers, network communications equipment, and industrial equipment.

(D) Planned development of new products (services)

The Company primarily engages in the research, development, manufacture, and sales of connectors and precision electronic components, which are used in various electronic products to connect electronic subsystems for power and signal transmission. In response to the demand for lighter, thinner, shorter, and smaller notebook computers and consumer electronic devices, the company is dedicated to developing products that withstand high temperatures, have fine pitches, and have low profiles. Additionally, it actively develops high-frequency, high-speed connectors and high-speed transmission cables required for cloud servers, power supplies, and connector cable assemblies needed for automotive electronics.

The company primarily engages in the research, development, manufacture, and sales of connectors and precision electronic components, which are used in various electronic products to connect electronic subsystems for power and signal transmission. In response to the demand for lighter, thinner, shorter, and smaller notebook computers and consumer electronic devices, the company is dedicated to developing products that withstand high temperatures, have fine pitches, and have low profiles. Additionally, it actively develops high-frequency, high-speed connectors and high-speed transmission

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cables required for cloud servers, power supplies, and connector cable assemblies needed for automotive electronics.

The Company continues to provide the most comprehensive solution services to more international clients, offering integrated product services ranging from connectors, cables, high-speed transmission cable assemblies, high-frequency microwave connector cable assemblies, and metal stamping components, to chassis assembly, all aimed at enhancing the company’s development competitiveness.

• B. An analysis of the market as well as the production and marketing situation

• (A) The current situation and development of the industry

According to reports from Bishop & Associates (March 2024), the world connector market is mainly led by international giants who set the global trend for connector technology. By comparing and analyzing the application scope layout of connector manufacturers in the US, Taiwan, Japan, and China, it can be observed that the US giants still occupy a leading position in the high-end connector product market, with the top three US companies (Tyco, Amphenol, and Molex) accounting for more than 30% of the global market share. These companies have a wide distribution of applications in all areas, including consumer electronics, cloud communications, industrial control and medical equipment, automotive equipment, defense and aerospace, and communication networks. In recent years, the Taiwan connector industry has had a clear direction toward transformation and upgrading, accelerating the demand for high-frequency, high-power, high-speed transmission, and durable/miniaturized connector products. In addition, due to generational transitions, global fragmentation driving the effects of single sourcing, cost shifting, and mergers and acquisitions, connector industry leaders are more actively deploying in the fields of automobiles, green energy, medical care, national defense, and industrial control, with accelerated revenue and profit growth. In conjunction with product portfolio optimization, deep cultivation of these related applications will be the main growth momentum for the industry in the future. Given this situation, Taiwan connector manufacturers need to flexibly use business models and operating strategies, establish highly flexible supply chains (multi-chain, short-chain, external chain, and intelligent chain), strengthen their ability to resist risks, and enhance their intelligent manufacturing level to enhance their core competitiveness. Additionally, through domestic/foreign industry alliances or mergers, they can leverage complementary benefits, deeply penetrate potential application markets, conduct resource horizontal integration, and combine industry vertical connections to expand the market scale, enhance product market niches, and create the highest market efficiency alongside domestic industrial digital transformation.

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【 World Connector 】

==> picture [458 x 209] intentionally omitted <==

Data source: Bishop & Associates, Inc.(2024, March)& Compiled by ACES.

According to research data from Bishop & Associates in March 2024, due to repeated outbreaks of COVID-19 causing a growth bubble and weak demand, the global connector output value decreased by 2.7% from the previous year (2022) to $81.9 billion. It is estimated that in 2024, due to easing inflation and stabilizing raw material costs for connectors, connector prices will remain stable, and the connector output value will increase by 4.2%, estimated to exceed $85.3 billion. The data shows that the global connector industry continues to maintain stable growth momentum.

Furthermore, a report by Allied Market Research in September 2023 indicates that the electronic connector market is in a mature phase. The demand for high-performance electronic connectors from advanced electronic devices is continually increasing, driving the development of the electronic connector market. Additionally, the electronic connector market is also boosted by the manufacturing industry's implementation of Industry 4.0, with growing application demands in automotive, transportation, computer and peripheral equipment, and telecommunications. It is projected that by 2032, the global connector market will reach a scale of $123.9 billion, with a compound annual growth rate (CAGR) of 4.7%.

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【 Comparison of CAGR of World Connector Production Value 】

==> picture [404 x 160] intentionally omitted <==

Data source: Allied Market Research(2023, September )& Compiled by ACES.

With the advent of the 5G era, the Industrial Internet of Things (IIoT) is accelerating its deployment, and the wave of digital transformation is accelerating investments in infrastructure to support IoT technologies and Industry 4.0 automation transformations. A report by Bishop & Associates in March 2024 noted that in 2023, global connector applications in automotive equipment had the largest increase, valued at $18.503 billion, representing a growth rate of 107.6%. Recent years have seen smart driving and smart mobility become mainstream in global market developments, with strong demand for connectors in the automotive sector. In 2023, the top five global connector applications were ranked as telecommunications/data communication equipment, automotive equipment, industrial equipment, transportation equipment, and consumer product equipment. The global connectors used in telecommunications/data communication equipment were valued at $18.991 billion, accounting for 23.2% of the market and ranking first, although the value decreased by 33.6% from 2022, and the proportion decreased by 31.8%. Despite this, the connector market for telecommunications/data communication equipment is still in a growth phase. In 2023, automotive equipment ranked second in connector applications, valued at $18.503 billion (22.6% of the market), with a significant increase of 107.6% from 2022, and a proportion increase of 113.2%, marking the highest increase among all equipment. Connectors used in industrial equipment (including industrial automation and processing equipment, industrial robotics technology, machine tools and machinery, energy production and distribution, and construction and civil engineering) ranked third, valued at $10.742 billion (13.1% of the market), with a slight increase of 0.6% from 2022 and a proportion increase of 3.3%, highlighting the growing importance of automotive and industrial equipment applications. Transportation equipment was fourth, valued at approximately $5.857 billion (7.2% of the market), with a decrease of 34.3% from 2022 and a proportion decrease of 32.5%. Consumer product equipment ranked fifth, valued at $3.744 billion (4.6% of the market), with a significant decrease of 54.6% from 2022 and a proportion decrease of 53.3%, indicating a growth bubble in 2023 following high demand for telecommunications/data communication equipment and consumer products in 2021 and 2022. In February 2024, Bishop & Associates predicted that in response to future geopolitical situations and the era of 5G and AIoT (Artificial Intelligence of Things), the top three fastest-growing global connector applications in 2024 would be military/aerospace equipment (5.7% growth), telecommunications/data communication equipment (5.4% growth), and automotive equipment (4.6% growth).

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【 2023 connector sales proportion (by application equipment) 】

==> picture [424 x 247] intentionally omitted <==

Data source: Bishop & Associates, Inc.(2024, March)& Compiled by ACES.

According to the research analysis by Bishop & Associates in March 2024, in the global connector market, the production value proportions in 2023 for Europe, ROW (Rest of the World), and North America were 22.0%, 4.9%, and 23.0%, respectively, all showing year-on-year growth. Europe, as the third-largest production region, accounted for about one-fifth of the connector market and exhibited an increasing trend annually, with the largest year-on-year growth in proportion at approximately 6.7%. ROW (including Central and South America, Brazil, and South Africa), although not a primary production region, also performed better than in previous years, with a year-on-year proportional growth of 3.7%. North America remained the second-largest global production region for connectors, but its production value slightly decreased. Although the proportional share of production value increased slightly, the year-on-year proportional growth was not as significant as in previous years (about 2.5% in 2023 compared to about 6.3% in 2022), and the gap between Europe and North America halved (i.e., the gap was $1.56 billion in 2022 and reduced to $848 million in 2023). In terms of other regions, the production value proportions of the Chinese region, Asia-Pacific region (including Taiwan, South Korea, India, and Singapore), and Japan in the global connector market were 30.5%, 13.8%, and 5.7% respectively, all of which decreased compared to 2022. Despite still being the largest production region for connectors, China saw a year-on-year decrease in its share by 3.2%. The Asia-Pacific region, the fourth largest, saw its share decrease by 4.7% year-on-year. Since 2019, Japan has shown a continuous decreasing trend in its annual proportional share, with the 2023 value dropping to 5.7%, marking a year-on-year decrease of 7.0%, the largest decline among all regions.

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【 Comparison of World Connector Production Value by Region (YOY) 】

==> picture [439 x 205] intentionally omitted <==

Data source: Bishop & Associates, Inc.(2024, March)& Compiled by ACES.

Allied Market Research in November 2023 analyzed that the future trends of the global connector market will be shaped by the surging demand for high-speed connectors, growth in the automotive industry, and increased investments in defense and undersea cables. These factors are expected to enhance the growth rate of the connector market and expand its market share. The emergence of electric vehicles, autonomous driving cars, 5G, the Internet of Things (IoT), and robotics technology is anticipated to drive key market development activities.

According to statistics from the Department of Economic Affairs in February 2024, Taiwan's manufacturing industry generated a total output value of NT$17.61 trillion in 2023, with the electronic components industry accounting for NT$5.35 trillion, a decrease of 12.85% compared to 2022. Considering the domestic and international political and economic situations, the Industrial Technology Research Institute in October 2023 predicted that Taiwan's manufacturing industry would reach a total output value of NT$23.38 trillion in 2024, with a growth rate of 5.49%. Due to the restructuring of supply chains and the recovery of demand for end-user electronic products in 2024, along with the continuous expansion of emerging applications such as 5G, AIoT (Artificial Intelligence of Things), automotive sectors, and low-earth orbit satellites, there is a drive for high-specification, high-value electronic products. The new growth momentum brought by end-user applications also indicates that the future of the connector industry, part of the manufacturing sector, is showing similar robust growth momentum.

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(B) The correlation between upstream, midstream, and downstream industries

The company is mainly engaged in the production of connectors and cable assemblies. The upstream, midstream, and downstream structure diagram of the industry is as follows:

a. Structure diagram of the electronic connector industry

==> picture [500 x 519] intentionally omitted <==

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

（ Metal materials Electroplating Plastic materials Other materials
materials
）
Lathe Punch die Electroplating Plastic mold Die casting mold making
machining manufacturing processing making Die casting injection
（ Stamping processing Injection molding
molding
(plating before punching)
Electroplating Electroplating Electroplating Other
processing processing processing
）
Assembly
Testing
Connector finished
product
（
）
industry
Upstream raw materials
Connector manufacturing industry
products
Computer peripheral Computer Car Military electronics Consumer Other
Downstream application
Communication Aerospace /
----- End of picture text -----

Data source: ITIS Program of the Material and Chemical Research Laboratories, Industrial Technology Research Institute

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b. Industry structure diagram of electronic cable assembly

==> picture [513 x 498] intentionally omitted <==

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

（ Electroplating Copper wire Non-woven fabric
Metal materials materials Plastic materials
）
Connector or terminal Connecting wire Conductive fabric
（
）
Cable assembly
（
）
industry
Upstream raw materials
industry
Cable assembly manufacturing
Car Other
products
Computer equipment
Downstream application
Computer peripheral Information appliances Communication / Network Aerospace / Military Consumer electronics Medical treatment
----- End of picture text -----

Data source: Industrial Technology Research Institute (ITRI) Material Research Institute (MIRI) ITIS Project.

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• (C) Various development trends of the product

• a. Product miniaturization

In recent years, with the trend of "lightweight, thin, short, and small" in application products, connectors generally require fine pitch and low profile. Therefore, both metal stamping and plastic injection molding technologies have precision requirements. Specifically, the specifications of connectors are reflected in finer pin pitch and lower connector height. To meet the requirements of product miniaturization, in addition to increasing the precision of the original molds and fixtures, connectors must also have outstanding product design, analysis, and functional simulation capabilities, such as stress analysis, mold flow analysis, and precision testing equipment, to achieve the quality required by customers. According to data from IEK, in the future, connectors for Consumer electronics products will move towards two major technological directions: small size and low height.

• b. High-frequency high-speed connectors and cables

The latest version of the PCIe standard is PCIe Gen5.0, with a bandwidth and transfer rate of 128GB/s and 32GT/s per channel (lane), which can meet the needs of 400 GbE networks in new data centers, provide higher efficiency for data transmission applications of different peripheral devices, and achieve the best balance between cost and bandwidth. Therefore, achieving high-speed requirements can no longer be achieved by pursuing precision in molds and fixtures as in the past. High-speed and high-frequency signal analysis and simulation, as well as the number of actual testing items, will determine the key factors of signal quality. Therefore, high-frequency measuring equipment is necessary to perform precise high-frequency analysis.

The development of high-frequency connectors combines stamping, injection molding, assembly, mechanical structure design, mechanical analysis, high-frequency electrical characteristic analysis, and measurement as a comprehensive technology. According to the Industrial Technology Research Institute (ITRI), as the system moves towards high frequency, the impact of connectors on the electrical characteristics and functions of the system increases. The high-frequency design of connectors must consider the coordination between mechanical and electrical aspects, and the correct direction must also be grasped in the coordination. In testing methods, the effects generated by high frequency must also be considered. Therefore, the technology will cover structural electrical parameter analysis, component equivalent circuit design, component characteristic testing, and test board design. For the connector industry, these technologies not only have the significance of improvement but also indicate the vertical integration of technology.

The specifications of high-frequency connectors usually include impedance, crosstalk, or propagation delay, and their indicator sizes vary according to different specifications. Therefore, in the design consideration, it is necessary to consider the time-domain and frequency-domain conversion, the basic characteristics and high-frequency response of electronic components, the basic theory of transmission lines and impedance matching design, the generation and prevention of crosstalk and loss, and parameter and Smith chart analysis. Taking electromagnetic interference as an example, as the signal frequency carried by connectors becomes higher, the impact on signal integrity also becomes greater. Therefore, comprehensive improvement in electromagnetic interference prevention technology is required for the connector industry (such as cable ends). It is also important to understand the causes and solutions of common electromagnetic interference in system ends such as PCBs, such as the causes and prevention of electromagnetic interference between wires and grounding, shielding principles, shielding efficiency evaluation and shielding element design, causes and

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prevention of ESD, causes and prevention of radiation in digital circuits, and common techniques used in electromagnetic interference measurement.

High-frequency connectors can be used for high-end products such as RAMBUS high-speed input/output (IEEE 1394/USB), high-speed network applications (CAT-8), and more. CAT-8 is the latest IEEE copper Ethernet cable standard that encloses each pair of twisted pairs in aluminum foil, almost eliminating crosstalk interference and achieving higher data transmission speeds. CAT-8 Ethernet cables are the ideal choice for inter-switch communication in data centers and server rooms, providing maximum transmission speed and stability.

In recent years, various peripheral devices have experienced rapid development, and many cloud services (SaaS, IaaS, PaaS) have also seen significant growth. This has led to an increase in demand for high-frequency, high-speed, high-power, and high-current connectors. In order to achieve high-frequency and high-speed transmission goals, there is a need for greater precision and accuracy in the requirements for the control chips, electrical connectors, cable wires, and circuit boards used in high-speed transmission paths. High-quality structures that can process signals will increase the product pricing advantage and promote the overall technological advancement of the electronics industry, becoming an inevitable trend.

• c. 3C application products are still in the mainstream market

According to research data from Bishop & Associates in March 2024, 3C application products such as computers, consumer electronics, and telecommunications still maintain a certain market share in the world connector market, accounting for about 40% of the overall market value, which translates to a market size of approximately US$ 32.7 billion. This indicates that this market is still the main market for development for various manufacturers.

• d. Business opportunities in automotive applications

In a March 2024 report by Bishop & Associates, the 2023 global connector market value for automotive equipment was approximately $18.5 billion, accounting for 22.6% of the overall connector applications, making it the second-largest connector application sector. As the world has been working towards net-zero carbon emissions in recent years, the traditional fuel-powered automobile has become the main industry targeted by various countries to reduce carbon emissions. Some advanced countries have already proposed a ban on the sale of fuel-powered cars, such as the European Union's decision to ban the sale of all fuel-powered cars from 2035 onwards. Therefore, the energy transformation is driving the rise in demand for electric vehicles.

According to a January 2024 research analysis by Digitimes, global electric vehicle (EV) sales reached 14.22 million units in 2023, showing a growth rate of approximately 39% from 2022, with an overall EV market penetration rate of 16%. It is estimated that the global EV market will continue to grow in 2024, with sales projected to reach 18.42 million units, an increase of about 29.6%, and a market penetration rate of 20.6%. From 2020 to 2024, the EV market's average annual compound growth rate (CAGR) will reach 54.11%, significantly outperforming the overall automobile market's CAGR of 4.66%. The top three EV sales markets are China, Europe, and the United States, accounting for over 90% of the global share, with China holding approximately 60% market share, making it the largest EV production and sales country globally. It is estimated that the automotive electronics and related components for electric vehicles will show a simultaneous growth trend in the future.

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According to a study by Future Intelligence in October 2021, the average value of connectors per vehicle worldwide has increased from US$97 in 2000 to US$181 in 2020. With the continuous rise of trends such as vehicle electrification, digital technology, and environmental sustainability, the level of vehicle electrification has continued to increase. This means that vehicles increasingly rely on electronic components, and many operations must go through an electronic component processing process before they can be transmitted. As a result, the proportion of electronic products in the production cost of a vehicle has increased from 3% in 1970 to 20% in 2000 and 34% in 2020. In a study by IEK in January 2023, it is estimated that the proportion of automotive electronics in the average vehicle cost will exceed 50% in 2030, indicating that the value of automotive electronic systems will continue to rise.

【 Trend of the Global Automotive Electronics Cost Ratio 】

==> picture [446 x 180] intentionally omitted <==

Data source: Future Intelligence(2021, October)& IEK(2023, January)& Compiled by ACES.

According to Deloitte Insight's analysis in December 2022, the automotive industry supply chain will experience the highest growth in driveline systems, batteries, fuel cells, advanced driver assistance systems (ADAS) and sensors, and electronic products by 2025, with growth rates of 475%, 475%, 150%, and 22%, respectively.

【 Market Growth Rates 】 Y2020 v.s. Y2025

==> picture [122 x 97] intentionally omitted <==

1. Driveline Systems 475% 2. Batteries& Fuel Cells 475% 3. ADAS& Sensors 150% 4. Electronic Products 22%

Data source: Deloitte Insight (2022, December)& Compiled by ACES.

• e. China is the world's largest market in terms of connector

China has become the world's largest production base and consumer market for connectors. According to a March 2024 report by Bishop & Associates, the global connector market overall is showing a steady and level trend, with a high industry concentration. China, North America, and Europe are the top three global connector supply markets. Due to domestic manufacturers actively expanding their global

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business in recent years, there has been rapid growth in international orders from Europe and America. The Asia-Pacific region ranks as the fourth largest in global connector output. However, the global supply chain continues to fragment, and international end-brand supply chains are shifting. Although the Chinese connector market still accounts for about 30.5% of the overall market value, far exceeding North America's 23%, its growth rate has noticeably slowed, and the output value is not showing the growth patterns of previous years. According to a January 2024 report by the International Wire and Cable Association, the global economy is slowing down, and the Chinese connector industry faces fiercer competition, including mergers and acquisitions, restructuring, optimization of production line capacities, capital expenditures, and development of horizontal applications. Additionally, the industrial chain's supportive response is gradually reconstructing the connector industry's landscape, which is also beneficial for enhancing the overall level of the connector industry and its international competitiveness. In the future, sectors like new energy, industry, medical, and telecommunications will drive the demand for high-end connectors and experience rapid growth. Currently, China has become the world's largest consumer market for connectors.

【 World Connector Market by Region in 2023 】

==> picture [363 x 188] intentionally omitted <==

Data source: Bishop & Associates, Inc. (2024, March)& Compiled by ACES.

(D) Product competition

The Company mainly engages in the development, manufacture, and sales of connectors and assemblies related to laptops and computer peripherals, consumer electronics, automotive electronics, cloud servers, network communications, industrial equipment, medical devices, ultra-fine coaxial cable assemblies, high-speed transmission cable assemblies, wireless communication RF connector assemblies, metal stamping, and various components. It possesses a complete range of products and specifications. Due to the rapid changes in demand for applied products, in response to the rapid changes and increasing precision required by downstream customer products, the competitive situation of the Company's products is explained as follows::

• a. To keep up with market trends in real-time and enhance production technology capabilities.

Due to the wide variety of application products for connectors and cables, as long as electronic products involve signal transmission, there will be a continuous need for connector cables. Therefore, the application market for connector cables spans various industries and products. How connector cable manufacturers can promptly grasp the

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dynamics of downstream product application markets and quickly launch products that meet market demands becomes a key factor in whether connector cable manufacturers can earn profits. The Company has the capability for rapid development in product research and design, which shortens the product development time and allows for the customization of connector cable products according to individual customer needs.

b. Product quality and stability

As the quality of connectors can affect the reliability of signal transmission between electronic devices, they are a critical component in various electronic applications. Therefore, the company has had strict management processes for product quality since its establishment. This can be seen from the fact that the company obtained the UL ISO 9001 international quality system certification a few years after its establishment, which is highly regarded. In addition, the company has obtained the QC080000 quality certification and the IATF16949 automotive product certification. The company's efforts have been recognized by many well-known domestic and international customers, and the company has had long-term relationships with them, demonstrating the company's stability in terms of product quality.

c. Competitiveness of product prices

Due to the downward trend in the prices of connector cable application products and price competition among peers, the profit margins of various connector manufacturers have been compressed. In light of this, our company focuses on rapid product development and depth and strength of customer service (including production capacity and delivery times). Additionally, to increase profits and reduce production costs, our company not only strengthens control over raw material costs but also engages in product design and development domestically. We have established a production base for connector cables in mainland China to reduce production costs, giving the Company a cost advantage to face competition from peers and future price competition pressures.

C. Overview of technology and R&D

• (A)The amount of R&D expenses invested in the latest fiscal year and up to the date of printing of the annual report

		Unit: NT$ thousand
Year Item	2023	Q1 of 2024
R&D expenses(A)	621,268	128,522
Net operatingrevenue(B)	8,486,228	1,943,259
(A)/(B)%	7.32%	6.61%

Data source: Audited or reviewed consolidated financial reports for the fiscal year 2023 and Q1 of the fiscal year 2024 by certified public accountants.

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• (B) Recently developed successful technologies or products up to the date of printing of the annual report.

the annual	report.
Year	Researchachievements
2023	1. Development of MCIO connectors and cables. 2. Internal high-speed interconnect cable assembly Nearstack PCIe6. 3. High-speed board-to-board connector PCIe5. 4. Various M.2 card connectors PCIe5/WiFi 7. 5. Internal server RISER CABLE. 6. Low-height, high-current NB power connector with built-in switch control. 7. High-speed, high-density connector GENZ280PIN. 8. Gaming graphics card high-speed transmission cable (PCIe Gen4+USB3.2). 9. Type C to HDMI2.1 Dongle. 10. 12~23A high-current PCB design. 11. Electric bicycle charging cable. 12. Medical equipment heat sink. 13. Development of PCIe 12+4 power high-current wire-to-board connectors (wire). 14. Mini Fakra automotive connector project (board/wire end). 15. Mega Power miniaturized high-current connector (board/wire end, supports 20 amps). 16. Automotive Type-C socket & male connectors (wire). 17. Waterproof Type-C connector. 18. Separable ring-type push-pull connector socket. 19. 80pos Flatfast flyover cable. 20. EDSFF Flatfast cable. 21. QSFP-DD AEC 800G bpshigh-speed transmissioncable.
Up to May 10th of 2024	1. Development of PCIe CEM Gen6 connectors 2. OCP next-generation internal high-speed interconnect solution Multitrak PCIe6 connector. 3. Development of OCP high-current POWER CARDEDGE connector. 4. Mega Power 2 miniaturized high-current connector. 5. MiniSAS-HD Gen4 Active cable. 6. SFP112 and SFPDD112 connectors. 7. J1772 Type 1, 15 32 50A charging gun. 8. QSFPDD 112G PAM4 Active Copper Cable. 9. SFPDD 56G Passive cable.

• D. Long and short-term business development plans

(A) Short-term plans

• a. To strengthen product breadth in existing sales channels of notebook computers and consumer electronics products market, in addition to the existing product series, we will utilize existing mold technology and advantages to shorten the sample development cycle, collaborate with customers' product development plans, and develop more types of connectors for notebook computers, increase the breadth of our product line, and further expand market share and increase revenue.

• b. Proactively developing the server and network markets: Recognizing the high potential for development in the communication and network markets in the future, our company will utilize our existing technology and develop human resources to actively engage in the research and manufacturing of related product connectors and cables in the mobile device and network industries to respond to future business development.

• c. Expanding international business: In order to effectively utilize production capacity and achieve optimal economic scale, we actively seek foreign business opportunities, which will help control costs and increase sales channels. On the one hand, this can strengthen the control of production systems, and on the other hand, it can allow us to access more advanced technology and market information from overseas, and collaborate with brand customers on product design to shorten development time and capture market trends.

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• d. Establishing a comprehensive corporate image is crucial for enhancing brand awareness and gaining a competitive edge in the market. This can be achieved through various means such as maintaining a product catalog, optimizing the company website, and creating an effective company profile. By doing so, the company can improve its visibility and reputation, which can lead to better marketing opportunities and increased sales.

• e. Accelerating the development of production automation, modularizing production equipment to effectively improve production capacity and quality, reduce reliance on direct labor and increase the barrier to entry for production technology. This will improve production efficiency, shorten lead times, further reduce production costs, and maximize benefits.

• f. Accelerate the development of process vertical integration to reduce the outsourcing ratio of electroplating, to control product quality and production costs.

• g. Establishing an Automotive Electronics Engineering and Technology Research Center (Vehicle Electronics Zone) to expand the production capacity and research and development capabilities of automotive electronic connectors, in order to provide customers with more diversified product services.

(B) Long-term plans

• a. Double Eagle Project: Given that new technology products are often developed or regulated based on the U.S. market, it is important to obtain real-time information to provide product development directions and information needed for investment decisions. Our company has established a U.S. company to expand our U.S. business and gain access to market trends and new product information. Additionally, with the rise of China as a major manufacturing and consumer market, we have adjusted our business organization to establish stronger customer relationships to facilitate product sales. Our company spreads its wings across the U.S. and China markets with the Double Eagle Project, to respond to the rapid changes in market demand with timely and flexible services and to develop a forward-looking and comprehensive plan for future business development.

• b. Expanding international presence with a focus on research and development and leading products: We continue to invest in research and development and technology resources, and we are deepening our technical research and development in Taiwan Precision Center to expand our operations and focus on the design, development, and manufacturing of precision molds. We are continuously cultivating excellent product development, precision mold design, and manufacturing personnel, and building a complete technical team to meet the needs of domestic and international customers, with the long-term goal of becoming a leading brand in World Class Connectivity.

• (2) Market and Sales Overview

A. Market analysis

• (A) Main sales regions of products

		Unit: NT$ Thousands; %	Unit: NT$ Thousands; %
	Region	2023
		Operating revenue amount	Percentage of total operatingrevenue
Export	China	4,111,424	48.45
	Other	3,036,076	35.77
	Subtotal	7,147,500	84.22
Domestic sales		1,338,728	15.78
Total		8,486,228	100.00

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(B) Market share

According to data from ITIS in February 2022, Taiwan's connector industry (interconnect components) had a total annual production value of NT$200.8 billion in 2021. With our company's consolidated revenue of NT$8.486 billion for the year 2023, it is estimated that our company's market share is about 4% or more.

• (C) Future supply and demand situation and growth potential of the market

• a. Supply side

According to data from the American research institution Bishop & Associates in August 2023, the top 100 connector manufacturers worldwide had sales totaling $70.049 billion in 2022, accounting for 83.3% of the global connector market. The top ten connector manufacturers shipped a total of $45.142 billion worth of connectors in 2022, which represented 53.7% of the global market, an increase of 8.4% from $41.654 billion in 2021. The manufacturers ranked from eleventh to twentieth shipped connectors valued at $9.869 billion in 2022, making up 11.9% of the global market, up 11.9% from $8.82 billion in 2021. The top ten manufacturers in order are TE Connectivity (Tyco) from the USA, Amphenol from the USA, Molex Incorporated from the USA, Aptiv (formerly Delphi Connection Systems) from the USA, Luxshare Precision from Mainland China, Foxconn (FIT) from Taiwan, Yazaki Corporation from Japan, Rosenberger from Germany, JAE (Japan Aviation Electronics Industry) from Japan, and Hirose Electric Co., Ltd. from Japan.

The table demonstrates that from 1980 to 2022, TE Connectivity has consistently been the largest connector company, while Molex and Amphenol have maintained positions in the top ten. Notably, no Asian companies appeared in the top ten before 1980, but by 2020, six Asian companies had entered the top ten, and five remained in 2022. This change correlates closely with the rise in electronic manufacturing capabilities in Asia and the expanding market demand for connectors in the region, particularly as many connector companies, especially in China and other developing nations, are broadening the scope of their current product applications and establishing more collaborations with non-connector firms. Over the past decade, the global connector industry has experienced a slowdown in market growth, with a market structure heavily influenced by large-scale mergers and acquisitions, which have driven increased market concentration. According to statistics, about 48% of the top 100 connector companies ranked in 2000 were acquired by other companies by 2021. For instance, in 2021, TE Connectivity acquired ERNI Electronics GmbH, ranked 46th, Amphenol acquired Positronic Industries, ranked 79th, and our company acquired Genesis Technology. The top ten global connector manufacturers have acquired over 80 companies in the past few years, increasing their market share from 38% in 1980 to 53.7% in 2022. As their market share has grown year by year, these major international players are rapidly scaling up their industrial economies to enhance entry barriers and competitiveness in the market.

【 Top 10 connector manufacturers by global shipment volume from 1980 to 2022 (by region) 】

Year Region	1980	1990	2000	2010	2020	2022
North America	10	6	6	4	4	4
Europe	0	1	1	1	0	1
Japan	0	3	3	4	4	3
China	0	0	0	0	1	1
Asia-Pacific	0	0	0	1	1	1

Data source: Bishop & Associates, Inc.(2023, August)& Compiled by ACES.

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b. Demand Side

Demand for connectors and cables is mainly influenced by the product demand in downstream end-use applications. Our company produces connectors and cables mainly used in four major application areas: notebook computers/consumer electronics, network communications/servers, automotive electronics, and industrial industries. The development trends of individual application markets are explained as follows:

(a) The notebook computer (NB) market

According to an August 2023 report by TechSci Research, the global laptop market is expected to grow due to an increasing working population and rising demand for laptops. This growth is also driven by government policies aimed at promoting the digital economy and improving internet infrastructure (such as Make in India, Made in China 2025, and Digital India), a thriving gaming industry, and the widespread use of notebooks for entertainment purposes. These factors have led to the introduction of new product technologies and continuous innovation in notebook design, boosting market demand. A January 2024 study by 360i Research projected the global laptop market to be valued at $201.12 billion in 2023, growing to $214.83 billion in 2024, and reaching $349.3 billion by 2030, with a Compound Annual Growth Rate (CAGR) of 8.2%.

A report from Digitimes in October 2023 indicated that the global notebook shipment CAGR from 2023 to 2028 is expected to be 3%. Global notebook shipments in 2023 decreased by 10.8% from 2022, marking the lowest in nearly four years but still higher than the pre-pandemic average of 150 to 160 million units. This decline was tempered by a rebound in educational procurement in the second quarter and strong clearance of budget consumer models, followed by a sprint to the annual peak in the third quarter and a recovery in the commercial market in the fourth quarter. With global inflation expected to ease in 2024, the laptop market is forecasted to recover, driven by AI productivity applications that favor corporate hardware upgrades, as well as demand attracted by high-end models and new specifications. This is expected to result in a market growth of 4.7%, reversing the declines of the previous two years. In 2025, as the economy enters a new expansion phase, major processor manufacturers (Intel, MediaTek, AMD, and Qualcomm) are expected to undergo significant technology transitions. Additionally, Microsoft's discontinuation of Windows 10 updates in October 2025 is anticipated to spur a new wave of mainstream consumer device upgrades. Global notebook shipments are expected to show significant growth, increasing by 6% and surpassing 180 million units. Growth in 2026 is expected to slow to 2.8%, concentrated on high-end models, and the global notebook market is expected to contract slightly in 2027. By 2028, global notebook shipments are projected to experience modest growth, returning to over 190 million units. With the active operation of the management team, our company is estimated to continue to grow in the consumer electronics market, due to the addition of new products. In the future, we will adopt a diversified product sales combination strategy to improve our company's sales performance.

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【 Global notebook (NB) shipment volume 】

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Data Source: Digitimes (2023, October& 2024, January)& Compiled by ACES.

(b) Network communication market/servers

The communications industry is primarily divided into three major categories: network communications equipment, personal mobile devices, and communication services. Network communications equipment primarily involves hardware and components related to connecting network signals, including various broadband technologies such as Wireless Local Area Networks (WLAN), Ethernet Switches, Digital Subscriber Line Customer Premises Equipment (DSL CPE), Cable Modem Equipment (Cable CPE), Internet Protocol Set-Top Boxes (IP STB), Bluetooth technology, and mobile broadband access products. The network communications industry has rapidly developed and holds a significant position in the global economy. According to research by IEK in October and December 2023, the momentum for digital transformation in enterprises is strong in 2023. The adoption of generative AI applications and related infrastructure has driven upgrades in network bandwidth and growth in cloud and data centers, which has become a long-term trend. This has sustained the demand for network communication equipment. In 2023, the value of Taiwan's communications industry was approximately NT$1.31 trillion, showing a growth of about 3.0% from 2022, with an estimated value of NT$1.34 trillion in 2024, growing at a rate of 1.9%. In December 2023, IEK's research indicated that the global communications industry's output value in 2023 is estimated to reach $2.32 trillion, with a growth rate of 5.08%, and under the development vision for 6G by various countries, the global growth rate in 2024 is estimated at 7.2%, amounting to about $2.49 trillion.

The core mission of the network communications industry is to achieve global connectivity, rapidly transmitting data, information, and communications, necessitating advancements in wireless communication, the Internet of Things (IoT), cloud computing, and cybersecurity technologies and equipment. Research by ITIS in February 2024 indicated that Taiwan's communication equipment output value in 2023 was NT$543.7 billion, growing 2.6% from 2022. IEK's research in February 2024 highlighted that in network communications equipment, Wi-Fi penetration continues to increase with the adoption of Wi-Fi 6E in the new iPhone 15, while the demand for GPS navigation products and automotive products also grew.

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According to a February 2024 research analysis by Digitimes, the global server market shipped approximately 14.8 million units in 2023, which represented an 18.3% decline from 2022. The primary reason for this downturn was a contraction in demand for traditional cloud applications, as budgets for general-purpose servers were squeezed by more expensive AI servers. However, the continued development of generative AI applications is expected to drive not only the need for AI servers but also increase the demand for traditional computing and storage resources, which is beneficial for the overall growth of the server market in the long term. Looking ahead over the next five years, it is estimated that in 2024, major North American cloud providers such as Amazon, Microsoft, Google, and Meta will ramp up their procurement of general-purpose servers. The global server market shipment is projected to exceed 15.53 million units, leading to an overall shipment increase of 4.9%. With the economic recovery and the wave of enterprise equipment upgrades, the growth rates in 2025 and 2027 are expected to reach 6.8% and 7.8%, respectively. From 2023 to 2028, the global server shipment Compound Annual Growth Rate (CAGR) is projected to be 6%.

【 Global Server Shipments 】

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Data source: Digitimes(2024/02)& Compiled by ACES.

With the development and proliferation of artificial intelligence (AI) technology, the server market has undergone significant changes, especially with the introduction of generative AI services like ChatGPT (Chat Generative Pre-trained Transformer) developed by OpenAI, which relies on powerful AI servers for computation. Unlike general servers primarily used for data storage with slower computing speeds, AI servers boast much greater computational power and faster data processing capabilities to meet the demands of emerging technologies such as VR/AR, ultra-high definition, and autonomous driving technologies. According to a January 2024 report by MIC, the surge in generative AI continues to drive global AI server shipments. In 2023, AI servers accounted for over 50% of the global server market value. Furthermore, Taiwan's server industry accounted for more than 80% of global server shipments, with the production and assembly of AI servers comprising more than 90% of the global total. A March 2023 analysis by Digitimes reported that major Taiwanese server-related businesses saw revenues of approximately NT$2.18 trillion in 2023, marking a 7% decline from 2022. However, it is estimated that in 2024, with continued significant growth in

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AI server setups by large North American cloud clients, global server demand will rebound, driving-related revenues of Taiwanese server businesses to NT$2.5 trillion, a growth rate of 15%.

Looking ahead, the development of the 5G and cloud communication industries remains very promising. Our company is optimistic about the future growth potential in the development of high-speed connectors, high-speed transmission cables, server racks, and supports.

• (c) Automotive electronics market

In recent years, major global automobile manufacturers have been committed to improving the environmental and power performance of automobiles. With the changes in technology and the environment, the global automotive industry is continuing to develop toward new energy vehicles, and this trend has also increased investment in the automotive electronic components industry. Safety, comfort, energy saving, convenience, and environmental protection have become the main driving forces behind the development of automotive electronics. In the future, automotive electronic products will be more focused on electrification, intelligence, and electrification. As vehicle electronics and safety features increasingly penetrate the market, the value of electronic systems installed in vehicles continues to rise, surpassing the growth in automobile production and driving overall market development. IEEE research estimates that by 2030, the cost of vehicle electronics will account for 50% of the total vehicle cost. According to a December 2023 analysis by IEK, the industry is gradually transitioning from electrification and connectivity to automation, leading to an increase in automotive electronic products. In 2023, the global automotive electronics market is estimated to be $315.9 billion, up from $294.9 billion in 2022, representing a growth of 8.3%. It is expected to exceed $500 billion by 2030, with a Compound Annual Growth Rate (CAGR) of 7.0%.

【 The Global Automotive Electronics Market Scale 】

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Data source: IEK (2023, December)& Compiled by ACES.

According to a December 2023 analysis by IEK, the output value of Taiwan's automotive electronics industry exceeded NT$348.2 billion in 2022 and is estimated to surpass NT$409.5 billion in 2023, reaching an all-time high. By 2028, the output value of Taiwan's automotive electronics is projected to break through NT$915.8 billion, indicating that the electric vehicle market is growing rapidly under the trend of self-driving and networking, driving the proportion of automotive electronic systems. We in Taiwan can integrate our industrial

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capabilities and vertically integrated power electronic components, advanced driving safety assistance systems, in-vehicle infotainment systems (IVI systems), smart cabins, and other fields to accelerate the trend of vehicle electrification. The automotive electronics market has great potential, and with the promotion of the specification and technological requirements for smart vehicle products, it will continue to drive opportunities in the automotive electronics market.

• 【 The Annual Output Value of the Automotive Electronics Industry in Taiwan 】

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Data source: IEK(2023, December)& Compiled by ACES.

There are five main systems for the automotive electronics industry in Taiwan, including driver information system, engine transmission system, auto-body system, safety system, security system, and others. They are mostly concentrated on advanced driver assistance systems (ADAS), in-vehicle electronics technology, in-vehicle infotainment systems, and services. According to data from IEK in October 2020, the advantage of manufacturers in Taiwan lies in its integrated sensing system and a complete cluster of driver information systems. In addition, various countries' regulations that mandate the installation of ADAS-related systems bring strong demand for automotive electronic safety systems, which have the greatest potential for development.

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【 Relationship Between Automotive Electronics And Autonomous Vehicles 】

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Data source: Industrial Technology Research Institute's IEK IT IS Plan (October 2020)

According to the research analysis by the Market Intelligence & Consulting Institute (MIC) in September 2022, the main drivers of global growth in the automotive electronics market are autonomous driving, high-power electric vehicles, and upgrades to in-vehicle infotainment systems. The potential of this market has surpassed that of the information and communication technology industry. In 2022, traditional fuel vehicles still dominate the market, with a contribution ratio of 7:3 for the automotive electronics market size in comparison to electric vehicles. As the penetration rate of xEV (electric vehicles) increases, the application scope of automotive electronics becomes broader and more diverse. By 2030, the contribution ratio of the automotive electronics market size is expected to reverse to 3:7 in favor of electric vehicles over traditional fuel vehicles.

The Company is focusing on the automotive sector, targeting areas such as intelligent driver-assistance systems, vehicle electronic control panels, and new energy vehicles (EVs), and collaborating with partners in China and the USA to develop new energy vehicles. Our product range includes parking sensors, cameras, and electric switches. We have entered the automotive market, providing solutions for in-vehicle monitoring, wireless transmission, and collision avoidance radar systems to a U.S. smart transportation technology company's supply chain, moving from supplying individual parts to offering complete automotive solutions. We currently supply Europe, mainland China, and the USA with products like parking radar connectors, collision radars, automotive RF, and car entertainment systems. Having received orders from Tier1 European automakers, our company

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is focusing on the automotive connector and cable market, with a medium to long-term goal to accelerate the deployment of automotive products.

(d) Industrial market (represented by Uninterruptible Power Supply (UPS) systems)

The Company provides industrial power cords mainly for the uninterruptible power system (UPS) market. An Uninterruptible Power Supply (UPS) is an electrical device that automatically switches to its built-in battery to provide emergency power to load devices when the main power supply experiences abnormalities (such as faults, power outages, or voltage instability). This ensures a short-term continuation of safe, clean, stable, and uninterrupted electricity to the equipment. Thus, a UPS serves as a reliable buffer, continuously supplying power to automation controllers, sensors, and actuators, maintaining normal device operation. In the event of power issues, a UPS provides a stable backup power source to prevent equipment failure, data loss, or system malfunction. According to a market research report by GII in January 2024, UPS systems have become essential across various industries including telecommunications, engineering, manufacturing, research and development, education, pharmaceuticals, information technology, aviation, and banking. The UPS market is segmented into residential, commercial, and industrial areas, with the commercial sector (including data centers, telecommunications, medical, and defense) holding the largest market share and is expected to show significant growth.

UPS (Uninterruptible Power Supply) systems are vital support mechanisms to maintain the continuous operation of industrial infrastructure, typically used to support critical infrastructure during major failures. In the era of Industry 4.0, integrating new technologies such as the Internet of Things (IoT), cloud computing, cloud analytics, AI, and machine learning into production equipment is crucial. UPS systems are relied upon to stabilize power during outages and simplify production and manufacturing processes to protect data and reduce production line downtime. The growth drivers for the global UPS market include the rapid expansion of global data centers and the increasing power demands of end-users in the manufacturing and commercial sectors. According to a February 2024 report by the Forward-Looking Industry Research Institute, the applications of UPS are divided into uninterrupted power supplies for information equipment and industrial power equipment. UPS for information equipment is primarily used for communication systems and data centers in telecommunications, information technology, transportation, finance, aviation, etc., focusing on security protection. UPS for industrial power equipment is mainly used in automated industrial systems, remote systems, power continuity protection, and automated transmission systems, also focusing on safety issues.

According to GII's market research reports from January and March 2024, the global UPS market was valued at approximately $8.1 billion in 2023. Mordor Intelligence estimates that the UPS market will reach about $11.72 billion in 2024, and from 2024 to 2029, it is expected to expand at a Compound Annual Growth Rate (CAGR) of 4.23%, with projections suggesting the market will grow to $14.42 billion by 2029. The Asia-Pacific region, including China and India, is expected to lead the UPS market due to increasing power demands and the gradual phasing out of coal-fired power plants, making it the fastest-growing market for UPS. According to GII's September 2023 market research, China is expected to reach a market size of $2.2 billion by 2030, with an estimated CAGR of 6.7% from 2022 to 2030. Japan and Canada are projected to have CAGRs of approximately 3.4% and 4.9%, respectively, while Germany's CAGR is expected to be about 4.7%.

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• 【 Industrial and Commercial Level UPS Applications 】 【 Global UPS market size forecast 】

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Data source: Uninterruptible Power Supply (UPS) Industry Blue Ocean Market Strategy Formulation and Implementation Research Report in China, from 2020 to 2025(2020, December), GII(2024, January)& Compiled by ACES.

In the future, UPS (Uninterruptible Power Supply) systems are expected to evolve towards higher frequency, intelligence, and networking. The increasing demand for energy storage systems, growth trends in new technologies such as IoT (Internet of Things), virtual and cloud computing, AI (Artificial Intelligence), and machine learning, as well as the rising number of global data centers, all indicate a growing need for reliable power solutions. This is anticipated to drive the growth of the global UPS market. In developed countries, the UPS market is mature, while in developing countries like India and China, maintaining quality power remains a significant challenge and is expected to be a major driving force for the market. Looking at the global trends in the Information and Communication Technology (ICT) industry, as the world enters the information age, the application of UPS is becoming more widespread, and the demand for a full range of UPS products is robust. The future of UPS is expected to show strong growth momentum.

(D) Competitive niche

a. Product development speed and customization capability

The company has dual technology development capabilities in electronic and mechanical component development and verification to meet market and customer needs and respond quickly to changing market demands. The company also has the ability to self-produce molds and mechanical parts and can provide customers with customized Total Solutions services, providing customers with samples and solutions in a short period. To meet the diverse specifications and development needs of customers, the company has a strong R&D team dedicated to product development, mold design and development, and process technology research and development. With a continuous focus on strengthening R&D capabilities, the company has obtained approximately 590 product patents both domestically and internationally.

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• b. Mastering the independent capability of mold and equipment development

Terminal crimping and plastic injection molding are the key technologies for connector manufacturers. The company has independent capabilities in the design, development, and manufacturing of plastic injection molds and terminal crimping molds. By mastering these key capabilities in mold development and manufacturing, we do not rely on external suppliers, allowing us to effectively shorten mold development time and cost, and enhance product competitiveness. In terms of automatic assembly machines, we also can develop them in-house. Therefore, for product lines with large sales volumes, we can develop production equipment that is optimized for the manufacturing process, effectively increasing production capacity and reducing manufacturing costs.

• c. Complete product line and good customer relationship

The Company has a comprehensive product line, including connectors, ultra-fine coaxial cable assemblies, high-speed transmission cable assemblies, wireless communication RF connector assemblies, metal stamping, and various components. This diversity and completeness of specifications enable us to meet customers' needs in one go, allowing them to design and choose the most suitable and cost-effective connectors to solve their design challenges. Through close supply chain relationships, we will continue to strengthen our business cooperation through joint research and development efforts. This collaboration will be beneficial for the development of our new products and the expansion of our performance, allowing us to jointly explore new markets or industries.

• (E) Beneficial and adverse factors of development prospects and corresponding strategies

• a. Beneficial factors

• (a) As we expand our application scope towards diversification, our company's business scope encompasses laptops and computer peripherals, consumer electronics, automotive electronics, cloud servers, network communications, industrial equipment, and medical industries. With such a diversified range of application industries, the seasonal patterns vary among these sectors, which in the long term will effectively reduce the revenue fluctuations during peak and off-peak seasons for the group.

• (b)The R&D strength is strong, with advanced product development and mass production capabilities.

• (c)The customer base is solid, and the cooperative relationships are good.

• (d)The global logistics management capability covers production locations in Taiwan, mainland China, the Philippines, and Vietnam.

• (e)Continuously extending the industry development, committed to industry vertical integration or horizontal market expansion.

b. Adverse factors

• (a) Intense competition within the industry affecting profits: Facing the aggressive price-cutting and snatching of orders by competitors from mainland China, profits have been decreasing. Moreover, the large-scale of information and communication system manufacturers has indirectly reduced the number of customers, making it increasingly difficult to negotiate with them.

Corresponding strategies: the company is committed to reducing production costs while actively improving R&D design, continuously expanding niche and high-end product markets, seizing high-margin products of foreign manufacturers, and avoiding price-cutting competition from domestic competitors.

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• (b)The labor costs in mainland China continue to rise.

Corresponding strategies: the company will respond to this by actively developing automated assembly processes and expanding towards regions with lower labor costs, such as the Philippines, Vietnam, and other countries.

• B. The important uses and production processes of the main products

• (A) The important uses of the main products

  • The company's main products include connectors, ultra-fine coaxial cable assemblies, high-speed transmission cable assemblies, wireless communication RF connector assemblies, metal stamping, and various components. These products are used in applications such as laptops and computer peripherals, consumer electronics, automotive electronics, cloud servers, network communications, industrial equipment, and medical devices.

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• (B) The production processes of the main products

• a. Connectors

==> picture [365 x 386] intentionally omitted <==

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

Front-end
design Product design
Mold development
Metal Metal (electroplated Plastic
Primary semi-finished products)
production
processes
Stamping and forming Injection molding
Electroplating
Assembly
Final
assembly
Testing
Connector
----- End of picture text -----

• b. Cable assembly

b. Cable assembly	b. Cable assembly	b. Cable assembly	b. Cable assembly
Theproductionprocesses of cable assembly
Stage 1	Stage 2	Stage3	Stage 4
1. Cutting	1. Plastic body assembly	1. Electrical testing	1. Inspection
2. Wire stripping	2.Iron core insertion	2. Continuitytesting	2.Packaging
3.Terminalcrimping	3.Tinning, soldering	3. Visual inspection	3. Shipping
	4. Gluing	4. Other inspection

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C. The supply status of the main raw materials

Product	Name of main rawmaterials	Supply sources	Supply status
Connector	Plastic resin	P-BB、P-AY、P-T、P-I	Stable
	Copper material	P-V、P-BC、P-AV、P-AZ	Stable
Cable	Terminal, Connector	P-AC、P-AD、P-BD	Stable
	Wire material	P-AT、P-AO、P-AI	Stable

• Note: The Company is contractually obligated to not disclose customer names and they are not related parties. Therefore, customer names will be disclosed using code names.

• D. In either of the past two fiscal years, provide the names of customers who accounted for more than 10% of the total sales (or purchases), along with the amount and proportion of their sales (or purchases). Please also explain the reasons for any changes in these figures.

• (A) The names of suppliers who accounted for more than 10% of the total purchases in either of the past two fiscal years, along with the proportion and amount of their purchases, and the reasons for any changes in these figures, are as follows:

Unit: NT$ thousands: %

Year		2022	2022			2023	2023			Q1, 2024	Q1, 2024
Item	Name	Amount	Percentage of net purchases for the entire fiscal year	Relatio nship with the issuer	Name	Amount	Percentage of net purchases for the entire fiscal year	Relation ship with the issuer	Name	Amount	Percentage of net purchases for Q1, 2024	Relation ship with the issuer
1	-	Note 3	Note 3	-	-	Note 3	Note 3	-	-	Note 3	Note 3	-
2	Other	4,694,360	100%	-	Other	3,501,357	100%	-	Other	895,256	100%	-
Total	Net purchases	4,694,360	100%	-	Net purchases	3,501,357	100%	-	Net purchases	895,256	100%	-

• Note 1: The names of the above suppliers are disclosed using code names as the Company is contractually obligated to not disclose their actual names and they are not related parties.

Note 2: The information is sourced from audited or reviewed consolidated financial statements.

Note 3: This supplier is not separately disclosed as their purchase amount did not exceed 10% of net purchases.

Suppliers whose purchases did not exceed 10% of net purchases for the past two fiscal years and the first quarter of 2024 are not separately disclosed by the Company.

• (B) The names of customers who accounted for more than 10% of total sales in either of the past two fiscal years, along with the proportion and amount of their sales, and the reasons for any changes in these figures, are as follows:

Unit: NT$ thousands: %

Year		2022	2022			2023	2023			Q1, 2024	Q1, 2024
Item	Name	Amount	Percentage of net sales for the entire fiscal year	Relatio nship with the issuer	Name	Amount	Percentage of net sales for the entire fiscal year	Relatio nship with the issuer	Name	Amount	Percentage of net sales for Q1, 2024	Relation ship with the issuer
1	-	Note 3	Note 3	-	-	Note 3	Note 3	-	-	Note 3	Note 3	-
2	Other	10,392,504	100%	-	Other	8,486,228	100%	-	Other	1,943,259	100%	-
Total	Net revenue	10,392,504	100%	-	Net revenue	8,486,228	100%	-	Net revenue	1,943,259	100%	-

• Note 1: The names of the above suppliers are disclosed using code names as the Company is contractually obligated to not disclose their actual names and they are not related parties.

• Note 2: The information is sourced from audited or reviewed consolidated financial statements.

Note 3: This supplier is not separately disclosed as their sales amount did not exceed 10% of net purchases.

Customers whose sales did not exceed 10% of net revenue for the past two fiscal years and the first quarter of 2024 are not separately disclosed by the Company.

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E. The production value for the past two fiscal years

Unit: Thousands, NT$ thousands

Year Production value Mainproducts	2022	2022	2022	2023	2023	2023
	Production capacity	Production volume	Production value	Production capacity	Production volume	Production value
Connectors	51,193,383	38,395,037	5,313,854	44,765,852	33,126,731	4,584,723
Cable assemblies	123,082	100,927	2,052,555	112,752	91,464	1,661,391
Metal stamping parts	422,900	355,236	2,250,796	224,588	187,073	1,294,641
Other	193,615	164,573	596,812	254,032	214,767	491,847
Total	51,932,980	39,015,773	10,214,016	45,357,224	33,620,035	8,032,602

F. The sales volume for the past two fiscal years

Unit: Thousands, NT$ thousands

Year Sales volume	2022	2022	2022	2022	2023	2023	2023	2023
	Domestic sales		Export sales		Domestic sales		Export sales
Main products (or department)	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Connectors	250,973	900,558	4,687,506	4,098,004	174,468	697,001	4,257,733	3,937,490
Cable assemblies	6,597	403,164	85,937	1,680,692	5,497	145,082	76,245	1,434,161
Metal stamping parts	73,804	495,932	186,801	1,982,851	43,722	383,068	110,544	1,239,719
Other	10,305	141,229	157,101	690,074	8,865	113,577	112,557	536,130
Total	341,679	1,940,883	5,117,345	8,451,621	232,552	1,338,728	4,557,079	7,147,500

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• (3) Information on employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report

Unit: People; Year; %

	Year	2022	2023	As of May10,2024
Number of Employees (people) (Note)	Direct employees	202	214	216
	Indirect employees	498	466	457
	Total	700	680	673
Average age(years)		39.29	41.39	41.32
The average length of service(years)		5.38	6.6	6.54
Education level distribution ratio (%)	Ph.D.	0.57%	0.75%	0.59%
	Master's degree	10.43%	11.99%	11.45%
	College	65.86%	65.37%	65.3%
	Senior high school	20.00%	18.89%	19.40%
	Below senior high school	3.14%	3%	3.26%

Note: This refers to the number of employees who are currently employed.

• (4) Environmental expenditure information

For the recent fiscal year and up to the date of printing the annual report, any losses incurred due to environmental pollution (including compensation and penalties resulting from violations of environmental protection regulations) shall be disclosed. The date of the penalty, the penalty reference number, the violated regulations and content, and the details of the penalty should be listed. The estimated amount of such losses that may occur in the future should also be disclosed, along with the corresponding measures. If it is impossible to make a reasonable estimate, the reasons for the inability to do so should be explained:

• A. During the construction of our factory in 2022, the entrance and exit of the construction site did not have pressurized water sprinkling equipment. The Taoyuan City Environmental Protection Bureau, according to Article 23, Paragraph 2 of the Air Pollution Control Act and Article 10 of the Construction Project Air Pollution Control Facilities Management Measures, imposed a fine totaling NT$100,000 and required a one-hour environmental lecture. The Company has paid the fine, participated in the lecture, and made improvements as required by the official letter.

• In 2023, there was a discrepancy between our business waste disposal plan and the data reported online. The Environmental Protection Administration, according to Article 31, Paragraph 1, Subparagraph 2 of the Waste Disposal Act, imposed a fine totaling NT$6,000 and required a one-hour environmental lecture. Our company has paid the fine and participated in the lecture.

• B. Estimated amounts and response measures that may occur currently and in the future:

• (A) The Company's main factory and production equipment are located in Zhongli District, Taoyuan City. Environmental protection is a top priority for the Company, which provides employees and nearby residents with a good working and living environment. The Company strictly requires compliance with emission standards and adopts the following environmental measures for pollution and waste generated during the production process:

a.	The Company has a dedicated environmental protection unit and	The Company has a dedicated environmental protection unit and	The Company has a dedicated environmental protection unit and	personnel.
	Item	Name	License types	LicenseNo.
	Environmental Specialist	Chen Mei-Chen	Class B Labor Safety and Health Manager	103-030844

• b. There is no risk of pollution during the Company's production process. There have been no instances of air pollutant test values exceeding regulatory emission standards. Regarding noise pollution generated by machinery, the Company has strengthened appropriate soundproof measures and conducts environmental inspections every six months. The degree of noise pollution complies with the noise control standards for industrial areas set by the Environmental Protection Agency. General business waste is entrusted to legal environmental companies for disposal and reported online for waste flow according to the law, to legally clean up waste

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and recycle resource waste. Therefore, as of the date of the annual report, there have been no instances of environmental pollution.

• (B) The Company has always adhered to environmental protection policies, strictly abiding by environmental protection laws and regulations, as well as customer requirements. The Company effectively controls the flow of raw materials, production, and shipping processes, and continuously improves product quality through ongoing improvement activities. The Company ensures that the products provided do not contain restricted substances and encourages upstream suppliers to move towards a green supply chain to comply with RoHS regulations.

• (C) The current pollution status and improvement status, their impact on the Company's earnings, competitive position, and capital expenditures, as well as significant environmental capital expenditures expected in the next two years, are as follows:

• a. Significant environmental capital expenditures are expected in the next two years

	2024	2025
Planned pollution prevention and controlequipment to be purchased	None	None
Expectedimprovement	None	None
Amount of expenditure	None	None

     - b. The impact after improvement: There will be no impact on the Company's earnings and competitive position in the past two years.

• (5) Labor relations

• A. The following is a list of employee welfare measures, continuing education and training, retirement systems, and their implementation, as well as agreements between labor and management and the implementation of measures to protect employee rights.

  • The Company is committed to establishing a harmonious atmosphere of trust between labor and management in its business management. The Company adopts an actively open management model to create a challenging and comfortable working environment. Through the convening of labor-management coordination meetings, the Company values employee rights and expresses concern for its employees. The Company has set up an employee complaint mailbox, which is handled by dedicated personnel to handle employee feedback. The Company regularly holds employee meetings to allow employees to express their opinions, and the Company responds and communicates with employees. In addition, the Company holds health lectures, employee purchase activities, and monthly birthday celebrations to help employees relax and increase their sense of belonging. The Employee Welfare Committee organizes various beneficial physical and mental activities for employees and participates in donations to vulnerable groups. The Company places great importance on employee workplace safety and health issues and regularly holds social responsibility meetings and environmental safety review meetings, with continuous improvement as the goal. Outstanding employees are recognized and rewarded annually through the selection process. The Company also promotes various forms of public welfare activities under the name of outstanding employees. This motivational approach to employees enables them to have a sense of satisfaction and happiness, making them work smarter and live healthier lives.

  • (A) Employee welfare measures

In addition to complying with the Labor Standards Act and related laws, the Company provides group insurance, employee health checks, and other measures. The Company also established an Employee Welfare Committee to coordinate employee welfare. In addition to subsidies for marriage, funerals, hospitalization, and childbirth, the Company also provides employees with subsidies for further education and club activities. The Company also regularly organizes employee travel, birthday parties, family day activities, and other welfare activities.

• (B) Employee continuing education and training situation

The Company provides an open and diverse learning environment for employees.

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Colleagues can continue to learn and grow through departmental in-house training, external training, internal open courses, or mentorship programs. Employees can also use the "Hongzhi Academy" digital platform for self-learning, breaking through previous time and space limitations and continuously improving their knowledge and skills.

Through the new employee and professional job function training system, the Company helps new employees quickly learn and integrate into the new work environment. Through departmental in-house training, internal open courses, job rotation, project assignments, and overseas assignments, employees can continue to grow in their professional fields and personal development. To strengthen the management capabilities of supervisors, the Company arranges irregular training on management-related topics such as leadership, strategy, and execution to enhance the management and leadership abilities of managers.

Given the internationalization of the organization's development and to facilitate smoother communication and interaction within the group and with the outside world, in 2021, the Company launched a special project to subsidize the improvement of employees' English language abilities. The Company provides partial training fees to encourage employees to continue learning foreign languages and improve their professional skills during their free time.

The Company conducts the following related training courses in accordance with the annual education and training plan:

• a. New employee pre-employment training: It includes company culture and regulations, intellectual property overview, basic operating system operations, quality management awareness, non-hazardous substance policy promotion, personal job responsibilities and explanations, and professional job function training. The Company has established a "new employee mentorship system" where new employees follow a plan to receive complete pre-employment education and training, along with guidance from a dedicated mentor to assist new employees in quickly becoming familiar with and integrating into their work positions.

• b. Professional job function training:

• (a) Internal training: Department managers or senior employees serve as trainers and arrange training courses according to the technical and professional training needs of each functional unit. The goal is to enhance employees' value and sense of responsibility, correct work attitudes and concepts, strengthen professional skills to improve productivity and efficiency, and expand career development opportunities.

• (b) External training: The Company allocates an education and training budget every year to send employees to professional training institutions for training to acquire external professional knowledge and skills. The Company also encourages employees to continue their education while on the job. This year, in collaboration with the Industry-Academia Center of National Central University, we have the honor of inviting professors from the College of Management to launch a course for middle and senior executives. This series of courses is designed to enhance the managerial skills of our colleagues. At the same time, we are working with professors from the Department of Mechanical Engineering to develop professional competency-related courses specifically for our research and development units.

• c. Quality consciousness: Through the "Knowledge Management Zone," the Company regularly updates internal and external audit recommendations and improvement plans, and shares and analyzes common customer complaint cases. Using this quality information exchange channel helps to continuously optimize internal business processes and

110

quality management capabilities.

• d. ACES Academy:

We have established the "ACES Academy" digital learning platform to provide diverse and rich learning content, including training categories such as management functions, business sales, research and development, production management, general education, and language, in a more flexible manner and learning style to meet the needs of more employees.

• e. The statistics of employee education and training in our company for the year 2023

are as follows:	are as follows:
	Item	Classes	People	Training hours
	New Employee Training	9	94	6,768
	Professional Skills Training	117	218	4,927
	Total	126	312	11,695

• (C) Retirement system and its implementation status

The Company has established an employee retirement policy in accordance with the Labor Standards Act, which includes setting aside retirement reserves each month based on the total salary amount and depositing them into a designated account with Taiwan Bank. The Labor Pension Act has been in effect since July 1, 2005, and after adopting a defined contribution plan, employees of the Company may choose to apply the retirement provisions of the Labor Standards Act or the retirement system under the Labor Pension Act, while retaining the work seniority before the implementation of the Act. For employees who apply the Labor Pension Act, the Company's contribution rate for employee retirement shall not be less than 6% of the employee's monthly salary.

• (D) Employee behavior or code of ethics.

The Company has established work rules as a basis for employees' daily work and behavior. The work rules include the following code of ethics that employees should abide by:

• a. Professional ethics: Both employers and employees of the Company should strive to establish corporate ethics and professional ethics, consider each other, and maintain a good labor-management relationship.

• b. Employees should cherish the honor of the Company, demonstrate team spirit, and be loyal and diligent in carrying out their tasks.

• c. Employees should be diligent in their duties and comply with all rules and regulations of the Company.

• d. Employees should obey the instructions and supervision of all levels of management and not engage in any deceptive or shirking behavior. Managers at all levels should guide and instruct employees kindly and pay attention to work safety.

• e. Employees should work diligently, cherish public property, reduce losses, improve work quality, and increase work efficiency.

• f. Absolutely confidential about the Company's business or job duties.

• g. Employees of the Company should handle their duties and public affairs in order and not report them to higher levels without authorization, except in emergencies or special situations.

• h. When a significant fault occurs in any unit responsible for the Company, the immediate supervisor should receive joint disciplinary action according to the circumstances, and significant achievements should receive joint rewards.

• i. No arrogant, lazy, or corrupt behavior, accepting invitations, gifts, kickbacks, or other unlawful benefits, or other behavior that could damage personal or Company reputation.

• j. Employees should not use the Company's name for any purposes outside of their responsibilities.

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• k. Employees are not allowed, without the Company's written consent, to engage in the same or similar business as the Company for themselves or a third party, or to be an unlimited liability shareholder, business executor, director, or manager of a similar business company or an explicit or hidden partner of a business.

• l. Employees are not allowed to take public property out of the factory without approval.

• m. Labor-management meetings: The Company holds labor-management meetings in accordance with the "Implementation Measures for Labor-Management Meetings" to coordinate labor-management relations, promote mutual understanding, enhance labor-management cooperation, and improve work efficiency. Regular meetings are held to exchange opinions, and both employers and employees should adhere to the principles of harmony and integrity to negotiate and resolve problems.

• n. Social responsibility meetings: The Company attaches great importance to labor rights, strives to provide a quality working environment and respect for labor rights, and holds regular social responsibility meetings every quarter to announce corporate labor and environmental health and safety policies and measures, which serve as a channel for communication between employers and employees.

• o. Employee complaint handling system: The Company has set up an employee suggestion box and an "employee complaint handling system" to provide employees with a channel to express complaints and suggestions, and to strengthen the labor-management relationship.

  • (a) If an employee makes an oral complaint, the receiving staff in each department should record it and immediately report it for processing.

  • (b) If an employee's rights are infringed upon, or if they have other opinions, they may submit a complaint form or other written documents directly to the Company in accordance with the Company's complaint handling procedures, and the supervisor of each unit should immediately investigate and handle the matter or report it for processing, and reply to the complainant with the results or handling the situation in writing.

• (E) Working environment and employee personal safety protection measures

• Given the importance of the work environment and employee personal safety protection measures, the Company has been certified with the ISO 14001 Environmental Management System and ISO 45001 Occupational Health and Safety Management System. The ISO 14001 and ISO 45001 management systems are used to address significant environmental considerations and occupational safety and health risks, using target and program management to prioritize improvements. Lower-risk factors are controlled through operation management methods, and through good operation and improvement, significant effects and control have been achieved. The following are the measures that the Company has taken to promote environmental and occupational safety and health:

• a. Promotion of the Restriction of Hazardous Substances (ROHS) and REACH regulations.

  • The ROHS officially took effect on July 1, 2006, and products sold to the EU cannot contain six hazardous substances, including lead, cadmium, mercury, hexavalent chromium, polybrominated biphenyls (PBB), and polybrominated diphenyl ethers (PBDE). The Company actively promotes green production and procurement, implements it in the production process, and has already complied with the requirements of major customers for products that are free of hazardous substances, receiving recognition from them.

• b. Resource recycling and waste reduction plan

  • The Company actively utilizes resources effectively to reduce waste and lower production costs. It improves process and operational management to reduce the generation of scrap materials. On the other hand, it develops and selects

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pollution-free and low-pollution processes to reduce waste. The metal waste generated during production is quantified and recycled through an effective management system. The recovered waste metal is sold to waste recyclers, thereby reducing resource waste.

  - c. Occupational hazard prevention plan

     - To achieve the goal of zero harm, the Company schedules an occupational hazard prevention program every year to promote knowledge of occupational hazard prevention among colleagues. Through an audit system, execution deficiencies are identified. Additionally, meetings are held annually to review and improve the environmental and safety deficiencies according to the plan. Through the PDCA approach, the Company reduces the risk of harm in business units year by year, ultimately achieving the goal of zero accidents.

  - d. Implementation of automated inspection

     - Employees may face physical injuries when dealing with different working environments, processes, operations, and tasks due to unsafe operations, equipment, or management factors. Therefore, the Company actively establishes standard procedures for production operations and reduces the probability of work-related injuries. Through the implementation of these measures, potential hazards can be identified, and improvements can be made to effectively control the risks.

• (F) Agreements between labor and management and the situation of various measures to safeguard employee rights and interests The labor-management relationship in the Company is harmonious. In addition to regularly holding labor-management meetings and social responsibility meetings, the Company also communicates with employees through employee meetings and other means to maintain a good relationship between labor and management. The Company is committed to promoting workplace gender equality and raising awareness among employees about the concept and purpose of maternal protection in the workplace. The Company has established facilities and equipment for maternal protection, such as lactation rooms, throughout the factory. The Company also arranges for occupational health specialists to provide on-site health services and organize workplace health promotion and hazard prevention activities regularly.

• B. Recent annual and year-to-date losses due to labor disputes (including violations of labor standards as determined by labor inspections, which should indicate the date of the penalty, penalty number, violated legal provisions, violation content, and penalty content), as well as estimated amounts and measures to address current and potential future losses, up to the date of publication of the annual report:

• The Company and the labor union agree to follow the labor regulations promulgated by the government, and relevant management procedures have been established since the employee's date of hire. As of the date of publication of the annual report, the Company has not experienced any significant labor disputes or losses.

(6) Cyber security management:

• A. Information and communication security management strategy and framework

• (A) ACES Information Security Management Committee.

  • In response to strengthening the company's information security management, the " ACES Information Security Management Committee" was established in October 2020. The group's general manager serves as the advisory member, the head of the Digital Transformation Department acts as the convener, and the highest leaders of each company unit are members of the committee. The head of the Information Security Management Section is responsible for reviewing the information security governance policies of each subsidiary, overseeing the operation of information security governance, and regularly reporting the status of information security governance to the board of directors.

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==> picture [237 x 240] intentionally omitted <==

• (B)The Organizational Structure of the ACES Information Security Management Committee

• The Company has established an information security management section and allocated resources to hire a dedicated information security manager and staff. The Information Security Service Management Meeting is held at least once every quarter, and the Group Information Security Management Committee meeting is held at least twice a year. The Company also reports on the status of information security governance to the board of directors at least once a year.

==> picture [449 x 339] intentionally omitted <==

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• (C) Information and communication security policy

• a. All global employees and contract workers of ACES Group must adhere to the following ACES Information and Communication Security Policy:

==> picture [421 x 196] intentionally omitted <==

• b. Specific management plan:

• (a) Network Usage Policy: Implement next-generation firewalls, control internet usage behavior, activate advanced network protection mechanisms, and control cross-site transmission to prevent virus spread.

• (b) Email Usage Policy: Strictly control spam emails, introduce APT protection mechanisms, enhance awareness and conduct social security drills, and update email systems to improve self-protection.

• (c) Computer Usage Policy: Control end-user computer permissions, disable non-compliant software, replace outdated and insecure operating systems, implement vulnerability patches, and control removable storage media.

• (d) Anti-virus Protection Deployment Policy: Introduce server anti-virus systems, deploy anti-virus software, and update virus codes and anti-virus versions in real-time.

• (e) Password Principles: Implement password complexity principles, force regular password changes, and activate abnormal usage lockout mechanisms.

• (f) Information Backup/Restore Policy: In addition to basic system backup mechanisms, we have introduced high-reliability backup systems to prevent data tampering and have planned remote and cloud-based encrypted backup solutions. We also implement regular disaster recovery drills for critical services.

• (g) System Event Management Policy: Establish automatic alarm mechanisms to reduce disaster diffusion and shorten service interruption time.

• (h) Remote Access Policy: Control internal remote access permissions, control internal and external information transmission, and disable P2P remote control software.

• (i) Privileged Account Management Policy: Privileged accounts are centrally managed, with passwords stored in a digital vault and automatically changed on a regular schedule. Usage of accounts requires an application and is monitored through the system, with full recording of the usage details.

• (j) Endpoint Security Protection Policy: Implementation of Endpoint Detection and Response (EDR) and comprehensive conditional application control to enhance visibility through policy audits and prevent lateral movement of attacks.

• (k) Zero Trust Network Policy: Blocks unauthorized devices from connecting to the company network. Use of the company network requires an application and subsequent approval.

• c. Review and Continuous Improvement:

• (a) Strengthen employees' awareness of social engineering attacks, regularly conduct information security drills, and hold information security courses.

• (b) Enhance company data protection to prevent the leakage of important information.

• (c) Evaluate the adoption of more advanced backup mechanisms to prevent backup data from

115

being destroyed.

• (d) Continuously strengthen anti-virus and anti-hacking capabilities.

• (e) Continuously virtualize physical hosts to shorten disaster recovery time and comply with sustainable management.

• (f) Engage a third-party company annually to conduct system vulnerability scans and promptly rectify significant vulnerabilities.

• (g) Engage a third-party company annually to carry out penetration testing exercises to enhance cybersecurity defense capabilities.

• (h) Evaluate the implementation of ISO 27001 to elevate the company's cybersecurity level.

• (i) Assess the adoption of multi-factor authentication to mitigate cybersecurity risks and eliminate potential vulnerabilities for attackers.

• (j) Assess the implementation of SOC mechanisms for 24/7 monitoring, ensuring comprehensive cybersecurity protection.

• d. Execute according to the information security control procedure (TN-QP-0002): To maintain the continuous operation of the information system, prevent hacking, viruses, and other intrusions and damage, avoid human errors and accidents, prevent unauthorized and illegal use, and maintain physical environment safety.

(D) Information security objectives

==> picture [483 x 202] intentionally omitted <==

• B. Information security risks and corresponding measures

• The Company has established comprehensive network and computer-related cybersecurity measures and introduced a highly reliable backup system. However, it cannot guarantee complete avoidance of cyber-attacks, malicious software, and other forms of harassment because these attacks continuously update and find illegal ways to infiltrate the Company's internal network system, with the main objective of disrupting the Company's operations and damaging its reputation. In the event of a serious cyber-attack, the Company's system may lose important data, and the production line may also come to a halt. Nevertheless, the Company continues to evaluate existing information security regulations and review procedures to ensure their adequacy and effectiveness, to reduce the impact of constantly evolving information security threats, new risks, and attacks.

C. Significant information and communication security incidents

• On March 6, 2023, part of the Company's information systems was subjected to a hacker network attack. At the time of the incident, the Information Department had activated relevant defense mechanisms and recovery operations comprehensively, while collaborating with external cybersecurity company technical experts. This cybersecurity incident had no significant impact on the Company's operations. The Information

116

Department will strengthen the inspection and reinforce the existing infrastructure. The Company had already implemented off-site backup mechanisms for major systems, and will now more actively and comprehensively enhance network security levels to protect data security and integrity. Additionally, the Company will evaluate advanced server defense mechanisms, plan zero-trust network security mechanisms, strengthen OT network security, and actively promote information security awareness to establish information security defenses.

• D. Allocation of resources for information security management

• Dedicated Personnel: Establish a dedicated corporate unit, the "Information Security Management Division," responsible for company information security planning, technology implementation, and related audit matters to maintain and continuously enhance information security.

• Education and Training: All new employees complete an information security education and training course before starting their positions; all employees complete a three-hour online information security education training and assessment; and at least twice a year, social engineering phishing email tests are conducted.

• Security Advocacy: Issue at least four information security announcements annually to communicate important regulations and precautions regarding information security protection.

• Financial Investment: Continuously invest millions of dollars annually in information security-related maintenance and construction to strengthen group information security.

(7) Important contracts

		As of May10th,2024	As of May10th,2024	As of May10th,2024
Contract nature	Parties involved	Contract start and end date	Main content	Limitation clauses
Technology transfer agreement	KUNSHAN ACES ELECTRONIC CO., LTD.	2023.01.01~ 2025.12.31	ACES KS has obtained the rights to manufacture and sell products based on ACES’s technology and will pay ACES a technology fee based on a certain percentage of the net sales of the "Contract Products" for threeyears,as stipulated in the contract.	None
Technical service agreement	DONGGUAN ACES ELECTRONIC CO., LTD.	2023.01.01~ 2025.12.31	ACES DG will pay ACES a technology license fee based on a certain percentage of the net sales of the "Contract Products" for threeyears,as stipulated in the contract.	None
Joint credit agreement	E.SUN Commercial Bank, Ltd.	2023.07.03~ 2028.07.03	Credit agreement.	The financial ratios must meet the standards outlined in the contract.
Major engineering procurement contract	ACES ELECTRONI CS CO., LTD.	2022.03.18~ 2024.02.28	ACES will pay Li-Yuan Construction a fee based on a certain percentage, as stipulated in the "Engineering Contract", according to the contract.	None
Purchase and sale agreement	ACES ELECTRONI CS CO.,LTD.	2023.09.13	ACES will pay the landowner a fee based on a certain percentage, as stipulated in the " Sale Contract ",accordingto the contract.	None

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VI. An overview of the company's financial status

• (1) Condensed balance sheets and statements of comprehensive income for the past 5 fiscal years

• A. Consolidated condensed balance sheet - Adopting International Financial Reporting Standards (IFRS)

			Unit: NTDthousand	Unit: NTDthousand	Unit: NTDthousand	Unit: NTDthousand	Unit: NTDthousand
Year Item			The most recent fiveyears' financial data				Financial data as of March 31, 2024, for the fiscal year ending on that date(Note 1)
		2019	2020	2021	2022	2023
Current assets		5,486,737	5,724,348	7,594,984	6,997,696	6,175,416	6,128,078
Property, plant, and equipment (Note 2)		2,374,577	2,290,600	2,642,133	3,428,329	3,740,842	4,326,017
Intangible assets		24,904	26,466	156,098	154,296	142,030	133,967
Other assets(Note 2)		1,439,326	2,253,723	2,479,387	2,260,055	2,192,601	2,062,756
Total assets		9,325,544	10,295,137	12,872,602	12,840,376	12,250,889	12,650,818
Current liabilities	Before distribution	3,398,195	3,722,609	4,543,887	5,392,056	4,663,735	4,668,360
	After distribution	3,489,992	3,808,286	4,745,481	5,465,986	4,663,735	Undistributed
Non-current liabilities		1,594,197	2,008,378	2,796,512	1,792,965	2,330,650	2,609,575
Total liabilities	Before distribution	4,992,392	5,730,987	7,340,399	7,185,021	6,994,385	7,277,935
	After distribution	5,084,189	5,816,664	7,541,993	7,258,951	6,994,385	Undistributed
Equity attributable to shareholders of theparent		4,240,261	4,493,559	5,512,210	5,637,120	5,254,759	5,371,135
Common stock		1,223,959	1,223,959	1,343,959	1,344,177	1,344,177	1,344,177
Capital surplus		477,209	476,166	1,002,379	988,615	993,270	993,270
Retained earnings	Before distribution	2,726,073	2,912,004	3,328,840	3,363,445	3,024,883	3,027,917
	After distribution	2,634,276	2,826,327	3,127,246	3,289,515	3,024,883	Undistributed
Other equity		(186,980)	(118,570)	(162,968)	(59,117)	(107,571)	5,771
Treasurystock		－	－	－	－	－	－
Non-controllinginterests		92,891	70,591	19,993	18,234	1,745	1,748
Total equity	Before distribution	4,333,152	4,564,150	5,532,203	5,655,354	5,256,504	5,372,883
	After distribution	4,241,355	4,478,473	5,330,609	5,581,424	5,256,504	Undistributed

Source of information: Consolidated financial statements were audited or reviewed by CPAs. Note 1: Consolidated financial statements were reviewed by CPAs.

Note 2: Assets revaluation was not conducted during the year.

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B. Parent company only condensed balance sheet - Adopting International Financial Reporting Standards (IFRS).

						Unit: NTD thousand	Unit: NTD thousand
Year Item			The most recent fiveyears'		financial data		Financial data as of March 31, 2024, for the fiscal year ending on that date (Note 1).
		2019	2020	2021	2022	2023
Current assets		1,922,113	1,883,902	2,865,762	2,218,884	1,955,852	－
Property, plant, and equipment (Note 2)		681,698	773,741	885,306	1,351,408	1,759,922	－
Intangible assets		6,978	10,627	31,376	35,085	38,093	－
Other assets(Note 2)		4,462,391	5,269,718	6,104,195	6,683,037	6,791,619	－
Total assets		7,073,180	7,937,988	9,886,639	10,288,414	10,545,486	－
Current liabilities	Before distribution	1,698,767	1,802,798	2,006,866	3,169,258	3,318,373	－
	After distribution	1,790,564	1,888,475	2,208,460	3,243,188	3,318,373	－
Non-current liabilities		1,134,152	1,641,631	2,367,563	1,482,036	1,972,354	－
Total liabilities	Before distribution	2,832,919	3,444,429	4,374,429	4,651,294	5,290,727	－
	After distribution	2,924,716	3,530,106	4,576,023	4,725,224	5,290,727	－
Equity attributable to shareholders of theparent		4,240,261	4,493,559	5,512,210	5,637,120	5,254,759	－
Common stock		1,223,959	1,223,959	1,343,959	1,344,177	1,344,177	－
Capital surplus		477,209	476,166	1,002,379	988,615	993,270	－
Retained earnings	Before distribution	2,726,073	2,912,004	3,328,840	3,363,445	3,024,883	－
	After distribution	2,634,276	2,826,327	3,127,246	3,289,515	3,024,883	－
Other equity		(186,980)	(118,570)	(162,968)	(59,117)	(107,571)	－
Treasury stock		－	－	－	－	－	－
Non-controlling interests		－	－	－	－	－	－
Total equity	Before distribution	4,240,261	4,493,559	5,512,210	5,637,120	5,254,759	－
	After distribution	4,148,464	4,407,882	5,310,616	5,563,190	5,254,759	－

Source of information: Parent company only financial statements were audited by CPAs. Note 1: The Company did not prepare the parent company only financial statements for the first quarter of 2024 and therefore no disclosure is necessary.

Note 2: Assets revaluation was not conducted during the year.

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C. Consolidated condensed statement of comprehensive income - Adopting International Financial Reporting Standards (IFRS).

Unit: NTD thousand

Year Item		The most recent five years' financial data	The most recent five years' financial data	The most recent five years' financial data	The most recent five years' financial data	Financial data as of March 31, 2024, for the fiscal year ending on that date(Note 1).
	2019	2020	2021	2022	2023
Operatingrevenue	7,311,836	8,062,865	10,575,862	10,392,504	8,486,228	1,943,259
Grossprofit	1,672,405	1,835,966	2,429,221	2,232,885	1,751,804	397,641
Profit from operations	268,488	348,538	514,003	56,747	(330,729)	(58,792)
Profit before income tax	356,033	323,421	588,913	315,063	(269,692)	(7,360)
Net profit from continuingoperations	302,717	259,946	508,171	223,333	(268,188)	3,008
Net Loss from discontinued operations	－	－	－	－	－	－
Profit for the year/period	302,717	259,946	508,171	223,333	(268,188)	3,008
Total other comprehensive income(net of tax) for theyear/period	(118,631)	71,321	(43,992)	114,958	(46,476)	113,371
Total comprehensive income for the year/period	184,086	331,267	464,179	338,291	(314,664)	116,379
Net profit attributable to shareholders of the parent	311,498	276,373	510,855	225,319	(266,543)	3,034
Net profit attributable to non-controlling interests	(8,781)	(16,427)	(2,684)	(1,986)	(1,645)	(26)
Total comprehensive income attributable to shareholders of the parent	181,196	346,138	466,953	340,050	(313,086)	116,376
Total comprehensive income attributable to non-controlling interests	2,890	(14,871)	(2,774)	(1,759)	(1,578)	3
EPS	2.55	2.26	4.16	1.68	(1.98)	0.02

Source of information: Consolidated financial statements were audited or reviewed by CPAs. Note 1: Consolidated financial statements were reviewed by CPAs.

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D.Parent company only condensed statement of comprehensive income - Adopting International Financial Reporting Standards (IFRS)

		Unit: NTD thousand The most recent five years' financial data Financial data as of March 31, 2024, for the fiscal year ending on that date(Note 1). 2020 2021 2022 2023 3,334,805 3,942,195 3,446,892 3,090,318 － 826,745 995,063 762,759 691,235 － 228,750 304,222 37,459 (64,864) － 86,795 237,984 201,680 (222,127) － 315,545 542,206 239,139 (286,991) － 276,373 510,855 225,319 (266,543) － － － － － 276,373 510,855 225,319 (266,543) － 69,765 (43,902) 114,731 (46,543) － 346,138 466,953 340,050 (313,086) － － － － － － － － － － － － － － － － － － － － － 2.26 4.16 1.68 (1.98) －	Unit: NTD thousand The most recent five years' financial data Financial data as of March 31, 2024, for the fiscal year ending on that date(Note 1). 2020 2021 2022 2023 3,334,805 3,942,195 3,446,892 3,090,318 － 826,745 995,063 762,759 691,235 － 228,750 304,222 37,459 (64,864) － 86,795 237,984 201,680 (222,127) － 315,545 542,206 239,139 (286,991) － 276,373 510,855 225,319 (266,543) － － － － － 276,373 510,855 225,319 (266,543) － 69,765 (43,902) 114,731 (46,543) － 346,138 466,953 340,050 (313,086) － － － － － － － － － － － － － － － － － － － － － 2.26 4.16 1.68 (1.98) －	Unit: NTD thousand The most recent five years' financial data Financial data as of March 31, 2024, for the fiscal year ending on that date(Note 1). 2020 2021 2022 2023 3,334,805 3,942,195 3,446,892 3,090,318 － 826,745 995,063 762,759 691,235 － 228,750 304,222 37,459 (64,864) － 86,795 237,984 201,680 (222,127) － 315,545 542,206 239,139 (286,991) － 276,373 510,855 225,319 (266,543) － － － － － 276,373 510,855 225,319 (266,543) － 69,765 (43,902) 114,731 (46,543) － 346,138 466,953 340,050 (313,086) － － － － － － － － － － － － － － － － － － － － － 2.26 4.16 1.68 (1.98) －	Unit: NTD thousand The most recent five years' financial data Financial data as of March 31, 2024, for the fiscal year ending on that date(Note 1). 2020 2021 2022 2023 3,334,805 3,942,195 3,446,892 3,090,318 － 826,745 995,063 762,759 691,235 － 228,750 304,222 37,459 (64,864) － 86,795 237,984 201,680 (222,127) － 315,545 542,206 239,139 (286,991) － 276,373 510,855 225,319 (266,543) － － － － － 276,373 510,855 225,319 (266,543) － 69,765 (43,902) 114,731 (46,543) － 346,138 466,953 340,050 (313,086) － － － － － － － － － － － － － － － － － － － － － 2.26 4.16 1.68 (1.98) －	Unit: NTD thousand The most recent five years' financial data Financial data as of March 31, 2024, for the fiscal year ending on that date(Note 1). 2020 2021 2022 2023 3,334,805 3,942,195 3,446,892 3,090,318 － 826,745 995,063 762,759 691,235 － 228,750 304,222 37,459 (64,864) － 86,795 237,984 201,680 (222,127) － 315,545 542,206 239,139 (286,991) － 276,373 510,855 225,319 (266,543) － － － － － 276,373 510,855 225,319 (266,543) － 69,765 (43,902) 114,731 (46,543) － 346,138 466,953 340,050 (313,086) － － － － － － － － － － － － － － － － － － － － － 2.26 4.16 1.68 (1.98) －
Year Item		The most recent five years' financial data				Financial data as of March 31, 2024, for the fiscal year ending on that date(Note 1).
	2019	2020	2021	2022	2023
Operatingrevenue	3,055,419	3,334,805	3,942,195	3,446,892	3,090,318	－
Grossprofit	706,538	826,745	995,063	762,759	691,235	－
Profit from operations	192,681	228,750	304,222	37,459	(64,864)	－
Non-operating income and expenses	161,863	86,795	237,984	201,680	(222,127)	－
Profit before income tax	354,544	315,545	542,206	239,139	(286,991)	－
Net profit from continuingoperations	311,498	276,373	510,855	225,319	(266,543)	－
Net Loss from discontinued operations	－	－	－	－		－
Profit for theyear	311,498	276,373	510,855	225,319	(266,543)	－
Total other comprehensive income(net of tax) for theyear	(130,302)	69,765	(43,902)	114,731	(46,543)	－
Total comprehensive income for theyear	181,196	346,138	466,953	340,050	(313,086)	－
Net profit attributable to shareholders of the parent	－	－	－	－	－	－
Net profit attributable to non-controlling interests	－	－	－	－	－	－
Total comprehensive income attributable to shareholders of the parent	－	－	－	－	－	－
Total comprehensive income attributable to non-controlling interests	－	－	－	－	－	－
EPS	2.55	2.26	4.16	1.68	(1.98)	－

Source of information: Parent company only financial statements were audited by CPAs Note 1: The Company did not prepare the parent company only financial statements for the first quarter of 2024 and therefore no disclosure is necessary.

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E. The names of appointed certified accountants and their audit opinions in the last 5 years

(A) Consolidated financial statements:

Year	Name of accounting firm	Name of CPA	Audit opinion
2019	KPMG Taiwan	Yang Shu-Chih, Chen Pei-Chi	unqualified opinion
2020	KPMG Taiwan	Lin Heng-Sheng, Chen Pei-Chi	unqualified opinion
2021	KPMG Taiwan	Lin Heng-Sheng, Chen Pei-Chi	unqualified opinion
2022	KPMG Taiwan	Lin Heng-Sheng, Chen Zheng-Xue	unqualified opinion
2023	KPMG Taiwan	Lin Heng-Sheng, Chen Zheng-Xue	unqualified opinion

(B)Parent company onlyfinancialstatements:	(B)Parent company onlyfinancialstatements:	(B)Parent company onlyfinancialstatements:
Year	Name of accounting firm	Name of CPA	Audit opinion
2019	KPMG Taiwan	Yang Shu-Chih, Chen Pei-Chi	unqualified opinion
2020	KPMG Taiwan	Lin Heng-Sheng, Chen Pei-Chi	unqualified opinion
2021	KPMG Taiwan	Lin Heng-Sheng, Chen Pei-Chi	unqualified opinion
2022	KPMG Taiwan	Lin Heng-Sheng, Chen Zheng-Xue	unqualified opinion
2023	KPMG Taiwan	Lin Heng-Sheng, Chen Zheng-Xue	unqualified opinion

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、 (2) Financial analyses for the past 5 fiscal years

Ａ . Financial analysis

(A) Consolidated financial statements:

Item	Year	Financial data for the latest fiveyears(Note 1)	Financial data for the latest fiveyears(Note 1)	Financial data for the latest fiveyears(Note 1)	Financial data for the latest fiveyears(Note 1)	Financial data for the latest fiveyears(Note 1)	Financial information as of March 31,2024
		2019	2020	2021	2022	2023
Financial structure （%）	Debt Ratio(%)	53.53	55.66	57.02	55.95	57.09	57.52
	Long-term Funds to Property, Plant, and Equipment Ratio(%)	245.70	283.85	314.47	216.72	202.77	184.48
Solvency %	Current Ratio(%)	161.46	153.77	167.14	129.77	132.41	131.26
	Quick Ratio(%)	126.12	120.16	128.19	100.20	105.04	101.99
	Times Interest Earned	1,022.24	1,028.46	1,385.49	470.36	(1.48)	0.73
Operating Performance	Average Collection Turnover(Times)	3.43	3.46	4.16	3.82	3.48	3.27
	Average Collection Days	106.41	105.51	87.79	95.54	104.88	111.62
	Average Inventory Turnover(Times)	5.41	5.58	5.77	5.23	5.09	5.00
	Average Payables Turnover(Times)	4.81	4.40	4.79	4.60	4.44	4.33
	Average Inventory Turnover Days	67.46	65.38	63.21	69.78	71.70	73.00
	Property, Plant, and Equipment Turnover (Times)	3.27	3.37	4.16	3.21	2.28	1.85
	Total Assets Turnover (Times)	0.81	0.82	0.91	0.77	0.67	0.62
Profitability	Return on Total Assets (%)	3.83	3.10	4.72	2.28	(1.43)	0.20
	Return on Equity (%)	7.40	6.32	10.21	4.04	(4.89)	0.22
	Pre-tax Income to Capital (%)	29.08	26.42	43.81	23.43	(20.06)	(0.54)
	Net Profit Margin(%)	4.26	3.42	4.83	2.16	(3.14)	0.15
	Earnings per share (NT)	2.55	2.26	4.16	1.68	(1.98)	0.02
Cash flow	Cash Flow Ratio(%)	20.14	21.25	22.89	21.08	14.22	2.73
	Cash Flow Adequacy Ratio(%)	66.38	70.10	74.09	75.24	76.14	72.16
	Cash Flow Reinvestment Ratio(%)	7.15	8.22	9.45	9.70	5.77	1.16
Leverage	OperatingLeverage	2.69	2.34	2.15	13.22	(1.14)	(2.02)
	Financial Leverage	1.16	1.11	1.10	(2.00)	0.75	0.68
Analysis of significant changes in financial ratios over the last two years (20% change): 1. Interest Coverage Ratio: Not applicable for the fiscal year 2023 due to a loss. 2. Average Collection Period: Primarily due to a decrease in net revenue compared to the previous period. 3. Turnover Rate of Real Estate, Plant, and Equipment (times): Mainly due to an increase in the amount of real estate, plant, and equipment. 4. Return on Assets: Primarily due to a decrease in net profit for the period and an increase in financial costs compared to the previous period. 5. Return on Equity: Primarily due to a decrease in net profit for the period compared to the previous period. 6. Ratio of Pre-tax Net Income to Paid-in Capital: Mainly due to a decrease in pre-tax net profit for the period compared to the previous period. 7. Net Profit Margin: Mainly due to a decrease in net profit after tax compared to the previous period. 8. Earnings per Share: Mainly due to a decrease in net profit for the period compared to the previous period. 9. Cash Flow Ratio: Primarily due to a decrease in net cash flow from operating activities compared to the previous period. 10. Cash Reinvestment Ratio: Primarily due to a decrease in net cash flow from operating activities compared to the previous period. 11. Various Leverage Ratios: Not applicable for the fiscalyear 2023 due to an operatingloss.

Source of information: Consolidated financial statements were audited or reviewed by CPAs.

Note 1: Numbers after the second decimal place are rounded off by truncation.

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(B) Parent company only financial statements

Year Item	Year Item	Financial data for the latest fiveyears(Note 1)	Financial data for the latest fiveyears(Note 1)	Financial data for the latest fiveyears(Note 1)	Financial data for the latest fiveyears(Note 1)	Financial data for the latest fiveyears(Note 1)	Financial information as of March 31, 2024 (Note 2).
		2019	2020	2021	2022	2023
Financial structure（%）	Debt Ratio(%)	40.05	43.39	44.24	45.20	50.17	－
	Long-term Funds to Property, Plant, and Equipment Ratio(%)	666.63	622.10	725.88	481.02	314.96	－
Solvency %	Current Ratio(%)	113.14	104.49	142.79	70.01	58.94	－
	Quick Ratio(%)	101.19	91.08	124.83	59.82	48.98	－
	Times Interest Earned	2210.00	1835.48	2240.23	579.91	(314.79)	－
Operating Performance	Average Collection Turnover(Times)	3.11	3.19	3.82	3.46	3.36	－
	Average Collection Days	117.36	114.42	95.54	105.49	108.63	－
	Average Inventory Turnover (Times)	12.76	11.42	9.94	8.14	7.75	－
	Average Payables Turnover(Times)	2.88	2.81	3.05	2.67	2.47	－
	Average Inventory Turnover Days	28.60	31.96	36.72	44.84	47.09	－
	Property, Plant, and Equipment Turnover (Times)	4.79	4.58	4.75	3.07	1.98	－
	Total Assets Turnover (Times)	0.44	0.44	0.44	0.34	0.29	－
Profitability	Return on Total Assets(%)	4.68	3.88	5.95	2.62	(2.02)	－
	Return on Equity (%)	7.40	6.32	10.21	4.04	(4.89)	－
	Pre-tax Income to Capital (%)	28.96	25.78	40.34	17.79	(21.35)	－
	Net Profit Margin(%)	10.19	8.28	12.95	6.53	(8.62)	－
	Earnings per share (NT)	2.55	2.26	4.16	1.68	(1.98)	－
Cash flow	Cash Flow Ratio(%)	28.11	6.29	43.60	9.27	0.61	－
	Cash Flow Adequacy Ratio (%)	99.65	65.49	98.97	90.12	60.00	－
	Cash Flow Reinvestment Ratio(%)	6.37	0.32	8.89	1.11	(0.62)	－
Leverage	OperatingLeverage	1.61	1.62	1.59	6.93	(2.57)	－
	Financial Leverage	1.09	1.08	1.09	(3.02)	0.48	－
Analysis of significant changes in financial ratios over the last two years (20% change): 1. Long-term funds to property, plant, and equipment ratio: Mainly due to the increase in the amount of property, plant, and equipment. 2. Interest coverage ratio: Not applicable for the year 112 due to a loss. 3. Property, plant, and equipment turnover rate (times): Mainly due to the increase in the amount of property, plant, and equipment. 4. Return on assets: Mainly due to a decrease in net profit after tax compared to the previous period. 5. Return on equity: Mainly due to a decrease in net profit after tax compared to the previous period. 6. The ratio of pre-tax net profit to paid-in capital: Mainly due to a decrease in pre-tax net profit for the period compared to the previous period. 7. Net profit margin: Mainly due to a decrease in net profit after tax compared to the previous period. 8. Earnings per share: Mainly due to a decrease in net profit after tax for the period compared to the previous period. 9. Cash flow ratio: Mainly due to the decrease in net profit, resulting in a corresponding decrease in net cash flow from operating activities, leading to a decline in the cash flow ratio. 10. Cash adequacy ratio: Mainly due to an increase in cash outflows for capital investments, resulting in a decrease in the cash adequacy ratio. 11. Cash reinvestment ratio: Mainly due to the decrease in net profit, resulting in a corresponding decrease in net cash flow from operating activities, leading to a decline in the cash reinvestment ratio. 12. Various leverage ratios: Not applicable for theyear 112 due to an operatingloss.

• Source of information: Parent company only financial statements were audited by CPAs.

• Note 1: Numbers after the second decimal place are rounded off by truncation.

• Note 2: The Company did not prepare the parent company only financial statements for the first quarter of 2023 and therefore no disclosure is necessary.

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The formula is as follows:

• (A) Financial structure

• a. Debt Ratio = Total Liabilities / Total Assets

• b. Long-term Fund to Property, Plant and Equipment Ratio = (Total Equity + Non-current Liabilities) / Net Property, Plant and Equipment

• (B) Solvency

• a. Current Ratio = Current Assets / Current Liabilities

• b. Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities

• c. Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses

• (C) Operating Performance

• a. Average Collection Turnover = Net Sales / Average Accounts Receivable

• b. Average Collection Days = 365 / Average Collection Turnover

• c. Average Inventory Turnover = Cost of Sales / Average Inventory

• d. Average Payment Turnover = Cost of Sales / Average Accounts Payable

• e. Average Inventory Turnover Days = 365 / Average Inventory Turnover

• f. Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment

• g. Total Assets Turnover = Net Sales / Average Total Assets

• (D) Profitability

• a. Return on Total Assets = (Net Profit + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets

• b. Return on Equity = Net Profit Attributable to Shareholders of the Parent / Average Equity Attributable to Shareholders of the Parent

• c. Net Profit Margin = Net Profit / Net Sales

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

• (E) Cash Flow

• a. Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities

• b. Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend

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

• (F) Leverage

• a. Operating Leverage = (Net Sales - Variable Cost) / Profit from Operations b. Financial Leverage = Profit from Operations / (Profit from Operations - Interest Expenses)

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• (3) Audit committee's report on the financial statement of the latest fiscal year

ACES ELECTRONICS CO., LTD. Audit Committee’s Review Report

The Board of Directors has submitted the Company's 2023 business report, financial statements, and proposal for profit distribution, in which the financial statements were audited by CPAs Lin Heng-Sheng and Chen Zheng-Xue of KPMG, and an audit report has been issued. The business report referred to in the preceding paragraph, financial statement and proposal for profit distribution have been completed the deliberation by the Audit Committee and found there is no discrepancy. Reported above in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, please verify.

Sincerely,

The 2024 Annual Shareholders’ Meeting of the Company

Audit Committee Convener: Liaw Dar-Lii

March 12, 2024

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• (4) Financial statement for the most recent fiscal year

Representation Letter

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

Hereby declare

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

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Independent Auditors’ Report

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

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the ACES Group as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for each of the years then ended, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Description of key audit matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Revenue Recognition

2. Please refer to Notes 4(15) to the consolidated financial statements for the accounting policy on operating revenue; and refer to Notes 6(20) for disclosures relating to revenue.

3. Description of key audit matter:

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

How the matter was addressed in our audit:

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

• We inspected whether the Company's revenue recognition policies are in accordance with relevant guidelines.

• We tested the design of internal control process and its efficiency of execution for sales revenue.

• We focused on the top 10 clients, compared differences in numbers on the same period of the previous year, and checked if there’s any significant abnormality.

• We selected sales transaction samples from a certain period before and after the end of current year, and examined revenue transaction records with vouchers arising from appropriate time period.

• We assessed if there is any significant sales return and discount after the balance sheet date.

• Valuation of inventory

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

Description of key audit matter:

Inventory is valued at the lower of cost or net realizable value ACES Groups mainly produces electronic products such

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

How the matter was addressed in our audit:

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

• We assessed the inventory aging report, and analyzed changes in the inventory aging report from the previous to current year.

• We tested samples provided by the ACES Group on inventory valued at the lower of cost and net realizable value.

• We understand the selling prices adopted by the management of the Group, and use it to assess the reasonableness of inventory net realizable value.

• We assessed if the inventory valuation is recorded according to the accounting policies of the Group.

Other matter

ACES Electronics Co., Ltd. has additionally prepared its parent-company-only financial statements as of and for the years ended December 31, 2023 and 2022, on which we have issued an unmodified audit opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRS, IAS, IFRIC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

• 1.Identified and assessed the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• 2.Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of ACES Group and its subsidiaries’ internal control.

• 3.Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• 4.Concluded on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on ACES Electronics Co., Ltd. and its subsidiaries’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated

129

financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the ACES Group to cease to continue as a going concern.

• 5.Evaluated the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• 6.Obtained sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

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

KPMG

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

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.

130

ACES Electronics Co., Ltd. and Subsidiaries

Consolidated Financial Statements

December 31, 2023 and 2022

(Expressed in thousands of New Taiwan dollars)

Assets Current assets： 1100 Cash and cash equivalents (Note 6(1)) 1110 Financial assets at fair value through profit or loss - current (Note 6(2)) 1150 Notes receivable, net (Note 6(3)) 1170 Accounts receivable, net (Note 6(3)) 1180 Net trade receivable from related parties (Note 6(3) and 7) 1200 Other receivables (Note 6(3)) 1212 Other receivables- related parties–others (Note 6(3) and 7) 1310 Inventories (Note 6(4)) 1410 Prepayments 1470 Other current assets (Note 6(1)) Non-current assets： 1510 Financial assets at fair value through profit or loss - non-current (Note 6(2)) 1535 Financial assets at amortized cost-non-current (Note 6(2)) 1550 Investments in equity-accounted investees (Note 6(5)) 1600 Property, plant and equipment (Note 6(7) and 8) 1755 Right-of-use assets (Note 6(8)) 1760 Investment properties, net (Note 6(9) and 8) 1780 Intangible assets (Note 6(10)) 1915 Prepayment for equipment 1840 Deferred tax assets (Note 6(16)) 1990 Other non-current assets - others Total assets		December 31,	2023 ％ 17 - - 18 - 4 - 10 1 1 51 1 - 3 31 5 2 1 2 1 3 49 100	2023 ％ 17 - - 18 - 4 - 10 1 1 51 1 - 3 31 5 2 1 2 1 3 49 100	December 31, 2022 Amount ％ 2,458,617 19 62 - 82,493 1 2,476,073 19 23,553 - 196,900 2 - - 1,453,691 11 141,154 1 165,153 1 6,997,696 54 163,651 1 220,400 2 447,170 3 3,428,329 27 517,628 4 298,814 2 154,296 1 327,288 3 80,576 1 204,528 2 5,842,680 46 12,840,376 100 Liabilities and Equity Current liabilities： 2100 Short-term borrowings (Note 6(11) and 8) 2321 Current portion of corporate bonds (Note 6(13)) 2150 Notes payable 2170 Accounts payable 2180 Accounts payable to related parties (Note 7) 2200 Other payables (Note 6(6)) 2220 Other payables to related parties (Note 7) 2280 Lease liabilities - current (Note 6(14) and 7) 2230 Current tax liabilities 2322 Current installments of long-term borrowings (Note 6(12) and 8) 2399 Other current liabilities - others Non-current liabilities： 2530 Bonds payable (Note 6(13)) 2540 Long-term borrowings (Note 6(12) and 8) 2570 Deferred tax liabilities (Note 6(16)) 2580 Lease liabilities - non-current (Note 6(14) and 7) 2600 Other non-current liabilities (Note 6(6), (12) and (15)) Total liabilities Equity attributable to shareholders of the parent (Note 6(17)): 3110 Common stock 3200 Capital surplus (Note 6(5), (13) and (18)) Retained earnings： 3310 Legal Reserve 3320 Special Reserve 3350 Unappropriated earnings Other equity: 3410 Exchange differences on translation of the Financial Statements foreign operations 3460 Gain on property revaluation Total equity attributable to shareholders of the parent 36XX Non-controlling interests(Note 6(6)) Non-controlling interests Total liabilities and equity		December 31, 2023 Amount % $ 1,467,000 12 578,202 5 1,868 - 1,406,861 11 65 - 830,356 7 813 - 51,258 - 11,769 - 195,740 2 119,803 1 4,663,735 38 - - 1,737,355 14 307,893 3 110,084 1 175,318 1 2,330,650 19 6,994,385 57 1,344,177 11 993,270 8 726,030 6 62,371 1 2,236,482 18 3,024,883 25 (140,790) (1) 33,219 - (107,571) (1) 5,254,759 43 1,745 - 5,256,504 43 $ 12,250,889 100	December 31, 2023 Amount % $ 1,467,000 12 578,202 5 1,868 - 1,406,861 11 65 - 830,356 7 813 - 51,258 - 11,769 - 195,740 2 119,803 1 4,663,735 38 - - 1,737,355 14 307,893 3 110,084 1 175,318 1 2,330,650 19 6,994,385 57 1,344,177 11 993,270 8 726,030 6 62,371 1 2,236,482 18 3,024,883 25 (140,790) (1) 33,219 - (107,571) (1) 5,254,759 43 1,745 - 5,256,504 43 $ 12,250,889 100	December 31, 2023 Amount % $ 1,467,000 12 578,202 5 1,868 - 1,406,861 11 65 - 830,356 7 813 - 51,258 - 11,769 - 195,740 2 119,803 1 4,663,735 38 - - 1,737,355 14 307,893 3 110,084 1 175,318 1 2,330,650 19 6,994,385 57 1,344,177 11 993,270 8 726,030 6 62,371 1 2,236,482 18 3,024,883 25 (140,790) (1) 33,219 - (107,571) (1) 5,254,759 43 1,745 - 5,256,504 43 $ 12,250,889 100	December 31, 2022 Amount % 1,428,562 11 - - 518 - 1,623,419 13 327 - 1,012,818 8 2,823 - 47,039 - 56,365 - 1,119,167 9 101,018 1 5,392,056 42 555,906 4 660,121 5 317,009 3 75,665 1 184,265 2 1,792,966 15 7,185,022 57 1,344,177 10 988,615 8 702,410 6 168,631 1 2,492,404 19 3,363,445 26 (92,336) (1) 33,219 - (59,117) (1) 5,637,120 43 18,234 - 5,655,354 43 12,840,376 100	December 31, 2022 Amount % 1,428,562 11 - - 518 - 1,623,419 13 327 - 1,012,818 8 2,823 - 47,039 - 56,365 - 1,119,167 9 101,018 1 5,392,056 42 555,906 4 660,121 5 317,009 3 75,665 1 184,265 2 1,792,966 15 7,185,022 57 1,344,177 10 988,615 8 702,410 6 168,631 1 2,492,404 19 3,363,445 26 (92,336) (1) 33,219 - (59,117) (1) 5,637,120 43 18,234 - 5,655,354 43 12,840,376 100	December 31, 2022 Amount % 1,428,562 11 - - 518 - 1,623,419 13 327 - 1,012,818 8 2,823 - 47,039 - 56,365 - 1,119,167 9 101,018 1 5,392,056 42 555,906 4 660,121 5 317,009 3 75,665 1 184,265 2 1,792,966 15 7,185,022 57 1,344,177 10 988,615 8 702,410 6 168,631 1 2,492,404 19 3,363,445 26 (92,336) (1) 33,219 - (59,117) (1) 5,637,120 43 18,234 - 5,655,354 43 12,840,376 100
		Amount $ 2,058,206 - 46,942 2,221,528 25,422 448,619 528 1,189,410 87,022 97,739					Amount $ 1,467,000 578,202 1,868 1,406,861 65 830,356 813 51,258 11,769 195,740 119,803				Amount 1,428,562 - 518 1,623,419 327 1,012,818 2,823 47,039 56,365 1,119,167 101,018 5,392,056 555,906 660,121 317,009 75,665 184,265 1,792,966 7,185,022 1,344,177 988,615 702,410 168,631 2,492,404 3,363,445 (92,336) 33,219 (59,117) 5,637,120 18,234 5,655,354 12,840,376
		6,175,416		51			4,663,735		38			42
		167,452 - 428,470 3,740,842 598,340 304,881 142,030 227,093 80,566 385,799		1 - 3 31 5 2 1 2 1 3			- 1,737,355 307,893 110,084 175,318		- 14 3 1 1			4 5 3 1 2
							2,330,650		19			15
							6,994,385		57			57
							1,344,177		11			10
							993,270		8			8
							726,030 62,371 2,236,482		6 1 18			6 1 19
		6,075,473		49
							3,024,883		25			26
							(140,790) 33,219		(1) -			(1) -
							(107,571)		(1)			(1)
							5,254,759		43			43
							1,745		**- **			-
							5,256,504		43			43
		$ 12,250,889		100			$ 12,250,889		100			100

See accompanying notes to consolidated financial statements.

131

ACES ELECTRONICS CO., LTD. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan dollars, except for Earnings per share)

Operating Revenue(Note 6(19) and 7): 4100 Net sales revenue 4800 Other operating revenue Net revenue from operations 5000 Operating costs (Note 6(4), (14), (15), and 7) Gross profit Operating expenses(Note 6(6), (14), (15), (21), and 7): 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit loss (gain) (Note 6(3)) Total operating expenses Profit from operations Non-operating income and expenses(Note 6(22)): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs (Note 6(14) and (21)) 7060 Share of profit of equity-accounted investees(Note 6(5)) Total non-operating income and expenses 7900 Profit before income tax 7950 Less: income tax expenses (gains) (Note 6(16)) Profit for the year 8300 Other comprehensive income: 8310 Items that will never be reclassified to profit or loss 8311 Remeasurement of defined benefit plans 8349 Less: Income tax related to non-reclassified items(Note 6(16)) Total items that will never be reclassified to profit or loss 8360 Items that are or may be reclassified subsequently to profit or loss 8361 Exchange differences on translation to the presentation currency 8399 Less: Income tax related to items that may be reclassified(Note 6(16)) Total items that are or may be reclassified subsequently to profit or loss 8300 Total other comprehensive income(net of tax) for the year Total comprehensive income for the year Net profit attributable to: 8610 Shareholders of the parent 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Shareholders of the parent 8720 Non-controlling interests Earnings per share(NT$, Note 6(18)) 9750 Basic earnings per share 9850 Diluted earnings per share	2023		％		2022		％ 97 3 100 79 21 7 9 5 - 21 - - 1 2 - - 3 3 1 2 - - - 1 - 1 1 3 2 - 2 3 - 3 1.68 1.64
	Amount				Amount
	$ 8,188,173 96 298,055 4 8,486,228 100 6,734,424 79 1,751,804 21 585,051 7 876,700 10 621,268 7 (486) - 2,082,533 24 (330,729) (3) 49,730 - 124,934 1 5,746 - (108,725) (1) (10,648) - 61,037 - (269,692) (3) (1,504) - (268,188) (3) 1,911 - - - 1,911 - (60,484) (1) (12,097) - (48,387) (1) (46,476) (1) $ (314,664) (4) (266,543) (3) (1,645) - $ (268,188) (3) $ (313,086) (4) (1,578) - $ (314,664) (4) $ (1.98) $ (1.98)		96 4		10,047,587 344,917 10,392,504 8,159,619 2,232,885 686,463 915,292 573,935 448 2,176,138 56,747 27,212 141,151 164,921 (85,069) 10,101 258,316 315,063 91,730 223,333 10,880 - 10,880 130,098 26,020 104,078 114,958 338,291 225,319 (1,986) 223,333 340,050 (1,759) 338,291
			100 79
			21
			7 10 7 -
			24
			(3)
			- 1 - (1) -
			-
			(3) -
			(3)
			- -
			-
			(1) -
			(1)
			(1)
			(4)
			(3) -
			(3)
			(4) -
			(4)

See accompanying notes to consolidated financial statements.

132

ACES ELECTRONICS CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan dollars)

Equity Attributable to Shareholders of the parent

Balance at January 1, 2022 Appropriation of earnings： Legal Reserve Special Reserve Cash dividend distributed to shareholders Profit (loss) for the year Other comprehensive income Total comprehensive income for the year Other changes in capital surplus： Equity items recognized for the issuance of convertible bonds (preferred shares) Changes in associates and joint ventures accounted for using equity method Conversion of convertible bonds Changes in ownership of subsidiary equity Balance at December 31, 2022 Appropriation of earnings： Legal Reserve Special Reserve Cash dividend distributed to shareholders Profit (loss) for the year Other comprehensive income Total comprehensive income for the year Changes in ownership of subsidiary equity Balance at December 31, 2023	Common stock	Capital surplus 1,002,379	Legal reserve 651,554	Retained earnings	Retained earnings	Other Components of Equity	Other Components of Equity	Equity Attributable to Shareholders of the parent 5,512,210 - - (201,594) 225,319 114,731 340,050 (131) (14,827) 1,135 277 5,637,120 - - (73,930) (266,543) (46,543) (313,086) 4,655 5,254,759	Non-controlling interests 19,993	Total equity 5,532,203 - - (201,594) 223,333 114,958 338,291 (131) (14,827) 1,135 277 5,655,354 - - (73,930) (268,188) (46,476) (314,664) (10,256) 5,256,504
				Special reserve 122,358	Undistributed surplus earnings 2,554,928 (50,856) (46,273) (201,594) 225,319 10,880 236,199 - - - - 2,492,404 (23,620) 106,260 (73,930) (266,543) 1,911 (264,632) - 2,236,482	Difference on translation of financial statements of foreign operations (196,187) - - - - 103,851 103,851 - - - - (92,336) - - - - (48,454) (48,454) - (140,790)	Gains on property revaluation 33,219
	$ 1,343,959
	- - - - -	- - - - -	50,856 - - - -	- 46,273 - - -			- - - - -		- - - (1,986) 227
	-	-	-	-			-		(1,759)
	- - 218 -	(131) (14,827) 917 277	- - - -	- - - -			- - - -		- - - -
	1,344,177 - - - - -	988,615 - - - - -	702,410 23,620 - - - -	168,631 - (106,260) - - -			33,219 - - - - -		18,234 - - - (1,645) 67
	-	-	-	-			-		(1,578)
	-	4,655	-	-			-		(14,911)
	$ 1,344,177	993,270	726,030	62,371			33,219		1,745

See accompanying notes to consolidated financial statements.

133

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

Cash flows from operating activities: Profit before income tax Adjustments： Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit loss (gain) recognized Net loss (gain) on financial assets at fair value through profit or loss Interest expense Interest income Impairment loss Share of profit (loss) of equity-account investees Loss on disposals of property, plant and equipment Loss on disposals of equity-account investees Gain on investment property revaluation Gain on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities： Net changes in operating assets： Decrease (increase) in notes receivable Decrease in accounts receivable Increase in accounts receivable from related parties Decrease (increase) in other receivables Increase in other receivables from related parties Decrease in inventories Decrease (increase) in prepaid expenses Decrease in other current assets Decrease in other financial assets Total net changes in operating assets Net changes in operating liabilities： Increase (decrease) in notes payable Decrease in accounts payable Decrease in accounts payable to related parties Increase (decrease) in other payables Increase (decrease) in other payables to related parties Increase in other current liabilities Increase in net defined benefit liabilities Total net changes in operating liabilities Total adjustments Cash generated from operations Interest received Interest paid Income tax paid Net cash provided by operating activities Cash flows from investing activities： Acquisitions of financial assets at fair value through profit or loss Disposals of financial assets at fair value through profit or loss Acquisitions of equity-accounted investees Acquisitions of subsidiaries Disposals of subsidiaries Acquisitions of property, plant, and equipment Disposals of property, plant, and equipment Acquisitions of intangible assets Acquisition of right-of-use assets Increase in other non-current assets Increase in prepaid equipment payments Dividends received Net cash used in investing activities Cash flows from financing activities： Increase in short-term borrowings Proceeds from long-term borrowings Repayment of long-term borrowings Repayment of principal of lease liabilities Decrease in other non-current liabilities Cash dividends Acquisitions of subsidiary's equity Net cash (used in) provided by financing activities Effect of exchange rate change on cash and cash equivalents Decrease in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at December 31		2023 $ (269,692) 651,330 55,102 (486) (27,635) 108,725 (49,730) - 10,648 9,007 24,140 (6,067) (48)		2022 315,063 650,950 47,707 448 32,741 85,069 (27,212) 2,802 (10,101) 15,899 - 2,158 -
		774,986		800,461
		35,551 253,783 (1,869) (251,719) (528) 268,824 54,304 37,074 220,400		(21,136) 314,171 (23,553) (60,959) - 224,985 (34,701) 687 -
		615,820		399,494
		1,350 (216,712) (262) (182,738) (2,010) 14,536 1,316		(1,081) (296,549) (153) 88,354 322 9,292 4,270
		(384,520)		(195,545)
		1,006,286		1,004,410
		736,594 49,730 (86,429) (36,576)		1,319,473 27,212 (63,611) (100,440)
		663,319		1,182,634
		- 22,257 - (7,691) 21,157 (865,435) 97,868 (39,357) (71,611) (185,007) (21,827) -		(8,260) 81,833 (16,898) - - (922,935) 22,474 (36,445) - (82,832) (192,952) 20,391
		(1,049,646)		(1,135,624)
		51,602 3,775,000 (3,624,549) (70,245) (4,521) (73,930) (10,256)		353,711 3,961,000 (3,945,279) (69,369) (136,526) (201,594) (1,028)
		43,101		(39,085)
		(57,185)		(117,203)
		(400,411) 2,458,617		(109,278) 2,567,895
		$ 2,058,206		2,458,617

See accompanying notes to consolidated financial statements.

134

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

ACES Electronics Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements For the Years Ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

1. Organization

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

2. The Authorization of Financial Statements

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

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

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

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

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

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

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

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

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

• (2) Impact of the IFRSs that have been endorsed by the FSC but not yet in effect

• The Group assessed that the adoption of the following amendments, effective for annual period beginning on January 1, 2024, would not have a material impact on its parent company only financial statements.

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

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

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

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

• (3) The IFRSs issued by International Accounting Standards Board (“IASB”) but not yet endorsed by the FSC

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

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

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

• ‧ Amendments to IAS 21 “Lack of Exchangeability”

135

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

4. Summary of Significant Accounting Policies

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

• (1) Statement of compliance

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

• (2) Basis of preparation

• a. Basis of measurement

• The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the balance sheets:

• (i) Financial assets at fair value through profit or loss;

• (ii) Investment property at fair value ； and

• (iii) Defined benefit liability is recognized as the fair value of the plan assets less the present value of the defined benefit obligation.

• b. Functional and presentation currency

The functional currency of each entity of the Group is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar (“NTD”), which is also the Company’s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

• (3) Basis of consolidation

• a. Principle of preparation of the consolidated financial statements

• All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

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

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

136

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

1. Subsidiaries included in the consolidated financial statements

Subsidiaries included in the consolidated financial statements:

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

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

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

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

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

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

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

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

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

• Note 5: The Company sold the subsidiary, GENESIS GUIZHOU TECHNOLOGY CO., LTD., to non-related parties on November 3, 2023.

• Note 6: The subsidiary of the Company set up ACES ZHUHAI TECHNOLOGY LTD. on February 1, 2023, which is included into the Group since that day.

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

2. Subsidiaries not included in the consolidated financial statements: None.

• (4) Foreign currency

• a. Foreign currency transactions

• Transactions in foreign currencies are translated into the respective functional currencies of the Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent end of reporting date (hereinafter refer to as ‘end of reporting period’), monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at the date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction. Exchange differences are recognized in profit or loss.

• b. Foreign operations

• The assets and liabilities of foreign operations, including good will and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expense of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.

When the settlement of a monetary receivable from, or payable to, a foreign operation is neither planned nor likely to occur in the foreseeable future, the exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

• (5) Classification of current and non-current assets and liabilities

An asset is classified as current when:

• a. The asset expected to realize, or intends to sell or consume, in its normal operating cycle;

• b. The asset primarily held for the purpose of trading;

• c. The asset expected to realize within twelve months after the reporting date; or

• d. The asset is cash and cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

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A liability is classified as current when:

• a. The liability is expected to be settled within the consolidated company's normal operating cycle;

• b. The liability is held primarily for the purpose of trading ；

• c. The liability is due to be settled within twelve months after the reporting date; or

• d. The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments, do not affect its classification.

• (6) Cash and cash equivalents

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

• (7) Financial instruments

Account receivables initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the consolidated company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value, plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issuance. A trade receivable without a significant financing component is initially measured at the transaction price.

• a. Financial assets

• All regular way purchases or sales of financial assets are recognized and derecognized on a trade basis.

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

Financial assets are not reclassified subsequent to their initial recognition unless the consolidated company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the changes in the business model.

• (i) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as FVTPL:

• ‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments

of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on de-recognition is recognized in profit or

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loss.

(ii) Financial assets at fair value through profit or loss All financial assets not classified as at amortized cost or at fair value through other comprehensive income as described above are measured at fair value through profit or loss. This includes all derivative financial assets. The consolidated company has the intention to sell account receivable at fair price through profit and loss immediately or recently; these amounts are recorded under account receivables currently. These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit and loss.

(iii) Business model assessment

The Group makes an assessment of the objective of the business model in which a financial asset is held at portfolio level, because this best reflects the way the business is managed, and information is provided to management. The information considered includes:

‧ the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

‧ how the performance of the business model and the financial assets held within that business model are evaluated and reported to the entity’s key management personnel;

‧ the risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way in which those risks are managed;

‧ how managers of the business are compensated, for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected; and

‧ the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sale activity.

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

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

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

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

(v) Impairment of financial assets

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

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

• ‧ debt securities that are determined to have low credit risk at the reporting date ； and

• ‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased

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significantly since initial recognition.

Loss allowance for account receivables is always measured at an amount equal to lifetime ECL.

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

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

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

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

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

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

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

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the consolidated company in accordance with the contract and the cash flows that the consolidated company expects to receive). ECL is according to financial assets’ effective discount rate.

At each reporting date, the consolidated company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

• ‧ significant financial difficulty of the borrower or issuer ；

• ‧ a breach of contract such as a default or being more than 180 days past due ；

• ‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider ；

• ‧ it is probable that the borrower will enter bankruptcy or other financial reorganization ； or

‧ the disappearance of an active market for a security because of financial difficulties. Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due. According to experiences, the Group is not able to recover the overdue amount from company accounts after 180 days.

(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

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cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers the assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• b. Financial liabilities and equity instruments

• (i) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

• (ii) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

• (iii) Compound financial instruments

Compound financial instruments issued by the Company comprise convertible bonds denominated in NTD that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.

Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

• (iv) Financial liabilities

• Financial liabilities are classified as measured at amortized 。 A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

• (v) Derecognition of financial liabilities

• The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

• (vi) Offsetting of financial assets and liabilities

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

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

(8) Inventories Inventory is valued at the lower of cost or net realizable value The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

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

(9) Investing in the affiliated Companies Affiliates are all entities over which the Company has significant influence but not control. The Company has adopted equity method to account for interests in the affiliated companies. Under the equity method, investment is initially recognized at cost. Investment cost includes transaction cost. The carrying amount of investment in the affiliates includes goodwill recognized at initial investment, net of any accumulated impairment losses After adjusting the accounting policies of the affiliated parent company to be in line with that of the Company, the consolidated reports included the income and loss as well as other comprehensive income of the affiliate companies the Company recognized in proportion to its shares owned in the affiliated companies from the date the Company has significant influence over the affiliated parent company until the date it ceases to have such significant influence. When the affiliates have changes in equities not in relations to income or loss or other comprehensive income and not affecting the shares held by the Company, the changes of equity of the Company’s shares in the affiliated companies should be recognized in proportion to its shares in the equity as capital reserve.

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

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

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

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

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investment properties are measured using the cost model.

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

• (11) Property, plant and equipment

• a. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

• b. Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

• c. Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

• (i) Property and plants: 3 ~ 50 years

(ii) Machinery and equipment: 2 ~ 10 years

(iii) Mold equipment: 2 ~ 5 years

• (iv) Other equipment: 2 ~ 10 years

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

• (12) Lease

• a. Identifying a lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

• b. As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to 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

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impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, Discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’ s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

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

• (ii) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• (i) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

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

• (iii) there is any lease modification.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

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

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

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

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

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

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

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

• c. As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

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

If the agreement includes components from lease and non-lease parts, the Company adopts

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to Amendments to IFRS 15 to allocate considerations from the contract.

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

• (13) Intangible assets

• a. Recognition and measurement

• The goodwill acquired by the Company are measured at cost less accumulated impairment losses.

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

For other intangible assets acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

• b. Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred, including goodwill from internal development and brand name.

• c. Amortization

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

• (i) Software: 1~ 3 years

• (ii) Franchising: 8 years

(iii) Customer relationship: 3 years

• (iv) Other intangible assets 1~ 3 years

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

• (14) Impairment of non-financial assets

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

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An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

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

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

• (15) Revenue Recognition

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

Revenue is recognized when the control over a product has been transferred to the customer. being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

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

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

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

• (16) Government grants

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

• (17) Employee benefits

• a. Defined contribution plans

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

• b. Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for

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the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

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

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

• c. Short-term employee benefits

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

• (18) Income taxes

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

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainly related to income tax, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

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

• a. temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• b. temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

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

• a. the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

• b. the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• (i) the same taxable entity; or

• (ii) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period

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in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

The unapplied tax losses and unapplied tax credits carried forward and deductible temporary differences are recognized as deferred income tax assets within the range of probable future taxable income available for use. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

• (19) Earning per share

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

• (20) Operating segments

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

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

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

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

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

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

• (1) Valuation of inventories

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

• (2) Impairment of goodwill

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

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estimate the recoverable amount of relevant CGUs.

• (3) Valuation process

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

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

• a. Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• b. Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• c. Level 3: inputs for the assets or liability that are not based on observable market data. For any transfer within the fair value hierarchy, the impact of the transfer is recognized on the reporting date.

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

• (i) Note 6(2), financial assets.

• (ii) Note 6(9), investment property at fair value.

6. Description of Significant Accounts

• (1) Cash and Cash Equivalents

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

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

According to the IFRSs Q&A updated by Securities and Futures Bureau, FSC on January 5, 2024, the Group reclassified the deposits balance in repatriated offshore funds accounts amounting to $40,124 thousand and $61,468 thousand as of December 31, 2022 and January 1, 2022, respectively, from other current assets to cash and cash equivalent. In addition, the Group decreased the amount in “decrease in other current assets” under investing activities for the year ended December 31, 2022 by $21,344 thousand. As time deposits with original maturity date within 1 year, are held for the purpose of meeting short term cash commitments rather than for investment or other purposes, readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, those are recognized as cash and cash equivalents.

• (2) Financial assets

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

December 31,

December 31,

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

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

b Financial assets measured at amortized cost - non-current

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

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

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

• (3) Notes, trade and other receivables

• a. Details as follows:

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

• b. The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes, accounts and other receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. The loss allowance provision for notes receivable, accounts receivable and other receivables for the years ended December 31 2023 and 2022 was analyzed as follows:

Not past due Past due less than 60 days Past due 61~120 days Past due 121~180 days Past due over 181 days 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-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,619,353 0% - 116,086 0% - 13,102 50% 6,551 3,496 70% 2,447 10,468 100% 10,468 $ 2,762,505 19,466 December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,662,212 0% - 111,206 0% - 10,141 50% 5,071 1,770 70% 1,239 36,080 100% 36,080 $ 2,821,409 42,390	December 31, 2023 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,619,353 0% - 116,086 0% - 13,102 50% 6,551 3,496 70% 2,447 10,468 100% 10,468 $ 2,762,505 19,466 December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,662,212 0% - 111,206 0% - 10,141 50% 5,071 1,770 70% 1,239 36,080 100% 36,080 $ 2,821,409 42,390	December 31, 2023 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,619,353 0% - 116,086 0% - 13,102 50% 6,551 3,496 70% 2,447 10,468 100% 10,468 $ 2,762,505 19,466 December 31, 2022 Carrying amount of notes, accounts and other receivables Weighted-ave rage loss rate Loss allowance for lifetime expected credit losses $ 2,662,212 0% - 111,206 0% - 10,141 50% 5,071 1,770 70% 1,239 36,080 100% 36,080 $ 2,821,409 42,390
	Carrying amount of notes, accounts and other receivables $ 2,662,212 111,206 10,141 1,770 36,080	Weighted-ave rage loss rate
		0% 0% 50% 70% 100%
	$ 2,821,409		42,390

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

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

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

Underwriting bank				December 31, 2023	December 31, 2023
	Factoring amount $ 189,616 45,936 51,103	Acceptabl e advances		Amount collected in advance
Financial institutes Financial institutes Financial institutes Underwriting bank		663,228 124,355 110,538		- - -
	$ 286,655	898,121		-
	Factoring amount $ 207,627 5,700 39,710	Acceptabl e advances		Amount collected in advance
Financial institutes Financial institutes Financial institutes		476,471 221,112 107,638		186,865 - 2,918
	$ 253,037	805,221		189,783

(4) Inventories

• a. Details as follows:

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

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

b. Details of cost of goods sold as follows:

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

• c. As of December 31, 2023 and 2022, none of the Company’s inventories was pledged as collateral.

• (5) Investments accounted for using equity method

• a. Investments accounted for using equity method on the date or reporting as follows:

Affiliated company

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

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

Affiliated company Name	Main business venue with the Company by relationship	Main business venue/ Countries which parent company registered	Percentage of equity ownership interests and voting rights	Percentage of equity ownership interests and voting rights
			December 31, 2023	December 31, 2022
Nantong Dadi Electric Co., Ltd. Kung Shan Ching Zhi Electric Co., Ltd.
			19.31% 30.00%	19.31% 30.00%

• c. In the fourth quarter of 2021, Nantong Dadi Electric Co., Ltd., an affiliated company, KUNSHAN ACES ELECTRONIC CO., LTD. was listed on Beijing Stock Exchange. KUNSHAN ACES ELECTRONIC CO., LTD., an affiliated company did not participate in the capital increase of affiliated company; therefore, its equity holding percentage has decreased from 24.72% to 19.31% and resulting in changes in equity in the first quarter of 2022, and the decrease of $14,827 thousand in capital surplus.

• d. In January 2022, the Company acquired 30% shares of Kung Shan Ching Zhi Electric Co., Ltd. in the amount of RMB 3,750 thousand (NTD $16,898 thousand); therefore acquired significant influence over the company.

• e. The summarized financial information on significant affiliated company of the Group is as follows. The financial information has adjusted the amounts included in the consolidated financial statements in accordance with IFRS of each affiliated company, to reflect the adjustments for fair value and accounting policies when the Group acquired the equity of the affiliated companies:

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

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

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

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

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

• f. The Group is regulated by the agreement for the listing of affiliated companies for the years ended December 31, 2023 and 2022. The ordinary shares held shall not be transferred within one year after the affiliated companies go listing. Within two years after the lock-up period ends, the shares transferred shall not exceed 25% of the total shares held.

• g. The investments accounted for using equity method were not pledged as collaterals as of December 31, 2023, and 2022.

• (6) Acquisition of Subsidiaries and Non-controlling interests

  • a. Acquisition of Genesis Group

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

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

• b. Acquisition of subsidiary - JASON TECHNOLOGY LIMITED.

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

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

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

• c. Acquisition of subsidiary - ACES Surface Treatment Co., Ltd.

• In consideration of the extending demands of product processing and attaining the effectiveness from vertical integration of production, the Group acquired 100% of Yunchengyou Precision Technology Co., Ltd. (hereinafter “Yunchengyou Company”)’s shares by consideration of $7,000 thousand on May 5, Yunchengyou Company is primarily engaged in manufacture and sales of mold.

• According to the acquisition contract, part of the consideration of $6,000 thousand has been paid. After deducting the cash obtained, the amount paid is $5,834 thousand, and the residual payment of $1,000 thousand is expected to be paid one year after the settlement date, which is recognized under “other current liabilities.” Yunchengyou Company has completed the change of registration on May 30, 2023, and renamed as ACES Surface Treatment Co., Ltd.

• d. Loss of control over subsidiaries

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

• (ii) The Company sold the subsidiary, GENESIS GUIZHOU TECHNOLOGY CO., LTD., to non-related parties on November 3, 2023. The Group has disposed 100% of the shares and lost control over the subsidiary. The proceeds from the disposal are $6,416 thousand. The losses on disposals of $1,613 thousand have included under “other gains and losses” in the consolidated statements of comprehensive income.

• e. Changes in ownership of subsidiary equity

• (i) MEC IMEX INC.

The Group subscribed 9,999 thousand of shares of MEC IMEX INC. in cash capital increase by cash of $99,998 thousand in 2022, which increase its shareholding percentage from 99.79% to 99.84%. The resulting changes in equity increase the capital surplus by $87 thousand.

The Group subscribed 11,991 thousand of shares of MEC IMEX INC. in cash capital increase by cash of $119,907 thousand in 2023, which increase its shareholding percentage from 99.84% to 99.86%. The resulting changes in equity increase the capital surplus by $20 thousand.

• (ii) COMPUPACK TECHNOLOGY CO., LTD

The Group subscribed 3,000 thousand of shares of COMPUPACK TECHNOLOGY CO., LTD in cash capital increase by cash of $30,000 thousand in 2022, which increase its shareholding percentage from 92.64% to 93.67%. The resulting changes in equity increase the capital surplus by $190 thousand.

The Group bought back 1,362 thousand of shares of COMPUPACK TECHNOLOGY CO., LTD from minority shareholders by cash of $10,000 thousand in 2023, which increase its shareholding percentage from 93.67% to 100%. The resulting changes in equity increase the capital surplus by $4,840 thousand.

• (iii) MICON PRECISE CORP.

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

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percentage from 98.91% to 99.61%. The resulting changes in equity decrease the capital surplus by $205 thousand.

(7) Property, plant and equipment

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

Cost or deemed cost: Balance at January 1, 2023 Additions Reclassification Disposals Foreign Exchange Rates Balance at December 31, 2023 Balance at January 1, 2022 Additions Reclassification Disposals Foreign Exchange Rates Balance at December 31, 2022 Accumulated depreciation and impairment: Balance at January 1, 2023 Depreciation of the year Disposals Foreign Exchange Rates Balance at December 31, 2023 Balance at January 1, 2022 Depreciation of the year Impairment losses of the year Disposals Foreign Exchange Rates Balance at December 31, 2022 Carrying value: December 31, 2023 January 1, 2022 December 31, 2022	Land $ 338,579 - - - - -	Property andplants 1,560,763 - 8,986 544 (6,827) (17,157)	Machinery and equipment 1,726,391 3,284 86,041 16,684 (44,614) (35,778)	Mold equipment 1,380,841 - 153,966 55,822 (88,481) (18,281)	Other equipment 1,386,682 - 102,146 44,085 (134,174) (12,050)	Constructi ons in process 705,715 - 514,296 16,065 - (6,998)	Total 7,098,971 3,284 865,435 133,200 (274,096) (90,264)
	$ 338,579	1,546,309	1,752,008	1,483,867	1,386,689	1,229,078	7,736,530
	$ 338,424 - - - 155	1,456,325 70,271 7,409 - 26,758	1,608,345 108,116 12,312 (47,750) 45,368	1,215,456 110,473 94,149 (41,698) 2,461	1,250,941 118,347 131,406 (127,021) 13,009	186,376 515,728 - - 3,611	6,055,867 922,935 245,276 (216,469) 91,362
	$ 338,579	1,560,763	1,726,391	1,380,841	1,386,682	705,715	7,098,971
	$ - - - -	616,597 71,349 (3,089) (10,692)	1,060,245 152,458 (37,111) (29,016)	1,189,254 168,158 (37,055) (14,716)	804,546 173,608 (89,966) (18,882)	- - - -	3,670,642 565,573 (167,221) (73,306)
	$ -	674,165	1,146,576	1,305,641	869,306	-	3,995,688
	$ - - - - -	536,266 71,458 - - 8,873	910,196 150,004 2,802 (33,924) 31,167	1,039,311 174,591 - (33,558) 8,910	741,585 168,383 - (110,614) 5,192	- - - - -	3,227,358 564,436 2,802 (178,096) 54,142
	$ -	616,597	1,060,245	1,189,254	804,546	-	3,670,642
	$ 338,579	872,144	605,432	178,226	517,383	1,229,078	3,740,842
	$ 338,424	920,059	698,149	176,145	509,356	186,376	2,828,509
	$ 338,579	944,166	666,146	191,587	582,136	705,715	3,428,329

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

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

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(8) Right-of-use asset

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

Cost: Balance at January 1, 2023 Acquisition by business combination Additions Reductions Foreign Exchange Rates Balance at December 31, 2023 Balance at January 1, 2022 Additions Reductions Foreign Exchange Rates Balance at December 31, 2022 Accumulated depreciation: Balance at January 1, 2023 Provision for depreciation Reductions Foreign Exchange Rates Balance at December 31, 2023 Balance at January 1, 2022 Provision for depreciation Reductions Foreign Exchange Rates Balance at December 31, 2022 Carrying value: December 31, 2023 January 1, 2022 December 31, 2022	Land		Buildings and structures 181,087 1,664 96,810 (58,723) (5,334)	Other equipment		Total 728,818 1,664 192,204 (112,816) (18,496)
	$ 516,050 - 93,854 (45,465) (12,855)			31,681 - 1,540 (8,628) (307)
	$ 551,584		215,504	24,286		791,374
	$ 507,912 1,985 (3,033) 9,186		176,538 10,479 (7,045) 1,115	30,860 5,221 (4,695) 295		715,310 17,685 (14,773) 10,596
	$ 516,050		181,087	31,681		728,818
	$ 80,845 27,207 (34,684) (1,314)		113,300 49,470 (58,723) (346)	17,045 9,080 (8,628) (218)		211,190 85,757 (102,035) (1,878)
	$ 72,054		103,701	17,279		193,034
	$ 51,817 31,108 (3,033) 953		76,543 44,436 (7,045) (634)	10,692 10,970 (4,695) 78		139,052 86,514 (14,773) 397
	$ 80,845		113,300	17,045		211,190
	$ 479,530		111,803	7,007		598,340
	$ 456,095		99,995	20,168		576,258
	$ 435,205		67,787	14,636		517,628

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

160

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

(9) Investment property

• a. Details of investment property as follows:

Cost: Balance at January 1, 2023 Gains on fair value adjustment Balance at December 31, 2023 Balance at January 1, 2022 Losses on fair value adjustment Balance at December 31, 2022 Fair value: December 31, 2023 January 1, 2022 December 31, 2022	Land $ 259,599 5,149	Buildings and structures 39,215 918	Buildings and structures 39,215 918	Total 298,814 6,067
	$ 264,748	40,133		304,881
	$ 261,048 (1,449)	39,924 (709)		300,972 (2,158)
	$ 259,599	39,215		298,814
			$ 304,881
			$ 300,972
			$ 298,814

b Investment property fair value basis

The investment properties held by the consolidated company are located in the Nangang and Neihu districts of Taipei City. Their fair values are determined based on the results of an independent appraisal by valuation experts, using the discounted cash flow analysis method under the income approach. The main assumptions and relevant explanations are as follows:

• (i) The expected future cash inflows from investment properties of the consolidated company include rental income, interest income from deposits, vacancy losses, and disposal value at the end of the period. The rental income is estimated based on local and comparable market rental rates, taking into consideration the estimated annual rental growth rate for the next ten years. The interest income from deposits is estimated based on the average deposit interest rate published by the central bank for the top five banks, ranging from 1.575% for a one-year term. The vacancy losses are calculated based on the vacancy situation of similar properties in the neighboring area. The disposal value at the end of the period is determined by capitalizing the projected operating income for the next year, after deducting normal operating expenses, using a direct capitalization approach.

The future cash outflows include related taxes, insurance premiums, management fees, and repair costs that are directly related to the leases. The changing rates used to estimate future variations in these expenses are based on the current expenditure levels, taking into consideration adjustments to announced land prices and tax rates stipulated by housing tax regulations.

• (ii) The estimation of the discount rate is based on the regulations of the Financial Supervisory Commission, which stipulate that it shall not be lower than the interest rate for a two-year postal time deposit announced by Chunghwa Post Co., Ltd., plus three digits. However, considering the recent real estate market conditions, it is estimated to be 2.345% 2.470%.

• (iii) The decision on capitalizing end-of-period earnings is based on the reasonable capitalization rate of the subject and the future benefits of building improvements, estimated at 0.940% 1.230%.

• (iv) The monthly rent for investment properties in the local area and similar targets ranges from NT$1,010 to NT$1,390 per ping.

161

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

  - (v) The fair value of the Nangang and Neihu properties, as assessed by discounted cash flow analysis, is NT$54,434 thousand and NT$250,447 thousand, respectively.

  - (vi) The real estate appraisal reports used by the consolidated company are signed and issued by Mr. Tsai Jia-ho, a certified appraiser from Cushman & Wakefield, with appraisal dates of July 4, 2023 and June 29, 2023, respectively.

• c. For details on investment property pledged as collateral, please refer to Note 8.

• (10) Intangible assets

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

Cost: Balance at January 1, 2023 Separately acquired Acquired through merger Disposals Foreign Exchange Rates Balance at December 31, 2023 Balance at January 1, 2022 Separately acquired Foreign Exchange Rates Balance at December 31, 2022 Accumulated amortization and impairment: Balance at January 1, 2023 Current amortization Disposals Foreign Exchange Rates Balance at December 31, 2023 Balance at January 1, 2022 Current amortization Foreign Exchange Rates Balance at December 31, 2022 Carrying value: December 31, 2023 January 1, 2022 December 31, 2022	Goodwill		Computer software		Customer relationship		Others		Total 316,073 39,357 3,934 (11,403) (1,305)
	$ 31,201 - - - (5) $ 31,196 $ 28,123 - 3,078 $ 31,201 $ - - - - $- $ - - - $- $ 31,196 $ 28,123 $ 31,201		134,993 16,842 - (11,043) (1,271)		76,776 - - - (27) 76,749 69,242 - 7,534 76,776 20,730 12,306 - (184) 32,852 7,751 9,981 2,998 20,730 43,897 61,491 56,046		73,103 22,515 3,934 (360) (2)
			139,521				99,190		346,656
			122,605 11,520 868				45,875 24,925 2,303		265,845 36,445 13,783
			134,993				73,103		316,073
			110,868 17,514 (11,043) (609)				30,179 25,282 (360) (57)		161,777 55,102 (11,403) (850)
			116,730				55,044		204,626
			89,497 20,376 995				12,499 17,350 330		109,747 47,707 4,323
			110,868				30,179		161,777
			22,791				44,146		142,030
			33,108				33,376		156,098
			24,125				42,924		154,296

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

162

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

• (11) Short-term borrowings

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

Unsecured bank loans Secured bank loans Unused credit lines Interest rate		December 31, 2023			December 31, 2022
	$	1,225,000 242,000 1,467,000 3,518,777 1.225%~7.18%			1,166,562 262,000 1,428,562 3,168,996 0.75%~6.55%
	$
	$

b For details on property pledged as collateral for bank loans, please refer to Note 8. (12) Long-term borrowings

• a. The Company’s long-term borrowing details as follows:

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

• b. The maturity date for the unsecured bank loans of the Company is from 2023 to 2026; while the maturity date for the secured bank loans is from 2023 to year 2030.

• c. The Company entered into a syndicated loan agreement with group of banks. During the loan term, the Company is required to calculate and maintain certain financial ratios at an agreed level based on the consolidated financial statements audit. For the years ended December 31, 2023 and 2022, there is no incident of the Company violating such financial ratios.

• d. The Company has obtained special low-interest rate loans of $600,000 thousand from banks according to “Welcome Businesses Returning to Taiwan to Invest Solution” on June 2020. The actual special loan interest rate was 0.85%, and the difference calculated by the fair loan value on market interest rate of 1.35% was regarded as government grants and recorded as deferred income. As of December 31, 2023 and 2022, deferred revenue amounted to $3,526 thousand and $6,500 thousand respectively. These amounts were recorded under “other non-current liabilities.”

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

163

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

• (13) Bonds payable

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

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

• b. Major terms and conditions of the second issuance of convertible company bonds in 2021: (i) Issued period: Three years, from November 22, 2021 to November 22, 2024. (ii) Interest rate: 0%

• (iii) Redemption at the option of the Company: The Company may redeem the bonds under the following conditions:

• A. The Company may redeem the bonds, in whole or in part, 3 months after the issuance and forty days prior to the maturity date, at the principal amount of the bonds if the closing price of the Company’s ordinary shares on the Taiwan Stock Exchange for a period of 30 consecutive trading days, is at least 30% of the conversion price.

• B. The Company may redeem the bonds, in whole or in part, 3 months after the issuance and forty days prior to the maturity date, at the early redemption conversion price if at least 10% in principal amount of the bonds has already been exchanged, redeemed, purchased or canceled.

• (iv) Terms of conversion:

• A. From February 23, 2022 to November 22, 2024, bondholders may convert bonds into common shares of the Company according to terms of conversion.

• B. Conversion price: The conversion price at the time of issuance was NT$51.3 per share. The conversion price will be subject to adjustments upon the occurrence of certain events set out in the indenture. This bond does not have reset clause.

• The Company announced capital increase by issuing new share on December 8, 2021. As of December 16, 2021, the conversion price per share is from $51.3 New Taiwan dollars to $50.4 New Taiwan dollars. The Company announced due to the distribution of cash dividends for ordinary shares, the conversion price per share is from $50.4 New Taiwan dollars to $48.5 New Taiwan dollars as of August 12, 2022.

• (v) If the bondholder does not convert the bonds at maturity, the Company has to pay in full in cash for redemption of bonds held at the principal amount of bonds with additional interest for compensation (interest compensation at maturity is 1.5075% of the principal amount).

• c. The bondholders of the Company's convertible bonds redeemed the bonds during the year of 2022 and 22 thousand new shares were issued at par value.

164

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

(14) Lease liabilities

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

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

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

Interests on lease liabilities Expenses relating to short-term leases Expenses relating to low-value leases (excluding low-value lease of short-term leases)	For the year ended December 31, 2023 $ 4,991 $ 11,436 $ 5,729		For the year ended December 31, 2022
			4,602 11,749 3,045

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

follows:
Total cash outflow for leases	For the year ended December 31, 2023 $ 92,401	For the year ended December 31, 2022
			88,765

d. Lease of land, property and plants

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

e. Other lease

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

(15) Employee benefits

a. Defined benefit plans

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

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

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

165

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

(i) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

As of reporting date, the Company’ s Bank of Taiwan labor pension reserve account balance amounted to $29,197 thousand. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(ii) Changes on current value of defined obligation

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

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

(iii) Changes on fair value of plan assets

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

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

(iv) Expenses recognized in profit or loss

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

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

166

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

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

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

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

(6) Actuarial assumptions

6) Actuarial assumptions	6) Actuarial assumptions	6) Actuarial assumptions
Details of actuarial assumptions used at the end of reporting date as follows:
	December 31, 2023	December	31, 2022
Discount rate	1.625%		1.750%
Increase on future payroll	1%~3%		1%~5.5%

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

(vii) Sensitivity analysis

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

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

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

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

b. Defined contribution plans

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

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

167

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

• (16) Income taxes

• a. Income tax expenses

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

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

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

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

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

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

• b. Deferred tax assets and liabilities

• (i) Unrecognized deferred tax liabilities

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

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

168

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

(ii) Unrecognized deferred tax assets

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

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

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

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

Share of profit

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

169

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

c. Assessment of tax

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

(17) Capital and other equity

a. Share capital

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

• (a) Common stock issuance

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

(ii) Capital reserve

The balances of capital surplus were as follows:

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

According to the ROC Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

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

170

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

• c. Retained earnings

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

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

• (i) Legal reserve

• When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

• (ii) Special reserve

• In accordance with the guidelines of FSC, a portion of current-period earnings and undistributed prior-period earnings shall be retained as a special reserve. The amount to be retained should be equal to the current-period total reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special reserve to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions. According to the regulations of FSC, the Company reserved special earning surplus from current profit and loss and undistributed earnings from previous period as net debit item of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of 。

• other shareholders’ equity shall qualify for additional distributions.

• d. Earnings distribution

The amount of cash dividends of appropriations of earnings for the years ended December 31, 2022 and 2021 had been approved in the board meeting held on March 24, 2023 and March 30, 2022, respectively. The proposals of appropriations were resolved on June 27, 2023 and June 29, 2022 by the shareholders’ meetings respectively. These earnings were appropriated as follows:

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

171

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

e. Other equity

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

(18) Earnings per share

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

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

Note: As the result calculated by adding dilutive potential common stocks is anti-dilutive for the year ended December 31, 2023, diluted earnings (losses) per share were not calculated

172

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

(19) Revenue from contracts with customers

a. Disaggregation of revenue

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

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

173

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

b. Contract balances

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

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

(20) Remunerations to employees and directors

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

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

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

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

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

• (21) Non-operating income and expenses

a. Other revenue

Lease income Mold income Others er gains and losses Foreign exchange gains (losses) Losses on disposals of property, plant and equipment Gains on fair value adjustment–investment properties Gains (losses) on financial assets at fair value through profit or loss Gains (losses) on disposals of investments Impairment losses Others	For the year ended December 31, 2023	For the year ended December 31, 2023		For the year ended December 31, 2022
	$ 9,078 53,890 61,966 $ 124,934 For the year ended December 31, 2023			6,932 68,100 66,119 141,151 For the year ended December 31, 2022
		$ 31,627 (9,007) 6,067 27,635 (24,140) - (26,436)		227,551 (15,899) (2,158) (32,741) - (2,802) (9,030)
		$ 5,746		164,921

b. Other gains and losses

174

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

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

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

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

c. Finance costs

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

(23) Financial instruments

a. Credit risk

(i) Maximum credit risk exposure

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

(ii) Concentration to credit risk

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

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

175

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

b. Liquidity Risk

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

December 31, 2023 Non-derivative financial liabilities Short-term borrowings Notes payable Accounts payable Account payable - related parties Other payables Other payable - including related parties Lease liabilities Bonds payable (including current portion) Long-term borrowings (including current portion) December 31, 2022 Non-derivative financial liabilities Short-term borrowings Notes payable Accounts payable Account payable - related parties Other payables Other payable - including related parties Lease liabilities Bonds payable (including current portion) Long-term borrowings (including current portion)	Carrying amount	contractual cash flows	Within 1 years	2-5years	Over 5years
	$ 1,467,000 1,868 1,406,861 65 830,356 813 161,342 578,202 1,933,095	1,505,729 1,868 1,406,861 65 830,356 813 186,736 578,202 1,943,097	1,505,729 1,868 1,406,861 65 830,356 813 55,168 578,202 190,947	- - - - - - 93,108 - 1,742,549	- - - - - - 38,460 - 9,601
	$ 6,379,602	6,453,727	4,570,009	1,835,657	48,061
	$ 1,482,562 518 1,623,419 327 1,012,818 2,823 122,704 555,906 1,779,288	1,471,442 518 1,623,419 327 1,012,818 2,823 148,978 600,000 1,822,772	1,471,442 518 1,623,419 327 1,012,818 2,823 50,341 - 1,146,413	- - - - - - 53,275 600,000 662,826	- - - - - - 45,362 - 13,533
	$ 6,580,365	6,683,097	5,308,101	1,316,101	58,895

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

c. Currency risk

(i) Currency risk

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

Financial assets Monetary items USD Financial liabilities Monetary items USD	December 31, 2023	December 31, 2023	December 31, 2023	Expressed in thousands of dollars December 31, 2022 Foreign currency Exchange rate (dollar) NTD 111,539 30.710 3,425,363 55,474 30.710 1,703,593	Expressed in thousands of dollars December 31, 2022 Foreign currency Exchange rate (dollar) NTD 111,539 30.710 3,425,363 55,474 30.710 1,703,593
	Foreign currency	Exchange rate (dollar)	NTD	Foreign currency	Exchange rate (dollar)
	$ 113,335 64,039	30.705 30.705	3,479,948 1,966,316	111,539 55,474	30.710 30.710

(ii) Sensitivity analysis

The foreign currency risk mainly arose from the translation of cash and cash equivalents, accounts receivable, other receivables, accounts payable, and other payables.

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

176

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

(iii) Foreign exchange gains and losses on monetary items

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

• d Interest rate analysis

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

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

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

• v. Fair value

• (i) Fair value hierarchy

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

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

177

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

• (ii) Valuation techniques of financial instruments not measured at fair value

• A. Non-derivative financial instruments

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

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

If the financial instrument held by the Company is of an active market, the fair value of it is determined in accordance with market price. If its of a nonactive market, the fair value is measured by net assets.

• B. Derivative financial instruments

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

(iii) Changes on Level 3 table

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

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

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

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

178

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

Quantified information of significant unobservable inputs was as follow:

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

(23) Financial risk information

• a. Overview

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

• i. Credit risk

ii. Liquidity Risk

iii. Market risk

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

• b. Structure of risk management

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

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

• c. Credit risk

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

• (i) Accounts receivable and other receivables

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

179

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

(ii) Financial investments

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

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

• d. Liquidity Risk

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

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

• e. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Company’ s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

• (ii) Currency risk

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

• (iii) Interest rate risk

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

• (iv) Other market price risk

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

• (24) Capital management

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

180

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

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

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

Total liabilities Less: cash and cash equivalents Net liabilities Total equity Debt-to-equity ratio	December 31, 2023	December 31, 2023		December 31, 2022	December 31, 2022
	$	6,994,385 (2,058,206) 4,936,179 5,256,504 93.91%			7,185,022 (2,458,617) 4,726,405 5,655,354 83.57%
	$

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

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

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

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

Non-Cash changes

Long-term borrowings (including current portion) Short-term borrowings Lease liabilities Corporate bonds payable (including current portion) Total liabilities from financing activities Long-term borrowings (including current portion) Short-term borrowings Lease liabilities Corporate bonds payable Total liabilities from financing activities	January 1, 2023 $ 1,779,288 1,428,562 122,704 555,906	Cash flow 150,451 51,602 (70,245) -	Acquisition by business combination
			382 - - - 382
	$ 3,886,460	131,808
	January 1, 2022 $ 1,763,572 1,044,234 175,547 535,452	Cash flow 15,721 353,711 (69,369) -
			Acquisition by business combination
			- - - - -
	$ 3,518,805	300,063

181

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

7. Related-party transactions

• (1) Names and relationship with related parties

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

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

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

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

• (2) Significant related party transactions

• a. Operating revenue

Significant sales to related parties were as follows;

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

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

b. Purchase

Affiliated company

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

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

c. Receivables from related parties

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

182

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

d. Payables to Related Parties

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

e. Property transactions

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

Key management

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

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

• f. Lease

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

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

(3) Key management personnel transactions

Key management personnel compensation comprised:

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

(8) Assets pledged as security:

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

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

183

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

9. Significant Commitments and contingencies:

(1) Significant and unrecognized commitments of the Company:

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

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

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

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

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

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

10. Due to Major Disasters: none.

11. Materiality after the period: None

12. Other

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

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

13. Other disclosures

(1) Information of significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the years ended December 31, 2022.

184

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

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

185

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

	Name of Holder	Underwriting bank	Financial Statement Account	Name of related parties	Amount	Balance at end of the **year **	Amount	Interest rate	Nature	Amount	Unusual transaction details	Amount	Item	Value		Total Amount	Note Note12
12 12 12	GENESIS INNOVATION GROUP LIMITED GENESIS INNOVATION GROUP LIMITED GENESIS INNOVATION GROUP LIMITED	DONGGUAN POLIXIN ELECTRIC CO., LTD. Aces Precision Industry Pte Ltd. MEC IMEX INC.	Other receivables Other receivables Other receivables	Yes Yes Yes	64,850 97,275 179,700	61,410 92,115 100,000	61,410 92,115 100,000	1.20%~3.50% 3.85% 1.58%	2 2 2	- - -	Operation requirements Operation requirements Operation requirements	- - -	None None None	- - -	686,815 686,815 137,363	686,815 686,815 137,363	Note 9, 13 Note 9, 13 Note 9, 13

• Note 1: In accordance with the Company's ‘Procedures for Lending Funds to Others’, when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 10% of the Company's net value.

• Note 2: In accordance with the Company's ‘Procedures for Lending Funds to Others’, when lending funds to others, the total loan amount shall not exceed 40% of the Company's net value.

• Note 3: According to ‘Procedures for Lending Funds to Others’ of subsidiaries, KUNSHAN ACES ELECTRONIC CO., LTD., ASIA CENTURY INVESTMENT LTD, and ACES PRECISION INDUSTRY PTE LTD, when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 10% of the company’s net worth. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the individual loan amount shall not exceed 100% of the net worth of that subsidiary.

• Note 4: According to ‘Procedures for Lending Funds to Others’ of subsidiaries, KUNSHAN ACES ELECTRONIC CO., LTD., MEC IMEX INC., COMPUPACK TECHNOLOGY CO., LTD., ASIA CENTURY INVESTMENT LTD, and ACES PRECISION INDUSTRY PTE LTD, when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 40% of company’s net worth. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the total loan amount shall not exceed 100% of the net worth of that subsidiary.

• Note 5: According to ‘Procedures for Lending Funds to Others’ of subsidiary MEC IMEX INC. and COMPUPACK TECHNOLOGY CO., LTD., when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 40% of each lending company. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the individual loan amount shall not exceed 100% of the net value of that subsidiary.

• Note 6: The total amount of funds lent to others and the limit for individual loans for an individual enterprise by MEC BEST KNOWN COMPANY LTD., a subsidiary of the Company, was fixed at USD4,200 thousand.

• Note 7: The total amount of funds lent to others and the limit for individual loans for an individual enterprise by MEC ELECTRONICS (SUZHOU) CO., LTD., a subsidiary of the Company, was fixed at CNY30,000 thousand.

• Note 8: The total amount of funds lent to others and the limit for individual loans for an individual enterprise by MEC ELECTRONICS (HK) COMPANY LTD., a subsidiary of the Company, was fixed at USD4,000 thousand.

• Note 9: According to ‘Procedures for Lending Funds to Others’ of subsidiaries GENESIS ELECTRO-MECHANICAL LIMITED and GENESIS INNOVATION GROUP LIMITED., when lending funds to companies or firms that are in need of short-term working capital, the individual loan amount shall not exceed 40% of each lending company. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the foreign company, the individual loan amount shall not exceed 200% of the net value of that subsidiary.

• Note 10: According to ‘Procedures for Lending Funds to Others’ of subsidiary MEC SUZHOU ELECTRONICS CO., LTD., when lending funds to companies or firms that are in need of short-term working capital, the total amount lend to others shall not exceed 40% of the company’s net value, and the individual loan amount shall not exceed 40% of each lending company. However, if the 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,

186

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

the individual loan amount shall not exceed 40% of company’s net worth. However, if the borrowing company and its parent company directly or indirectly hold 100% of the voting shares of the company, the total loan amount and the individual loan amount shall not exceed 400% of the net worth of that subsidiary.

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

(i) Fill in ‘1’ for companies with business relationship.

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

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

b. Guarantees and endorsements for others:

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

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

187

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

• Note 3: According to ‘Endorsement Guarantee Procedure’ of subsidiary MEC IMEX INC., the guarantees and endorsements for an individual enterprise shall not exceed 20% of the Company's net value. However, if it holds more than 20% of the Company's direct or indirect voting rights, then guarantees and endorsements shall not exceed 100% of the Company's net value. The guarantees and endorsements shall not exceed 100% of the Company's net value.

• Note 4: The Company and its subsidiaries provide customs guarantee for themselves in accordance with rules and regulations for guarantees and endorsements for an individual enterprise from ‘Endorsement Guarantee Procedure’.

• Note 5: Relationship between the Company and counter-party of guarantee and endorsement as follows:

• (i) Companies with business relationship.

• (ii) The Company holds over 50% voting rights over the counter-party directly or indirectly.

• (iii) The counter-party holds over 50% voting rights of the Company directly or indirectly.

• (iv) Companies that hold over 90% voting rights directly or indirectly.

• (v) Companies for which the endorsement guarantee was provided by all shareholders based on shareholding ratio due to joint investment venture.

• (vi) Companies mutually providing guarantee according to contract requirements for engineering contracts or joint ventures.

• (vii) Joint and several guarantees for performance guarantees under pre-sale housing sales contracts among peers in accordance with the Consumer Protection Act.

• Note 6:According to ‘Endorsement Guarantee Procedure’ of subsidiary DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD. And SUZHOU KUANG YING ELECTRIC CO., LTD., the guarantees and endorsements for an individual enterprise shall not exceed the Company's paid-in capital However, if it holds more than 100% of the company's direct or indirect voting rights, then guarantees and endorsements shall not exceed the endorsing company’s paid-in capital. The guarantees and endorsements shall not exceed the company's paid-in capital.

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

(Shares in thousands)

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

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

• d. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None

• e. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:

188

									(in th	ousands 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 p ior transfers and	arties, the the relation	information on ship	Reference of price determinatio n	Acquisition purpose and usage	Other agreemen t
							**Owner **	Relationship **with the issuer **	Date of **transfer **	Amount
ACES ELECTRONICS CO., LTD.	Land with No. 0638 0000 on Shangling section, Zhongli District	2023/9/8	522,729	156,819 has been paid	Hsu, Chang-Fei	Director of the Company	N/A	N/A	N/A	-	The result of appraisa l report	For future business developme nt	-

• f. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None

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

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

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

Note 2: Only information pertaining to purchase was disclosed, relevant sales information will not be reiterated.

• h. Related-party transactions for purchases and sales with amounts exceeding

the lower of NT$100 million or 20% of the capital stock:

Recorded as other receivables Name of Holder	Name of counter-party Name of investee	Relationship	Receivables from related parties (Note 1)	Turnover rate	Overdue receivables from related parties	Overdue receivables from related parties	Receivables from related parties Ending Balance	Allowance for bad debt Amount
					Amount	Action taken
KUNSHAN ACES ELECTRONIC CO., LTD. DONGGUAN ACES ELECTRONIC CO., LTD. DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD. GENESIS INNOVATION GROUP LIMITED	The Company The Company KUANG YING COMPUTER EQUIPMENT CO., LTD. MEC IMEX INC.	Subsidiary Subsidiary Affiliates Affiliates	484,732 304,537 195,025 100,185 (Note 2)	3.90 3.45 4.83 -	- - - -		175,056 44,299 74,961 -	- - - -

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

Note 2: Loan and interest receivables.

• i. Trading in derivative instruments: None.

189

j. Significant transactions between parent company and subsidiaries:

==> picture [443 x 301] intentionally omitted <==

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

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

Note 1: Fill out the numbers as follows:

a. ‘0’ for parent company.

b. ‘1’ and sequential numbering for the subsidiaries. Note 2: Categories of relationships of transacting parties as below: 1. Parent company to subsidiary

1. Subsidiary to parent company

2. Subsidiary to subsidiary

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

(2) Information on investments:

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

Investor Company	Investee Company	Location	Main Activities	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Maximum Shareholdin g in the Interim	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee
				December 31, 2023	December 31, 2022	Shares	Percenta ge of ownershi p	Carrying amount	Percentage of ownership
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.	SAMOA SAMOA Singapore SAMOA Taiwan Taiwan	Investment holding Connectors sales Connectors sales business Investment holding Investment business Connector cable set sales business	771,665 - 208,410 351,112 25,000 928,939	621,315 9,579 208,410 351,112 25,000 809,032	24,800 - 8,162 12,000 2,500 47,582	100.00% - % 100.00% 100.00% 100.00% 99.86%	4,026,481 - 53,309 160,905 27,785 530,853	100.00% 100.00% 100.00% 100.00% 100.00% 99.86%	10,061 1,506 1,630 (26,709) (188) (130,721)	8,828 1,506 1,630 (26,709) (188) (130,261)	Note 1 Note 1, 4 Note 1 〃 〃 〃

190

Investor Company	Investee Company	Location	Main Activities	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Maximum Shareholdin g in the Interim	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee
				December 31, 2023	December 31, 2022	Shares	Percenta ge of ownershi p	Carrying amount	Percentage of ownership
The Company The Company The Company The Company The Company The Company The Company The Company ACESCONN HOLDINGS CO., LTD. ACES Precision Machinery Co., Ltd. MEC IMEX INC. MEC IMEX INC. MEC INTERNATI ONAL COMPANY LTD. MEC INTERNATI ONAL COMPANY LTD. MEC INTERNATI ONAL COMPANY LTD. MEC INTERNATI ONAL COMPANY LTD. MEC ELECTRONI CS PHILIPPINE S CORPORATI ON MEC ELECTRONI CS (HK) COMPANY LIMITED	ACES JAPAN CO., LTD. ACES INTERCONNECT (USA), INC. COMPUPACK TECHNOLOGY CO., LTD. KUANG YING COMPUTER EQUIPMENT CO., LTD. ACES Precision Machinery Co., Ltd. GENESIS HOLDING COMPANY GENESIS TECHNOLOGY USA, INC. JASON TECHNOLOGY LIMITED. ASIA CENTURY INVESTMENT LTD. ACES Surface Treatment Co., Ltd. MEC INTERNATIONAL COMPANY LTD. MEC ELECTRIC SOLUTIONS GMBH MEC BEST KNOWN COMPANY LIMITED MEC ULTRAMAX (HK) COMPANY LIMITED MEC ELECTRONICS (HK) COMPANY LIMITED MEC ELECTRONICS PHILIPPINES CORPORATION MEC IMEX (USA), INC. HOMEPRIDE TECHNOLOGY LIMITED	Japan USA Taiwan Taiwan Taiwan Cayman USA Hong Kong SAMOA Taiwan British Virgin Islands Germany Hong Kong Hong Kong Hong Kong Philippin es USA Hong Kong	Connector developme nt business Connectors sales industry Electronic component sales business Electronic component manufactur ing and sales business Mold part manufactur ing 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 manufactur ing and sales business Connector cable set sales business Investment holding	15,137 9,711 287,237 198,697 130,000 589,118 20,104 1,857 351,112 8,000 1,295,195 3,179 473,201 122,400 205,445 54,085 12,544 230,261	15,137 9,711 277,237 198,697 130,000 589,118 20,104 - 351,112 - 992,350 3,179 313,435 122,400 157,515 54,085 12,544 182,331	4.5 300 21,500 25,906 13,000 27,778 1.5 5,000 9,150 700 31 1 118,250 30,000 510 8,000 4 56,750	100.00% 100.00% 100.00% 99.66% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	14,177 9,542 223,655 294,027 75,377 703,939 166,298 8,732 160,904 6,297 335,216 2,845 9,202 80,805 109,951 265,280 17,555 49,137	100.00% 100.00% 100.00% 99.66% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	1,078 (142) (37,892) 47,272 (15,143) 38,901 (37,708) 442 (26,709) (1,391) (114,061) (641) (4,403) 1,102 13,344 6,924 (213) 16,699	1,078 (142) (32,703) 48,550 (15,143) 15,096 (37,708) (1,628) (26,709) (2,703) (114,061) (641) (4,403) 1,102 13,344 6,924 (213) 16,699	〃 〃 〃 〃 〃 〃 〃 〃 Note 1 Note 1, 3 Note 1 Note 1, 2 Note 1 〃 〃 〃 〃 Note 1

191

Investor Company	Investee Company	Location	Main Activities	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Maximum Shareholdin g in the Interim	Net Income (Loss) of Investee	Investor’s Share of Profit (Loss) of Investee
				December 31, 2023	December 31, 2022	Shares	Percenta ge of ownershi p	Carrying amount	Percentage of ownership
COMPUPACK TECHNOLOG Y CO., LTD. COMPUPACK TECHNOLOG Y CO., LTD. MICON PRECISE CORP. KUANG YING COMPUTER EQUIPMEN T CO., LTD. INFOMIGHT INVESTME NTS LIMITED INFOMIGHT INVESTME NTS LIMITED INFOMIGHT INVESTME NTS LIMITED GENESIS HOLDING COMPANY GENESIS HOLDING COMPANY	MICON PRECISE CORP. GLOBAL ACUMEN LIMITED Aces Precision Industry Pte Ltd. INFOMIGHT INVESTMENTS LIMITED BELTA INTERNATIONAL LIMITED CERTILINK INTERNATIONAL LIMITED ACCURATE GROUP LIMITED GENESIS INNOVATION GROUP LIMITED GENESIS ELECTRO-MECH ANICAL LIMITED	Taiwan Belize Vietnam SAMOA British Virgin Islands British Virgin Islands SAMOA Hong Kong Hong Kong	Electronic component sales business Electronic component sales business Electronic component manufactur ing and sales business Investment holding Investment holding Sales business Investment holding Investment holding Investment holding	333,845 1,497 336,292 285,904 52,349 1,605 131,588 228,280 268,229	333,845 1,497 336,292 285,904 52,349 1,605 131,588 228,280 268,229	12,950 - - 7,980 4 50 4,100 8,000 9,400	99.61% - 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(2,031) - (6,081) 192,927 152,521 (4,411) 41,324 343,407 328,315	99.61% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(39,142) 13,770 (38,316) 32,740 30,117 (14) 2,623 36,439 (23,986)	(38,785) 13,770 (38,316) 32,719 30,117 (14) 2,623 36,439 (23,986)	〃 Note 1, 4 〃 〃 〃 〃 〃 〃 〃

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

Note 2: The Company’s subsidiary MEC IMEX INC. set up a German subsidiary during the year of 2022.

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

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

(3) Information on investment in mainland China:

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

Name of investee	Main Activities	Total amount of paid-in capital	Method of investm ent (Note 1)	Accumulated remittance from Taiwan as of January 1, 2023	Investment flows	Investment flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Net Income (Loss) of Investee	% Ownership through Direct or Indirect Investment	Maximum Shareholdin g in the Interim	Investor’s Share of Profit (Loss) of Investee	Carrying amount of Investment as of December 31, 2023	Accumulat ed 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.	Connector manufacturi ng and sales business Connector manufacturi ng and sales business Connectors sales business	115,301 629,475 9,087	(2) (2) (2)	115,301 163,447 9,087	- - -	- - -	115,301 163,447 9,087	(20,168) 22,974 687	100.00% 100.00% 100.00%	100.00% 100.00% 100.00%	(20,168) 22,974 687	452,479 2,660,943 47,105	451,444 452,925 -	Note 13 〃 〃

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

Note 1: There are 3 types of investment:

(1) Direct investment from Mainland China.

(2) Investment through a company located at a third party area.

(3) Other methods.

Note 2: Direct investment of KUNSHAN ACES ELECTRONIC CO., LTD. in the amount of RMB43,397 thousand.

Note 3: Indirect investment of MEC IMEX INC.

Note 4: Direct investment of COMPUPACK TECHNOLOGY CO., LTD. in the amount of USD350 thousand.

Note 5: Indirect investment of KUANG YING COMPUTER EQUIPMENT CO., LTD.

Note 6: Direct investment of ACECONN ELECTRONIC CO., LTD. In the amount of

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RMB120,322 thousand.

Note 7: Indirect investment of GENESIS INNOVATION GROUP LIMITED.

Note 8: Indirect investment of GEUESIS INNOVATION GROUP LIMITED.

Note 9: Direct investment of KUNSHAN ACES ELECTRONIC CO., LTD. in the amount of RMB3,750 thousand.

Note 10: The Company set up ACES ZHUHAI TECHNOLOGY LTD on February 1, 2023, which is included into the Group since that day.

• Note 11: The dissolution and liquidation procedures of the subsidiaries of the Company, GENESIS INTERCONNECT CO., LTD., and SHENZHEN JINO ELECTRONIC CO., LTD. have been completed in 2023.

• Note 12: The subsidiary of the Company, GENESIS GUIZHOU TECHNOLOGY CO., LTD., has been sold in 2023.

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

b. Limitation on investment in Mainland China:

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

• Note 1: Accumulated remittance amount from Taiwan to China as of December 31, 2023 was estimated by historical exchange rates.

• Note 2: Inclusive on the amount of USD34,745 thousand authorized by Investment Commission as capital reserve to increase.

Note 3: As the Company obtained the operation headquarters recognition document issued by the Industrial Bureau of the Ministry of Economic Affairs in June, 2023, it is not subject to the quota restrictions of the "Principles for Reviewing Investment or Technical Cooperation in Mainland China" by the Ministry of Economic Affairs.

Note 4: As the Company obtained the operation headquarters recognition document issued by the Industrial Bureau of the Ministry of Economic Affairs in December, 2020, it is not subject to the quota restrictions of the "Principles for Reviewing Investment or Technical Cooperation in Mainland China" by the Ministry of Economic Affairs.

c. Significant transactions:

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

• (4) Major shareholders:

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

Note: (1)The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of the total nonphysical common stocks and preferred stocks (including treasury stocks) on the last business date of each quarter. The registered nonphysical stocks

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may be different from the capital stocks disclosed in the financial statement due to different calculations basis.

• (2) If the aforementioned data contained shares which were kept in trust by the shareholders, the data disclosed will be deemed as the settlor’s separate account for the fund set by the trustee. As for the shareholder who reports its share equity as an insider and whose shareholding ratio is greater than 10% in accordance with Securities and Exchange Act and include its self-owned shares and trusted shares, as well as the shares of the individuals who have power to decide how to allocate the trust assets. For the information on reported share equity of the insider, please refer to the Market Observation Post System.

14. Segment information:

(1) General Information

The Company has 4 reporting segments: connector, connector sets, metal stamping

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

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

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

The consolidated company allocates unrecognized income tax expenses or non-recurring gains and losses to the reporting segments. In addition, not all gains and losses of reporting segments include significant non-cash items other than depreciation and amortization. The reported amounts are consistent with the reports used by operating decision-makers.

The accounting policies of the operating segments of the consolidated company are the same as those summarized in the significant accounting policies. The operating segment profit and loss of the consolidated company is measured based on operating profit before tax and serves as the basis for performance evaluation.

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

Revenue: Revenue from external customer Revenue from between segments Total revenue		For theyear ended December 31, 2023	For theyear ended December 31, 2023	For theyear ended December 31, 2023	For theyear ended December 31, 2023		Total 8,486,228 -
	Connector segment $ 4,634,491 175,438	Connector cable segment 1,579,243 278,582	Metal stamping segment 1,622,787 15,529	Other segment 649,707 40,676	Adjustment and elimination
					- (510,225)
	$ 4,809,929	1,857,825	1,638,316	690,383	(510,225)		8,486,228

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Profit and loss from reportable segments Revenue: Revenue from external customer Revenue from between segments Total revenue Profit and loss from reportable segments	$ (303,764)	(118,380) 43,457 (29,659) 138,654	(118,380) 43,457 (29,659) 138,654	(118,380) 43,457 (29,659) 138,654	(118,380) 43,457 (29,659) 138,654		(269,692)
		For theyear ended December 31, 2023					Total 10,392,504 -
	Connector segment $ 4,998,562 248,116	Connector cable segment 2,083,856 191,596	Metal stamping segment 2,478,783 34,344	Other segment 831,303 43,713	Adjustment and elimination
					- (517,769)
	$ 5,246,678	2,275,452	2,513,127	875,016	(517,769)		10,392,504
	$ 237,409	(85,260)	269,623	(30,718)	(75,991)		315,063

(3) Information on products

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

(4) Geographic information

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

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

Non-current assets:

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

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

(5) Information on key customers:

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

U Customer	2023 $ 629,065	2022 760,882

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(5) A parent company only financial statement for the most recent fiscal year, certified by a CPA

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.

1. 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:

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

• We inspected whether the Company's revenue recognition policies are in accordance with relevant guidelines.

• We tested the design of internal control process and its efficiency of execution for sales revenue.

• We focused on the top 10 clients, compared differences in numbers on the same period of the previous year, and checked if there’s any significant abnormality.

• We selected sales transaction samples from a certain period before and after the end of current year, and examined revenue transaction records with vouchers arising from appropriate time period.

• We assessed if there is any significant sales return and discount after the balance sheet date.

• Valuation of inventory

Please refer to Notes 4(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.

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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

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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.

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ACES ELECTRONICS CO., LTD.

Balance Sheets

December 31, 2023 and 2022

(Expressed in thousands of New Taiwan dollars)

Assets Current assets： 1100 Cash and cash equivalents (Note 6(1)) 1110 Financial assets at fair value through profit or loss - current (Note 6(2) and 12) 1150 Notes receivable, net (Note 6(3) and (18)) 1170 Accounts receivable, net (Note 6(3) and (18)) 1180 Net trade receivable from related parties (Note 6(3), (18) and 7) 1200 Other receivables (Note 6(3)) 1210 Other receivables from related parties (Note 6(3) and 7) 1310 Inventories (Note 6(4)) 1470 Other current assets (Note 6(1)) Non-current assets： 1510 Financial assets at fair value through profit or loss - non-current (Note 6(2)) 1550 Investments in equity-accounted investees (Note 6(5) and 6) 1600 Property, plant and equipment (Note 6(7) and 7) 1755 Right-of-use assets (Note 6(8) and 7) 1780 Intangible assets (Note 6(9)) 1915 Prepayment for equipment 1840 Deferred tax assets (Note 6(15)) 1990 Other non-current assets–others (Note 6(15)) Assets Total assets		December 31,	2023 ％ 5 - - 7 1 2 - 3 - 18 1 60 17 - - 2 - 2 82 100	2023 ％ 5 - - 7 1 2 - 3 - 18 1 60 17 - - 2 - 2 82 100	December 31, 2022 Amount ％ 866,194 8 62 - 42 - 804,588 7 148,889 1 55,462 1 5,275 - 304,605 3 33,767 1 2,218,884 21 71,070 1 6,376,572 62 1,351,408 13 9,751 - 35,085 - 169,730 2 12,971 - 42,943 1 8,069,530 79 10,288,414 100 Liabilities and Equity Current liabilities： 2100 Short-term borrowings (Note 6(10)) 2321 Current portion of corporate bonds (Note 6(12)) 2150 Notes payable 2170 Accounts payable 2180 Accounts payable to related parties (Note 7) 2200 Other payables (Note 6(14)) 2220 Other payables to related parties (Note 7) 2230 Current tax liabilities (Note 6(15)) 2280 Lease liabilities - current (Note 6(13) and 7) 2322 Current installments of long-term borrowings (Note 6(11)) 2399 Other current liabilities - others Non-current liabilities： 2530 Bonds payable (Note 6(12)) 2540 Long-term borrowings (Note 6(11)) 2570 Deferred tax liabilities (Note 6(15)) 2580 Lease liabilities - non-current (Note 6(13) and 7) 2600 Other non-current liabilities (Note 6(11) and (14)) Total liabilities Equity (Note 6(16)): 3110 Common stock 3200 Capital surplus (Note 6(12)) Retained earnings： 3310 Legal Reserve 3320 Special Reserve 3350 Unappropriated earnings Other equity: 3410 Exchange differences on translation of the Financial Statements foreign operations 3460 Gain on property revaluation (Note 6(16)) Total equity Total liabilities and equity		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, 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	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.

201

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)

Operating Revenue(Note 6(18) and 7): 4100 Net sales revenue 4800 Other operating revenue Net revenue from operations 5000 Operating costs (Note 6(4), (14), (15), and 7) Gross profit 5910 Unrealized gains or losses from sales Gross profit, net Operating expenses(Note 6(6), (13), (14), (19), and 7): 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit loss (gain) (Note 6(3)) Total operating expenses Profit (loss) from operations Non-operating income and expenses(Note 6(20)): 7100 Interest income 7010 Other income 7020 Other gains and losses (Note 6(12)) 7050 Finance costs (Note 6(12) and (13)) 7070 Share of gains or losses from subsidiaries accounted for using equity method (Note 6(6)) Total non-operating income and expenses Profit (loss) before income tax 7950 Less: income tax expenses (gains) (Note 6(15)) Profit (loss) for the year 8300 Other comprehensive income: 8310 Items that will never be reclassified to profit or loss 8311 Remeasurement of defined benefit plans (Note 6(14) 8349 Less: Income tax related to non-reclassified items Total items that will never be reclassified to profit or loss 8360 Items that are or may be reclassified subsequently to profit or loss 8361 Exchange differences on translation to the presentation currency (Note 6(15)) 8399 Less: Income tax related to items that may be reclassified(Note 6(16)) Total items that are or may be reclassified subsequently to profit or loss 8300 Total other comprehensive income (net of tax) for the year 8500 Total comprehensive income for the year Earnings per share(NT$, Note 6(17)) 9750 Basic earnings per share 9850 Diluted earnings per share		2023	2023				2022		% 97 3 100 78 22 - 22 6 9 7 - 22 - - - 1 (1) 6 6 6 - 6 - - - 4 1 3 3 9 1.68
		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
		691,235 412		22 -			762,759 4,015
		691,647		22			766,774
		160,669 300,917 295,670 (745)		5 10 10 -			200,888 295,577 233,081 (231)
		756,511		25			729,315
		(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
		(222,127)		(6)			201,680
		(286,991) (20,448)		(9) (1)			239,139 13,820
		(266,543)		(8)			225,319
		1,911 -		- -			10,880 -
		1,911		-			10,880
		(59,819) (11,365)		(2) -			129,814 25,963
		(48,454)		(2)			103,851
		(46,543)		(2)			114,731
		$ (313,086)		(10)			340,050
			$	(1.98)
			$	(1.98)					1.64

See accompanying notes to parent company only financial statements.

202

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)

Balance at January 1, 2022 Appropriation of earnings: Legal Reserve Special Reserve Cash dividend distributed to shareholders Profit for the year Other comprehensive income, net of tax Total comprehensive income for the year Other changes in capital surplus： Equity items recognized for the issuance of convertible bonds Share of changes in equity of associates and joint ventures Changes in ownership of subsidiary equity Conversion of convertible bonds Balance at December 31,2022 Appropriation of earnings： Legal Reserve Cash dividend distributed to shareholders Reversal of Special Reserve Profit for the year Other comprehensive income, net of tax Total comprehensive income for the year Other changes in capital surplus： Changes in ownership of subsidiary equity Balance at December 31st 2023	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.

203

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) - 95,338 436 63,511 20,969 (4,411) (339) 50,024 (9,741) 120,449 (77) (82,123) (60,623) (1,447) (40,064) 2,699 (634) (182,269) (61,820) 33,518 272,657 3,291 (28,371) (29,810) 217,767 (8,260) 77,911 - - (629,459) 1,465 (28,801) (30,010) (46,729) - (663,883) 390,000 3,851,000 (3,806,000) (15,130) (68,895) (201,594) (129,998) 19,383 (426,733) 1,292,927 866,194
		477,945
		(80) 43,184 27,960 (190,786) 536 (9,764) (1,152)
		(130,102)
		1,350 12,713 65,526 (1,977) (72,661) (152) (500)
		4,299
		(125,803)
		352,142
		65,151 3,859 (46,893) (1,626)
		20,491
		- 13,300 (1,857) 14,860 (584,846) 422 (28,912) (183,640) (16,126) 125,000
		(661,799)
		470,000 3,670,368 (3,526,368) (12,537) (131) (73,930) (280,257)
		247,145
		(394,163) 866,194
		$ 472,031

See accompanying notes to parent company only financial statements.

204

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

(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”

205

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

206

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 – – value through other comprehensive income (FVOCI) debt investment, FVCI equity investment, or FVTL. Financial assets are not reclassified subsequent to their initial

207

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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;

‧ 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

208

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.

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.

209

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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 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.

210

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

• 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 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

211

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.

• (7) Inventories

Inventory is valued at the lower of cost or net realizable value The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

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

• (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

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

212

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

～ (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.

213

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.

214

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.

215

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 same taxation authority on either:

216

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

• (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 value), and reports directly to the chief financial officer. The Company also periodically

217

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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 283 865,911 866,194
	$ 279 471,752 $ 472,031

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.

218

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 71,070 62 71,132
	$ 71,866 - $ 71,866

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 42 807,001 148,889 55,462 5,275 (2,413) 1,014,256
	$ 122 763,817 120,929 246,248 4,739 (1,668) $ 1,134,187

• 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

219

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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, 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	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	December 31, 2023		Amount pledged (in thousands of USD) - Amount pledged (in thousands of USD) -
	Factoring amount $ 189,616	Acceptable advances		Amount collected in advance			Interest rate 0%
Financial institutes Underwriting bank		663,228		-
	Factoring amount $ 207,627	Acceptable advances		Amount collected in advance		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.

220

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

(4) Inventories

a. Details as follows:

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
	$ 2,399,083	2,684,133

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

221

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.”

222

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:

Cost or deemed cost: Balance at January 1, 2023 Additions Reclassification Disposals Balance at December 31, 2023 Balance at January 1, 2022 Additions Reclassification Disposals Balance at December 31, 2022 Accumulated depreciation: Balance at January 1, 2023 Depreciation of the year Disposals Balance at December 31, 2023 Balance at January 1, 2022 Depreciation of the year Disposals Balance at December 31, 2022 Carrying value: Balance at December 31, 2023 Balance at January 1, 2022 Balance at December 31, 2022	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:

223

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:

Computer software Cost: Balance at January 1, 2023 $ 34,596 Separately acquired 10,455 Balance at December 31, 2023 $ 45,051 Balance at January 1, 2022 $ 29,100 Separately acquired 5,496 Balance at December 31, 2022 $ 34,596 Accumulated amortization and impairment: Balance at January 1, 2023 $ 25,902 Current amortization 9,938 Balance at December 31, 2023 $ 35,840 Balance at January 1, 2022 $ 12,692 Current amortization 13,210 Balance at December 31, 2022 $ 25,902 Carrying value: December 31, 2023 $ 9,211 January 1, 2022 $ 16,408 December 31, 2022 $ 8,694	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
			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

224

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	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
		$ 1,683,974
		$ 2,606,000

Unused credit facility		$ 2,606,000
Unsecured bank loans Less: current maturity Total Unused credit lines	December 31, 2022	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.”

225

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

(12) Bonds payable

• a. The details of unsecured convertible bonds were as 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 For the years ended December 31, 2023 Embedded derivative–gains or losses from remeasurement of fair value of redeem options (recognized in other gains and losses) $ (62) Interest expenses $ 22,296	December 31, 2023		December 31, 2022
	$ 600,000 (20,698) (1,100)		600,000 (42,994) (1,100) 555,906 62 71,065 For the years ended December 31, 2022 (1,184) 21,458
	$ 578,202

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.

226

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

(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).

(13) Lease liabilities

abilities
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 December 31, 2023 For the years ended December 31, 2022 Interests on lease liabilities $ 330 298 Expenses relating to short-term leases $ 4,587 5,654	December 31, 2023 $ 4,176	December 31, 2022
	$ 5,811
			298 5,654

227

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

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

ws:
Total cash outflow for leases	For the years ended December 31, 2023 $ 17,454	For the years ended December 31, 2022
			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
	$ 8,448 12,877 $ 21,325		17,259 12,877
			30,136

228

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

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

229

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

Reasonably possible changes to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the

230

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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:

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)

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

231

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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:

Aggregate amount of temporary differences related to investments in subsidiaries Unrecognized amount of deferred tax liabilities (ii) Unrecognized deferred tax assets	December 31, 2023 $ 1,643,813	December 31, 2022
		1,448,762
	$ 328,763	289,752

As of December 31, 2023, the items not recognized as deferred tax assets are as follows:

s:
Tax loss The amount not recognized as deferred tax assets	December 31, 2023 $ 29,312 $ 5,862	December 31, 2022 -
		-

(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:

232

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Inventory valuation loss Deferred income tax assets: January 1, 2023 $ 7,775 (Debit) credit in profit or loss 938 December 31, 2023 $ 8,713 January 1, 2022 $ 6,151 (Debit) credit in profit or loss 1,624 December 31, 2022 $ 7,775 Share of profit or loss of subsidiaries accounted for using equity method Deferred tax liabilities: January 1, 2023 $ 280,788 Credit (debit) in profit or loss - Credit in other comprehensive income - December 31, 2023 $ 280,788 January 1, 2022 $ 280,788 Credit (debit) in profit or loss - Credit in other comprehensive income - December 31, 2022 $ 280,788	Inventory valuation loss	Unrealized profit and loss between affiliated companies	Others	Total 12,971 8,520 21,491 7,858 5,113 12,971 Total 276,386 1,487 (11,365)
		459 (82)	4,737 7,664
	$ 8,713	377	12,401
		1,262 (803)	445 4,292
	$ 7,775	459	4,737
	Share of profit or loss of subsidiaries accounted for using equity method	Exchange differences on translation of foreign financial statements	Others
		(23,084) - (11,365)	18,682 1,487 -
	$ 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.

233

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

b. Capital surplus

The balances of capital surplus were as follows:

Additional paid-in capital Consolidation excess Changes in net value of equity investment in affiliated companies accounted for using equity method Employee stock options Expired employee stock options Stock option for conversion of convertible bonds Others	December 31, 2023		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.

234

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

• (i) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

• (ii) Special reserve

• In accordance with the guidelines of FSC, a portion of current-period earnings and undistributed prior-period earnings shall be retained as a special reserve. The amount to be retained should be equal to the current-period total reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special reserve to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions. According to the regulations of FSC, the Company reserved special earning surplus from current profit and loss and undistributed earnings from previous period as net debit item of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

• (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

235

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

• c. Other equity

c. Other equity
		Exchange
		differences on			Subsidiary
		translation of			property
	foreign		financial		revaluation
		statements			increments			Total
Balance at January 1, 2023	$		(92,336)			33,219		(59,117)
Exchange differences on foreign
operations			(70,183)		-			(70,183)
Gains or losses on disposals of			21,729		-			21,729
foreign operations reclassified to
profit or loss
Balance at December 31, 2023	$	(140,790)				33,219		(107,571)
Balance at January 1, 2022	$	(196,187)				33,219		(162,968)
Exchange differences on foreign
operations			103,851		-			103,851
Balance at December 31, 2022	$		(92,336)			33,219		(59,117)
(17) Earning per share
The calculation of basic earnings per	share and diluted earnings per							share were as
follows:
				For the year ended				For the year
				**December 31, **		2023	ended December
								31, 2022
Basic earnings per share
Current net profit (loss) attributable to the Company Weighted average number of common stocks outstanding				$	(266,543) 134,418			225,319 134,406
(shares in thousands)
Basic earnings per share (dollar) Diluted earnings per share				$		(1.98)		1.68
Profit (loss) attributable to ordinary shareholders of the				$	(266,543)			225,319
Company (basic)
After tax shares of interest expenses of convertible		bonds				-		17,167
Profit (loss) attributable to ordinary shareholders of the Company (diluted)				$	(266,543)			242,486
Weighted average number of common stocks outstanding					134,418			134,406
(basic)
Effect of dilutive potential common stocks
Effect of remuneration to employees in stock						-		1,147
Effect of conversion of convertible Company	bonds					-		12,360
Weighted average number of common stocks outstanding (diluted)(shares in thousands)					134,418			147,913
Diluted earnings per share(dollar) (Note)						(1.98)		1.64

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	For the year ended December 31, 2023 $ 617,794 2,030,704	For the year ended December 31, 2022 782,215 2,255,705

236

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Other countries Total Major products/services lines: Connectors Connector accessories Others b. Contract balances Notes receivable Account receivable (including related parties) Less: Loss allowance Total	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

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 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”.

237

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

(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:

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.

238

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

b. Liquidity Risk

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

Carrying amount December 31, 2023 Non-derivative financial liabilities Short-term borrowings $ 1,120,000 Notes payable 1,868 Account payable (including related parties) 1,008,631 Bonds payable (including current portion) 578,202 Other payable (including related parties) 382,918 Lease liabilities 9,987 Long-term (including current portion) 1,871,474 $ 4,973,080 December 31, 2022 Non-derivative financial liabilities Short-term borrowings $ 650,000 Notes payable 518 Account payable (including related parties) 930,392 Bonds payable (including current portion) 555,906 Other payable (including related parties) 423,707 Lease liabilities 10,060 Long-term borrowings (including current portion) 1,724,500 $ 4,295,083	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:

Currency: expressed in thousands of dollars

Financial assets Monetary items USD Financial liabilities Monetary items USD	December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2022	December 31, 2022	December 31, 2022
	Foreign currency	Exchange rate (dollar) 30.705 30.705	NTD	Foreign currency	Exchange rate (dollar)	NTD
	$ 45,903 34,395		1,409,451 1,056,098	41,161 29,657	30.710 30.710	1,264,054 910,766

(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

239

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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:

240

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Financial assets at fair value through profit or loss Non-derivative financial assets mandatory measured at FVTPL Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes receivable Account receivable (including related parties) Other receivables (including related parties) Subtotal Total Financial liabilities measured at amortized cost Short-term borrowings Notes payable Account payable (including related parties) Convertible company bond - liability components Other payable (including related parties) Lease liabilities Long-term borrowings (including current portion) Subtotal Total Financial assets at fair value through profit or loss Non-derivative financial assets mandatory measured at FVTPL Convertible bonds of embedded derivatives Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes receivable Account receivable (including related parties) Other receivables (including related parties) Subtotal Total Financial liabilities measured at amortized cost Short-term borrowings Notes payable Account payable (including related parties) Convertible company bond - liability components Other payable (including related parties) Lease liabilities Long-term borrowings (including current portion) Subtotal Total		December 31, 2023	December 31, 2023	December 31, 2023	Total 71,866
	Carrying amount $ 71,866		Fair value
		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			Total 71,070 62
	Carrying amount $ 71,070 62		Fair value
		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	-	-	-	-

241

Notes to the Parent Company Only Financial Statements

ACES Electronics Co., Ltd.

• (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

hniques generally accepted by market participants such as option pricing models (Black-Scholes Model). hanges on Level 3 table	the discounted cash flow
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.

242

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.

243

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.

244

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
	$ 5,290,727 (472,031) $ 4,818,696 $ 5,254,759 91.70%		4,651,294 (866,194) 3,825,224 5,637,120 67.86%

(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 Subsidiary Subsidiary Subsidiary

ACECONN ELECTRONIC CO., LTD. Subsidiary ACES PRECISION INDUSTRY PTE LTD. Subsidiary ACESCONN HOLDINGS CO., LTD. Subsidiary WEI HONG INTERNATIONAL INVESTMENT CO., Subsidiary

245

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Name of related parties

Relationship with the Company

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

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

246

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

Name of related parties

Relationship with the Company

INFOMIGHT INVESTMENTS LIMITED 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 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.

247

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 Technical service Use of trade mark Commission for purchase	Sales and services provided	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:

KUNSHAN ACES ELECTRONIC CO., LTD. DONGGUAN ACES ELECTRONIC CO., LTD. Other subsidiaries	Purchase	Purchase	Payables to Related Parties December 31, 2022 December 31, 2021 485,752 400,142 301,777 333,913 41,866 29,814 829,395 763,869	Payables to Related Parties December 31, 2022 December 31, 2021 485,752 400,142 301,777 333,913 41,866 29,814 829,395 763,869	Payables to Related Parties December 31, 2022 December 31, 2021 485,752 400,142 301,777 333,913 41,866 29,814 829,395 763,869
	For the year ended December 31, 2022	For the year ended December 31, 2021 1,047,571 702,196 83,358 1,833,125			December 31, 2021
	$ 953,332 530,026 102,283 $ 1,585,641				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	Other payable December 31, 2023 1,621	-	related parties
	For the year ended December 31, 2023	For the year ended December 31, 2022 11,847			December 31, 2022
	$ 14,016				2,020

248

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

249

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.

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

December 31, 2023 $ 6,429,525 uarantee for imported goods: December 31, 2023 $ 4,000	December 31, 2022
	4,973,550 December 31, 2022
	4,000

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

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

250

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:

ear 2023 and 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:

251

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 INVESTMENTLTD 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

252

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

253

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.

254

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

b. Endorsement for others:

No.	Name of guarantor	Counter-party of guarantee and endorsement	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.

255

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

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

• d. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None

• e. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:

million	or 20%	of the	capital	stock:
											(in tho	usands 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 agreemen t
							**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%

Note 1: Only information pertaining to purchase was disclosed, relevant sales information will not be reiterated.

256

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

• 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 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 COMPUTER EQUIPMENT CO., LTD. ACES Precision Machinery Co., Ltd. GENESIS	SAMOA SAMOA Singapore SAMOA Taiwan Taiwan Japan USA Taiwan Taiwan Taiwan Cayman	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 component manufacturi ng and sales business Mold part manufacturi ng and sales business Investment	771,665 - 208,410 351,112 25,000 928,939 15,137 9,711 287,237 198,697 130,000 589,118	621,315 9,579 208,410 351,112 25,000 809,032 15,137 9,711 277,237 198,697 130,000 589,118	24,800 - 8,162 12,000 2,500 47,582 4.5 300 21,500 25,906 13,000 27,778	100.00% - % 100.00% 100.00% 100.00% 99.86% 100.00% 100.00% 100.00% 99.66% 100.00% 100.00%	4,026,48 - 53,30 160,90 27,78 530,85 14,17 9,54 223,65 294,02 75,37 703,93	10,061 1,506 1,630 (26,709) (188) (130,721) 1,078 (142) (37,892) 47,272 (15,143) 38,901	8,828 1,506 1,630 (26,709) (188) (130,261) 1,078 (142) (32,703) 48,550 (15,143) 15,096	Note 3

257

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 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. MICON PRECISE CORP. KUANG YING COMPUTER EQUIPMENT	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 Aces Precision Industry Pte Ltd. INFOMIGHT INVESTMENTS LIMITED	USA Hong Kong SAMOA Taiwan British Virgin Islands Germany Hong Kong Hong Kong Hong Kong Philippin es USA Hong Kong Taiwan Belize Vietnam SAMOA	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 Electronic component manufacturi ng and sales business Investment holding	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 1,497 336,292 285,904	20,104 - 351,112 - 992,350 3,179 313,435 122,400 157,515 54,085 12,544 182,331 333,845 1,497 336,292 285,904	1.5 5,000 9,150 700 31 1 118,250 30,000 510 8,000 4 56,750 12,950 - - 7,980	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% - % 100.00% 100.00%	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 (6,08 192,92	(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 1 (38,316) 32,740	(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 (38,316) 32,719	Note 2 Note 1 Note 3

258

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
CO., LTD. INFOMIGHT INVESTMEN TS LIMITED INFOMIGHT INVESTMEN TS LIMITED INFOMIGHT INVESTMEN TS LIMITED GENESIS HOLDING COMPANY GENESIS HOLDING COMPANY	BELTA INTERNATIONAL LIMITED CERTILINK INTERNATIONAL LIMITED ACCURATE GROUP LIMITED GENESIS INNOVATION GROUP LIMITED GENESIS ELECTRO-MECHA NICAL LIMITED	British Virgin Islands British Virgin Islands SAMOA Hong Kong Hong Kong	Investment holding Sales business Investment holding Investment holding Investment holding	52,349 1,605 131,588 228,280 268,229	52,349 1,605 131,588 228,280 268,229	4 50 4,100 8,000 9,400	100.00% 100.00% 100.00% 100.00% 100.00%	152,52 (4,41 41,32 343,40 328,31	30,117 1 (14) 2,623 36,439 (23,986)	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. ACES ZHUHAI TECHNOLOG Y LTD Nantong Dadi Electric Co., Ltd. Kung Shan Ching Zhi	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 Connector manufacturi ng and sales business Automobile cable bundle manufacturi ng and sales business Electronic component	115,301 629,475 9, 087 173,985 256,682 527,084 150,350 410,404 -	(2) (2) (2) (2) (2) (2) (2) (3) (3)	115,301 163,447 9,087 188,086 351,112 - - - -	- - - - - - 150,350 - -	- - - - - - - - -	115,301 163,447 9,087 188,086 351,112 - 150,350 - -	(20,168) 22,974 687 1,622 (27,235) (4,712) 3,138 (65,743) 6,823	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 19.31% 30.00%	(20,168) 22,974 687 1,622 (27,235) (4,712) 3,138 (12,695) 2,047	452,479 2,660,943 47,105 1,362 139,699 507,683 149,124 408,015 20,455	451,444 452,925 - - - - - - -	Note 7 Note 11 Note 3 Note 10

259

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
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.	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	121,853 519,336 214,991 272,030 10,477 128,110 104,307 109,860 108,600 65,150 21,720 80,897	(2) (2) (2) (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	- 159,640 48,135 95,070 - - - - - - - -	- - - - - - - - - - - -	301,403 369,705 121,258 272,030 10,477 129,711 153,819 56,432 161,665 228,805 168,495	1,185 (4,906) 17,009 (125,130) 3,231 30,156 1,833 (466) (825) 5,210 (32,245) 5,044	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% -% -% 100.00% 100.00% -%	1,185 (4,906) 17,009 (125,130) 3,231 30,156 1,833 (466) (825) 5,210 (32,245) 5,044	75,937 8,907 64,315 3,417 13,022 150,707 3,676 - - 6,474 44,075 -	- - - - - - - - - - - -	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.

(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

260

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

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.

261

ACES Electronics Co., Ltd.

Notes to the Parent Company Only Financial Statements

b. Limitation on investment in Mainland China:

b. Limitation on investment	in MainlandChina:
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.

262

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

263

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.

264

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

Name of investee Long-term equity investments accounted for using equity method: ACECONN ELECTRONIC CO., LTD. ACES (HONG KONG) ELECTRONIC CO., LTD. ACES PRECISION INDUSTRY PTE LTD. ACESCONN HOLDINGS CO., LTD. ACES INTERCONNECT (USA), INC. ACES JAPAN CO., LTD. WEI HONG INTERNATIONAL INVESTMENT CO., LTD. JASON TECHNOLOGY LIMITED. MEC IMEX INC. (Note 2) COMPUPACK TECHNOLOGY CO., LTD. (Note 2) KUANG YING COMPUTER EQUIPMENT CO., LTD. (Note 2) GENESIS HOLDING COMPANY GENESIS TECHNOLOGY USA, INC. ACES Precision Machinery Co., Ltd.	Beginning Balance Shares Amount 19,800 $ 3,947,663 300 12,726 8,162 51,722 12,000 190,259 300 9,684 4.5 13,978 2,500 27,973 5,000 10,361 45,575 552,065 20,138 238,248 25,906 248,338 27,778 845,798 1.5 137,237 13,000 90,520 $ 6,376,572	Addition (Note 1) Shares Amount 5,000 150,350 - - - - - - - - - - - - - - 11,991 119,907 1,362 10,000 - - - - - - - - 280,257	Decrease (Note 2) Shares Amount - - 300 14,424 - - - - - - - - - - - - 9,984 Note 3 - - - - - - - - - - 14,424	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)	Adjusted by equity method - (80,360) 192 (43) (2,645) - (879) - (1) (10,858) 8,110 (2,861) (156,955) 66,769 - (179,531)	Ending Balance Shares Percentage 24,800 100.00% - 100.00% 8,162 100.00% 12,000 100.00% 300 100.00% 4.5 100.00% 2,500 100.00% 5,000 100.00% 47,582 99.86% 21,500 100.00% 25,906 99.66% 27,778 100.00% 1.5 100.00% 13,000 100.00%	Ending Balance	Ending Balance	Ending Balance	Amount 4,026,481 - 53,309 160,905 9,542 14,177 27,785 8,732 530,853 223,655 294,027 703,939 166,298 75,377 6,295,080	Market Value or Net Assets Value Collateral Unit Price Total Amount 162.73 4,035,630 None - - 〞 6.53 53,309 〞 13.41 160,905 〞 31.81 9,542 〞 3,150.44 14,177 〞 11.11 27,785 〞 1.54 7,710 〞 11.78 560,341 〞 6.61 142,061 〞 12.11 313,690 〞 23.95 665,383 〞 110,865.33 166,298 〞 5.80 75,377 〞 〞
									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.

265

ACES Electronics Co., Ltd.

Statement of short-term borrowings

December 31, 2023

(Expressed in thousands of New Taiwan dollars)

Type Creditor Balance at end of the year Interest rate Unsecured Loan E.SUN BANK $ 280,000 1.7800%~1.7900% Unsecured Loan Yuanta Bank 330,000 1.4000%~1.8000% Unsecured Loan Bank SinoPac - 1.6966%~2.0085% Unsecured Loan HSBC Bank - - Unsecured Loan MEGA INTERNATIO NAL COMMERCIA L BANK 130,000 1.5780%~1.9030% Unsecured Loan Huan Nan Commercial Bank 250,000 1.5247%~1.9764% Unsecured Loan KGI Bank - 2.1459%~2.1459% Unsecured Loan Taishin International Bank 130,000 1.5100%~2.2100% $ 1,120,000 Statement of account payables Item P－AN P－AQ P－AW P－AV Others (less than 5%) Total	Type Creditor Balance at end of the year Interest rate Unsecured Loan E.SUN BANK $ 280,000 1.7800%~1.7900% Unsecured Loan Yuanta Bank 330,000 1.4000%~1.8000% Unsecured Loan Bank SinoPac - 1.6966%~2.0085% Unsecured Loan HSBC Bank - - Unsecured Loan MEGA INTERNATIO NAL COMMERCIA L BANK 130,000 1.5780%~1.9030% Unsecured Loan Huan Nan Commercial Bank 250,000 1.5247%~1.9764% Unsecured Loan KGI Bank - 2.1459%~2.1459% Unsecured Loan Taishin International Bank 130,000 1.5100%~2.2100% $ 1,120,000 Statement of account payables Item P－AN P－AQ P－AW P－AV Others (less than 5%) Total	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
			$
			$

266

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 INTERNAT IONAL 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 INTERNAT IONAL COMMER CIAL BANK					1.9229%-2.2119% " " " " " " " " " 1.525%~1.650% 1.225%-1.400%			Yes " " " " " " " " " None "
				1,683,974				4,556,000

267

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

268

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
	$ 160,669	300,918	295,670	757,257

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.

269

• (6) If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation: None.

270

VII. A review and analysis of the Company's financial position and financial performance, and a listing of risks

• (1) Financial position: The main causes and effects of significant changes in assets, liabilities, and equity in the past two years should be stated if the impact is significant.

Unit: NTD thousand;%

Year			Difference	Difference
	2022	2023
Item			Amount	Ratio
Current assets	6,997,696	6,175,416	(822,280)	(11.75)
Non-current assets	5,842,680	6,075,473	232,793	3.98
Total assets	12,840,376	12,250,889	(589,487)	(4.59)
Current liabilities	5,392,056	4,663,735	(728,321)	(13.51)
Non-current liabilities	1,792,966	2,330,650	537,684	29.99
Total liabilities	7,185,022	6,994,385	(190,637)	(2.65)
Common stock	1,344,177	1,344,177	0	0
Capital surplus	988,615	993,270	4,655	0.47
Retained earnings	3,363,445	3,024,883	(338,562)	(10.07)
Other equity	(59,117)	(107,571)	(48,454)	81.96
Treasurystock	-	-	-	-
Non-controlling interests	18,234	1,745	(16,489)	(90.43)
Totalequity	5,655,354	5,256,504	(398,850)	(7.05)
Explanation of significant changes (changes between periods exceeding 20% and with a change amount of at least NT$10 million): 1. Increase in non-current liabilities: Mainly due to an increase in long-term borrowings. 2. Decrease in other equity: Mainly due to adverse exchange differences from the translation of financial statements of overseas operating entities. 3. Decrease in non-controlling interests: Mainly due to the Company repurchasing its shares from minorityshareholders in theyear 2023.

• Explanation of significant changes (changes between periods exceeding 20% and with a change amount of at least NT$10 million):

• Increase in non-current liabilities: Mainly due to an increase in long-term borrowings.

• Decrease in other equity: Mainly due to adverse exchange differences from the translation of financial statements of overseas operating entities.

• Decrease in non-controlling interests: Mainly due to the Company repurchasing its shares from minority shareholders in the year 2023.

271

(2) Financial performance

• A. Analysis of the main reasons for significant changes in operating revenue, operating net profit, and pre-tax net profit in the past two years:

inancial performance A. Analysis of the main reasons for significant changes in operating revenue, operating net profit, and pre-tax net profit in the past two years:	inancial performance A. Analysis of the main reasons for significant changes in operating revenue, operating net profit, and pre-tax net profit in the past two years:	inancial performance A. Analysis of the main reasons for significant changes in operating revenue, operating net profit, and pre-tax net profit in the past two years:	inancial performance A. Analysis of the main reasons for significant changes in operating revenue, operating net profit, and pre-tax net profit in the past two years:	inancial performance A. Analysis of the main reasons for significant changes in operating revenue, operating net profit, and pre-tax net profit in the past two years:
Unit: NTD Thousand; % Item 2022 2023 Increased(Decreased) Amount % change Net revenue from operations 10,392,504 8,486,228 (1,906,276) (18.34) Operatingcosts 8,159,619 6,734,424 (1,425,195) (17.47) Grossprofit 2,232,885 1,751,804 (481,081) (21.55) Operatingexpenses 2,176,138 2,082,533 (93,605) (4.30) Operating profit 56,747 (330,729) (387,476) (682.81) Non-operating income and expenses 258,316 61,037 (197,279) (76.37) Profit before income tax 315,063 (269,692) (584,755) (185.60) Less:Income tax expenses 91,730 (1,504) (93,234) (101.64) Profit for theyear 223,333 (268,188) (491,521) (220.08) Explanation of significant changes (when the changes between the current and previous period exceed 20% and the amount of change is at least NT$10 million): 1. Decrease in gross profit: Mainly due to higher allocation of fixed costs. 2. Decrease in operating net profit: Mainly due to the decrease in gross profit. 3. Decrease in non-operating income and expenses: Mainly due to a decrease in exchange gains for the company. 4. Decrease in pre-tax net profit: Mainly due to the decrease in gross profit and non-operating income and expenses. 5. Decrease in income tax expense: Mainly due to the decrease in pre-tax net profit. 6. Decrease inprofit for theyear: primarilydue to a decrease in operating profit.
			Increased(Decreased)
Item	2022	2023		% change
			Amount
Net revenue from operations	10,392,504	8,486,228	(1,906,276)	(18.34)
Operatingcosts	8,159,619	6,734,424	(1,425,195)	(17.47)
Grossprofit	2,232,885	1,751,804	(481,081)	(21.55)
Operatingexpenses	2,176,138	2,082,533	(93,605)	(4.30)
Operating profit	56,747	(330,729)	(387,476)	(682.81)
Non-operating income and expenses	258,316	61,037	(197,279)	(76.37)
Profit before income tax	315,063	(269,692)	(584,755)	(185.60)
Less:Income tax expenses	91,730	(1,504)	(93,234)	(101.64)
Profit for theyear	223,333	(268,188)	(491,521)	(220.08)
Explanation of significant changes (when the changes between the current and previous period exceed 20% and the amount of change is at least NT$10 million): 1. Decrease in gross profit: Mainly due to higher allocation of fixed costs. 2. Decrease in operating net profit: Mainly due to the decrease in gross profit. 3. Decrease in non-operating income and expenses: Mainly due to a decrease in exchange gains for the company. 4. Decrease in pre-tax net profit: Mainly due to the decrease in gross profit and non-operating income and expenses. 5. Decrease in income tax expense: Mainly due to the decrease in pre-tax net profit. 6. Decrease inprofit for theyear: primarilydue to a decrease in operating profit.

• B. The expected sale amount and its basis, the Company's future financial performance, and the plan for any possible impact

The Company's estimated sales volume is based on the overall industry supply and demand, capacity planning, and past operational performance. With the overall industry still showing a growth trend, we anticipate an increase in our sales volume. In addition to enhancing product range and customer diversification in the existing laptop market, considering the high developmental potential of consumer electronics, automotive electronics, cloud servers, network communications, and industrial settings, our company will continue to develop and manufacture related product connectors and cable assemblies. To support operational growth, our company has also formulated appropriate financial strategies. For an analysis of cash flow liquidity for the upcoming year, please refer to the following detailed explanation.

(3) Cash flow

A. Explanation of changes in cash flows for the recent year

Year Item	2022	2023	% change
Cash flow ratio(%)	21.08	14.22	(32.54%)
Cash flow adequacy ratio(%)	75.24	76.14	1.20%
Cash reinvestment ratio (%)	9.70	5.77	(40.52%)
Explanation of Changes in Proportions: 1. Cash flow ratio: Mainly attributable to the decrease in net cash flow from operating activities, resulting in a decrease in the cash flow ratio compared to the previous period. 2. Cash reinvestment ratio: Mainly due to the decrease in net cash flows from operating activities and the increase in capital expenditures.

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• B. Insufficient Capital liquidity improvement plan: Not applicable.

C. Future year cash flow analysis

B. Insufficient Capital liquidity improvement plan: Not applicable. C. Future year cash flow analysis	B. Insufficient Capital liquidity improvement plan: Not applicable. C. Future year cash flow analysis	B. Insufficient Capital liquidity improvement plan: Not applicable. C. Future year cash flow analysis	B. Insufficient Capital liquidity improvement plan: Not applicable. C. Future year cash flow analysis
				Unit: NTDthousand
Beginning cash balance (1)	Cash flow from operating activities (2)	Projected cash inflows and outflows (3)	Net cash flow balance (1)+(2)+(3)	Cash shortage contingency plan
				Investment plan	Financing plan
2,058,206	1,071,121	(828,415)	2,300,912	－	－
(1) Analysis of changes in cash flow over the next year: I. Operating Activities: It is expected that there will still be profit generated in the fiscal year 2024, leading to net cash inflows from operating activities. II. Investing Activities: Considering the need for long-term strategic development, the company is integrating its overall resources and expanding its business scale to enhance global competitiveness. Additionally, to sustain long-term competitive development and deepen technological advancement, the company has purchased land and constructed factories in Taiwan, as well as continuously increased investments in machinery, molds, and other equipment. This includes expanding production capacity in parts of mainland China, which has resulted in net cash outflows from investment activities. III. Financing Activities: The Company will flexibly utilize operating funds and bank borrowing facilities. (2) Remedial measures for expected cash shortages and liquidity analysis: Not applicable.

  - I. Operating Activities: It is expected that there will still be profit generated in the fiscal year 2024, leading to net cash inflows from operating activities.

  - II. Investing Activities: Considering the need for long-term strategic development, the company is integrating its overall resources and expanding its business scale to enhance global competitiveness. Additionally, to sustain long-term competitive development and deepen technological advancement, the company has purchased land and constructed factories in Taiwan, as well as continuously increased investments in machinery, molds, and other equipment. This includes expanding production capacity in parts of mainland China, which has resulted in net cash outflows from investment activities.

• III. Financing Activities: The Company will flexibly utilize operating funds and bank borrowing facilities.

• (2) Remedial measures for expected cash shortages and liquidity analysis: Not applicable.

• (4) The effect upon financial operations of any major capital expenditures in the most recent fiscal year: None.

• (5) The Company's reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year

• A. Recent year's reinvestment policy

  • The Company's management policy regarding its reinvestment activities is based on the internal control system's "investment cycle" and "acquisition or disposal of assets processing procedures" as guidelines for managing the operations of its investee companies. The investee companies regularly provide their financial information to the Company to ensure that it is informed of its financial and operational status. In addition, the Company's internal auditing team periodically conducts on-site audits of the operations and internal control execution of the investee companies to facilitate effective management of these investments and achieve effective control over their operations.

• B. The main reasons for reinvestment losses in the recent fiscal year The Company's investment income recognized under the equity method for the fiscal year 2023 amounted to NT$(167,794) thousand. The losses primarily stemmed from weakened global demand for the investee companies' terminal products, leading to production volumes that did not achieve economies of scale. Future adjustments to operational planning will be made based on market conditions, capacity, and the Group's logistical status, with an expectation of gradual improvements in operations.

• C. Investment plan for the next year The Company has always adhered to the principles of "knowledge, vision, value, attitude, commitment, and execution," operating with integrity and striving to enhance the operational efficiency of the group. To meet the needs of long-term strategic development and to maximize the output and efficiency of various business groups, the company focuses on expansion in overseas and mainland China markets. Our overseas sales bases cover the United States, Japan, Germany, the Philippines, Vietnam, and Singapore, providing products and services such as connectors, cables, electromagnetic shields, internal mechanisms, and external casings for electronic products, and complete machine assembly and testing. These offerings aim to provide higher value-added products and services to increase growth momentum.

For long-term development, the company began constructing a research and development headquarters in Taoyuan, Taiwan, in April 2022, with completion expected in the first half of 2024. This will expand Taiwan's production capacity and enhance the group's competitiveness. The company has also established substantial production capabilities in Asia, with manufacturing locations in Taiwan, mainland China (Kunshan, Dongguan), the Philippines, and Vietnam. We will continue to implement lean

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manufacturing programs and increase the proportion of automated production to optimize cost structures, aiming to become the preferred supplier for international clients.

• (6) Risk analysis

• A. Impact of interest rates, exchange rates, and inflation on the company's profit and loss, and future response measures

Unit: NTD thousand

Item	2022	2023	Q1,2024
Net gain (loss) on foreign exchange (A)	227,551	31,627	46,126
Net revenue from operations(B)	10,392,504	8,486,228	1,943,259
Profit before income tax(C)	315,063	(330,729)	(7,360)
Ratio of net gain (loss) on foreign exchange to net revenue from operations(A)/(B)	2.19％	0.37%	2.37%
Ratio of net gain (loss) on foreign exchange to profit before income tax(A)/(C)	72.22％	(9.56%)	(626.71%)
Net interest income(expense).(D)	(57,857)	(58,995)	(15,204)
Ratio of net interest income (expense) to net revenue from operations(D)/(B)	(0.56％)	(0.70%)	(0.78%)
The ratio of the net interest income (expense) to profit before income tax(D)/(C)	(18.36％)	17.84%	206.58%

Source of information: Parent company only financial statements are audited by accountants.

• (A)Impact of interest rate changes on the Company's profit and loss, and future response measures.

• The Company's interest expenses for the years 2023 and 2022 were NT$108,725 thousand and NT$85,069 thousand, respectively, which accounted for a very small ratio of net operating revenue for each period. As such, there was no significant adverse impact on the Company's profit and loss. In line with the Company's strategy of continuing business growth and development towards the capital market, except for significant capital expenditures and long-term investments financed by medium- to long-term funds, short-term operating cash flow remains the main financial adjustment used. Therefore, interest rate fluctuations are not expected to have a significant impact on the Company's profit and loss.

• (B) Impact of exchange rate fluctuations on the Company's profit and loss, and future response measures

The Company's business is primarily export-oriented, and the pricing of its sales transactions is mostly based on the US dollar. However, as some of the Company's purchases are also priced in US dollars, there is a partial offsetting effect between purchases and sales. Nevertheless, exchange rate fluctuations still have a certain impact on the Company's overall operations.

The Company's exchange gains and losses for 2023 and 2022 were NT$31,627 thousand and NT$227,551 thousand, respectively, which accounted for 0.37% and 2.19% of the net operating revenue for each period. As such, they had a certain impact on the Company's profit and loss. Additionally, the Company has established foreign currency deposit accounts with major banks to handle incoming funds from customers. The Company will decide whether to convert the funds into local currency or deposit them into foreign currency accounts based on its actual fund requirements and exchange rate fluctuations. Furthermore, through its export and raw material import transactions, natural hedging effects can be generated from foreign currency receivables and payables, which can help mitigate the impact of exchange rate fluctuations on the Company's operations.

To strengthen the management of foreign exchange positions and exchange losses and gains, the Company utilizes the characteristics of natural hedging by using foreign currency accounts receivable to pay off foreign currency accounts payable generated from purchases. At the same time, when the business unit quotes prices

274

to customers, they should consider the future trend of exchange rates and the factors that affect exchange rates, and provide a more conservative quote to minimize the impact of exchange rate fluctuations. In addition, our company has signed foreign exchange hedging contracts with banks, which can take hedging measures at any time to reduce the impact of exchange rate fluctuations on our Company's operations.

• (C) Impact of inflation on the Company's profit and loss and future response measures In recent years, there has been a gradual upward trend in inflation. However, the Company has not yet experienced any significant immediate impact from inflation. The Company is also closely monitoring fluctuations in raw material market prices and maintaining good interaction with suppliers and customers to avoid any significant impact from inflation in the future.

• B. The main reasons for engaging in high-risk, high-leverage investments, lending funds to others, endorsing guarantees, and trading in derivative products, as well as the policies, profits or losses, and future response measures

• The Company has established the " Acquisition or Disposal of Asset Processing Procedures," "Endorsement and Guarantee Operations Procedures," and "Funds Lending Operations Procedures," which were approved by the shareholders' meeting as the basis for the Company to carry out relevant transactions. The following is an explanation of the above items:

• (A) The main reasons for engaging in high-risk, high-leverage investments, lending funds to others, endorsing guarantees, and trading in derivative products, as well as the policies, profits or losses, and future response measures The Company primarily focuses on the development of its core business and has not ventured into investments in other high-risk industries. The Company has always maintained a stable and financially sound operation and has not engaged in high-risk and high-leverage investments.

• (B) Policy, main reasons for profit or loss in lending funds to others, and future strategies: As of the printing date of the annual report for the most recent fiscal year, the Company has not engaged in any fund lending activities, which have no significant adverse effects on the Company's financial condition.

  • As for our subsidiary, as of the printing date of our annual report for the most recent fiscal year, all of the recipients of the fund lending activities of the subsidiary are companies that directly or indirectly hold 99.86% or more of voting rights in the Company. These fund lending activities mainly support the subsidiary's expansion of its operational business. All of the aforementioned transactions were approved by the subsidiary's board of directors in accordance with regulations and announced and reported publicly. The balance of fund lending by the subsidiary did not exceed the limit set by the "Operating Procedures for Fund Lending to Others" of the subsidiary, and therefore, had no significant adverse effects on the subsidiary's financial condition.

• (C) Policy, main reasons, and future response measures on endorsing guarantees for profit or loss: As of the printing date of our annual report for the most recent fiscal year, the parties to whom we provided endorsements and guarantees were our subsidiary companies, KUNSHAN ACES ELECTRONIC CO., LTD., CONG TY TNHH CHINH XAC NGAN VUONG, and ACES Precision Machinery Co., Ltd., all of which indirectly held 100% of voting shares in our company. The purpose of endorsing these guarantees was to assist our subsidiary companies in meeting their funding requirements for business expansion and obtaining financing from banks. All of these transactions were approved by our board of directors in accordance with regulations and publicly announced and reported. The balance of endorsement and guarantee did not exceed the limit set by the Company's "Endorsement and Guarantee Operating Procedures" and therefore had no significant adverse effects on our financial condition.

As for our subsidiary, as of the printing date of our annual report for the most recent fiscal year, the parties to whom the subsidiary provided endorsements and guarantees were companies that directly or indirectly held 100% of the subsidiary's voting shares. The purpose of endorsing these guarantees was to assist the subsidiary's subsidiary companies in meeting their funding requirements for business expansion and obtaining financing from banks. All of these transactions were approved by the subsidiary's board of directors in accordance with regulations and publicly announced and reported. The balance of endorsement and guarantee did not exceed the limit set by the subsidiary's "Endorsement and Guarantee Operating Procedures" and therefore had no significant adverse effects on the subsidiary's financial condition.

275

• (D) Policy, main reasons for engaging in derivative trading for profit or loss, and future response measures:

If the Company and its subsidiaries engage in derivative trading, they will strictly abide by the "Acquisition or Disposal of Assets Processing Procedures" regulations and regularly report on derivative trading to the Board of Directors. At the same time, they will also disclose derivative trading in accordance with regulations.

C. Future research and development plans and projected R&D expenses

As of May 10, 2024

Item	The current progress of ongoing research and development projects	Projected R&D expenses	Estimated time of completion for mass production	The primary factors that could influence future research and development success
Commissioned research for the development of supercritical cable extrusion technology	In the process of product development	NTD 50 million	Second half of 2024	Insulation material forming stability and metalplatingcoverage
High-speed transmission cables for gaming graphics cards (PCIe Gen4+USB4)	In the process of product development	NTD 2 million	Second half of 2024	Product high-speed design, SI analysis verification capability, and production testing technologycapability
DP2.1 Cable	In the process of product development	NTD 1 million	Second half of 2024	Product high-speed design, SI analysis verification capability, and production testing technologycapability
OCP's next-generation internal high-speed interconnect solution, Multitrak PCIe6	In the process of product development	NTD 20 million	Second half of 2024	Product high-speed design, SI analysis verification capability, and production testing technologycapability
Development of PCIE RISER CABLE DA direct soldering series connector wire set	In the process of product development	NTD 22 million	Second half of 2024	Product high-speed design, SI analysis verification capability, and mass production technologycapability
Development of PCIE CEM GEN6 connector	In the process of product verification	NTD 20 million	Second half of 2024	Product high-speed design, SI analysis verification capability
Automotive waterproof Type-C project	In the process of product development	NTD 3 million	Second half of 2024	Waterproof inspection methods, the durability of waterproof gaskets, strength, and smoothness of snap-fit mechanisms, appearance quality of die castings, and solderabilityof the board
Mega Power 2 project	In the process of product development	NTD 4.2 million	Second half of 2024	Direct soldering design for wire ends, avoidance of the first generation, and addition of new patents
Development of next-generation PCIE GEN6 GENZseries connectors.	In the process of product design	NTD 20 million	First half of 2025	Product high-speed design, SI analysis verification capability
USB4(V2.0) Gen4 80Gbps Cable	In the process of product design	NTD 1 million	First half of 2024	Product high-speed design, SI analysis verification capability, and production testing technologycapability

276

• Note: The projected R&D expenses refer to the estimated amount to be invested in the research and development project. However, the actual recognition of "R&D expenses and fixed assets" will depend on the progress of the research project and the nature of the investments made, before it can be confirmed.

• D. The impact of significant domestic and international policy and legal changes on the Company's financial operations and the corresponding measures taken The Company has not been financially or operationally affected by significant domestic or international policy and legal changes in the recent years up to the printing date of the annual report. The Company operates in compliance with relevant domestic and international laws and regulations and constantly monitors changes in domestic and international policies and laws. It is anticipated that the Company's financial and business operations will not be significantly adversely affected by future important domestic or international policy and legal changes.

• E. The impact of technological advancements (including information security risks) and industry changes on the Company's financial operations, as well as the corresponding measures to address them

• The Company always keeps track of technological changes in the industry and timely launches products that align with market trends. We stay informed about market trends and evaluate their impact on the Company's operations. However, there have been no significant technological changes in recent years that have had a significant impact on the company's financial and business operations.

• F. The impact of corporate image change on crisis management and corresponding measures

• The Company has always adhered to the principles of integrity and sound management. Since its establishment, we have actively strengthened internal management to enhance the quality and efficiency of our operations. The Company's corporate image has been consistently positive, and there have been no significant changes in the corporate image that would lead to a crisis.

• G. Expected benefits, potential risks, and mitigation measures of mergers and acquisitions As of the date of printing of the annual report, the Company has no plans for any acquisitions.

• H. Expected benefits, potential risks, and mitigation measures for expanding the plant After the official launch of the Taiwan Precision Center in the first quarter of 2012, the Company can accelerate the development of key technologies and products required in the precision fine-pitch connector, smartphone, automotive electronics, and network communication markets. It will gradually generate benefits in terms of production quality and technological accumulation. At the same time, it will also be responsible for the development of precision molds and mold components, serving as the Group's mold coordination center, effectively utilizing and allocating resources for the production of mold components used by various manufacturing units for molding and stamping, aiming to reduce costs and maintain quality stability. For highly automated processes and high-end niche products, production will be planned in the Precision Center. In addition, for long-term operational development and to master core technologies in the Taiwan headquarters, the Company will also leverage Taiwan's abundant technical human resources to cultivate excellent product development and precision mold design and manufacturing personnel, building a complete technical team. In April 2022, the Company started the construction of the Precision Center R&D Headquarters Building in Taoyuan, Taiwan, to enhance the long-term competitiveness and profitability of the Group. The establishment of the new building for the establishment of the Precision Center R&D Headquarters was funded through cash capital increase and the issuance of the second unsecured convertible corporate bonds in the domestic market in the fourth quarter of 2021, providing medium to

277

long-term funds to cope with the Company's operations without causing significant impact.

• I. The risks and corresponding measures associated with concentrated procurement or sales

  • (A) Assessment of concentrated procurement risks and corresponding measures The Company has two or more fixed qualified suppliers for each of its major raw materials to ensure the quality and stability of the supply, thereby mitigating the risk of over-reliance on a single source of supply.

  • (B) Assessment of concentrated sales risk and corresponding measures In the past two fiscal years and the first quarter of 2024, the proportion of sales from customers of the Company to net revenue did not exceed 10%. Due to the recent vertical integration of the Company's industry and the increase in revenue, the proportion of net sales from U Company has increased in the Company's net revenue. U Company is one of the world's top five notebook computer contract manufacturers and is a major customer of the Company, which is reasonable. In the future, the Company will continue to expand sales to domestic and international customers and actively develop connectors and related products in other fields. This should help reduce the risk associated with reliance on products in a single field.

• J. Directors, supervisors, or major shareholders holding more than ten percent of the shares, the impact, risks, and response measures of significant transfers or changes in ownership on the Company

  • The Company has not experienced significant transfers or changes in equity during the recent fiscal year and up to the date of printing of the annual report.

• K. The impact, risks, and mitigation measures of changes in ownership on the company's operations

  • The Company's directors and supervisors have long been involved in the Company's operations, and the management team has a strong sense of mission towards the company, considering the company's management as a lifelong career aspiration. In addition, employees identify with the company's development direction and are willing to hold the company's stocks for the long term, sharing in the Company's growth. Therefore, the Company should have no risk of a change in management control.

• L. Litigation or non-litigation events

  • Significant litigation, non-litigation, or administrative disputes involving the Company, its directors, supervisors, general manager, substantial shareholders with a stake exceeding 10%, and subsidiary companies, which have been finally judged or are currently pending and may have a significant impact on shareholder equity or securities prices, should disclose the disputed facts, the amount in dispute, the commencement date of the litigation, the main parties involved, and the status of the proceedings as of the date of the annual report publication.

  • As of the date of the annual report publication, there are no litigation, non-litigation, or administrative disputes that have been finally judged or are currently pending, which could have a significant impact on shareholder equity or securities prices.

  • For lawsuits, non-litigation, or administrative disputes involving the Company's directors, supervisors, general manager, substantial shareholders with a stake exceeding 10%, and subsidiary companies, where the judgments have been finalized or are currently pending as of the date of the annual report publication, and the outcomes may have a significant impact on shareholder equity or securities prices: None.

• M. Other significant risks and corresponding measures

  • The Company has not identified any other significant risk factors in its recent annual report up until the date of printing.

• (7) Other important matters: None.

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VIII. Other items deserving special mention

(1) information related to the company's affiliates

• A. Consolidated business report of related companies

• (A) Related company organizational chart (As of December 31, 2023)

==> picture [81 x 54] intentionally omitted <==

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

ACES ELECTRONICS
CO., LTD.
----- End of picture text -----

==> picture [750 x 199] intentionally omitted <==

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

ACES INTERCONNECT ACECONN Wei Hong International ACES JAPAN ACESCONN ACES PRECISION Aces Precision MEC INEX INC. Compupack Kuang Ying Computer GENESIS HOLDING GENESIS
(USA), INC. ELECTRONIC CO., Investment CO., LTD. HOLDINGS CO.,LTD. INDUSTRY PTE. LTD. Machinery (99.86% shareholding) Technology Co., Ltd. Equipment Co., Ltd. COMPANY TECHNOLOGY
(100% shareholding) LTD. Co., Ltd. (100% shareholding) (100% shareholding) ( 100% shareholding) Co., Ltd. See Cable Group (100% shareholding) (99.66% shareholding) (100% shareholding) USA, INC
(100% shareholding) (100% shareholding) (100% shareholding) See Stamping Metal See Genesis Group (100% shareholding)
Connectors Group
See Genesis Group
Dongguan Aces Kunshan Aces Kunshan Aces Trading Kunshan Chenggang ASIA CENTURY Chongqing Hong Gao Hongyu Surface Jason Technology
Electronic Electronic Co., Ltd. Electronic Technology INVESTMENT LTD. Electronics Treatment Co., Ltd. Limited
Co., Ltd. Co., Ltd. (100% shareholding) Co., Ltd. (100% shareholding) Co., Ltd. (100% shareholding) (100% shareholding)
(100% shareholding)
(100% shareholding) (100% shareholding) (100% shareholding)
Galis Accurate Smithcraft
ACES ZHUHAI Products Co., Ltd.Of Suzhou
TECHNOLOGY LTD (100% shareholding)
(100% shareholding)
----- End of picture text -----

279

Cable Group

==> picture [492 x 423] intentionally omitted <==

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

ACES ELECTRONICS
CO.,LTD.
MEC IMEX INC.
( 99.86% shareholding )
MEC MEC ELECTRIC
INTERNATIONAL SOLUTIONS GMBH.
COMPANY LTD.
(100% shareholding)
(100% shareholding)
MEC SUZHOU MEC BEST KNOWN MEC ULTRAMAX MEC ELECTRONICS MEC ELECTRONICS
PHILIPPINES
ELECTRONICS CO., COMPANY LTD. (H.K.) COMPANY LTD. (HK) COMPANY LTD.
CORPORATION
LTD. (100% shareholding) (100% shareholding) ( 100% shareholding) (100% shareholding)
(100% shareholding)
SUZHOU HANTENG MEC ELECTRONICS HOMEPRIDE MEC IMEX (USA),
ELECTRONICS TECHNOLOGY LTD. INC.
(SUZHOU) CO., LTD.
TECHNOLOGY CO., (100% shareholding) (100% shareholding)
(100% shareholding)
LTD.
(100% shareholding)
HOMEPRIDE
ELECTRONICS
(DONGGUAN)
COMPANY LIMITED
(100% shareholding)
----- End of picture text -----

280

==> picture [191 x 125] intentionally omitted <==

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

ACES ELECTRONICS
CO.,LTD.
COMPUPACK CompuPack
TECHNOLOGY Technology Co.,
CO., LTD. Ltd., German
(100% shareholding) Branch, Farchant
----- End of picture text -----

==> picture [96 x 127] intentionally omitted <==

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

MICON PRECISE
CORP.
(99.61% shareholding)
CONG TY TNHH
CHINH XAC NGAN
VUONG
(100% shareholding)
----- End of picture text -----

==> picture [96 x 74] intentionally omitted <==

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

DONGGUAN
COMPUPACK
TECHNOLOGY
CO., LTD.
(100% shareholding)
----- End of picture text -----

281

Stamping Metal Connectors Group

==> picture [358 x 395] intentionally omitted <==

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

ACES
ELECTRONICS
CO.,LTD.
KUANG YING
COMPUTER
EQUIPMENT CO.,
LTD.
( 99.66% shareholding )
INFOMIGHT
INVESTMENTS
LIMITED.
(100% shareholding)
CERTILINK BELTA ACCURATE
INTERNATIONAL INTERNATIONAL GROUP
LIMITED LIMITED LIMITED
(100% shareholding) (100% shareholding) (100% shareholding)
DONGGUAN SUZHOU KUANG
KUANGYING YING ELECTRIC
HARDWARE PLASTIC CO., LTD.
PRODUCT CO.,LTD (100% shareholding)
(100% shareholding)
----- End of picture text -----

282

Genesis Group

==> picture [367 x 296] intentionally omitted <==

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

ACES
ELECTRONICS
CO.,LTD.
Genesis Holding
Genesis Technology USA, Inc.
Company
（ 100% shareholding)
(100% shareholding)
Genesis Genesis Innovation Genesis Innovation
Electro-Mechanical
Group Limited
Limited Group Limited,Taiwan
(100% shareholding) (100% shareholding) Branch
GENESIS GENESIS
TECHNOLOGY INTERCONNECT CO.,
(NINGBO) INC. LTD.
（ 100% shareholding) （ 100% shareholding)
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283

(B) Basic information on affiliated companies

As of December 31, 2023.

Unit: Thousand

Company Name	Establishme nt date	Address	Paid-in capital	Primary business or production items
ACECONN ELECTRONIC CO., LTD.	2002/05/21	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, SAMOA	USD24,800	Investment holding
ACES PRECISION INDUSTRY PTE LTD	1999/07/15	50 Serangoon North Avenue 4 #01-02 First Centre Singapore (555856)	SGD8,162	Connector sales business
ACESCONN HOLDINGS CO.,LTD.	2012/01/09	Maystar Chambers, P.O. Box 3269,Apia,SAMOA	USD12,000	Investment holding
ASIA CENTURY INVESTMENT LTD.	2007/01/03	Maystar Chambers, P.O. Box 3269,Apia,SAMOA	USD9,150	Investment holding
ACES INTERCONNECT(USA), INC.	2015/10/26	25613 Dollar St.Ste.11 Hayward, CA 94544, USA	USD300	Connector sales business
ACES JAPAN CO., LTD.	2012/09/03	Tachikawa Nishiki-cho Building 5F Nishiki-Cho 1-8-7 Tachikawa-cityTokyo Japan	JPY45,000	Connector development business
DONGGUAN ACES ELECTRONIC CO., LTD.	2002/12/10	No. 1, Jianggan Road, Chang'an Town, Dongguan City, Guangdong Province, China.	USD3,500	Connector manufacturing and sales business.
KUNSHAN ACES ELECTRONIC CO., LTD.	2003/02/12	No. 578, Qingyang North Road, Zhoushi Town, Kunshan City, Jiangsu Province, China.	USD20,000	Connector manufacturing and sales business.
KUNSHAN ACES TRADING CO., LTD.	2008/06/13	Building B, 1st Floor, No. 578 Qingyang North Road, Zhouzhi Town, Kunshan City, JiangsuProvince, China.	USD300	Connector sales business
CHONGQING HONG GAO ELECTRONIC CO., LTD.	2010/07/07	No. 68, Fajian Road, Bajuan Street Office, Tongliang District, Chongqing City, Sichuan Province, China (Shangfeng Mingju), Building 5, Unit1-29-3.	USD5,950	Connector sales business
GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OFSUZHOU	2005/10/21	No. 102 Matang Road, Kunshan Development Zone, Jiangsu Province, China.	USD8,790	Surface treatment and sales
KUNSHAN CHENGGANG ELECTRONIC	2018/2/27	Building A, 2nd floor, No. 578 Qingyang North Road, Zhoushi Town,Kunshan City,	USD14,745	Connector manufacturing and sales

284

Company Name	Establishme nt date	Address	Paid-in capital	Primary business or production items
TECHNOLOGY CO., LTD.		Jiangsu Province, China.		business.
ACES ZHUHAI TECHNOLOGY LTD	2022/11/02	Room 471, 1st Floor, Block C, Building 24, Science and Technology Innovation Park, No. 1, Jintang Road, Tangjiawan Town, High tech Zone, Zhuhai City, Guangdong Province, China (Centralized Office Area)	USD5,000	Connector manufacturing and sales business.
WEI HONG INTERNATIONAL INVESTMENT CO., LTD.	2010/11/02	No. 13, Dongyuan Road, Zhongli District, Taoyuan City, Taiwan (R.O.C.)	NTD25,000	Investment
ACES PRECISION MACHINERY CO., LTD.	2019/8/28	No. 12, Dazhong Road, Taitung City, Taitung County	NTD130,000	Mode part manufacturing and sales
HONGYU SURFACE TREATMENT CO., LTD.	2020/11/20	No. 22, Alley 13, Lane 107, Zhengnan First Street, Yongkang District, Tainan City,Taiwan.	NTD 7,000	Metal surface treatment
JASON TECHNOLOGY LIMITED	2007/8/6	Room 2001, 20/F., 299 QRC, 287-299 Queen's Road Central,HongKong	HKD5,000	Electronic component sales business
MEC IMEX INC.	1986/07/18	No. 13, Dongyuan Road, Zhongli District, Taoyuan City,Taiwan(R.O.C.)	NTD476,500	Cable assembly sales business
MEC INTERNATIONAL COMPANY LTD.	1998/06/24	OMC Chambers, Wickhams Cay 1, Road Town, Tortola, BVI	USD33,400	Investment holding
MEC ELECTRONICS (HK) COMPANY LIMITED	1992/03/24	Room D1, 9/F, Block 2, Camelpaint Building, 62 Hoi Yuen Road, Kwun Tong,Kowloon,HongKong	HKD51,000	Cable assembly sales business
MEC ULTRAMAX (H.K.) COMPANY LIMITED	2008/01/11	Room D1, 9/F, Block 2, Camelpaint Building, 62 Hoi Yuen Road, Kwun Tong,Kowloon,HongKong	HKD30,000	Investment holding
MEC BEST KNOWN COMPANY LIMITED	2007/10/10	Room D1, 9/F, Block 2, Camelpaint Building, 62 Hoi Yuen Road, Kwun Tong,Kowloon,HongKong	HKD118,250	Investment holding
HOMEPRIDE TECHNOLOGY LIMITED	1998/05/20	Room D1, 9/F, Block 2, Camelpaint Building, 62 Hoi Yuen Road, Kwun Tong,Kowloon,HongKong	HKD56,750	Investment holding

285

Company Name	Establishme nt date	Address	Paid-in capital	Primary business or production items
MEC ELECTRONICS PHILIPPINES CORPORATION	1989/05/16	Lot 1 Block 8A Phase I, Cavite Economic Zone, Rosario, Cavite, Philippines	PHP80,000	Production and sales of cable assemblies
MEC IMEX (USA), Inc.	2013/08/22	25613 Dollar Street, Suite 11 Hayward, CA. 94544-2535, USA	USD400	Cable assembly sales business
MEC ELECTRIC SOLUTIONS GMBH (Note 1)	2022/03/30	Partenkirchener Straße 52, 82490 Farchant	EUR 100,000.00	Cable assembly sales business
MEC ELECTRONICS (SUZHOU) CO., LTD.	2001/12/20	Room 2604, Building 18, No. 3188 Renmin Road, Suzhou City, Jiangsu Province, China.	USD3,850	Cable assembly sales business
SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD.	2007/12/27	Room 2604, Building 18, No. 3188 Renmin Road, Suzhou City, Jiangsu Province, China.	USD16,700	Cable assembly sales business
HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED	2011/01/25	Building 1, No.1, Chang 'an Zhenyuan West Road, Chang 'an Town, Dongguan City, Guangdong Province, China.	USD7,050	Production and sales of cable assemblies.
MEC SUZHOU ELECTRONICS CO., LTD.	2020/01/07	Factory Buildings B and C, No. 555, Qingyang North Road, Zhoushi Town, Kunshan City, Jiangsu Province, China.	USD9,000	Production and sales of cable assemblies
COMPUPACK TECHNOLOGY CO., LTD.	2001/08/27	3F, No. 198, Chongyang Road, Nangang District, Taipei City, Taiwan(R.O.C.)	NTD215,000	Electronic component sales business
MICON PRECISE CORP.	1987/11/02	3F, No. 196, Chongyang Road, Nangang District, Taipei City, Taiwan(R.O.C.)	NTD130,000	Electronic component sales business
CONG TY TNHH CHINH XAC NGAN VUONG	2007/05/25	New Chang Industrial Zone, Xin Chang Community, Jinjiang County, Haiyang Province, Vietnam.	VND217,383,296	Electronic components manufacturing and sales business.
DONGGUAN COMPUPACK TECHNOLOGY CO., LTD.	2017/10/24	Room 201, No. 1 Jianggan Road, Chang'an Town, Dongguan City, Guangdong Province, China.	USD350	Electronic component sales business
KUANG YING COMPUTER EQUIPMENT CO., LTD.	1991/8/1	No. 13, Dongyuan Road, Zhongli District, Taoyuan City, Taiwan (R.O.C.)	NTD259,946	Electronic components manufacturing and sales

286

Company Name	Establishme nt date	Address	Paid-in capital	Primary business or production items
				business.
INFOMIGHT INVESTMENTS LIMITED	2008/1/3	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, SAMOA	USD7,980	Investment holding
BELTA INTERNATIONAL LIMITED	2010/8/12	Palm Grove House, P.O. Box 438, Road Town, Tortola, BVI	USD3,600	Investment holding
CERTILINK INTERNATIONAL LIMITED	2004/10/18	OMC Chambers, Wickhams Cay 1, Road Town, Tortola, BVI	USD50	Electronic component sales
ACCURATE GROUP LIMITED	2003/1/3	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, SAMOA	USD4,100	Investment holding
DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD	2008/1/14	Building 1, No.1, Chang 'an Zhenyuan West Road, Chang 'an Town, Dongguan City, Guangdong Province, China.	USD4,190	Production and sales of electronic components.
SUZHOU KUANG YING ELECTRIC CO., LTD.	2003/5/9	Room 2604, Building 18, No. 3188 Renmin Road, Suzhou City, Jiangsu Province, China.	USD3,250	Production and sales of electronic components.
GENESIS TECHNOLOGY USA, INC.	2001/6/4	1325 Capital Circle, Suite A, Lawrenceville, GA 30043, USA	USD1.5	Electronic component sales business
GENESIS HOLDING COMPANY	2013/9/9	The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands.	NTD277,778	Investment holding
GENESIS ELECTRO-MECHANICAL LIMITED	2013/9/24	Unit 903, 9/F, Tower 2, Enterprise Square, No. 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong	USD12,500	Investment holding
GENESIS INNOVATION GROUP LIMITED	2017/7/21	Unit 903, 9/F, Tower 2, Enterprise Square, No. 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong	USD8,000	Investment holding
GENESIS TECHNOLOGY (NINGBO) INC.	2007/12/7	No. 20, Xingye Road, YangMing Science & Tech Industrial Park, Yuyao City, Zhejiang Province, China.	RMB5,000	Electronic components manufacturing and sales business.

287

Company Name	Establishme nt date	Address	Paid-in capital	Primary business or production items
DONGGUAN POLIXIN ELECTRIC CO., LTD.	2006/5/18	No. 16 JunPeng Road, Qingyun Lin Industrial Zone, Tangxia Town, Dongguan City ,Guangdong Province , China	RMB15,000	Electronic components manufacturing and sales business.

Note 1: Liquidation in progress.

• (C) Estimated identical shareholder information for entities with control and subordinate relationships: None.

• (D) The industries covered by the overall business operations of the affiliated enterprises. If there are interrelated business operations among the affiliated enterprises, their respective division of labor should be explained.

The industries covered by our company and its affiliated enterprises include the design, development, testing, manufacturing, and sales of electronic components such as connectors, cable assemblies, and Access and RF products. We also engage in investment activities.

288

(E) Information on Directors, Supervisors, and General Managers of Related Companies

		As	of December31,2023 Shareholding Shares Ratio 24,800,000 100% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% - - - - - - - - - - - - - - - - - - - - - - - - - -	of December31,2023 Shareholding Shares Ratio 24,800,000 100% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% - - - - - - - - - - - - - - - - - - - - - - - - - -
Company Name	Title	Name or representative	Shareholding
			Shares	Ratio
ACECONN ELECTRONIC CO., LTD.	Director	ACES ELECTRONICS CO., LTD. Representative: Yang Tsung-Lin	24,800,000	100%
ACES PRECISION INDUSTRY PTE LTD	Director	Yuan Wan-Ting	0	0%
	Director	Yang Tsung-Lin	0	0%
	Director	Wai Siew-Ping	0	0%
	General Manager	Yang Tsung-Lin	0	0%
ACESCONN HOLDINGS CO.,LTD.	Director	Yuan Wan-Ting	0	0%
ASIA CENTURY INVESTMENT LTD.	Director	Yuan Wan-Ting	0	0%
ACES INTERCONNECT(USA), INC.	Director /Representative	Yang Tsung-Lin	0	0%
ACES JAPAN CO., LTD.	Representative Director	Yang Tsung-Lin	0	0%
	Representative Director	Kato Nobukazu	0	0%
DONGGUAN ACES ELECTRONIC CO., LTD. (Note)	Chairman	Yuan Wan-Ting	-	-
	Director	Huang Wen-Cheng	-	-
	Director	Yang Tsung-Lin	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Lin Ying-Yun	-	-
KUNSHAN ACES ELECTRONIC CO., LTD. (Note)	Chairman	Yuan Wan-Ting	-	-
	Director	Huang Wen-Cheng	-	-
	Director	Yang Tsung-Lin	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Chan Wei-Chen	-	-
KUNSHAN ACES TRADING CO., LTD. (Note)	Chairman	Yuan Wan-Ting	-	-
	Director	Huang Wen-Cheng	-	-
	Director	Yang Tsung-Lin	-	-

289

Company Name	Title	Name or representative	Shareholding	Shareholding
			Shares	Ratio
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Chan Wei-Chen	-	-
CHONGQING HONG GAO ELECTRONIC CO., LTD. (Note)	Chairman	Yuan Wan-Ting	-	-
	Director	Huang Wen-Cheng	-	-
	Director	Yang Tsung-Lin	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Chan Wei-Chen
GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU (Note)	Chairman	Yuan Wan-Ting	-	-
	Director	Huang Wen-Cheng	-	-
	Director	Yang Tsung-Lin	-	-
	Supervisor	Lu Yi-Hsing	-	-
	General Manager	Wang Hsueh-Hui	-	-
KUNSHAN CHENGGANG ELECTRONIC TECHNOLOGY CO., LTD. (Note)	Chairman	Yuan Wan-Ting	-	-
	Director	Lin Wan-Fu	-	-
	Director	Yang Tsung-Lin	-	-
	General Manager	Wang Hsueh-Hui	-	-
ACES ZHUHAI TECHNOLOGY LTD (Note)	Chairman	Yuan Wan-Ting	-	-
	Director	Lin Wan-Fu	-	-
	Director	Yang Tsung-Lin	-	-
	Director	Wang Hsueh-Hui	-	-
	General Manager	Lin Yin-Yun
WEI HONG INTERNATIONAL INVESTMENT CO., LTD.	Chairman	ACES ELECTRONICS CO., LTD. Representative: Yuan Wan-Ting	2,500,000	100%
ACES PRECISION MACHINERY CO., LTD.	Chairman	ACES ELECTRONICS CO., LTD. Representative: YuanWan-Ting	13,000,000	100%
	General Manager	Hsu Sheng-Hsien	0	0%

290

Company Name	Title	Name or representative	Shareholding	Shareholding
			Shares	Ratio
HONGYU SURFACE TREATMENT CO., LTD.	Chairman	ACES PRECISION MACHINERY CO., LTD. Representative: Hsu Sheng-Hsien	700,000	100%
JASON TECHNOLOGY LIMITED	Director	Lin Wan-Fu	0	0%
	Director	Ho Wai-Kuen	0	0%
MEC IMEX INC.	Chairman	ACES ELECTRONICS CO., LTD. Representative: Yuan Wan-Ting	47,582,370	99.86%
	Director	ACES ELECTRONICS CO., LTD. Representative: Hsieh Han-Chang	47,582,370	99.86%
	Director	ACES ELECTRONICS CO., LTD. Representative: YangTsung-Lin	47,582,370	99.86%
	Supervisor	Tsai Shu-Chuan	0	0%
	General Manager	Huang Tien-Fu	0	0%
MEC INTERNATIONAL COMPANY LTD.	Director	Yang Tsung-Lin	0	0%
MEC ELECTRONICS (HK) COMPANY LIMITED	Director	Yang Tsung-Lin	0	0%
MEC ULTRAMAX (H.K.) COMPANY LIMITED	Director	Yang Tsung-Lin	0	0%
MEC BEST KNOWN COMPANY LIMITED	Director	Yang Tsung-Lin	0	0%
HOMEPRIDE TECHNOLOGY LIMITED	Director	Yang Tsung-Lin	0	0%
MEC ELECTRONICS PHILIPPINES CORPORATION	Chairman	Yang Wei-Yen	0	0%
	Director	Yang Tsung-Lin	0	0%
	Director	Lu Yi-Hsing	0	0%
	Director	OLIVIA T. DE PERIO	0	0%
	Director	CUA, JULIE	0	0%

291

Company Name	Title	Name or representative	Shareholding	Shareholding
			Shares	Ratio
	General Manager	Lu Yi-Hsing	0	0%
MEC IMEX (USA), Inc.	Director/ Representative	Yang Wei-Xin	0	0%
MEC ELECTRONICS (SUZHOU) CO., LTD. (Note)	Chairman	Yang Tsung-Lin	-	-
	Director	Lee Shu-Yun	-	-
	Director	Chan Wei-Chen	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Chan Wei-Chen	-	-
SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. (Note)	Chairman	Yang Tsung-Lin	-	-
	Director	Lee Shu-Yun	-	-
	Director	Chan Wei-Chen	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Chan Wei-Chen	-	-
HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED (Note)	Chairman	Yang Tsung-Lin	-	-
	Director	Chan Wei-Chen	-	-
	Director	Lin Ying-Yun	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Lin Ying-Yun	-	-
MEC SUZHOU ELECTRONICS CO., LTD. (Note)	Chairman	Yang Tsung-Lin	-	-
	Director	Lin Wan-Fu	-	-
	Director	Chan Wei-Chen	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Chan Wei-Chen	-	-
COMPUPACK TECHNOLOGY CO., LTD.	Chairman	ACES ELECTRONICS CO., LTD. Representative: Lin Wan-Fu	21,500,000	100%
MICON PRECISE CORP.	Chairman	COMPUPACK TECHNOLOGY CO., LTD. Representative: Fan Chi-Yuan	12,949,619	99.61%

292

Company Name	Title	Name or representative	Shareholding	Shareholding
			Shares	Ratio
	Director	COMPUPACK TECHNOLOGY CO., LTD. Representative: YangTsung-Lin	12,949,619	99.61%
	Director	COMPUPACK TECHNOLOGY CO., LTD. Representative: Lin Wan-Fu	12,949,619	99.61%
	Supervisor	Lee Shu-Yun	0	0%
CONG TY TNHH CHINH XAC NGAN VUONG (Note)	Chairman	Fan Chi-Yuan	-	-
	Vice Chairman	Lin Wan-Fu	-	-
	Director and General Manager	Liao Cheng-Yang	-	-
DONGGUAN COMPUPACK TECHNOLOGY CO., LTD. (Note)	Chairman	Lin Ying-Yun	-	-
	Director	Yang Tsung-Lin	-	-
	Director	Huang Jen-Sheuan	-	-
	Supervisor	Lee Shu-Yun	-	-
	General Manager	Fan Chi-Yuan	-	-
KUANG YING COMPUTER EQUIPMENT CO., LTD.	Chairman	ACES ELECTRONICS CO., LTD. Representative: Yuan Wan-Ting	25,905,737	99.66%
	Director	ACES ELECTRONICS CO., LTD. Representative: Hsu Sheng-Hsien	25,905,737	99.66%
	Director	ACES ELECTRONICS CO., LTD. Representative: Yang Tsung-Lin	25,905,737	99.66%
	Supervisor	Lee Shu-Yun	0	0%
	General Manager	Liu Fang-Sheng	0	0%
INFOMIGHT INVESTMENTS LIMITED	Director	Yang Tsung-Lin	0	0%
BELTA INTERNATIONAL LIMITED	Director	Yang Tsung-Lin	0	0%

293

Company Name	Title	Name or representative	Shareholding	Shareholding
			Shares	Ratio
CERTILINK INTERNATIONAL LIMITED	Director	Yang Tsung-Lin	0	0%
ACCURATE GROUP LIMITED	Director	Yang Tsung-Lin	0	0%
DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD (Note)	Chairman	Yang Tsung-Lin	-	-
	Director	Hsu Sheng-Hsien	-	-
	Director	Lin Ying-Yun	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Lin Ying-Yun	-	-
SUZHOU KUANG YING ELECTRIC CO., LTD. (Note)	Chairman	Yang Tsung-Lin	-	-
	Director	Hsu Sheng-Hsien	-	-
	Director	Chan Wei-Chen	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Chan Wei-Chen	-	-
GENESIS TECHNOLOGY USA, INC.	Director	Yang Tsung-Lin	-	-
GENESIS HOLDING COMPANY	Director	Yang Tsung-Lin	-	-
GENESIS ELECTRO-MECHANCIAL LIMITED	Director	Yang Tsung-Lin	-	-
GENESIS INNOVATION GROUP LIMITED	Director	Yang Tsung-Lin	-	-
GENESIS TECHNOLOGY(NINGBO) INC. (Note)	Legal representative	Yang Tsung-Lin	-	-
	Executive Director	Yang Tsung-Lin	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Chan Wei-Chen	-	-
DONGGUAN POLIXIN ELECTRIC CO., LTD. (Note)	Legal representative	Lin Ying-Yun	-	-
	Executive Director	Lin Ying-Yun	-	-
	Supervisor	Wang Hsueh-Hui	-	-
	General Manager	Lin Ying-Yun	-	-

294

• Note: 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 TECHNOLOGY CO., LTD. 、 ACES ZHUHAI TECHNOLOGY LTD. 、 MEC ELECTRONICS (SUZHOU) CO., LTD. 、 SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD. 、 HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED 、 MEC SUZHOU ELECTRONICS CO., LTD. 、 CONG TY TNHH CHINH XAC NGAN VUONG 、 DONGGUAN COMPUPACK TECHNOLOGY CO., LTD. 、 DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO., LTD. 、 SUZHOU KUANG YING ELECTRIC CO., LTD. 、 DONGGUAN POLIXIN ELECTRIC CO., LTD. and GENESIS TECHNOLOGY(NINGBO) INC.

295

(F) Business operations of affiliated companies

		As of December 31, 2023 Unit: NTD thousand(The earningsper share,excludingNT$ per share)	As of December 31, 2023 Unit: NTD thousand(The earningsper share,excludingNT$ per share)	As of December 31, 2023 Unit: NTD thousand(The earningsper share,excludingNT$ per share)	As of December 31, 2023 Unit: NTD thousand(The earningsper share,excludingNT$ per share)	As of December 31, 2023 Unit: NTD thousand(The earningsper share,excludingNT$ per share)	As of December 31, 2023 Unit: NTD thousand(The earningsper share,excludingNT$ per share)	As of December 31, 2023 Unit: NTD thousand(The earningsper share,excludingNT$ per share)
Company name	Paid-in capital	Total assets	Total liabilities	Net worth	Operating revenue	Profit (loss) from operations	Profit (loss) for theyear	Earnings per share
ACES (HONG KONG) ELECTRONIC CO.,LTD.	－	－	－	－	1,563	1,440	1,506	Note 2
ACECONN ELECTRONIC CO., LTD.	621,315	4,026,481	－	4,026,481	－	(37)	10,061	0.41
ACES PRECISION INDUSTRY PTE LTD.	208,410	66,876	13,567	53,309	14,345	(1,677)	8	－
DONGGUAN ACES ELECTRONIC CO., LTD.	115,301	1,102,636	650,157	452,479	1,409,356	(39,732)	(20,168)	Note 1
KUNSHAN ACES ELECTRONIC CO., LTD.	629,475	3,329,100	668,157	2,660,943	2,188,673	(33,731)	22,974	Note 1
KUNSHAN ACES TRADING CO., LTD.	9,087	82,910	35,805	47,105	110,351	558	687	Note 1
CHONGQING HONG GAO ELECTRONIC CO.,LTD.	173,985	9,134	7,772	1,362	10,194	1,798	1,622	Note 1
KUNSHAN CHENGGANG ELECTRONIC TECHNOLOGY CO., LTD.	527,084	509,360	1,677	507,683	596	(4,777)	(4,712)	Note 1
ACES ZHUHAI TECHNOLOGY LTD	150,350	149,124	－	149,124	－	(2,081)	3,138	Note 1
WEI HONG INTERNATIONAL INVESTMENT CO., LTD.	25,000	27,789	4	27,785	－	(437)	(188)	(0.08)
ACESCONN HOLDINGS CO.,LTD.	351,112	160,905	－	160,905	－	－	(26,709)	(2.23)
ASIA CENTURY INVESTMENT LTD.	351,112	160,904	－	160,904	－	(33)	(26,709)	(2.92)
GALIS ACCURATE SMITHCRAFT PRODUCTS CO., LTD. OF SUZHOU	256,682	267,142	127,443	139,699	315,912	(26,410)	(27,235)	Note 1
ACES JAPAN CO., LTD.	15,137	14,177	－	14,177	21,700	1,505	1,078	239.56
ACES PRECISION MACHINERY CO., LTD.	130,000	113,286	37,909	75,377	36,408	(12,207)	(15,143)	(1.16)

296

Company name	Paid-in capital	Total assets	Total liabilities	Net worth	Operating revenue	Profit (loss) from operations	Profit (loss) for theyear	Earnings per share
HONGYU SURFACE TREATMENT CO., LTD.	7,000	8,450	2,153	6,297	795	(2,747)	(2,703)	(3.86)
ACES INTERCONNECT(USA) INC.	9,711	12,001	2,459	9,542	2,379	(142)	(142)	(0.47)
MEC IMEX INC.	476,500	1,052,015	490,888	561,127	523,673	(13,126)	(130,721)	(2.74)
MEC INTERNATIONAL COMPANY LTD.	1,295,195	470,627	135,411	335,216	－	(88)	(114,061)	(3,415)
MEC ELECTRIC SOLUTIONS GMBH	3,179	3,389	544	2,845	914	(602)	(641)	(641)
MEC ELECTRONICS (HK) COMPANY LTD.	157,515	141,678	31,727	109,951	133,667	(4,847)	13,344	26.16
MEC ULTRAMAX (H.K.) COMPANY LTD.	122,400	80,903	98	80,805	－	(115)	1,102	0.04
MEC BEST KNOWN COMPANY LTD.	473,201	9,312	110	9,202	－	(358)	(4,403)	(0.04)
HOMEPRIDE TECHNOLOGY LTD.	230,261	64,928	15,791	49,137	－	(126)	16,699	0.29
MEC ELECTRONICS PHILIPPINES CORPORATION	54,085	529,708	264,428	265,280	876,604	18,051	6,924	0.87
MEC IMEX (USA), INC.	12,544	19,394	1,839	17,555	30,086	(213)	(213)	(53.25)
MEC ELECTRONICS (SUZHOU) CO., LTD.	121,853	75,959	22	75,937	－	(100)	1,185	Note 1
SUZHOU HANTENG ELECTRONICS TECHNOLOGY CO., LTD.	519,336	8,967	60	8,907	7,821	(2,799)	(4,906)	Note 1
HOMEPRIDE ELECTRONICS (DONGGUAN) COMPANY LIMITED	214,991	170,791	106,476	64,315	368,054	16,477	17,009	Note 1
MEC SUZHOU ELECTRONICS CO.,LTD.	272,030	266,384	262,967	3,417	612,198	(119,220)	(125,130)	Note 1

297

Company name	Paid-in capital	Total assets	Total liabilities	Net worth	Operating revenue	Profit (loss) from operations	Profit (loss) for theyear	Earnings per share
COMPUPACK TECHNOLOGY CO., LTD.	215,000	438,031	295,969	142,061	540,125	(10,153)	(37,892)	(1.76)
MICON PRECISE CORP.	130,000	13,847	(15,887)	(2,039)	28,293	(1,142)	(39,142)	(3.01)
GLOBAL ACUMEN LIMITED	0	0	0	－	－	－	13,770	Note 1
CONG TY TNHH CHINH XAC NGAN VUONG	336,292	123,117	129,198	(6,081)	76,167	(29,377)	(38,316)	Note 1
DONGGUAN COMPUPACK TECHNOLOGY CO., LTD.	10,477	38,743	25,721	13,022	88,052	3,045	3,231	Note 1
KUANG YING COMPUTER EQUIPMENT CO., LTD.	259,946	561,918	247,151	314,767	614,538	(6,303)	47,272	1.82
INFOMIGHT INVESTMENTS LIMITED	285,904	194,649	－	194,649	－	(41)	32,740	4.10
BELTA INTERNATIONAL LIMITED	52,349	152,521	－	152,521	－	(58)	30,117	7,529.25
CERTILINK INTERNATIONAL LIMITED	1,605	259	4,670	(4,411)	－	(54)	(14)	(0.28)
ACCURATE GROUP LIMITED	131,588	41,324	－	41,324	－	(42)	2,623	0.64
DONGGUAN KUANGYING HARDWARE PLASTIC PRODUCT CO.,LTD	129,711	354,155	203,448	150,707	535,211	25,439	30,156	Note 1
SUZHOU KUANG YING ELECTRIC CO.,LTD.	153,819	4,110	434	3,676	328	1,717	1,833	Note 1
JASON TECHNOLOGY LIMITED	－	35,664	26,932	8,732	47,384	442	442	0.09
GENESIS HOLDING COMPANY	277,778	703,939	0	703,939	0	123	38,901	1.40
GENESIS TECHNOLOGY USA, INC	43	315,460	149,162	166,298	534,272	(15,448)	(37,708)	(25,139)

298

Company name	Paid-in capital	Total assets	Total liabilities	Net worth	Operating revenue	Profit (loss) from operations	Profit (loss) for theyear	Earnings per share
GENESIS INNOVATION GROUP LIMITED	228,280	343,611	203	343,407	450,958	(262)	36,439	4.55
GENESIS ELECTRO-MECHA NICAL LIMITED	268,229	333,394	5,079	328,315	0	(202)	(23,986)	(2.55)
GENESIS INTERCONNECT CO.,LTD.	0	0	0	0	0	(46)	(466)	Note 2
GENESIS GUIZHOU TECHNOLOGY CO., LTD.	0	0	0	0	0	(1,025)	(825)	Note 3
DONGGUAN POLIXIN ELECTRIC CO.,LTD.	65,150	108,978	102,503	6,474	214,942	9,873	5,210	Note 1
GENESIS TECHNOLOGY(NIN GBO)INC.	21,720	133,828	89,753	44,075	235,863	(31,760)	(32,245)	Note 1
SHENZHEN JINO ELECTRONIC CO., LTD.	0	0	0	0	0	(392)	5,044	Note 2

• Note 1: The affiliated company is a limited company without shares, so it is not possible to calculate earnings per share.

• Note 2: ACES (HONG KONG) ELECTRONIC CO., LTD., GENESIS INTERCONNECT CO., LTD., and SHENZHEN JINO ELECTRONIC CO., LTD. completed the dissolution and liquidation process in 2023.

Note 3: GENESIS GUIZHOU TECHNOLOGY CO., LTD. was sold in 2023.

• B. Consolidated financial statements for related companies' merger

The company will not prepare a separate consolidated financial statement for related party mergers for the fiscal year 2023 (from January 1, 2023, to December 31, 2023) in accordance with the "Guidelines for the Preparation of Consolidated Financial Statements for Related Party Mergers, Related Financial Statements, and Reports" and International Accounting Standard No. 27 recognized by the Financial Supervisory Commission for the preparation of consolidated financial statements for parent and subsidiary companies. The relevant information required for the related party consolidated financial statements has already been disclosed in the aforementioned consolidated financial statements for parent and subsidiary companies, therefore, there is no need to prepare a separate consolidated financial statement for related party mergers.

C. Relationship report

According to Article 369-12 of the Company Law, as a subsidiary of a non-publicly traded stock company, our company is not required to prepare a related-party transaction report.

• (2) Execution status and disclosure items for the Company has carried out a private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

299

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

• (4) Other matters that require additional description: None.

• (5) If any of the situations listed in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

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ACES ELECTRONICS CO., LTD.

Chairman Yuan Wan-Ting