AVC - Annual Report 2023 | FinancialReports.eu

ASIA VITAL COMPONENTS CO. , LTD

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT ACCOUNTANTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Address: No.248-27, Xinsheng Rd., Qianzhen Dist., Kaohsiung City 806, Taiwan (R.O.C.) Telephone: 886-7-815-7612

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese financial statements shall prevail.

～1～

==> picture [403 x 110] intentionally omitted <==

Independent Auditors’ Report

To ASIA VITAL COMPONENTS CO., LTD

Opinion

We have audited the accompanying consolidated balance sheets of ASIA VITAL COMPONENTS CO., LTD and its subsidiaries (the "Company ") as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2023 and 2022, and notes to the consolidated financial statements, including the summary of material accounting policies (together “the consolidated financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter-Making Reference to the Audits of Component Auditors section of our report) the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and their consolidated financial performance and cash flows for the years ended December 31, 2023 and 2022, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of 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 the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2023 consolidated financial statements. 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.

～2～

==> picture [93 x 98] intentionally omitted <==

1. Assessment of revenue recognition for hub-warehouse

The Company’s recognized NT$59,194,356 thousand as net sales for the year ended December 31, 2023, and source of revenue comes from the sale of goods. According to the partial sales contract of the Company, the Company prepare the stock in the hub-warehouse based on the customer's demand. The Company recognizes revenue upon the goods are picked up from the hub-warehouses and accepted by the customers if picked up. Since the revenue recognition of sales from hub-warehouse should determine the performance obligation and the timing of revenue recognition, we consider this is a key audit matter.

Our audit procedures included, but are not limited to, understanding and testing the effectiveness of the internal controls around sales revenue, include periodic reconciliation; performing test of details on the revenue from hub-warehouse and verifying the reconciliation data between the Company and customers in order to assure the occurrence of sales revenue; performing cutoff tests on the revenue from hub-warehouse for a specific period before and after the end of the financial reporting period, includes verifying documentation from hubwarehouse custodians to assess the appropriateness of revenue cutoff; confirming the inventory quantities with materiality hub-warehouse custodian to ensure the movements and remaining quantities of inventories in the hub-warehouses.

Please refer to Note 4 and 6 of consolidated financial statements for the revenue recognised disclosion.

Valuation for slow-moving inventories

As of December 31, 2023 the Company’s net inventories amounted to NT$17,234,926 thousand, constituting 24% of consolidated total assets which is significant for the financial statements. The valuation for slow-moving inventories due to the uncertainty caused by the rapid change of product technology, is closely related to the significant management judgment. Therefore, we consider this is a key audit matter.

Our audit procedures included, but are not limited to, understanding and testing the effectiveness of the internal controls over the Company’s slow-moving inventories reserve process; evaluating the appropriateness of the reserve policies for slow-moving inventories; sample-testing the accuracy of inventory aging, analyzing changes in inventory aging, considering anticipated demand and write-off activities, and recalculating inventory reserve; assessing inventory status by observing the inventory counting process.

In addition, we evaluated the adequacy of disclosures of inventories. Please refer to Note 4, 5 and 6 to the consolidated financial statements.

～3～

==> picture [93 x 98] intentionally omitted <==

Other Matter – Making Reference to the Audits of Component Auditors

Certain subsidiaries included in the consolidated financial statements were audited by other independent accountants. These subsidiaries’ total assets amounted to NT$375,259 thousand and NT$430,537 thousand, which accounted for 0.52% and 0.71% of the total consolidated assets as of December 31, 2023 and 2022, respectively. The net sales of these subsidiaries amounted to NT$800,759 thousand and NT$1,393,219 thousand, which accounted for 1.35% and 2.49% of the consolidated net sales for the years ended December 31, 2023 and 2022, respectively. Certain investments, which were accounted for under the equity method based on the financial statements of the investees, were audited by other independent accountants. Our audit, insofar as it relates to the investments accounted for under the equity method balances of NT$269,484 thousand and NT$204,880 thousand, which accounted for 0.38% and 0.34% of the total consolidated assets as of December 31, 2023 and 2022, respectively, and the related shares of investment income from the associates amounted to NT$83,156 thousand and NT$29,812 thousand, which accounted for 1.04% and 0.46% of the consolidated income fromcontinuing operations before income tax for the years ended December 31, 2023 and 2022, respectively, and the related shares of other comprehensive income from the associated amounted to (NT$1,292) thousand and (NT$7,396) thousand, which accounted for 0.35% and (2.06%) of the consolidated total comprehensive income, for the years ended December 31, 2023 and 2022, respectively, is based solely on the reports of other independent accountants.

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 the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretation Committee as endorsed and as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of the Company.

～4～

==> picture [93 x 98] intentionally omitted <==

Auditor’s 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 auditing standards generally accepted in 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 auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and we 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 an override of internal controls.
Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Company. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

～5～

==> picture [93 x 98] intentionally omitted <==

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2023 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

We have audited and expressed an unqualified opinion on only the parent company’s financial statements of the Company as of and for the years ended December 31, 2023 and 2022, respectively.

Ernst & Young, Taiwan Republic of China March 13, 2024

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.

～6～

English translation of Consolidated Financial Statements Originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD CONSOLIDATED BALANCE SHEETS

December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

Assets	Notes	December 31, 2023	December 31, 2023	December 31, 2022	December 31, 2022	Liabilities and Equity	Notes	December 31, 2023	December 31, 2023	December 31, 2022	December 31, 2022
		Amount	％	Amount	％			Amount	％	Amount	％
Current assets Cash and cash equivalents Financial assets measured at amortized costs, current Notes receivable, net Accounts receivable, net Other receivables Other receivables-related parties Inventories, net Prepayments Other current assets Total current assets Non-current assets Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets at amortized cost-noncurrent Investments accounted for under the equity method Property, plant and equipment Right-of-use assets Investment property Intangible assets Deferred tax assets Other non-current assets Net defined benefit assets, noncurrent Total non-current assets Total assets	6(1) 6(2), 8 4,6(3) 4,6(4) 6(4).(5) 6(5) 6(6) 6(7) 4,6(8) 6(2) 6(9) 4, 6(10), 8 4, 6(25), 8 4, 6(11), 8 6(12) 4, 6(29) 6(13), 8 4, 6(21)	$26,956,969 2,134,278 784,120 5,748,404 655,852 7,955 17,234,926 561,098 808,571	38 3 1 8 1 0 24 1 1	$20,048,964 1,591,337 737,514 3,992,020 342,920 8,895 17,359,772 707,461 697,119	33 3 1 6 1 0 29 1 1	Current liabilities Short-term loans Short-term notes payable Contract liabilities, current Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities, current Other current liabilities Current portion of long-term loans Total current liabilities Non-current liabilities Corporate bonds payable Long-term loans Deferred tax liabilities Lease liabilities-Non current Long-term deferred revenue Guarantee deposits Total non-current liabilities Total liabilities Equity attributable to the parent company Capital Common stock Additional paid-in capital Retained earnings Legal reserve Special reserve Undistributed earnings Total retained earnings Other components of equity Total equity attributable to the parent company Non-controlling interests Total equity Total liabilities and equity	6(14) 6(15) 6(24) 6(16) 4, 6(29) 4, 6(25) 6(17) 6(19) 6(18) 6(19) 4, 6(29) 4, 6(25) 6(20) 6(22) 6(22) 6(22) 6(22)	$6,765,540 30,000 516 3,661,646 15,111,400 6,127,180 1,689,363 254,125 2,406,429 787,127	10 0 0 5 21 9 2 0 3 1	$6,294,019 － 5,439 2,898,825 11,183,322 4,828,690 1,334,677 237,049 4,421,873 1,675,864	10 － 0 5 19 8 2 0 7 3
		54,892,173	77	45,486,002	75
		164,310 30,642 363,888 11,350,100 1,714,950 105,638 176,574 1,285,158 1,566,069 17,715	0 0 1 16 2 0 0 2 2 0	137,638 30,645 255,698 9,694,096 1,874,586 99,867 134,102 1,253,720 1,485,778 21,816	0 0 1 16 3 0 0 2 3 0			36,833,326	51	32,879,758	54
								2,400,000 2,977,023 2,039,195 869,355 665,737 35,503	4 4 3 1 1 0	2,400,000 4,189,443 1,837,012 1,026,275 705,691 12,685	4 7 3 2 1 0
								8,986,813	13	10,171,106	17
								45,820,139	64	43,050,864	71
		16,775,044	23	14,987,946	25			3,833,101 3,866,691 1,768,785 1,119,685 12,892,929	5 6 2 2 18	3,533,101 1,006,639 1,351,070 1,445,059 9,280,252	6 2 2 2 16

								15,781,399	22	12,076,381	20
								(1,451,514)	(2)	(1,119,685)	(2)
								22,029,677 3,817,401	31 5	15,496,436 1,926,648	26 3
								25,847,078	36	17,423,084	29
		$71,667,217	100	$60,473,948	100			$71,667,217	100	$60,473,948	100

(The accompanying notes are an integral part of the consolidated financial statements.)

〜 7 〜

English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars, except for earnings par share)

Items	Notes	December 31, 2023	December 31, 2023	December 31, 2022	December 31, 2022
		Amount	`％`	Amount	`％`
Operating Revenue Operating costs Gross profit Operating expenses Sales and marketing expenses General and administrative expenses Research and development expenses Expected credit impairment losses Subtotal Operating income Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit or loss of associates Subtotal Income before income tax Income tax expense Net income Other comprehensive income (loss) Items that will not be reclassified subsequently to profit or loss: Remeasurements of defined benefit pension plans Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income Income tax related to items that will not be reclassified Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Share of other comprehensive income (loss) of associates Income tax related to items that may be reclassified subsequently Total other comprehensive loss, net of tax Total comprehensive income Net income attributable to: Stockholders of the parent Non-controlling interests Comprehensive income (loss) attributable to: Common Stockholders of the parent Non-controlling interests Earnings per share (NTD) Earnings per share-basic Earnings per share-diluted	4,6(24) 6(25).(26) 6(25).(26) 6(27) 6(27) 6(27) 6(27) 4,6(9) 6(29) 6(28) 4, 6(30)	$59,194,356 (46,806,236)	100 (79)	$56,016,554 (45,166,937)	100 (81)
		12,388,120	21	10,849,617	19
		(989,645) (802,959) (3,128,895) (45,522)	(2) (1) (5) (0)	(880,457) (756,575) (2,884,592) (22,274)	(2) (1) (5) (0)
		(4,967,021)	(8)	(4,543,898)	(8)
		7,421,099	13	6,305,719	11
		387,857 755,146 (186,556) (433,646) 81,182	1 1 (0) (1) 0	88,080 688,112 (359,502) (272,269) 38,610	0 1 (1) (0) 0
		603,983	1	183,031	-
		8,025,082 (2,210,618)	14 (4)	6,488,750 (1,870,961)	11 (3)
		5,814,464	10	4,617,789	8
		(6,080) 68 1,215 (429,724) (2,492) 67,945	(0) 0 0 (1) (0) 0	18,612 1,178 (3,722) 437,310 (7,416) (86,528)	0 0 (0) 1 (0) (0)
		(369,068)	(1)	359,434	1
		$5,445,396	9	$4,977,223	9
		$5,304,713 509,751	9 1	$4,162,261 455,528	7 1
		$5,814,464	10	$4,617,789	8
		$4,970,146 475,250	8 1	$4,502,525 474,698	8 1
		$5,445,396	9	$4,977,223	9
		$14.11		$11.78
		$13.71		$11.67

(The accompanying notes are an integral part of the consolidated financial statements.)

〜 8 〜

English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO. , LTD CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

Items				Equity Attributable	to the Parent Comp	any			Non-Controlling Interests	Total Equity
	Capital	Additional Paid- in Capital		Retained Earnings		Other Comp	onents of Equity	Total
	Common Stock		Common Stock	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains (Losses) From Equity Instruments Investments Measured At Fair Value Through Other Comprehensive Income
Balance as of January 1, 2022 Appropriation and distribution of 2021 retained earnings Legal reserve Cash dividends Special reserve Donation from shareholders Cash dividends distributed from capital surplus Net income for the year ended December 31, 2022 Other comprehensive income (loss), net of tax for the year ended December 31, 2022 Total comprehensive income (loss) Share-based payment transaction Decrease in non-controlling interests Balance as of December 31, 2022 Balance as of January 1, 2023 Appropriation and distribution of 2022 retained earnings Legal reserve Cash dividends Special reserve reversed Donation from shareholders Cash dividends distributed from capital surplus Net income for the year ended December 31, 2023 Other comprehensive income (loss), net of tax for the year ended December 31, 2023 Total comprehensive income (loss) Issue of shares Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries Share-based payment transaction Increase in non-controlling interests Disposal of equity investments at fair value through other comprehensive income Balance as of December 31, 2023	$3,533,101 － $3,533,101 $3,533,101 － 300,000 $3,833,101	$1,260,103 238 (353,310)	$1,057,847 293,223	$1,326,487 118,572	$6,680,820 (293,223) (1,165,924) (118,572) 4,162,261 14,890	($1,120,959) 324,196	($324,100) 1,178	$12,413,299 － (1,165,924) － 238 (353,310) 4,162,261 340,264	$1,671,627 455,528 19,170	$14,084,926 － (1,165,924) － 238 (353,310) 4,617,789 359,434
		－	－	－	4,177,151	324,196	1,178	4,502,525	474,698	4,977,223
		99,608						99,608	(219,677)	99,608 (219,677)
		$1,006,639	$1,351,070	$1,445,059	$9,280,252	($796,763)	($322,922)	$15,496,436	$1,926,648	$17,423,084
		$1,006,639 251 (317,979)	$1,351,070 417,715	$1,445,059 (325,374)	$9,280,252 (417,715) (1,596,962) 325,374 5,304,713 (4,865)	($796,763) (329,770)	($322,922) 68	$15,496,436 － (1,596,962) － 251 (317,979) 5,304,713 (334,567)	$1,926,648 509,751 (34,501)	$17,423,084 － (1,596,962) － 251 (317,979) 5,814,464 (369,068)
		－	－	－	5,299,848	(329,770)	68	4,970,146	475,250	5,445,396
		2,550,000 10,849 253,379 363,552			2,132	5	(2,132)	2,850,000 10,854 253,379 363,552 －－	3,104 1,412,399 －	2,850,000 13,958 253,379 363,552 1,412,399 －
		$3,866,691	$1,768,785	$1,119,685	$12,892,929	($1,126,528)	($324,986)	$22,029,677	$3,817,401	$25,847,078

(The accompanying notes are an integral part of the consolidated financial statements.)

〜 9 〜

English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD

CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

For the years ended December 31, 2023 and 2022 (Expressed in thousands of New Taiwan Dollars)
Items		2023		2022
Cash flows from operating activities: Net income before tax Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expanse adjustments : Depreciation Amortization Amortization of royalty Expected credit losses Interest expense Interest income Dividend income Compensation costs of share-based payment transaction Share of (profit) of associates Loss on disposal of property, plant and equipment Loss (Gain) on disposal of investments Impairment loss on non-financial assets Others Changes in operating assets and liabilities: Notes receivable Accounts receivable Other receivables Other receivables-related parties Inventories Prepayments Other current assets Other operation assets Contract liabilities Notes payable Accounts payable Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash provided by operating activities Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets measured at amortized costs Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (Increase) in refundable deposits Acquisition of intangible assets Proceeds from disposal of intangible assets Acquisition of right-of-use asset Decrease (Increase) in other noncurrent assets-others (Increase) Decrease in other noncurrent assets-others Dividends received Net cash (used) in investing activities Cash flows from financing activities: Increase in short-term loans Increase (Decrease) in short-term loans (Decrease) increase in short-term notes payable Proceeds from long-term loans Repayments of long-term loans Increase in guarantee deposits Repayment of lease liabilites Cash dividends Proceeds from issuing shares Disposal of ownership interests in subsidiaries (without losing control) Change in non-controlling interests Net cash provided in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year		$8,025,082 1,888,934 64,191 876 45,522 433,646 (387,857) (2,070) 389,571 (81,182) 96,385 － 78,099 446,807 (46,051) (2,101,240) 11,079 940 (312,267) 146,363 (111,452) (542,941) (4,923) 762,821 3,928,078 1,300,441 (2,015,444) (1,979) 12,011,429 364,402 (435,597) (1,616,027) 10,324,207 (30,000) 3,390 －－－ (50,000) (3,657,403) 3,246 12,864 (110,537) 19 － 31,955 (126,760) 16,043 (3,907,183) 16,133,745 (15,560,506) 30,000 3,581,846 (5,659,361) 22,818 (265,249) (1,914,941) 2,850,000 13,958 1,639,760 872,070 (381,089) 6,908,005 20,048,964 $26,956,969		$6,488,750 1,660,272 54,791 876 22,274 272,269 (88,080) － 99,608 (38,610) 285,829 27,580 78,675 846,798 7,190 1,697,274 (45,480) 294 (2,632,123) 865,383 310,483 (835,296) 2,921 4,354 (2,300,956) 1,064,052 2,733,071 (1,557) 10,580,642 85,645 (244,498) (1,581,788) 8,840,001 (14,810) － (27,609) (8,786) 8,879 － (3,666,138) 30,003 (13,628) (38,620) － (193,300) (670,688) 391,504 9,540 (4,193,653) 23,937,751 (21,577,694) (250,000) 6,691,860 (4,765,263) 3,208 (219,395) (1,519,234) －－ (219,677) 2,081,556 406,249 7,134,153 12,914,811 $20,048,964

(The accompanying notes are an integral part of the consolidated financial statements.)

〜 10 〜

English Translation of Financial Statements Originally Issued in Chinese ASIA VITAL COMPONENTS CO., LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 December 2023 AND 2022

(Unless otherwise stated, all amounts expressed are in thousands of New Taiwan Dollars)

1. History and organization

ASIA VITAL COMPONENTS CO., LTD. (the Company) was incorporated on December 17, 1991. The Company’s registered address is No.248-27, Xinsheng Rd., Qianzhen Dist., Kaohsiung City. The principal activities of the Company are to manufacture, process, assemble and to import and export electronic parts, electronic materials, communication electronic machinery products, automobile parts, lighting device, computer peripherals.

The Company’s ordinary shares were publicly listed on the Taiwan Stock Exchange (TWSE) on September 27, 2002.

2. Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Company and its subsidiaries (“the Group”) for the years ended 31 December 2023 and 2022were authorized for issue by the Board of Directors on March 13, 2024.

3. Newly issued or revised standards and interpretations

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments.

The Group adopted International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after January 1, 2022. The adoption of these new standards and amendments had no material impact on the Group.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, and not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	Classification of Liabilities as Current or Non-current – Amendments to IAS 1	1 January 2024
b	Lease Liability in a Sale and Leaseback – Amendments to IFRS 16	1 January 2024
c	Non-current Liabilities with Covenants – Amendments to IAS 1	1 January 2024
d	Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7	1 January 2024

～11～

(A) Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

(B) Lease Liability in a Sale and Leaseback – Amendments to IFRS 16

The amendments add seller-lessees additional requirements for the sale and leaseback transactions in IFRS 16, thereby supporting the consistent application of the standard.

The amendments improved the information companies provide about long-term debt with covenants. The amendments specify that covenants to be complied within twelve months after the reporting period do not affect the classification of debt as current or non-current at the end of the reporting period.

(D) Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7

The amendments introduced additional information of supplier finance arrangements and added disclosure requirements for such arrangements.

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after 1 January 2024. The Group is continuously assessing the possible impact that the application of above standards and interpretations will have on the Groups financial position and financial performance and will disclose the relevant impact when the assessment is completed.

(3) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are not endorsed by FSC, but not yet adopted by the Company as at the end of the reporting period are listed below:

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS 17 “Insurance Contracts”	1 January2023
c	Lack of Exchangeability– Amendments to IAS 21	1 January2025

～12～

A. IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures , in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

B. IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in September 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

C. Lack of Exchangeability – Amendments to IAS 21

These amendments specify whether a currency is exchangeable into another currency and, when it is not, to determining the exchange rate to use and the disclosures to provide. The amendments apply for annual reporting periods beginning on or after 1 January 2025.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Group is still currently determining the potential impact of the standards and interpretations listed under(A), it is not practicable to estimate their impact on the Group at this point in time. The remaining new or amended standards and interpretations have no material impact on the Group.

～13～

4. Summary of significant accounting policies

(1) Statement of compliance

The consolidated financial statements of the Group for the years ended 31 December 2023 and 2022 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”) and IAS 34 Interim Financial Reporting as endorsed and became effective by the FSC.

(2) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Basis of consolidation

Preparation principle of consolidated financial statements

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

(a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

(b) exposure, or rights, to variable returns from its involvement with the investee, and
(c) the ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) the contractual arrangement with the other vote holders of the investee
(b) rights arising from other contractual arrangements
(c) the Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance.

If the Group loses control of a subsidiary, it:

(a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;
(b) derecognizes the carrying amount of any non-controlling interest;
(c) recognizes the fair value of the consideration received;

～14～

(d) recognizes the fair value of any investment retained;
(e) recognizes any surplus or deficit in profit or loss; and

(f) reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss.

The consolidated entities are listed as follows:

Investor	Subsidiary	Main businesses	Percentage of ownership (%)	Percentage of ownership (%)
			2023.12.31	2022.12.31
The Group	AVC INTERNATIONAL CO., LTD.`－`B.V.I. (AVCI`－`BVI)	Investmentholding	100.00%	100.00%
	CHIHUNG INTERNATIONAL LTD. (CHIHUNG)	Investmentholding	100.00%	100.00%
	RAYNEY INTERNATIONAL LTD. (RAYNEY)	Trade	100.00%	100.00%
	MERIT TRADING CORPORATION (MERIT)	Trade	100.00%	100.00%
	AVC AMERICA, INC. (AVCA)	Trade	100.00%	100.00%
	AVC INTERNATIONAL (SAMOA) CO., LTD. (AVCI(SAMOA))	Trade	100.00%	100.00%
	JADS CORPORATION (HK)LTD.(JADS)	Trade	100.00%	100.00%
	AVC INTERNATIONAL CO., LTD.`－`SAMOA (AVCI－SAMOA)	Trade	100.00%	100.00%
	HUNG YE INVESTMENT CO., LTD.(HUNG YE)	Investmentholding	100.00%	100.00%
	D-MAX TECHNOLOGY CO., LTD. (D-MAX)	Sales and manufacture of electronic parts and related products	100.00%	100.00%
	FOSITEK CORP. (FST)	Sales and manufacture of electronic parts and related products	16.87%	19.25%
	AVC EUROPE TECHNOLOGY GMBH (AVCEU)	Trade	100.00%	100.00%
	AVC TECH.(VIETNAM) CO.,LTD. (AVC(VN))	Sales and manufacture of electronic parts and related products	100.00%	100.00%

～15～

Investor	Subsidiary	Main businesses	Percentage of ownership (%)	Percentage of ownership (%)
			2023.12.31	2022.12.31
AVCI`－`BVI	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. (AVCSZ)	Sales and manufacture of electronic products	100.00%	100.00%
	MACE TECH CORP. (MACE)	Trade	100.00%	100.00%
	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. (AVCCD)	Sales and manufacture of computers, related parts and accessories	100.00%	100.00%
	AVC OPTICS CORP. (AVCOC)	Investment holding	100.00%	100.00%
MACE	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. (AVCDG)	Manufacture, process and sales of electronic products	100.00%	100.00%
AVCDG	AVC PRECISION, CO., LTD. (AVCP)	Sales and manufacture of electronic products	100.00%	100.00%
AVCOC	AVC OPTICS (WUHAN) CORP. (AVCWH)	Sales and manufacture of computers, related parts and accessories	100.00%	100.00%
AVCWH	WUHAN ASIA VITAL COMPONENTS CO.,LTD. (AVCWN)	Trade	100.00%	100.00%
CHIHUNG	TONBRIDGE INVESTMENTS LTD. (TONBRIDGE)	Investment holding	`－` (Note 1)	`－` (Note 1)
	ASIA VITAL COMPONENTS (CHINA) CO., LTD. (AVCCN)	Sales and manufacture of electronic products	100.00%	100.00%
AVCCN	BEIJING AVC TECHNOLOGY RESEARCH CENTER CO.,LTD. (AVCBJ)	Maintenance, research and development of electronic products	100.00%	100.00%
D-MAX	WUCHIDA INTERNATIONAL (SAMOA) CO., LTD. (WUCHIDA)	Investment holding	100.00%	100.00%
WUCHIDA	D-Max INTERNATIONAL CO.,LIMITED(D-Max HK)	Investment holding	100.00%	100.00%
D-Max	(JIASHAN) D-MAX ELECTRONICS CO.,LTD.	Sales and manufacture of electronic and photographic equipment	100.00%	100.00%
FST	MARKETHILL INVESTMENTS LIMITED (MARKETHILL)	Investment holding	100.00%	100.00%
	FOSITEK (VIET NAM) COMPANY LIMITED	Sales and manufacture of rails and shafts	100.00% (Note 2)	`－`
MARKETHILL	FIRST DOME CORP TELECOM.,LTD.	Sales and manufacture of rails, shafts and metal stampingtooling	100.00%	100.00%

～16～

Note 1: TONBRIDGE INVESTMENTS LTD. has been cancelled the registration in January 2023.

Note 2: FST, a subsidiary of the Company, invested in the establishment of the Company in October of 2023.

Although the percentage of ownership interests in FST is less than 50%, the company determined that it has control over FST. This is due to a combination of factors : the company remains the single largest shareholder of FST since the increase of the investment in September 2014, the company could obtain proxies to achieve relative majority in the absence of a contractual arrangement in place; and the ability of the company to appoint or approve the key management personnel of FST who have the ability to direct the relevant activities.

(4) Foreign Currency Transactions

The Group’s consolidated financial statements are presented in NT$, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

A. Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
B. Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.
C. Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

～17～

(5) Traslation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following partial disposals are accounted for as disposals:

A. when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and
B. when the retained interest after the partial disposal of an interest in a joint arrangement or a partial disposal of an interest in an associate that includes a foreign operation is a financial asset that includes a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or joint arrangement that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(6) Current and non-current distinction

An asset is classified as current when:

A. The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
B. The Group holds the asset primarily for the purpose of trading
C. The Group expects to realize the asset within twelve months after the reporting period
D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

A. The Group expects to settle the liability in its normal operating cycle
B. The Group holds the liability primarily for the purpose of trading
C. The liability is due to be settled within twelve months after the reporting period
D. The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

～18～

(7) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 12 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(8) Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

A. Financial instruments: Recognition and Measurement

The Group accounts for regular way purchase or sales of financial assets on the trade date.

The Group classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

(a) the Group’s business model for managing the financial assets and
(b) the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognise the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

～19～

(a) purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(b) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

(a) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
(b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
(c) Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
i. Purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
ii. Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

～20～

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

B. Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

The Group measures expected credit losses of a financial instrument in a way that reflects:

(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
(b) the time value of money; and
(c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measures as follow:

(a) At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Group measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.
(b) At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
(c) For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

～21～

C. Derecognition of financial assets

A financial asset is derecognized when:

(a) The rights to receive cash flows from the asset have expired
(b) The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred
(c) The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

D. Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Compound instruments

The Group evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, the Group assesses if the economic characteristics and risks of the put and call options contained in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on the rate of interest applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost before the instrument is converted or settled.

For the embedded derivative that is not closely related to the host contract (for example, if the exercise price of the embedded call or put option is not approximately equal on each exercise date to the amortized cost of the host debt instrument), it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies for an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IFRS 9 Financial Instruments .

～22～

Transaction costs are apportioned between the liability and equity components of the convertible bond based on the allocation of proceeds to the liability and equity components when the instruments are initially recognized.

On conversion of a convertible bond before maturity, the carrying amount of the liability component being the amortized cost at the date of conversion is transferred to equity.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is classified as held for trading if:

(a) it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
(b) on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or
(c) it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

(a) it eliminates or significantly reduces a measurement or recognition inconsistency; or
(b) a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

～23～

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

E. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(9) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

A. In the principal market for the asset or liability, or
B. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(10) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

～24～

Raw materials – Purchase cost on a first in, first out basis

Finished goods and work in progress – Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(11) Investments accounted for using the equity method

The Group’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Group has significant influence. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture.

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the Group’s related interest in the associate or joint venture.

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Group’s percentage of ownership interests in the associate or joint venture, the Group recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a prorata basis.

When the associate or joint venture issues new stock, and the Group’s interest in an associate or a joint venture is reduced or increased as the Group fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in Additional Paid in Capital and Investment accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Group disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures (before 1 January 2019: IAS 39 Financial Instruments: Recognition and Measurement). If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets. In determining the value in use of the investment, the Group estimates:

～25～

A. Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
B. The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets.

Upon loss of significant influence over the associate or joint venture, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(12) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such costs include the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

assets:
Buildings	20`～`57 years
Machinery and Equipment	1`～`12 years
Molding Equipment	1`～`10 years
Other Facilities	1`～`30 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

～26～

(13) Investment property

The Group’s owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal Group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets: Buildings 43 ～ 57 years

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Group transfers to or from investment properties when there is a change in use for these assets. Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

(14) Leases

For contracts entered on, the Group assesses whether the 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. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether the contract, throughout the period of use, has both of the following:

A. the right to obtain substantially all of the economic benefits from use of the identified asset; and

B. the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the standalone price, maximising the use of observable information.

～27～

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

A. fixed payments (including in-substance fixed payments), less any lease incentives receivable;
B. variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
C. amounts expected to be payable by the lessee under residual value guarantees;
D. the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
E. payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the right-ofuse asset comprises:

A. the amount of the initial measurement of the lease liability;
B. any lease payments made at or before the commencement date, less any lease incentives received;
C. any initial direct costs incurred by the lessee; and
D. an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset 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.

～28～

The Group applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Group accounted for as short-term leases or leases of low-value assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

Group as a lessor

At inception of a contract, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Group recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Group allocates the consideration in the contract applying IFRS 15.

The Group recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

(15) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditures are reflected in profit or loss for the year in which the expenditures are incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least once at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

～29～

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are recognized in profit or loss.

Research and development costs

Research costs are expensed as incurred. Development expenditures, on an individual project, are recognized as an intangible asset when the Group can demonstrate the following:

A. the technical feasibility of completing the intangible asset so that it will be available for use or sale
B. its intention to complete and its ability to use or sell the asset
C. how the asset will generate future economic benefits
D. the availability of resources to complete the asset
E. the ability to measure reliably the expenditure during development

Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. During the period of development, the asset is tested for impairment annually. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected future benefit.

A summary of the policies applied to the Group’s intangible assets is as follows:

Useful lives Amortization method used Internally generated or acquired	Patents	Computer software Finite(1`～`10 years) Amortized on a straight- line basis Acquired
	Finite(5 years) Amortized on a straight- line basis Acquired

(16) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

～30～

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(17) Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probably that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

(18) Revenue recognition

The Group’s revenue arising from contracts with customers are primarily related to sale of goods. The accounting policies are explained as follow:

The Group manufactures and sells goods. Sales are recognized when control of the goods is transferred to the customer. The main product of the Group is 3C electronic products and revenue is recognized based on the consideration stated in the contract. Some of customer contracts will refund the discount in the subsequent period. The company estimates the amount that may be refunded based on historical experience as a deduction of income and recognizes the refund liability. The aforesaid estimate will be based on the balance sheet date during the contract period be updated.

The credit period of the Group’s sale of goods is from 90 to 150 days. For all of the contracts, when the Group transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Group usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract.

～31～

However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Group has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component is arised.

(19) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(20) Share-based payment transactions

The cost of equity-settled transactions between the Group and its subsidiaries is recognized based on the fair value of the equity instruments granted. The fair value of the equity instruments is determined by using an appropriate pricing model.

The cost of equity-settled transactions is recognized, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The income statement expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

No expense is recognized for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the sharebased payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

～32～

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

(21) Government grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Where the Group receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to the statement of comprehensive income over the expected useful life and pattern of consumption of the benefit of the underlying asset by equal annual installments. Where loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as additional government grant.

(22) Post-employment benefits

All regular employees of the Company and its domestic subsidiaries are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore fund assets are not included in the Group’s consolidated financial statements. Pension benefits for employees of the overseas subsidiaries and the branches are provided in accordance with the respective local regulations.

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur.

Past service costs are recognized in profit or loss on the earlier of:

A. the date of the plan amendment or curtailment, and
B. the date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

～33～

(23) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

A. where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
B. in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

A. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
B. In respect of deductible temporary differences associated with investments in subsidiaries and associates, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

～34～

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(24) Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The consideration transferred, the identifiable assets acquired and liabilities assumed are measured at acquisition date fair value. For each business combination, the acquirer measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and are classified under administrative expenses.

When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognized at the acquisitiondate fair value. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with IFRS 9 Financial Instruments either in profit or loss or as a change to other comprehensive income. However, if the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.

Goodwill is initially measured as the amount of the excess of the aggregate of the consideration transferred and the non-controlling interest over the net fair value of the identifiable assets acquired and the liabilities assumed. If this aggregate is lower than the fair value of the net assets acquired, the difference is recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or group of units to which the goodwill is so allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purpose and is not larger than an operating segment before aggregation.

～35～

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation. Goodwill disposed of in this circumstance is measured based on the relative recoverable amounts of the operation disposed of and the portion of the cash-generating unit retained.

5. Significant accounting judgements, estimates and assumptions

The preparation of the Group’s consolidated financial statements require management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Inventories

Estimates of net realisable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made.Please refer to Note 6 for more details.

6. Contents of significant accounts

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and demand deposits Time deposits Securities purchased under resell agreements Total	31 Dec 2023	31 Dec 2022
	$20,641,043 6,284,631 31,295	$19,013,406 1,004,848 30,710
	$26,956,969	$20,048,964

Cash and cash equivalents were not pledged.

(2) Financial assets measured at amortized cost, current

Current: Bank deposits Noncurrent: Bond Total	31 Dec 2023	31 Dec 2022
	$2,134,278 30,642	$1,591,337 30,645
	$2,164,920	$1,621,982

The Group classified certain financial assets as financial assets measured at amortized cost. Please refer to Note 8 for more details on financial assets measured at amortized cost under pledge and Note 12 for details on credit risk and assessment of impairment loss.

～36～

(3) Notes receivable, net

Notes receivable Less: loss allowance Total	31 Dec 2023	31 Dec 2022 $739,277 (1,763) $737,514
	$785,579 (1,459)
	$784,120

B. Notes receivables arised from operating activities and were not pledged.
C. The Group follows the requirement of IFRS 9 to assess the impairment. The Group measures the loss allowance of its note receivables at an amount equal to lifetime expected credit losses. The movement in the provision for impairment of note receivables as of 31 December, 2023 and 2022 is as follows:
D. Movement of the loss allowance table:

As of 1 Jan 2023 (Reversal) for the current period Foreign exchange adjustments As of 31 Dec 2023 As of 1 Jan 2022 (Reversal) for the current period Foreign exchange adjustments As of 31 Dec 2022	Loss allowance
	$1,763 (277) (27)
	$1,459
	Loss allowance
	$3,039 (1,351) 75
	$1,763

(4) Accounts receivable, net

Accounts receivable, net
A. Account receivables Less: loss allowance Total	31 Dec 2023	31 Dec 2022 $4,160,600 (168,580) $3,992,020
	$5,957,796 (209,392)
	$5,748,404

B. Accounts receivables were not pledged.
C. Trade receivables are generally on 90-150 day terms. The total carrying amount as of 31 December, 2023 and 31 December, 2022 were $5,957,796 thousand and $4,160,600 thousand, respectively. The Group follows the requirement of IFRS 9 to assess the impairment, measure the loss allowance of its trade receivables at an amount equal to lifetime expected credit losses, condsider the grouping of note receivables by counterparties’ credit rating, by geographical region and by industry sector, and its loss allowance is recognized based on expected loss ratio, details are as follow.

～37～

Neither past due nor impaired	Past due but not impa	Past due but not impa	ired	Total
	31~90 days	91~180 days	>=181 days
$5,890,936 0%~5% 173,082	$30,359 1%~10% 303	$35 5%~20% 2	$36,466 50%~100% 36,005	$5,957,796 209,392
$5,717,854	$30,056	$33	$461	$5,748,404
$4,110,902 0%~5% 140,935	$7,519 1%~10% 75	$5,961 5%~20% 298	$36,218 50%~100% 27,272	$4,160,600 168,580
$3,969,967	$7,444	$5,663	$8,946	$3,992,020

D. Movement of the loss allowance table:

As of 1 Jan 2023 Charge for the current period Foreign exchange adjustments As of 31 Dec 2023 As of 1 Jan 2022 Charge for the current period Foreign exchange adjustments As of 31 Dec 2022	Collectively impaired $168,580 42,164 (1,352) $209,392 $142,749 24,346 1,485 $168,580

E. The Group entered into a factoring agreement with the following banks to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable, but is liable for the losses incurred on any business dispute. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognized the transferred accounts receivable.

As of 31 December 2023 and 2022, other receivables from banks incurred by accounts receivable factoring amounted to NT$459,167 thousand and NT$155,123 thousand, respectively.

As of 31 December 2023 and 31 December 2022, the relevant information of accounts receivable factored and derecognised by the Group is as follows:

(a) 31 December 2023:

The Factor (Transferee) E.SUN CTBC Total	Rates (%) `－` `－`	Accounts receivable factoring not yet due(in thousands) $13,359 1,595 $14,954	Amount received (in thousands) `－` `－` `－`	Retention (recognized as other receivables) (in thousands) $13,359 1,595 $14,954	Credit Limit (in thousands)
					$100,000 20,000
					$120,000

～38～

(b) 31 December, 2022:

The Factor (Transferee) E.SUN CTBC Total	Rates (%) 5.127%~ 5.325% 5.3911%~ 5.4043%	Accounts receivable factoring not yet due(in thousands) $31,484 11,610 $43,094	Amount received (in thousands) $27,594 10,449 $38,043	Retention (recognized as other receivables) (in thousands) $3,890 1,161 $5,051	Credit Limit (in thousands)
					$100,000 20,000
					$120,000

(5) Other receivables and other receivables-related parties

Tax refund receivable Other receivables Less: loss allowance Subtotal Other receivables`－`related parties Total	2023.12.31	2022.12.31
	$64,695 607,779 (16,622)	$52,356 303,699 (13,135)
	655,852	342,920
	7,955	8,895
	$663,807	$351,815

B. The Group follows the requirement of IFRS 9 to assess the impairment. The Group measures the loss allowance of its other receivables at an amount equal to lifetime expected credit losses, condsiders the grouping of note receivables by counterparties’ credit rating, by geographical region and by industry sector and its loss allowance is recognized based on expected loss ratio, details are as follow. Please refer to Note 12 for more details on credit risk management.

C. Movement of the loss allowance table:

Movement of the loss allowance table:
As of 1 Jan 2023 Charge for the current period Write off Foreign exchange adjustments As of 31 Dec 2023 As of 1 Jan 2022 (Reversal) for the current period Write off Foreign exchange adjustments As of 31 Dec 2022	Collectively impaired
	$13,135 3,635 `－` (148)
	$16,622
	$13,737 (721) `－` 119
	$13,135

(6) Inventories

A.

Raw materials Work in progress Finished goods Total	31 Dec 2023	31 Dec 2022
	$3,342,569 1,217,410 12,674,947	$3,607,360 1,109,560 12,642,852
	$17,234,926	$17,359,772

～39～

B. Expenses and losses incurred on inventories for the years ended 31 December 2023 and 2022 were as follows:

as follows:
Cost of inventories sold Loss on inventory valuation Loss on disposal of Inventory Cost of goods sale	2023	2022
	$46,331,908 166,186 308,142	$44,292,404 542,834 331,699
	$46,806,236	$45,166,937

C. No inventories were pledged.

(7) Prepayments

(7)	Prepayments	Prepayments
(8)	31 Dec 2023 31 Dec 2022 Payment in advance $483,818 $658,480 Other prepaid expenses 77,280 48,981 Total $561,098 $707,461 Financial assets at fair value through other comprehensive income, noncurrent 31 Dec 2023 31 Dec 2022 Debt instrument investments measured at fair value through other comprehensive income – Non-current: Unlisted companies stocks $164,310 $137,638		31 Dec 2022
			$658,480 48,981
			$707,461
	Debt instrument investments measured at fair value through other comprehensive income – Non-current: Unlisted companies stocks	31 Dec 2023
		$164,310

Financial assets at fair value through other comprehensive income were not pledged.

(9) Investments accounted for under the equity method

A. The following table lists the investments in associates of the Group:

	31 Dec 2023	31 Dec 2023	31 Dec 2022	31 Dec 2022
Investees	Carrying	Percentage of	Carrying	Percentage of
	amount	ownership (%)	amount	ownership (%)
Investments in associates:
ZIMAG TECHNOLOGY CO., INC. (Note 1)	$50,498	9.53`％`	$50,818	9.53`％`

FURUKAWA AVC ELECTRONICS (SUZHOU) CO., LTD.	160,502	30.00`％`	98,316	30.00`％`

ZHUZHOU CRRC-AVC THERMAL TECHNOLOGY CO., LTD.	108,982	25.00`％`	106,564	25.00`％`

KEY APPLICATION TECHNOLOGY CO., LTD. (Note 2)	`－`	16.31`％`	`－`	16.31`％`

PARAGON SEMICONDUCTOR LIGHTING TECHNOLOGY CO.,LTD.	43,906	40.00`％`	`－`	`－`

Total	$363,888		$255,698

～40～

Note 1: The Group evaluated and concluded that it has significant influence over Innovision, thus, this investment of the Group used the equity method for evaluation.
Note 2: The Group evaluated and concluded that it has significant influence over Innovision, thus, this investment of the Group used the equity method for evaluation.

Certain investments accounted for under the equity method were audited by other independent accountants. Shares of profit or loss of these associates amounted to NT$83,156 thousand and NT$29,812 thousand for the years ended 31 December 2023 and 2022, respectively. Share of other comprehensive income (loss) of these associates amounted to NT$(1,292) thousand and NT$(7,396) thousand for the years ended 31 December 2023 and 2022, respectively. The balances of investments accounted for under the equity method were NT$269,484 thousand and NT$204,880 thousand as of 31 December 2023 and 2022, respectively.

None of the aforementioned associates were pledged.

B. Financial information of associates:

There is no individually significant associate for the Group. When an associate is a foreign operation, and the functional currency of the foreign entity is different from the Group, an exchange difference arising from translation of the foreign entity will be recognized in other comprehensive income (loss).

The aggregate financial information of the Group’s investments in its joint ventures is as follows:

	For theyears ended	For theyears ended
	31 Dec 2023	31	Dec 2022
Net income	$81,182		$38,610
Other comprehensive (loss) income	(2,492)		(7,416)
Total comprehensive income	$78,690		$31,194
Property, plant and equipment
	31 Dec 2023		31 Dec 2022
Owner occupied property, plant and equipment	$11,350,100		$9,694,096

(10) Property, plant and equipment

～41～

A. Owner occupied property, plant and equipment (applicable under IFRS 16 requirements)

Land	Buildings	Machinery and equipment	Molding equipment	Other facilities	Construction in progress and equipment awaiting examination	Total
$167,151 －－－－	$3,365,191 512,702 － (10,111) (59,653)	$7,348,096 1,714,772 (325,280) － (266,023)	$846,333 228,101 (128,452) － (20,638)	$3,396,428 1,077,127 (139,780) － (20,719)	$1,440,945 124,701 －－ (56,020)	$16,564,144 3,657,403 (593,512) (10,111) (423,053)
$167,151	$3,808,129	$8,471,565	$925,344	$4,313,056	$1,509,626	$19,194,871
`－` `－` `－` `－` `－` `－`	$1,070,817 115,901 －－ 538 (13,747)	$3,084,204 771,845 78,136 (190,685) － (193,197)	$737,437 131,812 － (127,791) － (28,867)	$1,977,590 592,942 － (120,126) － (42,038)	－－－－－－	$6,870,048 1,612,500 78,136 (438,602) 538 (277,849)
`－`	$1,173,509	$3,550,303	$712,591	$2,408,368	－	$7,844,771

～42～

Land	Buildings	Machinery and equipment	Molding equipment	Other facilities	Construction in progress and equipment awaiting examination	Total
$167,151 －－－－	$3,304,819 8,721 (21,151) (1,268) 74,070	$6,302,197 1,787,902 (780,442) － 38,439	$928,372 92,230 (186,225) － 11,956	$3,002,298 568,332 (191,147) － 16,945	$204,132 1,208,953 －－ 27,860	$13,908,969 3,666,138 (1,178,965) (1,268) 169,270
$167,151	$3,365,191	$7,348,096	$846,333	$3,396,428	$1,440,945	$16,564,144
`－` `－` `－` `－` `－` `－`	$942,969 101,570 － (12,975) (208) 39,461	$2,862,849 633,040 78,675 (484,938) － (5,422)	$695,325 219,606 － (185,802) － 8,308	$1,696,692 432,194 － (165,033) － 13,737	－－－－－－	$6,197,835 1,386,410 78,675 (848,748) (208) 56,084
`－`	$1,070,817	$3,084,204	$737,437	$1,977,590	－	$6,870,048
$167,151	$2,634,620	$4,921,262	$212,753	$1,904,688	$1,509,626	$11,350,100
$167,151	$2,294,374	$4,263,892	$108,896	$1,418,838	$1,440,945	$9,694,096

～43～

B. The Group has evaluated the value of some machinery and equipment has been impaired, and impairment losses are recognized amounted to NT$78,099 thousand and NT$78,675 thousand for the years ended 31 December 2023 and 2022, respectively. The recoverable amount is the difference between fair value and disposal cost, this fair value measurement is categorized under Level 3.
C. Please refer to Note 8 for more details on property, plant and equipment under pledge.

(11) Investment property

Investment property includes the Group's own occupied investment property and the investment property held by the Group with the right-of-use assets. The Group enters into commercial property leasing contracts for its own investment property with a leasing period ranging from 1 to 10 years. The lease contract includes provisions for adjusting the rent based on the annual market environment.

Cost`：` As of 1 Jan 2023 Additions Transfers and reclassifications Exchange differences As of 31 Dec 2023 As of 1 Jan 2022 Additions Transfers and reclassifications Exchange differences As of 31 Dec 2022 Depreciation and impairment: As of 1 Jan 2023 Depreciation Transfers and reclassifications Exchange differences As of 31 Dec 2023 As of 1 Jan 2022 Depreciation Transfers and reclassifications Exchange differences As of 31 Dec 2022 Net carrying amount as at: As of 31 Dec 2023 As of 31 Dec 2022	Land $8,769 `－` `－` `－` $8,769 $8,769 `－` `－` `－` $8,769 `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` $8,769 $8,769	Buildings $182,921 `－` 10,111 (1,260) $191,772 $180,637 `－` 1,268 1,016 $182,921 $91,823 3,888 (538) (270) $94,903 $86,910 3,485 208 1,220 $91,823 $96,869 $91,098	Total
			$191,690 `－` 10,111 (1,260)
			$200,541
			$189,406 `－` 1,268 1,016
			$191,690
			$91,823 3,888 (538) (270)
			$94,903
			$86,910 3,485 208 1,220
			$91,823
			$105,638
			$99,867

～44～

Rental income from investment property Less: Direct operating expenses from investment property generating rental income Total	2023	2022
	$21,652 (6,031)	$18,743 (5,623)
	$15,621	$13,120

Please refer to Note 8 for more details on investment property under pledge.

The investment property held by the Group is industrial land and buildings, and the fair value is equivalent to the carrying value.

(12) Intangible assets

Computer

	Computer
Cost: As of 1 Jan 2023 Addition Disposals Transfers and reclassifications Exchange differences As of 31 Dec 2023 As of 1 Jan 2022 Addition Disposals Transfers and reclassifications Exchange differences As of 31 Dec 2022 Amortization and impairment: As of 1 Jan 2023 Amortization Disposals Transfers and reclassifications Exchange differences As of 31 Dec 2023	software	Patents	License fee	Goodwill	Total
	$394,347 110,537 (3,958) `－` (6,004)	$5,185 `－` `－` `－` `－`	$25,679 `－` `－` `－` `－`	$7,107 `－` `－` `－` `－`	$432,318 110,537 (3,958) `－` (6,004)
	$494,922	$5,185	$25,679	$7,107	$532,893
	$356,830 38,620 (5,208) `－` 4,105	$5,185 `－` `－` `－` `－`	$25,679 `－` `－` `－` `－`	$7,107 `－` `－` `－` `－`	$394,801 38,620 (5,208) `－` 4,105
	$394,347	$5,185	$25,679	$7,107	$432,318
	$264,774 62,541 (2,053) `－` (3,261)	$5,185 `－` `－` `－` `－`	$21,150 876 `－` `－` `－`	$7,107 `－` `－` `－` `－`	$298,216 63,417 (2,053) `－` (3,261)
	$322,001	$5,185	$22,026	$7,107	$356,319

～45～

Computer software	Patents	License fee	Goodwill	Total
$211,462 53,984 (3,423) `－` 2,751	$5,185 `－` `－` `－` `－`	$20,274 876 `－` `－` `－`	$7,107 `－` `－` `－` `－`	$244,028 54,860 (3,423) `－` 2,751
$264,774	$5,185	$21,150	$7,107	$298,216
$172,921	`－`	$3,653	`－`	$176,574
$129,573	`－`	$4,529	`－`	$134,102

Amortization expense of intangible assets under the statement of comprehensive income:

2023	2022	31 Dec 2022
$7,943	$8,236
$55,474	$46,624
	31 Dec 2023
	$1,238,823 194,534 126,760 5,952	$1,276,214 207,398 `－` 2,166
	$1,566,069	$1,485,778

(13) Other non-current assets

Please refer to Note 8 for more details on other non-current assets under pledge.

(14) Short-term borrowings

Short-term borrowings
A. Unsecured bank loans	31 Dec 2023	31 Dec 2022
	$6,795,540	$6,294,019

B. Interest rate ranges are within 1.6500%~6.6000% and 1.3700%~5.6500% as of 31 December 2023 and 2022, respectively.
C. The Group’s unused short-term lines of credits amounted to NT$15,441,812 thousand and NT$13,635,705 thousand as of 31 December 2023and 2022, respectively.

～46～

(15) Short-term notes and bills payable

property	Guarantee or acceptance agency	112.12.31	111.12.31
Commercial papers payable Range of interest rates	Mega Bills Finance CO., LTD.	$30,000	$`－`
		112.12.31	111.12.31
		1.6400%	`－`

(16) Other payables

Salaries and bonus Employee’s compensation and remuneration of directors Others Total	31 Dec 2023 $2,482,336 357,549 3,287,295 $6,127,180	31 Dec 2022
		$2,015,224 293,002 2,520,464
		$4,828,690

(17) Other current liabilities

Other current liabilities
Refund liabilities Others Net	31 Dec 2023	31 Dec 2022
	$1,315,733 1,090,696	$1,517,063 2,904,810
	$2,406,429	$4,421,873

(18) Corporate Bonds payable

Corporate Bonds payable
5 year secured bonds - issued at par value. Issued in August 2020. Interest at 0.62%, bullet repayment, payable annually Less: current portion Net	31 Dec 2023	31 Dec 2022	Collateral
	$2,400,000 `－`	$2,400,000 `－`	Bank guarantee
	$2,400,000	$2,400,000

The issuance of the above corporate bonds payable is to repay existing loans and expand working capital, the Company entered into a syndicated credit facility agreement with 9 banks by E.SUN Commercial Bank, Taiwan Cooperative Bank, Hua Nan Commercial Bank, Bank of Taiwan, Land Bank of Taiwan, Mega International Commercial Bank, The Shanghai Commercial & Savings Bank, First Commercial Bank and CTBC Bank for a NT$2,424,000 thousand credit line.

～47～

- (19) Long term borrowings

19) Long-term borrowings
Unsecured Long-Term Loan from Shanghai Commercial & Savings Bank Unsecured Long-Term Loan from Shanghai Commercial & Savings Bank Unsecured Long-Term Loan from Taipei Fubon Bank Unsecured Long-Term Loan from Bank of Taiwan Unsecured Long-Term Loan from E. Sun Bank Unsecured Long-Term Loan from E. Sun Bank Unsecured Long-Term Loan from Taiwan Cooperative Bank Unsecured Long-Term Loan from Jih Sun Bank	31 Dec 2023	31 Dec 2022
	`－` `－` `－` `－` `－` $500,000 `－` `－`	$87,500 175,000 100,000 141,666 175,000 `－` 105,000 132,000

～48～

Unsecured Long-Term Loan from Taiwan Business Bank Unsecured Long-Term Loan from Taiwan Cooperative Bank Unsecured Long-Term Loan from Taiwan Cooperative Bank Unsecured Long-Term Loan from Yuanta Commercial Bank Unsecured Long-Term Loan from Export-Import Bank of the Republic of China Unsecured Long-Term Loan from Taiwan Cooperative Bank Unsecured Long-Term Loan from Export-Import Bank of the Republic of China Unsecured Long-Term Loan from Taiwan Business Bank	31 Dec 2023	31 Dec 2022
	`－` `－` $406,250 `－` 250,000 168,750 770,000 312,500	$166,667 150,000 `－` 240,000 250,000 243,750 770,000 437,500

～49～

Unsecured Long-Term Loan from HSBC Commercial Bank Unsecured Long-Term Loan from HSBC Commercial Bank Unsecured Long-Term Loan from Hua Nan Bank Unsecured Long-Term Loan from Hua Nan Bank Unsecured Long-Term Loan from DBS Bank Unsecured Long-Term Loan from Land Bank of Taiwan Unsecured Long-Term Loan from Cathay United Bank Unsecured Long-Term Loan from First Commercial Bank	31 Dec 2023	31 Dec 2022
	`－` $200,000 `－` 200,000 160,000 199,999 `－` `－`	$600,000 `－` 120,000 `－` 500,000 300,000 300,000 13,333

～50～

Unsecured Long-Term Loan from First Commercial Bank Unsecured Long-Term Loan from First Commercial Bank Unsecured Long-Term Loan from E. Sun Bank Unsecured Long-Term Loan from E. Sun Bank Unsecured Long-Term Loan from Shanghai Commercial & Savings Bank Unsecured Long-Term Loan from Taipei Fubon Bank Subtotal Less: Due within one year Total Interest rates	31 Dec 2023	31 Dec 2022
	`－` `－` `－` `－` $298,325 298,326	$28,667 40,947 241,841 241,841 304,595 `－`
	3,764,150 (787,127)	5,865,307 (1,675,864)
	$2,977,023	$4,189,443
	1.6200%~6.5600%

(20) Long-term deferred revenue

Government grants were as follows:

Beginning balance Released to the statement of comprehensive income Exchange differences Ending balance	2023 $705,691 (27,484) (12,470) $665,737	2022
		$722,619 (27,653) 10,725
		$705,691

Government grants have been received for the purchase of certain items of property, plant and equipment.

～51～

(21) Post-employment benefits

A. Defined contribution plan

The Company and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company and its domestic subsidiaries will make monthly contributions of no less than 6% of the employees’ monthly wages

to the employees’ individual pension accounts. The Company and its domestic subsidiaries have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Expenses under the defined contribution plan for the years ended 31 December 2023 and 2022 were NT$32,681 thousand and NT$32,699 thousand, respectively.

B. Defined benefits plan

The Company and its domestic subsidiaries adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded for each year after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company and its domestic subsidiaries contribute an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company and its domestic subsidiaries will estimate the aforementioned Labor Pension reserve accounts balance. If the balance is insufficient for the estimated payments to employees meeting the conditions of receiving labor pension within the following year, the Company will set aside the shortfall in full by end of March in the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the regulations for revenues, expenditures, safeguard and utilization of the labor retirement fund. The pension fund is invested in-house or under a mandate, based on a passiveaggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with IAS 19. The Company expects to contribute NT$2,664 thousand to its defined benefit plan for the following 12 months as of 31 December 2023.

The durations of defined benefit obligation for the years ended 31 December 2023 and 2022 will expire in 10 years and 11 years, respectively.

Pension costs recognized in profit or loss are as follows:

Current period service costs Net interest on the net defined benefit liabilities Total	2023	2022
	$982 (297)	$1,051 (12)
	$685	$1,039

～52～

Reconciliations of liabilities (assets) of the defined benefit obligation and plan assets at fair value are as follows:

are as follows:
Defined benefit obligation Plan assets at fair value Net defined benefit (assets) liabilities	31 Dec 2023	31 Dec 2022
	$121,561 (139,276)	$114,615 (136,431)
	($17,715)	($21,816)

Reconciliations of liabilities (assets) of the defined benefit plan are as follows:

Defined benefit obligation	Plan assets at fair value	Net defined benefit liabilities
$123,426 1,051 901	($125,073) `－` (913)	(1,647) 1,051 (12)
125,378	(125,986)	(608)
422 (8,869) (875) `－`	`－` `－` `－` (9,290)	422 (8,869) (875) (9,290)
(9,322)	(9,290)	(18,612)
(1,441) `－`	1,441 (2,596)	`－` (2,596)
$114,615 982 1,559	($136,431) `－` (1,856)	($21,816) 982 (297)
117,156 `－` 1,694 4,838 `－`	(138,287) `－` `－` `－` (452)	(21,131) `－` 1,694 4,838 (452)
6,532	(452)	6,080
(2,126) `－`	2,126 (2,664)	`－` (2,664)
$121,562	($139,277)	($17,715)

～53～

The principal underlying actuarial assumptions are as follows:

Discount Rate Rate of future salary Increase	31 Dec 2023 1.23% 2.00%	31 Dec 2022
		1.36% 2.00%

Sensitivity analysis of each major actuarial assumption:

Sensitivity analysis of each major	actuarial assumption:	actuarial assumption:
Discount Rate increase 0.5% Discount Rate decrease 0.5% Future salary increase 0.5% Future salary decrease 0.5%	2023		2022
	Defined benefit obligations increase `－` $6,838 $6,750 `－`	Defined benefit obligations decrease	Defined benefit obligations increase	Defined benefit obligations decrease
		$5,730 `－` `－` $5,720	`－` $7,006 $6,925 `－`	$5,491 `－` `－` $5,485

(22) Equities

A. Common stock

As of 31 December 2023 and 2022, the Group’s authorized capital was both NT$6,000,000 thousand, and issued NT$3,833,101 thousand and $3,533,101 thousand with 383,310 thousand shares and 353,310 thousand shares, each at a par value of NT$10. Each share has one voting right and a right to receive dividends.

On November 11, 2022, the Company convened the Board of Directors and resolved to issue 30,000 thousand new shares in cash capital increase.The par value is 10 per share and is issued at NT$95 per share. This cash capital increase and issuance of new shares, It has been Financial Supervisory Commission approved the declaration on January 16, 2023, And will take April 17, 2023 as the base date for capital increase, and complete the change registration at April 27, 2023.

B. Additional paid-in capital

Additional paid-in capital
Share premium Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries Donated assets received Premium from merger Employee stock option Share options of convertible bonds Total	31 Dec 2023	31 Dec 2022
	$2,581,008 83,185 253,379 3,637 443,730 478,460 23,292	$348,987 72,336 `－` 3,386 443,730 114,908 23,292
	$3,866,691	$1,006,639

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the group. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

C. Retained earnings and dividend policies

According to the Group’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

～54～

(a)Payment of all taxes and dues;

(b)Offset prior years’ operation losses;

(c)Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve, except for when accumulated legal reserve has reached total authorized capital.

(d)Set aside or reverse special reserve in accordance with law and regulations; and

(e)The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.
(f)According to Paragraph 5, Article 240 of the Company Act, the resolution authorizing a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors shall, in the form of the distribution of dividends and dividends or all or part of the legal reserves and capital reserves provided for in Paragraph 1, Article 241 of the Companies Act, shall be paid in cash and shall be reported to the shareholders' meeting.

The policy of dividend distribution should reflect factors such as the current and future development plan, investment environment, fund requirements, domestic and international competition as well as the interest of the shareholders. A percentage of no less than 5% of the distributable profits of the accounting period shall be distributed as shareholders' dividends annually. When the accumulated distributable profits are less than 10% of our paid-up capital, we will no longer be required to make allowances for allocation. Shareholders' dividends could be paid in the form of shares or cash. Accordingly, at least 10% of the dividends must be paid in the form of cash.

According to the Company Act, the Company needs to set aside an amount to legal reserves unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal reserves that exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

Following the adoption of TIFRS, the FSC on 31 March 2021 issued Order No. FinancialSupervisory-Securities-Corporate-1100150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside an equal amount of special reserves. Following a company’s adoption of the TIFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside to special reserves, from the profit/loss of the current period and the undistributed earnings from the previous period. The amount should equal to “other net deductions from shareholders’ equity for the current fiscal year, provided that the company has already set aside special reserves according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

As of 31 December 2023 and 2022, special reserve set aside for the first-time adoption of TIFRS amounts to $95,481 thousand. Furthermore, the Group has not reversed special reserve during the year ended 2023 and 2022 as results of the no use, disposal or reclassification of related assets. As of 31 December 2023 and 2022, special reserve set aside for the first-time adoption of TIFRS amounts to $95,481 thousand.

～55～

Details of the 2023 and 2022 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on 13 March 2024 and 15 June 2023, respectively, are as follows:

Legal reserve Special reserve Common stock -cash dividend	Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2023	2022	2023	2022 $4.52
	$530,198 331,830 1,916,551	$417,715 (325,374) 1,596,962	$5

The Board of Directors’ meeting and shareholders’ meeting on 13 March 2024 and 15 June 2023 resolved to distribute $766,620 thousand and $317,919 thousand from capital surplus to shareholders in the form of cash. Shareholders are entitled to receive $2 and $0.83 per share.

Please refer to Note 6.26 for further details on employees’ compensation and remuneration to directors and supervisors.

D. Non-controlling interests

Non-controlling interests
Beginning balance Profit attributable to non-controlling interests Other comprehensive income, attributable to non-controlling interests, net of tax: Exchange differences resulting from translating the financial statements of a foreign operation Increasing in non-controlling interests Difference between consideration and carrying amount of subsidiaries acquired or disposed Ending balance	2023	2022
	$1,926,648 509,751 (34,501) 1,412,399 3,104	$1,671,627 455,528 19,170 (219,677) `－`
	$3,817,401	$1,926,648

(23) Share-based payment

Certain employees of the Group are entitled to share-based payments as part of their remunerations. Services are provided by the employees in return for the equity instruments granted. These plans are accounted for as equity-settled share-based payments transactions.

A. Stock option plan for employees of the parent company

On July 7, 2022 and June 29, 2023, the Parent Company issue employee share options with a total number of 14,631 units and 2,058 units. Each unit entitles an optioned to subscribe for 1,000 shares of the Company’s common shares. The exercise price of the option was set at the closing price of the Company’s common share on the grant date. The optionee may exercise the options in accordance with certain schedules as prescribed by the plan starting 2 years from the grant date. Settlement upon the exercise of the options will be made through the issuance of new shares by the Parent Company.

The fair value of the share options is estimated at the grant date using a binomial option pricingmodel, taking into account the terms and conditions upon which the share options were granted.

The contractual term of each option granted is 10 years. There are no cash settlement alternatives. The Group does not have a past practice of cash settlement for these employee share options.

～56～

The relevant details of the aforementioned share-based payments plan were as follows:

Date of grant July 7, 2022 June 29, 2023	Total number of share options granted (in thousands) $14,631 $2,058	The number of shares that can be option each unit(share) 1,000 1,000	Exercise price of share Options ($) (Note)
			$50 $147.8

Note: The exercise prices are adjusted in accordance with the plan in the event that changes to the Company’s total common shares occur or when the Company pays cash dividends.

The following table lists the inputs to the model used for the plan granted during January 1 to December 31,2023:

Dividend yield(%) Expected volatility(%) Risk-free interest rate(%) Expected option life(year) Option pricing model	June 29,2023 July7,2022 `－` `－` 40.36% 36.89% 1.16% 1.2462% 10 years 10 years Binomial option pricing model Binomial option pricing model

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

The further details of the Group of 2023 on the aforementioned share-based payments plan were as follows:

	2023	2023
Stock option	Number of share options outstanding	Average exercise price of share options($)	Fulfillment price range($)	Average remaining contract period of share options
Outstanding at beginning of period Granted Exercised Expired Outstanding at end of period Exercisable at end of period	14,631 2,058 `－` `－`	$50 147.8 `－` `－` `－` `－`	$50 147.8	8.51 years 9.49years
	16,689
	16,689

～57～

B. Expenses incurred on share-based payment transactions plan were shown as follows:

2023 Expenses incurred on sharebased payment transactions (equity-settled share-based payments transactions) $308,432

(24) Operating revenues
A. Disaggregation of revenue

rating revenues Disaggregation of revenue
Sale of goods Timing of revenue recognition: At a point in time Contract balances Contract liabilities - current Sale of goods	2023	2022
	$59,194,356	$56,016,554
	$59,194,356	$56,016,554
	31 Dec 2023	31 Dec 2022
	$516	$5,439

B. Contract balances

During the period, contract liabilities significantly decreased as performance obligations are partially unsatisfied and $5,439 thousand included in the contract liability balance at the beginning of the period was recognized as revenue during the period.

(25) Leases

A. Group as a lessee

The Group leases various properties, including real estate such as land and buildings, machinery and equipment and office equipment. The lease terms range from 1 to 50 years.

The Group’s leases effect on the financial position, financial performance and cash flows are as follow:

(a) Amounts recognized in the balance sheet
I. Right-of-use assets

Right-of-use assets
Land Buildings Other equipment Total	31 Dec 2023	31 Dec 2022
	$694,526 987,123 33,301	$727,653 1,131,904 15,029
	$1,714,950	$1,874,586

During the year ended of 31 December 2023, the Group’s additions to right-of-use assets amounted to $59,416 thousand.

～58～

II. Lease liabilities

Lease liabilities
Current Non-current Total	31 Dec 2023	31 Dec 2022
	$254,125 869,355	$237,049 1,026,675
	$1,123,480	$1,263,724

Please refer to Note 6.27(4) for the interest on lease liabilities recognized during the year ended 31 Dec 2023 and refer to Note 12.5 Liquidity Risk Management for the maturity analysis for lease liabilities as of 31 Dec 2023.

(b) Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Land Buildings Other equipment Total	2023	2022
	$18,558 242,445 11,543	$19,930 239,844 10,603
	$272,546	$270,377

The expenses relating to short-term leases	2023 $53,314	2022
		$56,435

(d) Cash outflow relating to leasing activities

During the year ended 31 December 2023, the Group’s total cash outflows for leases amounting to $318,563 thousand.

B. Group as a lessor (applicable to the disclosure requirement in IFRS 16)

Please refer to Note 6.11 for relevant disclosure of the Group's own occupied investment property. Leases of owned investment properties are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

Lease income for operating leases Income relating to fixed lease payments and variable lease payments that depend on an index or a rate	2023 $27,274	2022
		$29,800

Please refer to Note 6.11 for relevant disclosure of property, plant and equipment for operating leases under IFRS 16. For operating leases entered by the Group, the undiscounted lease payments to be received and a total of the amounts for the remaining years as of 31 December 2023 are as follow:

～59～

Not later than one year Later than one year and not later than five years Later than five years Total	31 Dec 2023 $21,642 51,022 `－` $72,664	31 Dec 2022
		$18,016 42,556 `－`
		$60,572

(26) Summary statement of employee benefits, depreciation and amortization expenses by function:

Function Nature	2023	2023	2023	2022	2022	2022
	Operating costs	Operating expenses	Total amount	Operating costs	Operating expenses	Total amount
Employee benefits expense
Salaries	$4,977,474	$2,587,115	$7,564,589	$5,318,541	$2,568,788	$7,887,329
Labor and health insurance	$378,156	$163,786	$541,942	$389,518	$150,925	$540,443
Pension	$3,650	$29,716	$33,366	$4,917	$28,821	$33,738
Other employee benefits expense	$104,470	$75,370	$179,840	$119,409	$64,295	$183,704
Depreciation	$1,568,725	$320,209	$1,888,934	$1,366,419	$293,853	$1,660,272
Amortization	$7,966	$57,101	$65,067	$8,650	$47,017	$55,667

According to the Company’s Articles of Incorporation, no less than 3% of profit of the current year is distributable as employees’ compensation and no higher than 2% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributed as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the board of directors’ resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

Based on the profit of the current year, the Company estimated the amounts of the employees’ compensation and remuneration to directors for the year ended 31 December 2023 to be NT$215,000 thousand and NT$104,296 thousand, respectively. The Company estimated the amounts of employees’ compensation and remuneration to directors and supervisors for the year ended 31 December, 2022 to be NT$178,639 thousand and NT$76,559 thousand, respectively. The aforementioned amounts were recognized as employee benefits expense. If the Board of Directors resolves to distribute employees’ compensation in the form of stocks, the number of stocks distributed was calculated based on the closing price of the day before the Board of Directors meeting. The difference between the estimation and the resolution of the stockholder’s meeting will be recognized in profit or loss in the subsequent year.

A resolution was passed at a Board of Directors meeting held on 13 March, 2024 to distribute NT$215,000 and NT$104,296 in cash as employees’ compensation and remuneration to directors and supervisors of 2023, respectively.

～60～

No material differences exist between the estimated amount and the actual distribution of the employee

compensation and remuneration to irectors and audit committee for the year ended 31 December, 2022.

(27) Non-operating income and expenses

A. Interest income

A. Interest income
Interest income from bank deposits Interest income from financial assets at amortized cost Others Total B. Other income Rental income Others Total C. Other gains and losses (Losses) on disposal of property, plant and equipment (Losses) gains on disposal of investments Foreign exchange gains (losses), net Impairment loss Others Total D. Finance costs Interest on borrowings from bank Interest on corporate bonds payable Interest on lease liabilities Others Total	2023 $381,294 6,510 53 $387,857	2022
		$79,214 8,834 32
		$88,080
	2023	2022
	$27,274 727,872	$29,800 658,312
	$755,146	$688,112
	2023	2022
	($96,385) `－` 23,573 (78,099) (35,645)	($285,829) (27,580) 67,555 (78,675) (34,973)
	($186,556)	($359,502)
	2023	2022
	$366,022 14,880 40,626 12,118	$167,454 14,880 52,887 37,048
	$433,646	$272,269

～61～

(28) Components of other comprehensive income

For the year ended 31 December 2023

(28) Components of other comprehensive income For the year ended 31 December 2023	sive income 2023
Arising during theperiod Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans ($6,080) Unrealized gains from equity instruments investments measured at fair value through other comprehensive income 68 To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of a foreign operation (429,724) Share of other comprehensive income of associates accounted for using the equity method (2,492) Total of other comprehensive income ($438,228) For the year ended 31 December 2022 Arising during theperiod Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans $18,612 Unrealized gains from equity instruments investments measured at fair value through other comprehensive income 1,178 To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of a foreign operation 437,310 Share of other comprehensive income of associates accounted for using the equity method (7,416) Total of other comprehensive income $449,684	Arising during theperiod	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
	($6,080) 68 (429,724) (2,492)	`－` `－` `－` `－`	($6,080) 68 (429,724) (2,492)	$1,215 `－` 67,945 `－`	($4,865) 68 361,779 (2,492)
	($438,228)	`－`	($438,228)	$69,160	($369,068)
		Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
	$18,612 1,178 437,310 (7,416)	`－` `－` `－` `－`	$18,612 1,178 437,310 (7,416)	($3,722) `－` (86,528) `－`	$14,890 1,178 350,782 (7,416)
	$449,684	`－`	$449,684	($90,250)	$359,434

～62～

(29) Income tax

A. Income tax expense recognized in profit or loss

ome tax Income tax expense recognized in profit or loss
Current income tax expense: Current income tax charge Deferred tax expense (income) : Deferred tax expense relating to origination and reversal of temporary differences Total income tax expense Income tax relating to components of other comprehensive income Deferred tax expense (income): Remeasurements of defined benefit plans Share of other comprehensive income of associates and joint ventures accounted for using the equity method Income tax relating to components of other comprehensive income	2023	2022
	$1,970,713 239,905	$1,981,026 (110,065)
	$2,210,618	$1,870,961
	2023	2022
	($1,215) (67,945)	$3,722 86,528
	($69,160)	$90,250

B. Income tax relating to components of other comprehensive income
C. A reconciliation between income tax expense and income before tax at applicable tax rate was as follows:

follows:
Accounting profit before tax from continuing operations Using related country’s statutory income tax rate Tax effect of expenses not deductible for tax purposes Surtax on undistributed retained earnings Adjustments in respect of current income tax of prior periods Total income tax expense recognized in profit or loss	2023	2022
	$8,025,082	$6,488,750
	$2,308,197 (18) 104,222 (201,783)	$2,064,273 10,244 78,106 (281,662)
	$2,210,618	$1,870,961

D. Deferred tax assets (liabilities) relate to the following:

		2023
Beginning balance as of 1 Jan 2023	Deferred tax income (expense) recognized in profit or loss	Deferred tax income recognized in other comprehensive income	Deferred tax (expense) charged directly to equity	Ending balance as of 31 Dec 2023
$19,198 39,735 298,805 (4,404) (1,585,632) (4,033) 647,969 5,070	$7,086 (11,487) (44,817) (3,274) (303,019) (725) 119,512 (3,181)	－－－－ $67,945 1,215 －－	－－－－－－－－	$26,284 28,248 253,988 (7,678) (1,820,706) (3,543) 767,481 1,889
($583,292)	($239,905)	$69,160	－	($754,037)

$1,253,720				$1,285,158
($1,837,012)				($2,039,195)

～63～

2022

			2022
Temporary differences Allowance for bad debts Allowance for losses on inventory Unrealized profit on intercompany sales Unrealized exchange (losses) Investments accounted for under the equity method Net defined benefit liabilities, noncurrent Others Unused tax losses Deferred tax (expense)/ income Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Beginning balance as of 1 Jan 2022	Deferred tax income (expense) recognized in profit or loss	Deferred tax income recognized in other comprehensive income	Deferred tax (expense) charged directly to equity	Ending balance as of 31 Dec 2022
	$12,462 54,368 152,627 (1,629) (1,268,910) (329) 425,640 22,664	$6,736 (14,633) 146,178 (2,775) (230,194) 18 222,329 (17,594)	－－－－ ($86,528) (3,722) －－	－－－－－－－－	$19,198 39,735 298,805 (4,404) (1,585,632) (4,033) 647,969 5,070
	($603,107)	$110,065	($90,250)	－	($583,292)

	$878,884				$1,253,720
	($1,481,991)				($1,837,012)

E. The following table contains information of the unused tax losses of the Group:

Year	Tax losses for theperiod	Unused tax	Expirationyear
		31 Dec 2023
2013 2014 2017 2018 2020	61,658 49,292 3,692 168 3,702	－ $1,933 3,663 149 3,702	2023 2024 2027 2028 2030
		$9,447

F. The assessment of income tax returns

The Company’s income tax returns through 2021 have been assessed and approved by the TaxAuthority.

～64～

(30) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT$) Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Employee share options Diluted earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT$) Basic earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT$) Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Employee share options Diluted earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT$)		2023
	Amount $5,304,713 `－` `－` $5,304,713	Number of shares (shares in thousands) 376,052 723 10,270 387,045 2022	Earningsper share
			$14.11
			$13.71

	Amount $4,162,261 `－` `－` $4,162,261	Number of shares (shares in thousands) 353,310 1,595 1,615 356,520	Earningsper share
			$11.78
			$11.67

～65～

7. Key management personnel compensation

nagement personnel compensation
Short-term employee benefits Post-employment benefits Total	2023	2022
	$177,407 1,272	$124,408 1,201
	$178,679	$125,609

8. Assets pledged as security

The following table lists assets of the Group pledged as security:

Assetspledged for security	Carryingamount	Carryingamount
	31 Dec 2023	31 Dec 2022
Financial assets measured at amortized cost Land Buildings Right-of-use assets Investment property Refundable deposits Total	$2,134,278 88,235 124,154 25,024 22,792 3,500	$1,591,337 88,235 126,014 26,475 30,977 3,500
	$2,397,983	$1,866,538

9. Commitments and contingencies

(1) Legal claim contingency

None.

(2) The group has signed for a new factory construction project in Vietnam due to operational needs. As of December 31, 2023, an amount of approximately NT$390 million has yet to be recognized.

(3) Other

The Company guaranteed a deposit for customs in the amount of NT$2,500 thousand and NT$1,000

thousand from Bank of Taiwan and Taiwan Cooperative Bank, respectively.

10. Losses due to major disasters

None.

～66～

11. Significant subsequent events

The investee of subsidiary FOSITEK CORP. of the Group, was passed by the Board of Directors meeting held on 9 January 2024, and transferred investment from FIRST DOME CORP TELECOM.,LTD. to establish Dongguan Fushida Communication Co., Ltd., with a 100% ownership. On 1 March, 2024, outflow of investment amount of RMB$50 million.

12. Other

(1) Categories of financial instruments

er Categories of financial instruments
Financial assets Financial assets at fair value through profit or loss: Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash and cash equivalents (excluding cash on hand) Financial assets measured at amortized cost Amounts receivables Subtotal Total Financial liabilities Financial liabilities at amortized cost: Short-term loans Short-term notes payable Amounts payables Corporate bonds payable (including current portion) Long-term loans (including current portion) Lease liabilities (including current portion) Total	31 Dec 2023	31 Dec 2022
	$164,310 26,948,413 2,164,920 7,196,331	$137,638 20,039,260 1,621,982 5,081,349
	$36,309,664	$26,742,591
	$36,473,974	$26,880,229
	31 Dec 2023	31 Dec 2022
	$6,765,540 30,000 24,900,226 2,400,000 3,764,150 1,123,480	$6,294,019 `－` 18,910,837 2,400,000 5,865,307 1,263,324
	$38,983,396	$34,733,487

(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Group identifies measures and manages the aforementioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

～67～

A. Foreign currency risk

The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense are denominated in a different currency from the Group’s functional currency) and the Group’s net investments in foreign subsidiaries.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore forming a natural hedge. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Group’s foreign currency risk is mainly related to the volatility in the exchange rates for USD and RMB. The information of the sensitivity analysis is as follows:

(a) When NTD strengthens/weakens against USD by 1%, the profit for 2023 and 2022 is decreased/increased by NT$52,266 thousand and NT$32,767 thousand, respectively.
(b) When NTD strengthens/weakens against RMB by 1%, the profit for 2023 and 2022 is increased/decreased by NT$10,016 thousand and NT$2,863 thousand, respectively.

B. Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to bank borrowings with fixed interest rates and variable interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period. A change of 10 basis points of interest rate in a reporting period could cause the profit for 2023 and 2022 to decreased/increased by NT$16,348 thousand and NT$7,307 thousand, respectively.

C. Equity price risk

The fair value of the Group’s unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s unlisted equity securities are classified as financial assets at fair value through other comprehensive income.

～68～

The equity price sensitivity analysis is based on fair value changes as at the end of the reporting period. For the years ended 31 December 2023 and 2022, a change of 5% in the price classified as equity instruments investments measured at fair value through other comprehensive income could cause the other comprehensive income to increased/decreased by NT$8,216 thousand and decreased/increased by NT$6,882 thousand, respectively.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group’s internal rating criteria etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of 31 December 2023 and 2022, amounts receivables from top ten customers represent 76.36% and 75.21% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group’s treasury in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents and bank borrowings. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

～69～

Non-derivative financial liabilities

As of 31 December 2023 Loans Short-term notes payable Corporate bonds payable Amounts payables Lease liabilities As of 31 December 2022 Loans Corporate bonds payable Amounts payables Lease liabilities	< 1year	2 to 3years	4 to 5years	> 5years	Total
	$7,755,767 $30,038 $14,880 $24,862,598 $276,370 $8,185,382 $14,880 $18,871,258 $281,909	$2,616,571 `－` $2,414,880 `－` $470,539 $3,433,111 $2,429,760 `－` $439,097	$470,926 `－` `－` `－` $245,258 $775,432 `－` `－` $449,665	`－` `－` `－` `－` $285,405 $96,743 `－` `－` $311,688	$10,843,264 $30,038 $2,429,760 $24,862,598 $1,277,572 $12,490,668 $2,444,640 $18,871,258 $1,482,359

(6) Reconciliation of liabilities arising from financing activities Reconciliation of liabilities for 2023:

As at 1 Jan 2023 Cash flows Non-cash changes As at 31 Dec 2023	Short-term borrowings	Short-term notespayable	Corporate bondspayable	Long-term borrowings	Lease liabilities
	$6,294,019 573,239 (101,718)	`－` $30,000 `－`	$2,400,000 `－` `－`	$5,865,307 (2,077,515) (23,642)	$1,263,324 (265,249) 125,405
	$6,765,540	$30,000	$2,400,000	$3,764,150	$1,123,480

As at 1 Jan 2023 Cash flows Non-cash changes As at 31 Dec 2023	Guarantee Deposits	Total liabilities from financing activities
	$12,685 22,818 `－`	$15,835,335 (1,716,707) 45
	$35,503	$14,118,673

Reconciliation of liabilities for 2022:

As at 1 Jan 2022 Cash flows Non-cash changes As at 31 Dec 2022	Short-term borrowings	Short-term notespayable	Corporate bondspayable	Long-term borrowings	Lease liabilities
	$3,837,377 2,360,057 96,585	$250,000 (250,000) `－`	$2,400,000 `－` `－`	$3,938,711 1,926,596 `－`	$1,397,631 (219,395) 85,088
	$6,294,019	`－`	$2,400,000	$5,865,307	$1,263,324

As at 1 Jan 2022 Cash flows Non-cash changes As at 31 Dec 2022	Guarantee deposits	Total liabilities from financing activities
	$9,477 3,208 `－`	$11,833,196 3,820,466 181,673
	$12,685	$15,835,335

～70～

(7) Fair values of financial instruments
A. The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

(a) The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.
(b) Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
B. Fair value of financial instruments measured at amortized cost

The carrying amount of financial assets and financial liabilities measured at amortized cost approximate their fair value due to their short maturities.

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12.8 for fair value measurement hierarchy for financial instruments of the Group.

(8) Fair value measurement hierarchy
A. Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by reassessing categorization at the end of each reporting period.

～71～

B. Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value on a recurring basis is as follows:

As at 31 December 2023 Financial assets: Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income As at 31 December 2022 Financial assets: Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income	Level 1	Level 2	Level 3	Total
	`－` Level 1	`－` Level 2	$164,310 Level 3	$164,310 Total
	`－`	`－`	$137,638	$137,638

C. Reconciliation for fair value measurements in Level 3 is as follows:

As at 1 Jan 2023 Unrealized gains from equity instruments investments measured at fair value through other comprehensive income Acquisition Disposals Others As at 31 Dec 2023 As at 1 Jan 2022 Unrealized gains from equity instruments investments measured at fair value through other comprehensive income Acquisition Disposals Others As at 31 Dec 2022	Financial assets at fair value through other comprehensive income
	$137,638 68 30,000 (3,390) (6)
	$164,310
	Financial assets at fair value through other comprehensive income
	$117,923 1,178 14,810 `－` 3,727
	$137,638

～72～

D. Information on significant unobservable inputs of fair value measurement in Level 3 fair value hierarchy

Significant unobservable inputs of fair value measurement in Level 3 fair value hierarchy are as follows:

As at 31 December 2023: Financial assets: Financial assets at fair value through other comprehensive income stocks As at 31 December 2022: Financial assets: Financial assets at fair value through other comprehensive income stocks	Valuation techniques Market approach and net asset approach Valuation techniques Market approach and net asset approach	Significant unobservable inputs Discount for lack of marketability Significant unobservable inputs Discount for lack of marketability	Quantitative information 35% Quantitative information 35%	Correlation between inputs and fair value The greater degree of lack of marketability, the lower the estimated fair value is determined. Correlation between inputs and fair value The greater degree of lack of marketability, the lower the estimated fair value is determined.	Sensitivity Analysis of correlation between inputs and fair value
					1% strengthens (weakens) in the discount for lack of marketability would result in (decreased) increased in the Group’s profit or loss by $872thousand. Sensitivity Analysis of correlation between inputs and fair value
					1% strengthens (weakens) in the discount for lack of marketability would result in (decreased) increased in the Group’s profit or loss by $737 thousand.

(9) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed

below:

～73～

Financial assets		31 December 2023
	Foreign currencies (in thousands)	Foreign exchange rate	NT$ (in thousands)
	$521,471 $3,834,476 $351,250 $3,602,968	30.7050 4.3270 30.7050 4.3270 31 December 2022	$16,011,780 $16,589,093 $10,785,138 $15,587,522
Monetary items: USD RMB Financial liabilities
Monetary items: USD RMB Financial assets
	Foreign currencies (in thousands)	Foreign exchange rate	NT$ (in thousands)
	$393,300 $2,785,793 $286,601 $2,850,751	30.7100 4.4080 30.7100 4.4080	$12,078,257 $12,279,776 $8,801,519 $12,566,108
Monetary items: USD RMB Financial liabilities
Monetary items: USD RMB

The Group’s functional currency are various, and hence is not able to disclose the information of exchange gains and losses by each significant assets and liabilities denominated in foreign currencies. The foreign exchange (losses) gains were $23,573 thousand and $67,555 thousand for the years ended 31 December 2023 and 2022, respectively.

(10) Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, returning capital to shareholders or issuing new shares.

13. Other disclosure

(1) Information at significant transactions and on investees
A. Financing provided to others for the year ended 31 December 2023: Please refer to Attachment 1.
B. Endorsement/Guarantee provided to others for the year ended 31 December 2023: Please refer to Attachment 2.
C. Securities held as of 31 December 2023: Please refer to Attachment 3.
D. Individual securities acquired or disposed of with accumulated amount exceeding the lowers of NT$300 million or 20% of the capital stock for the year ended 31 December 2023: None.

～74～

  - E. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock for the year ended 31 December 2023: Please refer to Attachment 4.

  - F. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock for the year ended 31 December 2023: None.

  - G. Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20% of the capital stock for the year ended 31 December 2023: Please refer to Attachment 5.

  - H. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of capital stock as of 31 December 2023: Please refer to Attachment 6.

  - I. Direct or indirect significant influence or control over the investees for the year ended 31 December 2023 (excluding investments in China): Please refer to Attachment 7.

  - J. Financial instruments and derivative transactions: None

  - K. Others: Significant inter-company transactions during the reporting periods: Please refer to Attachment 9.

(2) Information on investments in mainland China
- A. Information on investments in mainland China ： Please refer to Attachment 8.
- B. Significant transactions with the investee companies in China directly or indirectly through the third area and the relevant prices, payment terms and unrealized gains and losses:
  - (a)Purchase, ending balance of related payables and their weightings: Please refer to Attachment 5. (b)Sales, the ending balance of related receivables and their weightings: Please refer to Attachment 5.
  - (c)Ending balance of endorsements/guarantees or collateral provided and the purposes: Please refer to Attachment 2.
  - (d)Transactions that have significant impact on the profit or loss of current period or the financial position: None.
.
(3) Information of major shareholders: Please refer to Attachment 10.

14. Segment information

For management purposes, the Group is organized into business units based on their products and services and has two reportable operating segments as follows:

(1) General management segment:

The general management segment is responsible for the Group’s operation planning and owns manufacturing, R&D and sales functions.

(2) Overseas segment:

The overseas segment owns manufacturing and sales functions.

No operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

～75～

Segment performance is evaluated based on operating profit or loss and is measured based on accounting policies consistent with those in the consolidated financial statements.

However, finance costs, financial benefits and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.

For the year ended 31 December 2023

Overseas	General management	Adjustment and elimination	Total
$16,601,992 42,069,203	$42,592,364 3,077,406	`－` ($45,146,609)	$59,194,356 `－`
$58,671,195	$45,669,770	($45,146,609)	$59,194,356
$3,818,337	$4,125,563	$81,182	$8,025,082

(Note): Inter-segment revenues were eliminated on consolidation.

For the year ended 31 December 2022

Overseas	General management	Adjustment and elimination	Total
$17,369,497 46,875,273	$38,647,057 14,981,222	`－` ($61,856,495)	$56,016,554 `－`
$64,244,770	$53,628,279	($61,856,495)	$56,016,554
$3,939,540	$2,510,600	$38,610	$6,488,750

(Note): Inter-segment revenues were eliminated on consolidation

As of 31 December 2023 and 2022, the assets of reportable segment information were as follows:

31 December 2023 Assets 31 December 2022 Assets	Overseas	General management	Adjustment and elimination	Total
	$54,899,845	$33,130,674	($16,363,302)	$71,667,217
	$45,880,336	$27,745,184	($13,151,572)	$60,473,948

～76～

Geographic information

A. External customer revenue `：`

Area Asia America Europe Others Total	2023 $51,443,564 6,118,429 1,628,063 4,300 $59,194,356	2022
		$49,289,608 5,158,557 1,560,153 8,236
		$56,016,554

Revenue is categorized based on the country in which the customer is located.

B. Non-current assets `：`

Area Asia America Europe Others Total	31 Dec 2023	31 Dec 2022 $13,398,411 9,176 5 136,535 $13,544,127
	$15,072,417 9,103 7 195,692
	$15,277,219

Major customers

Individual customers accounting for at least 10% of net sales for the years ended December 31, 2023 and 2022 were as follows:

Customer	2023	2022
Customer A Customer B	32.10`％` 14.42`％`	32.27％ 13.70％

～77～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

FINANCING PROVIDED TO OTHERS

TABLE 1

TABLE 1
No (Note 1)	Financing Company	Counter-party	Financial Statement Account (Note 2)	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Note 9)	Amount Actually Drawn	Interest Rate	Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Transaction Amounts (Note 5)	Reason for Financing (Note 6)	Allowance for Doubtful Accounts	Collateral		Financing Limits for Each Borrower	Financing Company's Total Financing Amount Limits	Note
													Item	Value
0 1 2 3	ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. MACE TECH CORP. CHIHUNG INTERNATIONAL LTD.	WUCHIDA INTERNATIONAL CO., LTD. AVC PRECISION, CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. JADS CORPORATION (HK) LIMITED	Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes	$153,525 (USD5,000 thousand) $432,702 (CNY100,000 thousand) $107,468 (USD3,500 thousand) $153,525 (USD5,000 thousand)	－－ $107,468 (USD3,500 thousand) $153,525 (USD5,000 thousand)	－－ $107,468 (USD3,500 thousand) $153,525 (USD5,000 thousand)	3.00% 3.00% 0.00% 0.00%	2 2 2 2	`－` `－` `－` `－`	Operating capital Operating capital Operating capital Operating capital	－－－－	－－－－	－－－－	$8,811,870 $1,316,250 $1,437,559 $2,472,294	$8,811,870 $1,316,250 $1,437,559 $2,472,294	(Note 7) (Note 8) (Note 8) (Note 8)

Note 1 ： Companies are coded as follows ：

(1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".

(2) The investees are coded from "1" in the order presented in the table above.

Note 2 ： Receivables from affiliates and related parties, shareholder transactions, prepayments and temporary payments etc. are required to be disclosed in this field if they are financings provided to others.

Note 3：The maximum balance of financing provided to others for the year ended December 31, 2021.

Note 4 ： Nature of Financing are coded as follows ：

(1) Business transaction is coded "1".

(2) Short-term financing is coded "2".

Note 5 ： If nature of financing is business transaction, the amount of transaction should be disclosed.

Note 6 ： With respect to short-term financing, the reasons of financing and the purpose of use by the counter-party shall be specified, such as loan repayment, equipment acquisition or operating capital.
Note 7 ： ASIA VITAL COMPONENTS CO., LTD : The financing provided to any single entity shall not exceed 40% of the net worth. Total financing shall not exceed 40% of the net worth.
Note 8： D-MAX TECHNOLOGY CO., LTD. AND FOSITEK CORP. : The financing provided to any single entity shall not exceed 40% of the net worth. Total financing shall not exceed 40% of the net worth.

Note 9 ： If public companies, pursuant to Paragraph 1, Article 14 of Regulations Governing Loaning of Funds and Making of Endorsements / Guarantees by Public Companies, resolve each individual lending at the board meetings, the amounts resolved (before any drawing) shall be the publicly-announced balance to disclose the risk they assume; provided however,

if any repayment is made subsequently, the outstanding balance after such repayment shall be disclosed to reflect the risk adjusted. If public companies, pursuant to Paragraph 2, Article 14 of the same Regulations, authorize the chairperson by board resolution, within a certain monetary limit and a period not to exceed one year,
to give loans in instalments or to make a revolving credit line available, the amount resolved shall be the publicly-announced balance. Although repayment may be made subsequently, as drawings are likely to happen, the amount of financing resolved by the board shall be recorded as the publicly-announced balance.

Note 10 ： All the above transactions were eliminated on consolidation.

～78～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ENDORSEMENT/GUARANTEE PROVIDED TO OTHERS

TABLE 2

TABLE 2
(Note 1) No	Endorsement/Guarantee Provider	Guaranteed Party		Limits on Endorsement/Guarantee Amount Provided to Each Guaranteed Party (Note 3&4)	Maximum Balance for the Period (Note 12)	Ending Balance (Note 13)	Amount Actually Drawn (Note 14)	Amount of Endorsement/ Guarantee secured by Properties	Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Maximum Endorsement/ Guarantee Amount Allowed (Note 3&4)	Endorsement provided by parent company to subsidiaries (Note 15)	Endorsement provided by subsidiaries to parent company (Note 15)	Carrying Amount as of December 31, 2023 (Note 15)	Note
		Name	Nature of Relationship (Note 2)
`０` `０` `０` `０` ０	ASIA VITAL COMPONENTS CO.,LTD ASIA VITAL COMPONENTS CO.,LTD ASIA VITAL COMPONENTS CO.,LTD ASIA VITAL COMPONENTS CO.,LTD ASIA VITAL COMPONENTS CO.,LTD	AVC INTERNATIONAL (SAMOA) CO., LTD. AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. AVC OPTICS (WUHAN) CORP. AVC TECHNOLOGY (VIETNAM) COMPANY LIMITED	2 2 2 2 2	$22,029,676 $22,029,676 $22,029,676 $22,029,676 $22,029,676	$307,050 (USD10,000 thousand) $956,104 (USD10,000 thousand) (CNY150,000 thousand) $1,776,732 (USD48,000 thousand) (CNY70,000 thousand) $307,050 (USD10,000 thousand) $6,202,410 (USD202,000 thousand)	－ $432,702 (CNY100,000 thousand) $1,048,882 (USD25,000 thousand) (CNY65,000 thousand) － $6,202,410 (USD202,000 thousand)	－－ $268,276 (CNY62,000 thousand) － $4,338,737 (USD133,000 thousand) (VND203,977,489thousand)	－－－－－	－ 1.96% 4.76% － 28.15%	$33,044,515 $33,044,515 $33,044,515 $33,044,515 $33,044,515	Y Y Y Y Y	N N N N N	N Y Y Y N	(Note 3) (Note 3) (Note 3) (Note 3) (Note 3)
Note 1`：`Companies are coded as follows:

(1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".

(2) The investees are coded from "1" in the order presented in the table above.

Note 2 ： The relationships between endorsement/guarantee providers and guaranteed parties are categorized into the following types :

(1) A company that has a business relationship with AVC.
(2) A subsidiary in which AVC holds directly over 50% of common equity interest.
(3) An investee in which AVC and its subsidiaries jointly hold over 50% of common equity interest.
(4) A parent company that holds directly over 90% or indirectly over 90% through a subsidiary of the company's common equity interest.
(5) A company that has provided guarantees to AVC, and vice versa, due to contractual requirements.

(6) A company in which AVC jointly invests with other shareholders, and for which AVC has provided endorsement/guarantee in proportion to its shareholding percentage.

(7) Companies in the same industry provide among themselves joint and several security for a perfomance guarantee of a sales contract for pre-construction homes pursunat to the Consumer Protection Act for each other.

FOSITEK CORP.：The aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth. Note5 ： AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., is CNY120 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note6 ： ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (CHINA) CO., LTD., is CNY180 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note7 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC PRECISION, CO., LTD. is CNY80 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note8 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. is CNY70 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note9 ： AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. is CNY40 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note10 ： ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC PRECISION, CO., LTD. is CNY27million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note11 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC OPTICS (WUHAN) CORP. is CNY50 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note12 ： Maximum balance of endorsements/guarantees provided to others for current period.

Note13 ： The maximum balance for the period and ending balance represent the amounts approved by the Board Directors.

Note14 ： The company which endorsements/guarantees by AVC should disclosed the amount actually drawn within ending balance.

Note15 ： Public company provided endorsements/guarantees to subsidiary or subsidiary provided endorsements/guarantees to public company or provided endorsements/guarantees which located in CHINA area coded "Y".

～79～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ENDORSEMENT/GUARANTEE PROVIDED TO OTHERS

TABLE 2-1

(Note 1) No	Endorsement/Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Endorsement/Guarantee Amount Provided to Each Guaranteed Party (Note 3&4)	Maximum Balance for the Period (Note 12)	Ending Balance (Note 13)	Amount Actually Drawn (Note 14)	Amount of Endorsement/ Guarantee secured by Properties	Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Maximum Endorsement/ Guarantee Amount Allowed (Note 3&4)	Endorsement provided by parent company to subsidiaries (Note 15)	Endorsement provided by subsidiaries to parent company (Note 15)	Carrying Amount as of December 31, 2023 (Note 15)	Note
		Name	Nature of Relationship (Note 2)
1 2 2 3 3 3 3 4	AVC OPTICS (WUHAN) CORP. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. AVC PRECISION, CO., LTD.	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. AVC OPTICS (WUHAN) CORP. AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	4 4 4 4 4 4 4 3	$6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand)	$519,243 (CNY120,000 thousand) $519,243 (CNY120,000 thousand) $778,864 (CNY180,000 thousand) $865,405 (CNY200,000 thousand) $768,047 (CNY177,500 thousand) $513,834 (CNY118,750 thousand) $1,644,269 (CNY380,000 thousand) $1,185,605 (CNY274,000 thousand)	$519,243 (CNY120,000 thousand) $519,243 (CNY120,000 thousand) $778,864 (CNY180,000 thousand) $865,405 (CNY200,000 thousand) $346,162 (CNY80,000 thousand) $302,892 (CNY70,000 thousand) $1,644,269 (CNY380,000 thousand) $974,663 (CNY225,250 thousand)	$358,472 (CNY82,845 thousand) $358,472 (CNY82,845 thousand) $385,996 (CNY89,206 thousand) $108,393 (CNY25,050 thousand) $227,482 (CNY52,572 thousand) $47,912 (CNY11,073 thousand) $945,258 (CNY218,454 thousand) $286,353 (CNY66,178 thousand)	－－－－－－－－	17.56% 28.30% 42.44% 17.76% 7.11% 6.22% 33.75% 88.69%	$6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand)	N N N N N N N N	N N N N N N N N	Y Y Y Y Y Y Y Y	(Note 4、5) (Note 4、5) (Note 4、6) (Note 4、11) (Note 4、7) (Note 4、8) (Note 4、6) (Note 4、8、9)
Note 1`：`Companies are coded as follows: (1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".

(2) The investees are coded from "1" in the order presented in the table above.

Note 2 ： The relationships between endorsement/guarantee providers and guaranteed parties are categorized into the following types :

(1) A company that has a business relationship with AVC.

(2) A subsidiary in which AVC holds directly over 50% of common equity interest.

(3) An investee in which AVC and its subsidiaries jointly hold over 50% of common equity interest.

(4) A parent company that holds directly over 90% or indirectly over 90% through a subsidiary of the company's common equity interest.

(5) A company that has provided guarantees to AVC, and vice versa, due to contractual requirements.

(6) A company in which AVC jointly invests with other shareholders, and for which AVC has provided endorsement/guarantee in proportion to its shareholding percentage.

Note 3 ： ASIA VITAL COMPONENTS CO.,LTD. ： The aggregate amount of endorsements/guarantees for any single entity shall not exceed 20% of the Company's net worth, and the aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth. Note 4 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (DONGGUAN) CO., LTD., AVC PRECISION, CO., LTD. : The amount of guarantees/endorsements provided to any single entity shall not exceed USD200 million dollars. FOSITEK CORP.：The aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth. Note5 ： AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., is CNY120 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note6 ： ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (CHINA) CO., LTD., is CNY180 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note7 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC PRECISION, CO., LTD. is CNY80 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note8 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. is CNY70 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note9 ： AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. is CNY40 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note10 ： ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC PRECISION, CO., LTD. is CNY27million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note11 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC OPTICS (WUHAN) CORP. is CNY50 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note12 ： Maximum balance of endorsements/guarantees provided to others for current period.

Note13 ： The maximum balance for the period and ending balance represent the amounts approved by the Board Directors.

Note14 ： The company which endorsements/guarantees by AVC should disclosed the amount actually drawn within ending balance.

～80～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ENDORSEMENT/GUARANTEE PROVIDED TO OTHERS

TABLE 2-2

(Note 1) No	Endorsement/Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Endorsement/Guarantee Amount Provided to Each Guaranteed Party (Note 3&4)	Maximum Balance for the Period (Note 12)	Ending Balance (Note 13)	Amount Actually Drawn (Note 14)	Amount of Endorsement/ Guarantee secured by Properties	Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Maximum Endorsement/ Guarantee Amount Allowed (Note 3&4)	Endorsement provided by parent company to subsidiaries (Note 15)	Endorsement provided by subsidiaries to parent company (Note 15)	Carrying Amount as of December 31, 2023 (Note 15)	Note
		Name	Nature of Relationship (Note 2)
5 6 6 6 6 6 7	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. FOSITEK CORP.	AVC PRECISION, CO., LTD. AVC OPTICS (WUHAN) CORP. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. SHENZHEN FOSITEK TELECOME CO.,LTD.	2 4 4 4 4 4 2	$6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $4,595,498	$1,464,698 (CNY338,500 thousand) $216,351 (CNY50,000 thousand) $432,702 (CNY100,000 thousand) $1,168,297 (CNY270,000 thousand) $884,877 (CNY204,500 thousand) $686,915 (CNY158,750 thousand) $669,273 (USD7,000 thousand) (CNY105,000 thousand)	$1,042,813 (CNY241,000 thousand) $216,351 (CNY50,000 thousand) $432,702 (CNY100,000 thousand) $1,168,297 (CNY270,000 thousand) $462,992 (CNY107,000 thousand) $475,973 (CNY110,000 thousand) $546,453 (USD3,000 thousand) (CNY105,000 thousand)	$383,226 (CNY88,566 thousand) － $236,248 (CNY54,598 thousand) $849,227 (CNY196,261 thousand) $227,482 (CNY52,572 thousand) $47,912 (CNY11,073 thousand) －	$421,885 (CNY97,500 thousand) －－－－－－	31.69% 3.67% 7.33% 19.80% 7.84% 8.06% 11.89%	$6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,141,000 (USD200,000 thousand) $6,893,247	N N N N N N N	N N N N N N N	Y Y Y Y Y Y Y	(Note 4、7、10) (Note 4、11) (Note 4) (Note 4、5) (Note 4、7、10) (Note 4、8、9) (Note 4)
Note 1`：`Companies are coded as follows: (1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".

(2) The investees are coded from "1" in the order presented in the table above.
Note 2 ： The relationships between endorsement/guarantee providers and guaranteed parties are categorized into the following types :
(1) A company that has a business relationship with AVC.
(2) A subsidiary in which AVC holds directly over 50% of common equity interest.
(3) An investee in which AVC and its subsidiaries jointly hold over 50% of common equity interest.
(4) A parent company that holds directly over 90% or indirectly over 90% through a subsidiary of the company's common equity interest.
(5) A company that has provided guarantees to AVC, and vice versa, due to contractual requirements.
(6) A company in which AVC jointly invests with other shareholders, and for which AVC has provided endorsement/guarantee in proportion to its shareholding percentage.
(7) Companies in the same industry provide among themselves joint and several security for a perfomance guarantee of a sales contract for pre-construction homes pursunat to the Consumer Protection Act for each other.
Note 3 ： ASIA VITAL COMPONENTS CO.,LTD. ： The aggregate amount of endorsements/guarantees for any single entity shall not exceed 20% of the Company's net worth, and the aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth.
Note 4 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (DONGGUAN) CO., LTD., AVC PRECISION, CO., LTD. : The amount of guarantees/endorsements provided to any single entity shall not exceed USD200 million dollars.
FOSITEK CORP.：The aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth.
Note5 ： AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., is CNY120 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance.
Note6 ： ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (CHINA) CO., LTD., is CNY180 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note7 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC PRECISION, CO., LTD. is CNY80 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note8 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. is CNY70 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance.
Note9 ： AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. is CNY40 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note10 ： ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC PRECISION, CO., LTD. is CNY27million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note11 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., jointly guarnateed to AVC OPTICS (WUHAN) CORP. is CNY50 million dollars. The above table separately presents the resulting in double calculation of the closing balance. It is a joint endorsement guarantee for obtaining a single line of credit in substance. Note12 ： Maximum balance of endorsements/guarantees provided to others for current period.

Note13 ： The maximum balance for the period and ending balance represent the amounts approved by the Board Directors.

Note14 ： The company which endorsements/guarantees by AVC should disclosed the amount actually drawn within ending balance.

～81～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINTLY CONTROLLED ENTITIES)

TABLE 3

TABLE 3
Name of Held Company	Type and name of Marketable Securities	Relationship with the Company	Financial Statement Account	December 31, 2023
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership	Market Value
ASIA VITAL COMPONENTS CO.,LTD MERIT TRADING CORPORATION MACE TECH CORP. ASIA VITAL COMPONENTS (CHINA) CO., LTD.	RTR-TECH TECHNOLOGY CO., LTD. APTOS TECHNOLOGY INC. UBIQCONN TECHNOLOGY, INC. WK TECHNOLOGY FUND IX II LTD. FURUKAWA ELECTRIC (SHENZHEN) CO., LTD. SHENG-SHING WORLDWIDE CORP. Not listed (OTC) stocks SHENZHEN TIMELINK TECHNOLOGY CO., LTD. Not listed (OTC) stocks Not listed (OTC) stocks Not listed (OTC) stocks	`－` `－` `－` `－` Other related parties `－` `－`	Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent	14,000 450 4,140 3,000 (Note) 703 2,273	－－ $31,881 $30,000 $92,913 $9,516 －	19.42% 0.74% 5.52% 2.67% 9.06% 14.06% 10.80%	－－ $31,881 $30,000 $92,913 $9,516 `－`

Note ： None amount of shares is issued publicly by Limited Company.

～82～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 4

TABLE 4
Company Name	Types of Property	Transaction Date	Transaction Amount	Payment Term	Counterparty	Prior Transaction of Related Counterparty				Price Reference	Purpose of Acquisition	Other Terms
						Owner	Relationships	Transfer Date	Amount
AVC TECH. (VIETNAM) CO., LTD.	Factory construction	8 March, 2023	USD17,000 thousand	Based on the terms in the Contract	CHUANGXING CONSTRUCTION OVERSEAS DEVELOPMENT CO., LTD	N/A	N/A	N/A	N/A	Price comparison and price negotiation	Manufacturing purpose	None
AVC TECH. (VIETNAM) CO., LTD.	Factory construction	25 August, 2023~ 17 January, 2024	USD17,000 thousand	Based on the terms in the Contract	CHUANGXING CONSTRUCTION OVERSEAS DEVELOPMENT CO., LTD	N/A	N/A	N/A	N/A	Price comparison and price negotiation	Manufacturing purpose	None

～83～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RELATED PARTY TRANSACTIONS WITH PURCHASE OR SALES AMOUNT OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 5

TABLE 5
Company Name	Related Party	Nature of Relationships	Transaction Details				Abnormal Transaction		Accumulated Outflow of Investment from Taiwan as of December 31, 2023		Note
			Purchases/ Sales	Amount	Percentage to Total	Collection/ Payment Terms	Unit Price	Collection/ Payment Terms	Ending Balance	Percentage to Total
ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. AVC OPTICS (WUHAN) CORP. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. (JIASHAN) D-MAX ELECTRONICS CO.,LTD. WUCHIDA INTERNATIONAL CO., LTD. AVC TECH. (VIETNAM) CO., LTD. AVC AMERICA, INC.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	(Purchases) (Purchases) (Purchases) (Purchases) (Purchases) (Purchases) (Purchases) (Purchases) Sales	($1,762,704) ($11,547,288) ($1,142,051) ($765,062) ($14,811,355) ($828,694) ($376,619) ($2,768,404) $1,193,381	(5%) (33%) (3%) (2%) (42%) (2%) (1%) (8%) 3%	Net 30 days from the end of the month of when invoice is issued by T/T Net 30 days from the end of the month of when invoice is issued by T/T Net 30 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T	N/A N/A N/A N/A N/A N/A N/A N/A N/A	N/A N/A N/A N/A N/A N/A N/A N/A N/A	($521,137) ($5,138,010) ($341,898) ($164,403) ($3,961,638) ($392,125) － ($245,169) $77,395	(5%) (45%) (3%) (1%) (35%) (3%) － (2%) 4%

( Continued )

～84～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RELATED PARTY TRANSACTIONS WITH PURCHASE OR SALES AMOUNT OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 5-1

TABLE 5-1
Company Name	Related Party	Nature of Relationships	Transaction Details				Abnormal Transaction		Accumulated Outflow of Investment from Taiwan as of December 31, 2023		Note
			Purchases/ Sales	Amount	Percentage to Total	Collection/ Payment Terms	Unit Price	Collection/ Payment Terms	Ending Balance	Percentage to Total
ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. AVC OPTICS (WUHAN) CORP. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. (JIASHAN) D-MAX ELECTRONICS CO.,LTD. WUCHIDA INTERNATIONAL CO., LTD. AVC TECH. (VIETNAM) CO., LTD. AVC AMERICA, INC.	ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent	Sales Sales Sales Sales Sales Sales Sales Sales (Purchases)	$1,762,704 $11,547,288 $1,142,051 $765,062 $14,811,355 $828,694 $376,619 $2,768,404 ($1,193,381)	72% 96% 31% 8% 92% 47% 94% 98% (98%)	Net 90 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 30 days from the end of the month of when invoice is issued by T/T Net 30 days from the end of the month of when invoice is issued by T/T Net 30 days from the end of the month of when invoice is issued by T/T	N/A N/A N/A N/A N/A N/A N/A N/A N/A	N/A N/A N/A N/A N/A N/A N/A N/A N/A	$521,137 $5,138,010 $341,898 $164,403 $3,961,638 $392,125 － $245,169 ($77,395)	80% 95% 31% 7% 89% 91% － 70% (97%)

～85～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RECEIVABLES FROM RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 6

TABLE 6
Company Name	Related Party	Nature of Relationships	Ending Balance (Note 3)	Turnover Ratio (times)	Overdue		Amounts Received in Subsequent Periods	Allowance for Doubtful Accounts
					Amount	Action Taken
ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. AVC OPTICS (WUHAN) CORP. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. AVC TECH. (VIETNAM) CO., LTD. (JIASHAN) D-MAX ELECTRONICS CO.,LTD.	ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent	$164,403 $5,138,010 $521,137 $341,898 $3,961,638 $245,169 $392,125	3.83 2.68 3.51 2.60 4.26 15.92 4.23	－－－－－－－	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)	$97,565 $2,159,835 $275,423 $310,136 $2,609,803 $245,169 $233,610	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)

Note 1 ： The preparation of consolidated statements does not require recording the allowance for doubtful accounts.

Note 2 ： The Company balances its accounts regularly and writes off receivables against payables.

Note 3 ： All the above transactions were eliminated on consolidation.

～86～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEE COMPANIES (Not including investment in Mainland China)

TABLE 7

TABLE 7
Investor Company	Investee Company	Address	Main businesses and products	Initial Investment		Investment as of December 31, 2023			Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount
ASIA VITAL COMPONENTS CO., LTD	AVC INTERNATIONAL CO., LTD.`－`B.V.I. CHIHUNG INTERNATIONAL LTD. MERIT TRADING CORPORATION RAYNEY INTERNATIONAL LTD. AVC AMERICA, INC. AVC INTERNATIONAL (SAMOA) CO., LTD. JADS CORPORATION (HK) LTD. ZIMAG TECHNOLOGY CO., INC. AVC INTERNATIONAL CO., LTD.`－`SAMOA FOSITEK CORP. HUNG YE INVESTMENT CO., LTD. D-MAX TECHNOLOGY CO., LTD. AVC EUROPE TECHNOLOGY GMBH AVC TECHNOLOGY (VIETNAM) COMPANY LIMITED PARAGON SEMICONDUCTOR LIGHTING TECHNOLOGY CO., LTD.	British Virgin Islands Samoa Samoa Samoa USA Samoa Hongkong Taoyuan City, Taiwan Samoa New Taipei City, Taiwan New Taipei City, Taiwan New Taipei City, Taiwan Germany Vietnam New Taipei City, Taiwan	Investment holding Investment holding Trade Trade Trade Trade Trade Trade Investment holding Trade Sales and manufacture of electronic Manufacture, process and sales of molds and aluminum products Sales and manufacture of electronic parts, computers and related products Sales and manufacture of electronic parts and related products Manufacture of industrial lighting equipment	$5,147,294 $1,040,647 $29,088 $78,950 $91,903 $10,157 $327 $45,000 $32,120 $209,829 $60,000 $201,035 $9,050 $1,419,917 $50,000	$5,147,294 $1,040,647 $29,088 $78,950 $91,903 $10,157 $327 $45,000 $32,120 $211,099 $60,000 $201,035 $9,050 $1,419,917 －	16 32,770 892 2,400 41 300 10 2,700 1,000 11,567 6,000 28,500 250 (Note) 5,000	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 9.53% 100.00% 16.87% 100.00% 100.00% 100.00% 100.00% 40.00%	$11,043,156 $6,154,608 $93,664 $197,047 $229,735 $11,201 $28,913 $50,498 $35,121 $778,098 $5,398 $359,721 $8,857 $1,076,046 $43,906	$1,548,545 $656,011 ($38,978) $68,225 $458 ($1,753) $24 $31,847 ($96,157) $627,958 $17 $73,219 $82 $139,276 ($28,049)	$1,077,779 $648,801 ($36,602) $68,225 $458 $3,901 $2,380 $2,922 ($96,157) $118,207 $17 $66,885 $82 ($250,368) ($4,896)

Note ： None amount of shares is issued publicly by Limited Company.

( Continued )

～87～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEE COMPANIES (Not including investment in Mainland China)

TABLE 7-1

TABLE 7-1
Investor Company	Investee Company	Address	Main businesses and products	Initial Investment		Investment as of December 31, 2023			Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount
AVC INTERNATIONAL CO., LTD.`－`B.V.I. CHIHUNG INTERNATIONAL LTD. HUNG YE INVESTMENT CO., LTD. D-MAX TECHNOLOGY CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. FOSITEK CORP. FOSITEK CORP.	MACE TECH CORP. AVC OPTICS CORP. TONBRIDGE INVESTMENTS LTD. (Note 1) KEY APPLICATION TECHNOLOGY CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. D-MAX INTERNATIONAL CO., LIMITED MARKETHILL INVESTMENTS LTD. FOSITEK (VIET NAM) COMPANY LIMITED	British Virgin Islands Cayman Islands Samoa Hsinchu City, Taiwan Samoa Hongkong Samoa Vietnam	Trade Investment holding Investment holding Investment holding Investment holding Investment holding Sales and manufacture of rails and shafts Sales and manufacture of electronic products	$319,776 $3,128,775 － $15,300 $132,004 $132,004 $949,097 $59,430	$319,776 $3,128,775 － $15,300 $132,004 $132,004 $949,097 －	11,068 100,000 － 1,115 4,000 4,000 33,200 (Note 2)	100.00% 100.00% － 16.31% 100.00% 100.00% 100.00% 100.00%	$3,593,899 $2,956,766 － `－` $289,022 $410,781 $3,112,355 $62,444	$494,174 $1,280 － $848 $89,640 $87,146 $684,425 ($586)	$494,174 $1,280 －－ $89,640 $88,163 $674,760 ($586)

Note 1 ： TONBRIDGE INVESTMENTS LTD. has been cancelled the registration in January 2023.

Note 2 ： None amount of shares is issued publicly by Limited Company.

～88～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified) INFORMATION ON INVESTMENT IN MAINLAND CHINA

TABLE 8

TABLE 8
Investor Company	Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2023	Investment Flows		Accumulated Outflow of Investment from Taiwan as of December 31, 2023	Percentage of Ownership (Direct or Indirect Investment)	Profits/ Losses of the Investee Company	Share of Profits/Losses	Carrying Amount as of December 31, 2023	Accumulated Inward Remittance of Earnings as of December 31, 2023
						Outflow	Inflow
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	Sales and manufacture of computers related products and computer cooling fans	$642,719	(2) AVC INTERNATIONAL CO., LTD.`－`B.V.I.	$642,719	－	－	$642,719	100.00%	$873,769	$873,769	$4,871,841	－
ASIA VITAL COMPONENTS CO. , LTD	FURUKAWA AVC ELECTRONICS (SUZHOU) CO., LTD.	Sales and manufacture of reflow machines, solder paste printers and notebook thermal modules	$267,247	(2) RAYNEY INTERNATIONAL LTD.	$54,176	－	－	$54,176	30.00%	$226,170	$67,851	$160,502	－
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	Sales and manufacture of computers, electronic products and related parts	$514,105	(2) AVC INTERNATIONAL CO., LTD.`－`B.V.I.	$319,776	－	－	$319,776	100.00%	$497,357	$497,357	$3,290,625	－
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	Sales and manufacture of computers related products and computer cooling fans	$879,291	(2) CHIHUNG INTERNATIONAL LTD.	$879,291	－	－	$879,291	100.00%	$654,049	$654,049	$5,901,912	－
ASIA VITAL COMPONENTS CO. , LTD	FURUKAWA ELECTRIC (SHENZHEN) CO., LTD.	Sales and manufacture of automobile parts	$321,060	(2) MERIT TRADING CORPORATION	$29,088	－	－	$29,088	9.06%	($63,173)	－	$92,913	－
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	Sales and manufacture of computers, related parts and accessories	$1,055,897	(2) AVC INTERNATIONAL CO., LTD.`－`B.V.I.	$1,055,897	－	－	$1,055,897	100.00%	$166,840	$166,840	$1,835,035	－
D-MAX TECHNOLOGY CO., LTD.	(JIASHAN)D-MAX ELECTRONICS CO.,LTD.	Sales and manufacture of electronic and photographic equipment	$132,004	(2) WUCHIDA INTERNATIONAL CO., LTD.	$132,004	－	－	$132,004	100.00%	$87,142	$87,142	$410,403	－
ASIA VITAL COMPONENTS CO. , LTD	AVC OPTICS (WUHAN) CORP.	Sales and manufacture of computers related products and computer cooling fans	$3,128,775	(2) AVC INTERNATIONAL CO., LTD.`－`B.V.I.	$3,128,775	－	－	$3,128,775	100.00%	$1,280	$1,280	$2,956,754	－
FOSITEK CORP.	SHENZHEN FOSITEK TELECOME CO.,LTD.	Sales and manufacture of rails, shafts and metal stamping tooling	$846,331	(2) MARKETHILL INVESTMENTS LTD.	$846,331	－	－	$846,331	100.00%	$680,535	$680,535	$3,106,303	－

Accumulated Outflow of Investment from Taiwan to Mainland China as of December 31, 2023	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment	`－` `－` `本` `期` `期` `末` `已` `清` `算` ( `解` `散` ) `之截至本期止已清算`( `解散`) `之` `大` `陸` `子` `公` `司` `自` `台` `灣` `累` `計` `投` `資` `金` `額大陸子公司已匯回投資收益`
(US$230,093,010) $7,088,057	(US$260,750,828) $8,006,354	(Note 3)

Note 1 ： The methods for investment in Mainland China are categorized into the following three types. Please specify the type.

(1) Direct investment in Mainland China.

(2) Indirectly investment in Mainland China through companies registered in the third area (Please specify the name of the company in third region).

(3) Others.

Note 2 ： The table is expressed in thousands of New Taiwan Dollars.

Note 3 ： The Company has obtained the certificate of being qualified for operating headquarters, issued by the Industrial Development Bureau, MOEA, the ceiling amount of the investment in Mainland China is not applicable to the Company.

Note 4 ： All the above transactions were eliminated on consolidation.

～89～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

TABLE 9

TABLE 9
No. (Note 1)	Company Name	Counter Party	Nature of Relationship (Note 2)	IntercompanyTransactions
				Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
0	ASIA VITAL COMPONENTS CO. , LTD	AVC AMERICA, INC.	1	Sales	$1,193,381	General trading terms	2%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC AMERICA, INC.	1	Accounts receivable	$77,395	General trading terms	0%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	1	Purchases	$765,062	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	1	Accounts payable	$164,403	General trading terms	0%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC OPTICS (WUHAN) CORP.	1	Purchases	$1,142,051	General trading terms	2%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC OPTICS (WUHAN) CORP.	1	Accounts payable	$341,898	General trading terms	0%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	1	Purchases	$1,762,704	General trading terms	3%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	1	Accounts payable	$521,137	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	1	Purchases	$11,547,288	General trading terms	20%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	1	Accounts payable	$5,138,010	General trading terms	7%
0	ASIA VITAL COMPONENTS CO. , LTD	WUCHIDA INTERNATIONAL CO.,LTD.	1	Purchases	$376,619	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	1	Purchases	$14,811,355	General trading terms	25%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	1	Accounts payable	$3,961,638	General trading terms	6%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC TECH. (VIETNAM) CO., LTD.	1	Purchases	$2,768,404	General trading terms	5%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC TECH. (VIETNAM) CO., LTD.	1	Accounts payable	$245,169	General trading terms	0%

～90～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

TABLE 9-1

TABLE 9-1
No. (Note 1)	Company Name	Counter Party	Nature of Relationship (Note 2)	IntercompanyTransactions
				Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
1	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	3	Sales	$189,019	General trading terms	0%
1	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	JADS CORPORATION (HK) LTD.	3	Sales	$210,765	General trading terms	0%
2	AVC PRECISION, CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	3	Sales	$104,198	General trading terms	0%
3	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	AVC OPTICS (WUHAN) CORP.	3	Purchases	$413,225	General trading terms	1%
3	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	AVC OPTICS (WUHAN) CORP.	3	Accounts payable	$186,414	General trading terms	0%
3	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	(JIASHAN) D-MAX ELECTRONICS CO.,LTD.	3	Sales	$422,942	General trading terms	1%
3	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	(JIASHAN) D-MAX ELECTRONICS CO.,LTD.	3	Accounts receivable	$144,496	General trading terms	0%
4	AVC OPTICS (WUHAN) CORP.	JADS CORPORATION (HK) LTD.	3	Accounts payable	$186,845	General trading terms	0%
4	AVC OPTICS (WUHAN) CORP.	JADS CORPORATION (HK) LTD.	3	Purchases	$733,505	General trading terms	1%
4	AVC OPTICS (WUHAN) CORP.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	3	Purchases	$365,442	General trading terms	1%
4	AVC OPTICS (WUHAN) CORP.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	3	Accounts payable	$171,604	General trading terms	0%
5	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	3	Accounts payable	$111,573	General trading terms	0%
5	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	JADS CORPORATION (HK) LTD.	3	Accounts receivable	$118,251	General trading terms	0%
5	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	JADS CORPORATION (HK) LTD.	3	Sales	$286,609	General trading terms	0%
6	CHIHUNG INTERNATIONAL LTD.	JADS CORPORATION (HK) LTD.	3	Other accounts receivable	$153,525	General trading terms	0%
7	JADS CORPORATION (HK) LTD.	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	3	Accounts receivable	$247,633	General trading terms	0%
7	JADS CORPORATION (HK) LTD.	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	3	Sales	$609,285	General trading terms	1%
7	JADS CORPORATION (HK) LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Purchases	$725,397	General trading terms	1%
7	JADS CORPORATION (HK) LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Accounts payable	$186,961	General trading terms	0%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	JADS CORPORATION (HK) LTD.	3	Sales	$718,755	General trading terms	1%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	JADS CORPORATION (HK) LTD.	3	Accounts receivable	$186,578	General trading terms	0%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	3	Other payable expenses	$315,551	General trading terms	0%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	AVC TECH. (VIETNAM) CO., LTD.	3	Sales	$552,256	General trading terms	1%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	AVC TECH. (VIETNAM) CO., LTD.	3	Accounts receivable	$209,193	General trading terms	0%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	AVC PRECISION, CO., LTD.	3	Accounts payable	$657,625	General trading terms	1%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	AVC PRECISION, CO., LTD.	3	Purchases	$2,305,187	General trading terms	4%

Note 1 ： The parent company and its subsidiaries are coded as follows:

No.1. The parent company is coded "0". No.2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2 ： Transactions are categorized as follows:

No.1. Transactions from parent company to a subsidiary.

No.2. Transactions from subsidiary to the parent company. No.3. Transactions between subsidiaries.

Note 3 ： Regarding the percentage of transaction amount to consolidated net revenue or total assets, it is computed based on the ending balance to consolidated total assets for balance sheet items; and based on interim accumulated amount to consolidated net revenue for income statement items.

～91～

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Information of major shareholders

TABLE 10

TABLE 10
Shares Name	Number of shares (thousand)	Percentage of ownership
FURUKAWA ELECTRIC CO., LTD.	52,945	13.81%
The new labor retirement fund of discretionary nomura investment account for the first time in 2022.	30,818	8.04%
Fubon Life Insurance Co., Ltd.	21,261	5.54%

Note 1 ： The main shareholder information in this form is calculated by the collection company, on the last business day of each quarter, that the total information of the common

shares and special shares held by shareholders of the company that have completed the non-entity login delivery (including the storage shares) of the company amounts

to more than 5%. As for the share capital recorded in the Company's financial report and the number of unregistered shares actually completed by the Company, there

may be differences or differences due to the basis for the calculation of the company.

Note 2 ： The opening of the information, if the shareholders will share the shares to the trust, is disclosed to the trustees to open a trust account of the individual sub-accounts.

As for the shareholders to handle the internal ownership declaration of more than 10% of the shares in accordance with the Securities Exchange Act, the shareholding of the

shareholders includes their own shareholding plus their delivery of the trust and the use of decision-making rights for the trust property, etc., the relevant insider equity

declaration information can be found in the Market Observation Post System.

～92～

AI assistant

AVC — Annual Report 2023

52251_rns_2023-12-05_468b8578-3e6f-4784-84ad-75b954642c14.pdf

ASIA VITAL COMPONENTS CO. , LTD

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT ACCOUNTANTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

1. Assessment of revenue recognition for hub-warehouse

Other Matter – Making Reference to the Audits of Component Auditors

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

English translation of Consolidated Financial Statements Originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD CONSOLIDATED BALANCE SHEETS

December 31, 2023 and 2022

English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD

1. History and organization

2. Date and procedures of authorization of financial statements for issue

3. Newly issued or revised standards and interpretations

B. IFRS 17 “Insurance Contracts”

C. Lack of Exchangeability – Amendments to IAS 21

4. Summary of significant accounting policies

(1) Statement of compliance

(2) Basis of preparation

Preparation principle of consolidated financial statements

Note 2: FST, a subsidiary of the Company, invested in the establishment of the Company in October of 2023.

(7) Cash and cash equivalents

(8) Financial instruments

Financial assets measured at amortized cost

Financial asset measured at fair value through other comprehensive income

Financial asset measured at fair value through profit or loss

C. Derecognition of financial assets

Classification between liabilities or equity

Equity instruments

Compound instruments

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derecognition of financial liabilities

(11) Investments accounted for using the equity method

(13) Investment property

(14) Leases

Group as a lessee

Group as a lessor

(15) Intangible assets

Research and development costs

(17) Provisions

(18) Revenue recognition

(19) Borrowing costs

(20) Share-based payment transactions

(21) Government grants

Current income tax

Deferred tax

5. Significant accounting judgements, estimates and assumptions

Estimates and assumptions

Inventories

6. Contents of significant accounts

(1) Cash and cash equivalents

(2) Financial assets measured at amortized cost, current

(3) Notes receivable, net

(4) Accounts receivable, net

(b) 31 December, 2022:

(5) Other receivables and other receivables-related parties

C. Movement of the loss allowance table:

(6) Inventories

A.

(7) Prepayments

(9) Investments accounted for under the equity method

(10) Property, plant and equipment

(11) Investment property

(12) Intangible assets

Computer

(13) Other non-current assets

(14) Short-term borrowings

AVC Annual Report 2023

A. External customer revenue `：`

B. Non-current assets `：`