BIOSTAR - Audit Report / Information 2023

Biostar Microtech Int'L Corp. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The entities required to be included in the combined financial statements of Biostar Microtech Int’L Corp. as of and for the year ended December 31, 2023 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standard 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Biostar Microtech Int’L Corp. and subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

BIOSTAR MICROTECH INT’L CORP.

MING-YI WANG Chairman

March 1, 2024

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Biostar Microtech Int’L Corp. and Subsidiaries

Opinion

We have audited the accompanying financial statements of Biostar Microtech Int’L Corp. (the “Company”) and subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2023 and 2022 and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing 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 Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion based on our audits and the reports of other auditors.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2023. 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.

Key audit matters of the Group’s consolidated financial statements for the year ended December 31, 2023 are stated as follows:

Estimation Uncertainty on Write-down of Inventories

The Group is primarily engaged in sales of computer motherboards, industrial computer and other computer peripheral products. The industrial characteristic and frequent releases of products resulting in the slow-moving (unmarketable) and obsolescence. The estimation of inventories net realisable value involved management uncertainty. The actual result might differ from the estimates. The estimation uncertainty on write-down of inventories is critical to financial statements as of December 31, 2023. Therefore, it was identified as a key audit matter. Please refer to Notes 4, 5 and 11 to the consolidated financial statements for detailed information related to the estimation uncertainty on write-down of inventories’ accounting policies, estimation uncertainty and disclosures.

Our main audit procedures we performed to address the above key audit matter were as follows:

We obtained an understanding of the Group’s inventories evaluation policies and the design of internal controls related to inventories evaluation and tested the operating effectiveness of such control.
We selected the sales and purchase documentation and tested the book value of inventories to check whether they were measured at lower of cost and net realisable value.
We tested and recalculated the data used by the management to calculate the allowance for inventory impairment losses and we compared the amount of the allowance for inventory impairment losses recognized by Biostar Microtech Int’L Corp. Afterwards, we confirmed the scrap inventory and whether it was listed in accordance with the inventory policy of the Group.
We observed the annual inventory count, and observed whether there were sluggish or obsolete inventories.

Other Matter

We did not audit the financial statements of Biostar Microtech (U.S.A.) Corp. and Biostar Microtech Europe Holding B.V., a subsidiary included in the consolidated financial statements of the Group, but such statements were audited by other auditors. Our opinion, insofar as it relates to the amounts included for Biostar Microtech (U.S.A.) Corp. and Biostar Microtech Europe Holding B.V., is based solely on the report of other auditors. The total assets of Biostar Microtech (U.S.A.) Corp. and Biostar Microtech Europe Holding B.V. constituted NT$213,434 thousand and NT$280,229 thousand, which constituted 7.65% and 9.97% of total assets as of December 31, 2023 and 2022, respectively; and total revenue constituted NT$487,617 thousand and NT$598,245 thousand, which constituted 20.8% and 26.75% of the total comprehensive income for the years ended December 31, 2023 and 2022, respectively.

We have also audited the parent company only financial statements of Biostar Microtech Int’L Corp. as of and for the years ended December 31, 2023 and 2022, on which we have issued an unmodified opinion with other matter paragraph.

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

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

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

Those charged with governance, including members of the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

As part of an audit in accordance with the Standards on Auditing of 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, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
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Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Han-Ni Fang and Shih-Chieh Chou.

Deloitte & Touche Taipei, Taiwan Republic of China

March 20, 2024

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance 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 audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at fair value through other comprehensive income - current (Note 8) Financial assets at amortized cost - current (Note 9) Trade receivables, net (Notes 10 and 22) Other receivables (Note 10) Current tax assets (Note 24) Inventories, net (Notes 5 and 11) Other current assets (Note 16) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Note 7) Property, plant and equipment (Notes 13 and 29) Right of use asset (Note 14) Investment properties, net (Notes 15 and 29) Deferred tax assets (Note 24) Other non-current assets (Notes 16 and 20) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Notes payable (Note 17) Trade payables (Note 17) Other payables (Note 18) Current tax liabilities (Note 24) Provision - current (Note 19) Lease liabilities - current (Note 14) Other current liabilities (Note 18) Total current liabilities NON-CURRENT LIABILITIES Provisions - non-current (Note 19) Deferred tax liabilities (Note 24) Lease liabilities - non-current (Note 14) Other non-current liabilities (Note 18) Total non-current liabilities Total liabilities EQUITY (Note 21) Share capital Ordinary Shares Capital surplus Retained earnings Other equity Total equity TOTAL		2023 Amount % $ 695,035 25 333,114 12 204,443 7 54,865 2 161,322 6 9,387 - 11,895 1 809,169 29 8,710 - 2,287,940 82 119,217 4 130,145 5 1,944 - 195,792 7 33,518 1 20,677 1 501,293 18 $ 2,789,233 100 $ 1,886 - 466,161 17 94,358 3 - - 30,000 1 1,755 - 11,933 1 606,093 22 20,000 1 13,962 - 303 - 3,336 - 37,601 1 643,694 23 1,781,000 64 66,778 2 294,720 11 3,041 - 2,145,539 77 $ 2,789,233 100		2022
				Amount % $ 747,831 27 219,536 8 205,657 7 30,323 1 115,030 4 13,475 1 4,873 - 902,426 32 7,380 - 2,246,531 80 172,615 6 132,065 5 3,611 - 197,799 7 40,294 1 16,831 1 563,215 20 $ 2,809,746 100 $ 2,631 - 343,106 12 115,838 4 16,782 1 30,000 1 1,663 - 14,938 1 524,958 19 20,000 1 11,971 - 2,054 - 3,336 - 37,361 1 562,319 20 1,781,000 64 66,778 2 404,023 14 (4,374 ) - 2,247,427 80 $ 2,809,746 100

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

(With Deloitte & Touche auditors’ report dated March 20, 2024)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

OPERATING REVENUE (Note 22) OPERATING COSTS (Notes 11 and 23) GROSS PROFIT OPERATING EXPENSES (Notes 10 and 23) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain) Total operating expenses PROFIT (LOSS) FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income (Note 23) Other income (Note 23) Other gains and losses (Notes 23 and 30) Finance costs (Note 23) Total non-operating income and expenses PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX EXPENSE (BENEFIT) (Note 24) NET PROFIT (LOSS) FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 20, 21 and 24) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Income tax related to items that will not be reclassified subsequently to profit or loss		2023 Amount % $ 2,344,435 100 2,209,087 94 135,348 6 120,272 5 71,533 3 73,555 4 (206 ) - 265,154 12 (129,806 ) (6 ) 24,199 1 31,970 2 (43,232) (2) (154 ) - 12,783 1 (117,023) (5) (3,663 ) - (113,360 ) (5 ) 5,071 - (1,014 ) - 4,057 -		2022
				Amount % $ 2,236,385 100 1,967,765 88 268,620 12 138,210 6 55,800 3 71,880 3 1,198 - 267,088 12 1,532 - 14,476 - 40,158 2 (39,834) (2) (125 ) - 14,675 - 16,207 - 3,356 - 12,851 - 10,415 - (2,083 ) - 8,332 -

(Continued)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Unrealized gain (loss) on investments in debt instruments at fair value through other comprehensive income Income tax related to items that may be reclassified subsequently to profit or loss Other comprehensive income (loss) for the period, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR NET PROFIT (LOSS) ATTRIBUTABLE TO Owner(s) of Company Non-controlling interests TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO Owner(s) of Company Non-controlling interests EARNINGS PER SHARE (Note 25) Basic Diluted		2023 Amount % $ (910) - 8,143 1 182 - 7,415 1 11,472 1 $ (101,888 ) (4 ) $ (113,360) (5) - - $ (113,360 ) (5 ) $ (101,888) (4) - - $ (101,888 ) (4 ) $ (0.64 ) $ (0.64 )		2022
				Amount % $ 36,731 2 (20,824) (1) (7,346 ) - 8,561 1 16,893 1 $ 29,744 1 $ 12,851 1 - - $ 12,851 1 $ 29,744 1 - - $ 29,744 1 $ 0.07 $ 0.07


		$		$
		$		$
		$		$
		$		$
		$		$

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

(With Deloitte & Touche auditors’ report dated March 20, 2024)

(Concluded)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company
Ordinary Shares Shares (In Thousands) Amount Capital Surplus 178,100 $ 1,781,000 $ 66,778 - - - - - - - - - - - - - - - - - - - - - 178,100 1,781,000 66,778 - - - - - - - - - - - - - - - - - - - - - 178,100 $ 1,781,000 $ 66,778	Retained Earnings	Total $ 596,560 - - (213,720 ) (213,720 ) 12,851 8,332 21,183 404,023 - - - - (113,360) 4,057 (109,303 ) $ 294,720	Other Equity
			Exchange Differences on Translating the Unrealized Valuation Gain (Loss) on Financial Assets Financial Statements of at Fair Value Through Other Foreign Comprehensive Operations Income $ (20,132 ) $ 7,197 - - - - - - - - - - 29,385 (20,824 ) 29,385 (20,824 ) 9,253 (13,627 ) - - - - - - - - - - (728 ) 8,143 (728 ) 8,143 $ 8,525 $ (5,484 )
Shares (In Thousands) 178,100 - - - - - - - 178,100 - - - - - - - 178,100	Unappropriated Legal Reserve Special Reserve Earnings $ 229,550 $ 3,271 $ 363,739 36,287 - (36,287) - 9,664 (9,664) - - (213,720 ) 36,287 9,664 (259,671 ) - - 12,851 - - 8,332 - - 21,183 265,837 12,935 125,251 2,118 - (2,118) - - - - (8,561 ) 8,561 2,118 (8,561 ) 6,443 - - (113,360) - - 4,057 - - (109,303 ) $ 267,955 $ 4,374 $ 22,391

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

(With Deloitte & Touche auditors’ report dated March 20, 2024)

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BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income tax before income tax Adjustments for: Depreciation expense Expected credit loss recognized (reversed) on trade receivables Net loss on fair value changes of financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Net loss on disposal of financial assets Write-down of inventories Reversal of write-down of inventories Unrealized net loss on foreign currency exchange Changes in operating assets and liabilities Trade receivables Other receivables Inventories Other current assets Other operating assets Notes payable Trade payables Other payables Provisions Other current liabilities Net defined benefit liabilities Cash generated from (used in) operations Interest paid Income taxes paid Net cash generated from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at amortized cost Purchase of financial assets at fair value through profit or loss Proceeds from sale of financial assets at fair value through profit or loss Payments for property, plant and equipment Increase in refundable deposits Decrease in refundable deposits	2023 $ (117,023) 6,324 (206) 46,185 154 (24,199) (11,218) 106 - (9,203) (8,895) (45,766) 4,038 103,258 (1,330) 1,272 (745) 123,058 (21,443) - (3,005) (8 ) 41,354 (154) (12,212 ) 28,988 - 15,463 (24,924) (140,823) 37,141 (708) (39) -	2022 $ 16,207 6,635 1,198 83,932 125 (14,476) (14,717) 6,715 60,413 - (9,315) 23,930 5,032 79,552 3,381 (5,040) (588) (184,821) (42,226) (50,000) (11,707) 5,005 (40,765) (125) (39,868 ) (80,758 ) (118,860) 51,747 - (307,882) 723,109 (2,098) - 844 (Continued)

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BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

Interest received Dividends received Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from guarantee deposits received Dividends paid to owners of the Company Repayment for lease liability principle Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2023 $ 24,249 11,218 (78,423 ) - (1,682) - (1,682 ) (1,679 ) (52,796) 747,831 $ 695,035	2022 $ 13,847 14,717 375,424 70 (213,720) (1,514 ) (215,164 ) 15,743 95,245 652,586 $ 747,831

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

(With Deloitte & Touche auditors’ report dated March 20, 2024)

(Concluded)

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NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

1. GENERAL INFORMATION

Biostar Microtech Int’L Corp. (the “Group”) was incorporated as a group limited by shares under the provisions of the Company Law of the Republic of China (ROC) in June 1986 and has been listed on the Taiwan Stock Exchange since March 20, 2001. The Group is dedicated to the design, development, manufacture and marketing of a broad range of networking solutions.

The financial statements are presented in the Group’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Group’s board of directors on March 1, 2024.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies.

b. The IFRSs endorsed by the FSC for application starting from 2023

Effective Date New, Amended and Revised Standards and Interpretations Announced by IASB (Note 1) Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” January 1, 2024 (Note 2) Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2024 Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants” January 1, 2024 Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements” January 1, 2024 (Note 3)

Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.
Note 3: The amendments provide some transition relief regarding disclosure requirements.

As of the date the financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

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c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

Effective Date New IFRSs Announced by IASB (Note 1)

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - January 1, 2023 Comparative Information” Amendments to IAS 21 “Lack of Exchangeability” January 1, 2025 (Note 2)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments, the entity recognizes any effect as an adjustment to the opening balance of retained earnings. When the entity uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the cumulative amount of translation differences in equity.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, biological assets excluding bearer plants which are measured at fair value less costs to sell, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.
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When preparing these parent company only financial statements, the Group used the equity method to account for its investments in subsidiaries. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of the Group in its financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries, the share of other comprehensive income of subsidiaries, and the related equity items, as appropriate, in these parent company only financial statements.

c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

d. Foreign currencies

In preparing the Group’s financial statements, transactions in currencies other than the Group’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value is determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items denominated in a foreign currency that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purposes of presenting the financial statements, the assets and liabilities of the Group and its foreign operations (including of the subsidiaries in other countries or those that use currencies that are different from the Group) are translated into New Taiwan dollars using the exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

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e. Inventories

Inventories consist of raw materials, work-in-process and finished goods and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost and stated at lower of cost or net realizable value on the balance sheet date.

f. Investments in subsidiaries

The Group uses the equity method to account for its investments in subsidiaries.

Subsidiaries are the entities controlled by the Group.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the subsidiary. The Group also recognizes the changes in the Group’s share of equity of subsidiaries.

Changes in the Group’s ownership interest in a subsidiary that do not result in the Group losing control of the subsidiary are accounted for as equity transactions. The Group recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

When the Group’s share of loss of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Group’s net investment in the subsidiary), the Group continues recognizing its share of further loss, if any.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business over the cost of acquisition is recognized immediately in profit or loss.

The Group assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Group recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

When the Group loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides this, the Group accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Group directly disposed of the related assets or liabilities.

16 -

Profit or loss resulting from downstream transactions is eliminated in full only in the parent company only financial statements. Profit and loss resulting from upstream transactions and transactions between subsidiaries is recognized only in the parent company only financial statements and only to the extent of interests in the subsidiaries that are not related to the Group.

g. Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

The depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in the estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

h. Investment properties

Investment properties are properties held to earn rental or for capital appreciation.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in current profit or loss.

i. Impairment of property, plant and equipment and investment properties

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset, investment properties and intangible assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

j. Financial instruments

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

17 -

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1) Financial assets

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

a) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI.

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any remeasurement gains or losses not on such financial assets are recognized in any dividends or interest earned.

ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) 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.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade notes receivables at amortized cost, accounts receivable, other receivable and investments in debt instruments, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and
ii) Financial asset that is not credit impaired on purchase or origination but has subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.
18 -

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii. Investments in debt instruments at FVTOCI

Debt instruments that meet the following conditions are subsequently measured at FVTOCI:

i) The debt instrument is held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of such financial assets; and
ii) The contractual terms of the debt instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in debt instruments at FVTOCI are subsequently measured at fair value. Changes in the carrying amounts of these debt instruments relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and impairment losses or reversals are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of.

b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables), investments in debt instruments at fair value through other comprehensive income, lease receivable and contract assets.

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.

c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

19 -

2) Financial liabilities

a) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, is recognized in profit or loss.

k. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

1) Onerous contracts

Onerous contracts are those in which the Group’s unavoidable costs of meeting the contractual obligations exceed the economic benefits expected to be received from the contract. The present obligations arising under onerous contracts are recognized and measured as provisions.

2) Warranties

Provisions for the expected cost of warranty obligations to assure that products comply with agreed-upon specifications are recognized on the date of sale of the relevant products at the best estimate by the management of the Group of the expenditures required to settle the Group’s obligations.

l. Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of electronic equipment. Group are recognized as revenues and trade receivables when control of the merchandise is transferred to the customer.

The Group does not recognize sales revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control of materials ownership.

2) Revenue from the rendering of services

Revenue from the rendering of services is recognized when information verification service is rendered.

20 -

m. Leases

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

When a lease includes both land and building elements, the Group assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the lessee. The lease payments are allocated to the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of the contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably to the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for by applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. However, if leases transfer ownership of the underlying assets to the Group by the end of the lease terms or if the costs of right-of-use assets reflect that the Group will exercise a purchase option, the Group depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate, residual value guarantees, the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and payments of penalties for terminating a lease if the lease term reflects such termination, less any lease incentives receivable. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

21 -

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in the amounts expected to be payable under a residual value guarantee, a change in the assessment of an option to purchase an underlying asset, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

n. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) is recognized as employee benefits expense in the period they occurs. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represents the actual deficit (surplus) in the Group’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

o. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

22 -

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and affiliates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and such temporary differences are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets 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.

3) Current and deferred taxes

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for the acquisition of a subsidiary, the tax effect is included in the accounting for the investments in a subsidiary.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimations and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

23 -

Key Sources of Estimation Uncertainty

Write-down of inventories

The net realizable value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The estimation of net realizable value is based on current market conditions and historical experience in the sale of product of a similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents (investments with original maturities of 3 months or less) Time deposits		December 31	December 31
		2023 $ 233 290,881 403,921 $ 695,035	2022 $ 319 353,063 394,449 $ 747,831

The market rate intervals of cash in the bank at the end of the reporting periods were as follows:

Demand deposits	December 31
	2023 2022 0.001%-5.5% 0.001%-4.00%

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds Preference shares Domestic listed shares Financial assets at FVTPL-non-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Domestic unlisted shares Domestic unlisted preference shares		December 31	December 31
		2023 $ 132,907 20,367 179,840 $ 333,114 $ 55,976 63,241 $ 119,217	2022 $ 126,995 18,661 73,880 $ 219,536 $ 111,210 61,405 $ 172,615

24 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in Debt Instruments at FVTOCI

Current Foreign investments Bonds		December 31	December 31
		2023 $ 204,443	2022 $ 205,657

The Group adopted a policy of only investing only in debt instruments that are rated the equivalent of investment grade or higher and have low credit risk for the purpose of impairment assessment. The credit rating information is supplied by independent rating agencies. The Group’s exposure and the external credit ratings are continuously monitored. The Group reviews changes in bond yields and other publicly available information and makes an assessment whether there has been a significant increase in credit risk since the last period to the reporting date.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Time deposits with original maturities of more than 3 months		December	31
		2023 $ 54,865	2022 $ 30,323

The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 1.16%-4% and 0.785%-1.75% per annum as of December 31, 2023 and 2022, respectively.

10. TRADE RECEIVABLES AND OTHER RECEIVABLES

Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Other receivables Interest receivables Others		December 31	December 31
		2023 $ 165,500 (4,178 ) $ 161,322 $ 8,556 623 208 $ 9,387	2022 $ 119,493 (4,463 ) $ 115,030 $ 12,762 673 40 $ 13,475

25 -

a. Trade receivables

The average credit period of sales of goods is 30-180 days. The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the customer, the customer’s current financial position, economic condition of the industry in which the customer operates, as well as the GDP forecasts and industry outlook. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

December 31, 2023

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2022 Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Not Past Due 1 to 30 Days 0.14% 14.02% $ 135,336 $ 27,780 (189 ) (3,894 ) $ 135,147 $ 23,886 Not Past Due 1 to 30 Days 0.17% 27.03% $ 103,958 $ 14,932 (182 ) (4,036 ) $ 103,776 $ 10,896	91 to 180 Days 20% $ 10 (2 ) $ 8 91 to 180 Days 33.58% $ 539 (181 ) $ 358	Over 180 Days 3.92% $ 2,374 (93 ) $ 2,281 Over 180 Days 100% $ 64 (64 ) $ -	Total $ 165,500 (4,178 ) $ 161,322 Total $ 119,493 (4,463 ) $ 115,030

26 -

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Less: Net remeasurement of loss allowance Foreign exchange translation gains and losses Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 4,463 - (83) (206) 4 $ 4,178	2022 $ 3,234 1,198 - - 31 $ 4,463

b. Other receivables

The Group measures the loss allowance for other receivables at an amount equal to actual credit losses of customers; therefore, there is no uncertain recovery in addition to the amount as follows.

The movements of the loss allowance of other receivables were as follows:

Balance at January 1 Less: Amounts written off Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ - - $ -	2022 $ 4,351 (4,351 ) $ -

11. INVENTORIES

Raw materials Work-in-process Finished goods Merchandise Packing Materials		December 31	December 31
		2023 $ 269,564 67,281 294,456 148,631 29,237 $ 809,169	2022 $ 324,030 61,514 306,499 160,479 49,904 $ 902,426

The nature of the cost of goods sold is as follows:

Cost of inventories sold Inventory write-downs (reversed)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 2,218,290 (9,203 ) $ 2,209,087	2022 $ 1,907,352 60,413 $ 1,967,765

The Company cost of goods sold related to inventories included the Inventory write-downs (reversed) as a result of selling the slow moving inventories.

27 -

12. SUBSIDIARIES

Subsidiaries included in consolidated financial statements.

Investor
Investee
Main Business

The Company
Garnet International
Corp.
Manufacture and Sale
of Mainboard,
Industrial Computers,
and Display Card

The Company
Biostar Microtech
(U.S.A.) Corp.
Sale of Mainboard,
Industrial Computers,
and Display Card

The Company
Biostar Microtech
Europe Holding B.V.
Investment Business

The Company
Immense Wealth
International Limited
Investment Business

Garnet International
Corp.
Dong Guan Biomax
Technology Co., Ltd.
Electronic Technology
Consulting Services

Biostar Microtech
Europe Holding B.V.
Biostar Microtech
Netherlands B.V.
Sale of Mainboard,
Industrial Computers,
and Display Card

Immense Wealth
International Limited
Hong Ren Yi Medical
Equipment
(Dongguan) Co., Ltd.
Manufacture and Sale
of Medical Supplies
and Equipments

Proportion of
Ownership
December
Remark
2023 2022
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
-
100%
Note

Note: Hong Ren Ren Medical Equipment (Dongguan) Co., Ltd. completed the deregistration registration on March 22, 2023.

13. PROPERTY, PLANT AND EQUIPMENT

Freehold Land
Cost
Balance at January 1, 2022
$ 97,344

Additions
-
Disposals
-
Net exchange difference

-

Balance at December 31, 2022$ 97,344

Accumulated depreciation
Balance at January 1, 2022
$ -

Depreciation expense
-
Disposals
-
Net exchange difference

-

Balance at December 31, 2022$ -

Carrying amount at
December 31, 2022
$ 97,344

Buildings
Machinery and
Equipment
Transportation
Equipment
Other
Equipment
Total
$ 131,761
$ 18,824
$ 748
$ 112,314
$ 360,991
490
-
-
1,608
2,098
(3,772 )
(1,435 )
-
(23,637 )
(28,844 )

4,913

1,833

82

3,433

10,261
$ 133,392
$ 19,222
$ 830
$ 93,718
$ 344,506
$ 97,839
$ 18,807
$ 748
$ 110,650
$ 228,044
1,935
19
-
1,057
3,011
(3,772 )
(1,435 )
-
(23,637 )
(28,844 )

4,897

1,831

82

3,420

10,230
$ 100,899
$ 19,222
$ 830
$ 91,490
$ 212,441
$ 32,493
$ -
$ -
$ 2,228
$ 132,065
(Continued)

28 -

Freehold Land
Cost
Balance at January 1, 2023
$ 97,344

Additions
-
Disposals
-
Net exchange difference

-

Balance at December 31, 2023$ 97,344

Accumulated depreciation
Balance at January 1, 2023
$ -

Depreciation expense
-
Disposals
-
Net exchange difference

-

Balance at December 31, 2023$ -

Carrying amount at
December 31, 2023
$ 97,344

Buildings
Machinery and
Equipment
Transportation
Equipment
Other
Equipment
Total
$ 133,392
$ 19,222
$ 830
$ 93,718
$ 344,506
205
-
-
503
708
-
-
(842 )
(2,708 )
(3,550 )

(8
)

(3
)

12

(9
)

(8
)
$ 133,589
$ 19,219
$ -
$ 91,504
$ 341,656
$ 100,899
$ 19,222
$ 830
$ 91,490
$ 212,441
1,752
-
-
874
2,626
-
-
(842 )
(2,708 )
(3,550 )

(9
)

(3
)

12

(6
)

(6
)
$ 102,642
$ 19,219
$ -
$ 89,650
$ 211,511
$ 30,947
$ -
$ -
$ 1,854
$ 130,145
(Concluded)

No impairment assessment was performed for the years ended December 31, 2023 and 2022 as there was no indication of impairment.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Building Main buildings 20-55 years Air-conditioning units 3-8 years Machinery and equipment 2-10 years Transportation equipment 5 years Other equipment 2-10 years

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 29.

14. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Buildings Additions to right-of-use assets Depreciation charge for right-of-use assets Buildings		December	31
	2023 2022 $ 1,944 $ 3,611 For the Year Ended December 31
		2023 $ - $ 1,691	2022 $ 5,122 $ 1,618

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b. Lease liabilities

Carrying amounts Current Non-current Range of discount rate for lease liabilities was as follows:		December	31
		2023 $ 1,755 $ 303	2022 $ 1,663 $ 2,054

Building	December 31
	2023 2022 2.37% 2.37%

c. Other lease information

Lease arrangements under operating leases for leasing out the investment properties are set out in Note 15.

Expenses relating to short-term leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 3,330 $ (5,083 )	2022 $ 3,466 $ (5,085 )

The Group’s leases of building qualify as short-term asset leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

15. INVESTMENT PROPERTIES

Cost Balance at January 1, 2022 and December 31, 2022 Accumulated depreciation and impairment Balance at January 1, 2022 Depreciation expense Balance at December 31, 2022 Carrying amount at December 31, 2022	Land $ 142,300 $ - - $ - $ 142,300	Buildings $ 104,069 $ 46,564 2,006 $ 48,570 $ 55,499	Total $ 246,369 $ 46,564 2,006 $ 48,570 $ 197,799 (Continued)

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Cost Balance at January 1, 2023 and December 31, 2023 Accumulated depreciation and impairment Balance at January 1, 2023 Depreciation expense Balance at December 31, 2023 Carrying amount at December 31, 2023	Land $ 142,300 $ - - $ - $ 142,300	Buildings $ 104,069 $ 48,570 2,007 $ 50,577 $ 53,492	Total $ 246,369 $ 48,570 2,007 $ 50,577 $ 195,792 (Concluded)

The investment properties are depreciated using the straight-line method over their estimated useful lives as follows:

Buildings Main buildings 55 years Air-conditioning units 3-8 years Other equipment 3-8 years

The market for comparable properties is inactive and alternative reliable measurements of fair value are not available; therefore, the Group determined that the fair value of the investment property is not reliably measurable.

The investment properties are leased out for 1 year. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.

The maturity analysis of lease payments receivable under operating leases of investment properties was as follows:

Year 1		December	31
		2023 $ 9,629	2022 $ 9,483

All of the Group’s investment properties are proprietary owned. The investment properties pledged as collateral for bank borrowings are set out in Note 29.

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16. OTHER ASSETS

Current Prepayments Others Non-current Refundable deposits Net defined benefit assets (Note 20) Others		December	31
		2023 $ 7,473 1,237 $ 8,710 $ 750 16,155 3,772 $ 20,677	2022 $ 6,468 912 $ 7,380 $ 711 11,076 5,044 $ 16,831

17. NOTES PAYABLE AND TRADE PAYABLES

Notes payable Operating Trade payables Operating		December 31	December 31
		2023 $ 1,886 $ 466,161	2022 $ 2,631 $ 343,106

The average credit period on purchases of raw materials was 30-120 days. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

18. OTHER LIABILITIES

Current Other payables Payables for salaries and bonuses Payables for processing fee		December 31	December 31
		2023 $ 46,538 47,820 $ 94,358	2022 $ 46,205 69,633 $ 115,838 (Continued)

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Other liabilities Advance receipts Receipts under custody Others Non-current Guarantee deposits		December 31	December 31
		2023 $ 9,772 1,240 921 $ 11,933 $ 3,336	2022 $ 12,741 1,276 921 $ 14,938 $ 3,336 (Concluded)

19. PROVISIONS

Current Warranties Non-current Warranties		December	31
		2023 $ 30,000 $ 20,000	2022 $ 30,000 $ 20,000

The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic benefits that will be required under the Group’s obligations for warranties under contracts for the sale of goods. The estimate has been made on the basis of historical warranty trends.

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Group adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Group makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plan adopted by the Group in accordance with the Labor Standards Act is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Group contribute amounts equal to 4% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

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The amounts included in the balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit (assets) liability		December 31	December 31
		2023 $ 85,890 (102,045 ) $ (16,155 )	2022 $ 88,843 (99,919 ) $ (11,076 )

Movements in net defined benefit liability (assets) were as follows:

	Present Value of	Present Value of
	the Defined				Net Defined
		Benefit	Fair Value of			Benefit
	Obligation		the Plan Assets		Liabilities
Balance at January 1, 2022	$	86,601	$ (92,267 )		$	(5,666 )
Service cost
Past service cost		5,041		-		5,041
Net interest expense (income)		541		(577 )		(36 )
Recognized in profit or loss		5,582		(577 )		5,005
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-		(7,075)		(7,075)
Actuarial (gain) loss
Changes in financial assumptions		(4,278)		-		(4,278)
Experience adjustments		938		-		938
Recognized in other comprehensive income		(3,340 )		(7,075 )		(10,415 )
Contributions from the employer		-		-		-
Balance at December 31, 2022	$	88,843	$ (99,919 )		$	(11,076 )
Balance at January 1, 2023	$	88,843	$ (99,919 )		$	(11,076 )
Service cost
Past service cost		130		-		130
Net interest expense (income)		1,111		(1,249 )		(138 )
Recognized in profit or loss		1,241		(1,249 )		(8 )
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-		(877)		(877)
Actuarial (gain) loss
Changes in financial assumptions		806		-		806
Experience adjustments		(5,000 )		-		(5,000 )
Recognized in other comprehensive income		(4,194 )		(877 )		(5,071 )
Contributions from the employer		-		-		-
Balance at December 31, 2023	$	85,890	$ (102,045 )		$	(16,155 )

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Through the defined benefit plans under the Labor Standards Act, the Group is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
3) Salary risk: The present value of the defined benefit obligation is calculated using the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase	December 31
	2023 2022 1.125% 1.25% 2.50% 2.50%

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.25% increase 0.25% decrease		December	31
		2023 $ (1,600 ) $ 1,649 $ 1,601 $ (1,562 )	2022 $ (1,618 ) $ 1,670 $ 1,623 $ (1,581 )

The above sensitivity analysis may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions will occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plan for the next year Average duration of the defined benefit obligation		December	31
		2023 $ - 7.6 years	2022 $ - 7.4 years

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21. EQUITY

a. Share capital

Ordinary shares

Shares authorized (in thousands of shares) Shares authorized Shares issued and fully paid (in thousands of shares) Shares issued		December 31	December 31
		2023 300,000 $ 3,000,000 178,100 $ 1,781,000	2022 300,000 $ 3,000,000 178,100 $ 1,781,000

A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

b. Capital surplus

The capital surplus generated from the excess of the issuance price over the par value of capital stock (including the stock issued for new capital), may be used to offset a deficit; in addition, when the Group has no deficit, such capital surplus may be distributed as cash dividends or stock dividends up to a certain percentage of the Group’s paid-in capital.

c. Retained earnings and dividends policy

Under the dividends policy as set forth in the Articles, where the Group made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Group’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of compensation of employees and remuneration of directors and supervisors after the amendment, refer to compensation of employees and remuneration of directors and supervisors in Note 23 (h).

The Group is in a steadily growing information industry. In order to meet the Group’s long-term business development, future capital needs, long-term financial planning and shareholders’ needs for cash inflows, the issuance of cash dividends takes precedence over the payment of share dividends. The aforementioned distribution ratio of cash dividends and share dividends are 50% to 100% and 0% to 50% of the total dividend, respectively.

An appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Group’s paid-in capital. The legal reserve may be used to offset deficit. If the Group has no deficit and the legal reserve has exceeded 25% of the Group’s paid-in capital, the excess may be transferred to capital or distributed in cash.

When a special reserve is appropriated for cumulative net debit balance reserves from prior period, [the special reserve is only appropriated from the prior unappropriated earnings.

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The appropriations of earnings for 2022 and 2021, which were approved in the shareholders’ meeting on June 21, 2023 and June 23, 2022, respectively, were as follows:

Legal reserve Special reserve Reversal of special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended		December 31
		2022 $ 2,118 $ - $ 8,561 $ - $ -	2021 $ 36,287 $ 9,664 $ - $ 213,720 $ 1.2

The Company’s shareholders also resolved in the shareholders’ meeting on March 1, 2024 for the Loss make-up proposal, respectively, were as follows:

Reversal of special reserve d. Special reserve Balance at January 1 Appropriations in respect of Debits to other equity items Reversals: Reversal of the debits to other equity items Balance at December 31	For the Year Ended December 31, 2023 $ 1,881 For the Year Ended December 31	For the Year Ended December 31, 2023 $ 1,881 For the Year Ended December 31	For the Year Ended December 31, 2023 $ 1,881 For the Year Ended December 31
		2023 $ 12,935 - (8,561 ) $ 4,374	2022 $ 3,271 9,664 - $ 12,935

On the first-time adoption of IFRSs, the Group appropriated for a special reserve of $2,493 thousand, the same amount as the exchange differences on translating the financial statements of foreign operations transferred to retained earnings.

If a proportionate share of the special reserve appropriated on the first-time adoption of IFRSs relates to exchange differences on translating the financial statements of foreign operations (including the subsidiaries of the Group) will be reversed on the Group’s disposal of foreign operations; on the Group’s loss of significant influence, however, the entire special reserve will be reversed. Additional special reserve should be appropriated for the amount equal to the difference between net debit balance reserves and the special reserve appropriated on the first-time adoption of IFRSs. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and is thereafter distributed.

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e. Other equity items

1) Exchange differences on the translation of the financial statements of foreign operations

Balance at January 1 Recognized for the year Exchange differences on the translation of the financial statements of foreign operations Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 9,253 (728 ) $ 8,525	2022 $ (20,132) 29,385 $ 9,253

The exchange differences arising on translation of foreign operation’s net assets from its functional currency to the Group’s presentation currency are recognized directly in exchange differences on the translation of the financial statements of foreign operations under other comprehensive income.

2) Unrealized valuation gain/(loss) on financial assets at FVTOCI

Balance at January 1 Recognized for the year Unrealized gain/(loss) - debt instruments Net remeasurement of loss allowance Reclassification adjustments Disposal of investments in debt instruments Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ (13,627) 8,037 106 $ (5,484 )	2022 $ 7,197 (27,539) 6,715 $ (13,627 )

22. REVENUE

Revenue from contracts with customers Revenue from the sale of goods Other operating income a. Contract balances December 31, 2023 Trade receivables (Note 10) $ 165,500	For the Year Ended December 31	For the Year Ended December 31
	2023 $ 2,344,312 123 $ 2,344,435 December 31, 2022 $ 119,493	2022 $ 2,235,929 456 $ 2,236,385 January 1, 2022 $ 139,912

b. Contract explanation: Note 32
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23. NET (LOSS) PROFIT

a. Interest income

Bank deposits Investments in financial assets at FVTOCI	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 14,173 10,026 $ 24,199	2022 $ 5,207 9,269 $ 14,476

b. Other income

Rental income Investment properties (See Note 15) Dividends Others Other gains and losses Fair value changes of financial assets and financial liabilities Financial assets mandatorily classified as at FVTPL Net foreign exchange gains Loss on disposal of financial assets Investments in debt instruments at FVTOCI Net loss on disposal of property, plant, and equipments Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2023 2022 $ 12,420 $ 12,270 11,218 14,717 8,332 13,171 $ 31,970 $ 40,158 For the Year Ended December 31
		2023 $ (46,185) 5,881 (106) - (2,822 ) $ (43,232 )	2022 $ (83,932) 53,911 (6,715) - (3,098 ) $ (39,834 )

c. Other gains and losses

d. Finance cost

Interest on bank loans Interest on lease liabilities Other interest expense	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 57 71 26 $ 154	2022 $ - 105 20 $ 125

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e. Impairment losses recognized (reversed)

For the Year Ended	For the Year Ended	December 31
2023 $ 9,203 $ 206 For the Year Ended		2022 $ (60,413 ) $ (1,198 ) December 31
2023 $ 2,626 2,007 1,691 $ 6,324 $ 11 4,306 2,007 $ 6,324 For the Year Ended		2022 $ 3,011 2,006 1,618 $ 6,635 $ 338 4,291 2,006 $ 6,635 December 31
2023 $ 2,816 For the Year Ended		2022 $ 2,818 December 31
	2023 $ 6,041 (8 ) 6,033 175,702 $ 181,735 $ 18,133 163,602 $ 181,735	2022 $ 6,007 5,005 11,012 175,086 $ 186,098 $ 17,654 168,444 $ 186,098

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i. Compensation of employees and remuneration of directors and supervisors

According to the Group’s Articles, the Group accrues compensation of employees and remuneration of directors and supervisors at the rates 5%-15% and no higher than 3%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors and supervisors.

The compensation of employees and the remuneration of directors and supervisors for the years ended December 31, 2023 and 2022, which were approved by the Group’s board of directors on , 2024 and March 24, 2023, respectively, are as follows:

Accrual rate

Compensation of employees Remuneration of directors and supervisors Amount Compensation of employees Remuneration of directors and supervisors	For the Year Ended December 31, 2022 12.5% 2.0% For the Year Ended December 31, 2022
	Cash $ 2,495 399

Due to the loss before in come tax for the years ended December 31, 2023, the Company did not accrues Compensation of employees and remuneration of directors and supervisors.

There is no difference between the actual amounts of compensation of employees and remuneration of directors and supervisors paid and the amounts recognized in the financial statements for the years ended December 31, 2022 and 2021.

Information on the compensation of employees and remuneration of directors and supervisors resolved by the Group’s board of directors for 2023 and 2022 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

j. Gains or losses on foreign currency exchange

Foreign exchange gains Foreign exchange losses Net Gains (losses)	For the Year Ended	For the Year Ended	December 31
		2023 $ 59,524 (53,643 ) $ 5,881	2022 $ 112,232 (58,321 ) $ 53,911

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24. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of income tax expense (benefit) are as follows:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior year Deferred tax In respect of the current year Income tax expense (benefit) recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 800 - (12,392 ) (11,592) 7,929 $ (3,663 )	2022 $ 23,293 5,160 (25,729 ) 2,724 632 $ 3,356

A reconciliation of accounting profit and income tax expense (benefit) is as follows:

Profit before tax Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Tax-exempt income Unrecognized deductible temporary differences Income tax on unappropriated earnings Adjustments for prior years’ tax Income tax expense (benefit) recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2023 $ (117,023 ) $ (27,781) - 12,782 23,728 - (12,392 ) $ (3,663 )	2022 $ 16,027 $ (781) 140 20,121 4,445 5,160 (25,729 ) $ 3,356

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Translation of foreign operations Remeasurement of defined benefit plans Total income tax recognized in other comprehensive income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ (182) 1,014 $ 832	2022 $ 7,346 2,083 $ 9,429

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c. Current tax assets and liabilities

Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December	31
		2023 $ 11,895 $ -	2022 $ 4,873 $ 16,782

d. Deferred tax assets and liabilities

The movements of deferred tax liabilities are as follows:

For the year ended December 31, 2023

Deferred tax assets Temporary differences Unrealized write down of inventories Unrealized provision Impairment loss Unrealized gross profit on associates and joint ventures Defined benefit obligations Unrealized loss on foreign currency exchange Others Deferred tax liabilities Temporary differences Defined benefit obligations Exchange differences on translating the financial statements of foreign operations Unrealized gain on foreign currency exchange Others	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income Exchange Differences $ 27,969 $ (1,778) $ - $ (6) 5,000 - - - 154 (112) - 2 5,772 (4,933) - - - 1,019 - - 1,091 (1,091) - - 308 125 - (2 ) $ 40,294 $ (6,770 ) $ - $ (6 ) $ 985 $ 2,004 $ 1,014 $ - 7,857 - (182) - - 1,895 - - 3,129 (2,740 ) - - $ 11,971 $ 1,159 $ 832 $ -	Closing Balance $ 26,185 5,000 44 839 1,019 - 431
		$ 33,518
		$ 4,003 7,675 1,895 389
		$ 13,962

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For the year ended December 31, 2022

Deferred tax assets Temporary differences Unrealized write down of inventories Unrealized provision Impairment loss Unrealized gross profit on associates and joint ventures Defined benefit obligations Unrealized loss on foreign currency exchange Others Deferred tax liabilities Temporary differences Defined benefit obligations Exchange differences on translating the financial statements of foreign operations Others	Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income Exchange Differences $ 17,360 $ 10,483 $ - $ 126 10,000 (5,000) - - 384 (240) - 10 5,971 (199) - - 16 1,082 (1,098) - 4,214 (3,123) - - 748 (507 ) - 67 $ 38,693 $ 2,496 $ (1,098 ) $ 203 $ - $ - $ 985 $ - 511 - 7,346 - - 3,128 - 1 $ 511 $ 3,128 $ 8,331 $ 1	Closing Balance $ 27,969 5,000 154 5,772 - 1,091 308
		$ 40,294
		$ 985 7,857 3,129
		$ 11,971

e. Deductible temporary differences and unused loss carryforwards for which no deferred tax assets have been recognized in the balance sheets

Loss carryforwards Expiry in 2033 Deductible temporary differences Unrealized loss on investment Impairment loss on financial asset Unrealized provision		December 31	December 31
		2023 $ 108,303 165,008 42,799 25,000 232,807 $ 341,110	2022 $ - 149,420 44,870 25,000 219,290 $ 219,290

f. Income tax assessments

As of December 31, 2021, the tax returns have been assessed by the tax authorities.

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25. EARNINGS (LOSS) PER SHARE

Weighted average number of basic earnings per share (in thousands of shares)

Net Profit (Loss) for the Year

Profit (loss) for the year attributable to owners of the Company	For the Year Ended	For the Year Ended	December 31
		2023 $ (113,369 )	2022 $ 12,851

Weighted average number of ordinary shares used in the computation of basic earnings (loss) per share Effect of potentially dilutive ordinary shares Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings (loss) per share	Unit: NT$ Per Share For the Year Ended December 31	Unit: NT$ Per Share For the Year Ended December 31	Unit: NT$ Per Share For the Year Ended December 31
		2023 178,100 - 178,100	2022 178,100 831 178,931

The Group may settle the compensation of employees in cash or shares; therefore, the Group assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

26. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The Group is not subject to any externally imposed capital requirements.

27. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

Management of the Group believes the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values or their fair value cannot be reliably measured.

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b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2023

Financial assets at FVTPL Mutual fund Preference shares Common shares Financial assets at FVTOCI Investment in debt instrument Bonds December 31, 2022 Financial assets at FVTPL Mutual fund Preference shares Common shares Financial assets at FVTOCI Investment in debt instrument Bonds	Level 1 $ 132,907 20,367 179,840 $ 333,114 $ 204,443 Level 1 $ 126,995 18,661 73,880 $ 219,536 $ 205,657	Level 2 $ - - - $ - $ - Level 2 $ - - - $ - $ -	Level 3 $ - 63,241 55,976 $ 119,217 $ - Level 3 $ - 61,405 111,210 $ 172,615 $ -	Total $ 132,907 83,608 235,816
				$ 452,331
				$ 204,443
				Total $ 126,995 80,066 185,090
				$ 392,151
				$ 205,657

2) Reconciliation of Level 3 fair value measurements of financial instruments

December 31, 2023

Financial Assets Balance at January 1, 2023 Recognized in profit or loss (included in other gains and losses) Disposal Balance at December 31, 2023 Changes in unrealized gains or losses related to assets held in the end of year and are recognized in profit or losses	Financial Assets at FVTPL
	Equity Instruments $ 172,615 (85,398) 32,000 $ 119,217 $ (85,398 )

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December 31, 2022

Financial Assets Balance at January 1, 2022 Recognized in profit or loss (included in other gains and losses) Disposal Balance at December 31, 2022 Changes in unrealized gains or losses related to assets held in the end of year and are recognized in profit or losses	Financial Assets at FVTPL
	Equity Instruments $ 172,343 2,072 (1,800 ) $ 172,615 $ 2,072

3) Valuation techniques and inputs applied for Level 3 fair value measurement

The valuation techniques of domestic unlisted shares are mainly applicable for valuation model.

c. Categories of financial instruments

Financial assets FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (1) Financial assets at FVTOCI Investment in debt instrument Financial liabilities Amortized cost (2)	December 31
	2023 2022 $ 452,331 $ 392,151 921,359 907,370 204,443 205,657 565,741 464,911

1) The balances included financial assets at amortized cost, which comprise cash, trade receivables, other receivables, financial assets at amortized cost, and refundable deposits.
2) The balances include financial liabilities measured at amortized cost, which comprise notes payable, trade payables, other payables, and guarantee deposits.

d. Financial risk management objectives and policies

The Group’s major financial instruments include equity and debt instrument investments, trade receivables, trade payables, and borrowings. The Group’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (a) and interest rates (b).

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a) Foreign currency risk

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are set out in Note 30.

Sensitivity analysis

The Group was mainly exposed to the USD and RMB.

The following table details the Group’s sensitivity to a 5% increase and decrease in the functional currency against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. A negative number below indicates a decrease in pre-tax profit and other equity when the New Taiwan dollar or other functional currency weakens by 5% against the relevant foreign currency. Conversely, a positive number indicates a decrease in pre-tax profit when the functional currency weakens by 5% against the relevant foreign currency.

Profit or loss	Currency USD Impact For the Year Ended December 31 2023 2022 $ 2,259 $ 3,158	Currency RMB Impact
		For the Year Ended December 31
		2023 2022 $ 3,967 $ 2,269

b) Interest rate risk

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets	December 31
	2023 2022 $ 663,229 $ 630,429 2,058 3,717 275,354 332,953

Sensitivity analysis

The sensitivity analysis below was determined based on the Group’s exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate assets, the analysis was prepared assuming the amount of the assets outstanding at the end of the reporting period was outstanding for the whole year. A 25 base point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 25 base point higher/lower and all other variables were held constant, the Group’s pre-tax loss and profit for the years ended December 31, 2023 and 2022 would have increased/decreased by $688 thousand and $832 thousand, respectively.

The Group’s sensitivity to interest rates increased during the current period mainly due to the increase in floating rate demand deposits.

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c) Other price risk

The Group was exposed to equity price risk through its investments in equity securities, mutual funds, and bonds. Equity investments are held for strategic rather than for trading purposes; the Group does not actively trade these investments. The Group’s management manage risk by holding portfolio of different investment.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the year.

If equity prices had been 5% higher/lower, pre-tax profit for the years ended December 31, 2023 and 2022 would have increased/decreased by $22,617 thousand and $19,608 thousand, respectively, other comprehensive income for the years ended December 31, 2023 and 2022 would have increased/decreased by $10,222 thousand and $10,283 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation could be the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheet.

The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral and factoring of trade receivables, where appropriate, as a means of mitigating the risk of financial loss from defaults.

Accounts receivables are addressed to wide range of clients and are dispersed across different industries and geographies. The Group continuously evaluates the collateral and financial position obtained by customers receivable.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2023 and 2022, the Group had available unutilized bank loan facilities set out in below.

Financing facilities

Bank overdraft facilities Amount used Amount unused		December 31	December 31
		2023 $ - 500,000 $ 500,000	2022 $ - 500,000 $ 500,000

49 -

28. TRANSACTIONS WITH RELATED PARTIES

Balances and transaction between the Group and its subsidiaries, which are related parties of the Group, have been eliminated on consolidation and are not disclosed in this note.

Remuneration of key management personnel

The total remuneration of directors and other key management in 2023 and 2022 personnel are as follows:

Short-term employee benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 30,353	2022 $ 30,940

The remuneration of directors and other key management personnel, as determined by the remuneration committee, was based on the performance of individuals and on market trends.

29. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings of property:

Land and buildings (included in property, plant and equipment) Land and buildings (included in investment property)		December 31	December 31
		2023 $ 23,155 195,792 $ 218,947	2022 $ 23,297 197,799 $ 221,096

30. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant assets and liabilities denominated in foreign currencies other than functional currencies of the entities in the Group and the exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2023

Foreign Currency Exchange Rate Financial assets Monetary items USD $ 17,540 30.705 (USD:NTD) USD 312 7.083 (USD:RMB) RMB 18,613 4.327 (RMB:NTD)	Carrying Amount $ 538,551 9,588 80,538 $ 628,677 (Continued)

50 -

Foreign
Currency
Exchange Rate
Non-monetary items
Financial assets at fair value through profit
of loss
USD
$ 4,992
30.705 (USD:NTD)
Financial assets at fair value through other
comprehensive income
USD
6,658
30.705 (USD:NTD)

Financial liabilities

Monetary items

USD
16,380
30.705 (USD:NTD)
RMB
275
4.327 (RMB:NTD)

December 31, 2022
Foreign
Currency
Exchange Rate
Financial assets

Monetary items

USD
$ 14,933
30.710 (USD:NTD)
USD
120
6.965 (USD:RMB)
RMB
10,736
4.408 (RMB:NTD)

Non-monetary items
Financial assets at fair value through profit
of loss
USD
4,743
30.710 (USD:NTD)
Financial assets at fair value through other
comprehensive income
USD
6,697
30.710 (USD:NTD)

Financial liabilities

Monetary items

USD
12,996
30.710 (USD:NTD)
RMB
440
4.408 (RMB:NTD)

Carrying
Amount
$ 153,274

204,443
$ 357,717
$ 502,958

1,188
$ 504,146
(Concluded)
Carrying
Amount
$ 458,585

3,691

47,325
$ 509,601
$ 145,656

205,657
$ 351,313
$ 399,122

1,939
$ 401,061

51 -

The significant realized and unrealized foreign exchange gains (losses) were as follows:

Functional Currency NTD USD RMB	For the Year Ended December 31	For the Year Ended December 31
	2023 Exchange Rate Net Foreign Exchange Loss 1 (NTD:NTD) $ 5,817 31.155 (USD:NTD) 95 4.396 (RMB:NTD) (31 ) $ 5,881	2022
		Exchange Rate Net Foreign Exchange Loss 1 (NTD:NTD) $ 53,512 29.805 (USD:NTD) (70) 4.422 (RMB:NTD) 469 $ 53,911

31. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions:
1) Financing provided to others (None).
2) Endorsements/guarantees provided (None).
3) Marketable securities held (excluding investment in subsidiaries, associates and jointly controlled entities) (Table 1).
4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None).
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None).
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None).
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 2).
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 3).
9) Trading in derivative instruments (None).
10) Others: Intercompany relationships and significant intercompany transactions (Table 4).
b. Information on reinvestments (Table 5).
c. Information on investment in mainland China:
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 6).
52 -
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (None)
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
- c) The amount of property transactions and the amount of the resultant gains or losses.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to the financing of funds.
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.
d. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (None).

32. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on types of corporation. Specifically, the Group’s reportable segments were as follows:

Asia-Pacific Operating Segment: Manufacture of computer mainboard, industrial computers and display cards, and sale of electronic products in the Asia-Pacific area.
America Sales Segment: Sale of electronic products in the Americas
Europe Sales Segment: Sale of electronic products in Europe
a. Segment revenues and results

The following is an analysis of the Group’s revenue and result from continuing operations from reportable segment.

Asia-Pacific operating segment America sales segment Europe sales segment Total of continuing operations		Segment Revenues For the Year Ended December 31 2023 2022 $ 1,856,818 $ 1,638,140 253,340 311,464 234,277 286,781 $ 2,344,435 $ 2,236,385		Segment Profit (Loss)	Segment Profit (Loss)
				For the Year Ended December 31
		2023 $ 1,856,818 253,340 234,277 $ 2,344,435		2023 $ (113,648) (13,582) (2,576 ) (129,806)	2022 $ 20,318 (11,448) (7,338 ) 1,532 (Continued)

53 -

Interest revenues Other income Other profit or losses Finance costs Income before tax	Segment Revenues For the Year Ended December 31 2023 2022		Segment Profit (Loss)	Segment Profit (Loss)
			For the Year Ended December 31
			2023 $ 24,199 31,970 (43,232) (154 ) $ (117,023 )	2022 $ 14,476 40,158 (39,834) (125 ) $ 16,207 (Concluded)

The above segment revenues are from sales to external clients. The intercompany transactions of 2023 and 2022 are eliminated. Segment profit represents the profit before tax earned by each segment without allocation of interest income, other income, other gains or losses, finance costs and income tax expense. This is the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

b. Segment assets and liabilities

Segment assets Asia-Pacific operating segment America sales segment Europe sales segment Total segment assets Segment liabilities Asia-Pacific operating segment America sales segment Europe sales segment Total segment liabilities	For the year ended December 31	For the year ended December 31	For the year ended December 31
		2023 $ 2,575,799 109,806 103,628 $ 2,789,233 $ 635,014 5,149 3,531 $ 643,694	2022 $ 2,529,517 173,936 106,293 $ 2,809,746 $ 552,671 7,029 2,619 $ 562,319

c. Information about major customers

Single customers contributing 10% or more to the Group’s revenue in 2023 and 2022 were as follows:

Customer A Customer B	For the Year Ended	For the Year Ended	December 31
		2023 $ 249,013 $ 2,555	2022 $ 93,776 $ 184,863

54 -

TABLE 1

BIOSTAR MICROTECH INT’L CORP. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			December	31, 2023			Note
				Shares		Carrying Amount	Percentage of Ownership (%)	Market Value or Net Asset Value
Biostar Microtech Int’L Corp.	Bonds AMXLMM 5 3/8 04/04/32 -REGS- 5/8% 04 Apr 2032 ARGENTUM NETHERLANDS B.V. FRN 5 3/4% 15 Aug 2050 BARCLAYS 5.2% 12 May 2026 C 4.14 05/24/25 FRN 4,14 % 24 May 2025 HSBC 5.21 08/11/28 FRN 5.21 % 11 Aug 2028 HYSAN 4.1 PERP FRN 4.1% 03 Mar 2169 JPM 3.9 07/15/25 3.9 % 15 Jul 2025 MQGAU 1.201 10/14/25 FRN -REGS- 1.201% 14 Oct 2025 MS 3.62 04/17/25 FRN 3,62 % 17 Apr 2025 MUFG 2.193 02/25/25 2,193% 25 Feb 2025 NSANY 4.81 09/17/30 -REGS- 4.81% 17 Sep 2030 ORACLE CORP 2.95 % 15 May 2025 QBE INSURANCE GROUP 6 3/4% 02 Dec 2044 SCGAU 5 1/8 09/24/2080 FRN -REGS- 5 1/8% 24 Sep 2080 SOCGEN 6.221 06/15/33 FRN -REGS- 6.221% 15 Jun 2033 STANLN 3.785 05/21/25 FRN -REGS- 3,785% 21 May 2025 STANLN 3.971 03/30/26 FRN -REGS- 3.971% 30 Mar 2026 T-MOBILE USA INC 4 3/4% 01 Feb 2028 TRPCN 5 7/8 08/15/2076 FRN -16-A- 5 7/8% 15 Aug 2076 VOD 4 1/8 06/04/2081 FRN 4 1/8% 04 Jun 2081	None None None None None None None None None None None None None None None None None None None None	Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current	300 400 300 300 300 300 300 300 300 300 700 300 400 500 300 300 300 300 350 400		$ 8,562 12,100 9,155 9,156 9,210 8,069 9,069 8,888 9,156 8,898 20,095 8,942 12,250 13,669 9,207 9,130 8,981 9,179 10,159 10,568 $ 204,443	- - - - - - - - - - - - - - - - - - - -		$ 8,562 12,100 9,155 9,156 9,210 8,069 9,069 8,888 9,156 8,898 20,095 8,942 12,250 13,669 9,207 9,130 8,981 9,179 10,159 10,568 $ 204,443

(Continued)

55 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			December	31, 2023			Note
				Shares		Carrying Amount	Percentage of Ownership (%)	Market Value or Net Asset Value
	Mutual funds BLACKROCK ASIA TIGER BD USD DIS A3 BLACKROCK CHINA BOND USD HDG DIS A6 JPM GLB BOND OPPS FD USD DIST C MTH JPM GLB HI YLD USD BD FD DIST -C- JPM INCOME USD DIV C MZNCH ENHANCEDYIELD ST USDHDGACC R PIMCO GLBL IG CREDIT USD ACC INV PIMCO INCOME FUND USD ACC INV PIMCO INCOME FUND USD INC INV Preference shares ATHENE HOLDING LTD PFD PERP FRN A AEGON FUNDING CORP II PFD Domestic listed shares United Microelectronics Corporation Arcadyan Technology Corporation K. S. Terminals Inc. Chip MOS Technologies Inc. Niko Semiconductor Co., Ltd. Genius Electronic Optical Co., Ltd. Foxsemicon Integrated Technology Inc. Domestic unlisted shares Gunitech Corp. Phansco Co., Ltd. Ostar Meditech Corp. AMIC TECHNOLOGY CORPORATION HODAD ELECTRONIC CO., LTD. GenkiTek Technology Co., Ltd. BE Epitaxy Semiconductor Technology Co., Ltd. Best Epitaxy Manufacturing Company Ltd. Domestic unlisted preference shares Element III Venture Capital Co., Ltd. Element IV Venture Capital Co., Ltd.	None None None None None None None None None None None None None None None None None None None None None None None None None None None None	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current	40 49 5 6 5 4 22 41 47 15 15 1,000 200 200 700 250 40 80 1,250 1,250 660 79 309 500 7,721 2,000 2,820 3,000		$ 11,953 12,219 14,981 17,398 13,312 17,309 14,836 17,362 13,537 $ 132,907 $ 10,354 10,013 $ 20,367 $ 52,600 34,100 14,380 29,575 15,525 16,820 16,840 $ 179,840 $ 4,216 - - - - - 41,330 10,430 $ 55,976 $ 28,892 34,349 $ 63,241	- - - - - - - - - - - - - - - - - - 12.50 13.82 10.59 - 1.93 15.63 11.33 2.98 5.39 11.45		$ 11,953 12,219 14,981 17,398 13,312 17,309 14,836 17,362 13,537 $ 132,907 $ 10,354 10,013 $ 20,367 $ 52,600 34,100 14,380 29,575 15,525 16,820 16,840 $ 179,840 $ 4,216 - - - - - 41,330 10,430 $ 55,976 $ 28,892 34,349 $ 63,241

(Concluded)

56 -

TABLE 2

BIOSTAR MICROTECH INT’L CORP. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship		Transaction Detail	Transaction Detail	Transaction Detail	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			(Purchase)/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Biostar Microtech Int’L Corp.	Biostar Microtech (U.S.A.) Corp. Biostar Microtech Netherlands B.V.	Subsidiary Subsidiary	Sales Sales	$ (202,824) (206,404)	8.95 9.11	About 120 days About 120 days	Normal Normal	Normal Normal	$ 101,169 43,807	34.07 14.75

Note: The transactions between the company and investee companies have already been eliminated in the preparation of the consolidated financial statements.

57 -

TABLE 3

BIOSTAR MICROTECH INT’L CORP. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate		Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Action Taken
Biostar Microtech Int’L Corp.	Biostar Microtech (U.S.A.) Corp.	Subsidiary	$ 101,169	-	$ -	-	$ 8,196	$ -

Note: All transactions listed in the table have been eliminated in the preparation of the consolidated statements.

58 -

TABLE 4

BIOSTAR MICROTECH INT’L CORP. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Investee Company	Counterparty	Relationship (Note 2)		Transaction Details	Transaction Details
				Financial Statement Accounts	Amount	Payment Terms	% to Total Sales or Assets (Note 3)
0	Biostar Microtech Int’L Corp.	Biostar Microtech (U.S.A.) Corp. Biostar Microtech (U.S.A.) Corp. Biostar Microtech Netherlands B.V. Biostar Microtech Netherlands B.V. Immense Wealth International Limited. Immense Wealth International Limited.	1 1 1 1 1 1	Sales Account receivables - related parties Sales Account receivables - related parties Other operating costs Other payables - related parties	$ 202,824 101,169 206,404 43,807 14,101 964	Under arm’s length terms Under arm’s length terms Under arm’s length terms Under arm’s length terms Under arm’s length terms Under arm’s length terms	9 4 9 2 1 1

Note 1: Companies are identified by number, as follows:

a. “0” represents the parent company.
b. Subsidiaries are numbered sequentially starting from “1”.

Note 2: The flow of transactions is as follows:

a. 1 - from the parent company to the subsidiary.
b. 2 - from the subsidiary to the parent company.
c. 3 - between subsidiaries.
Note 3: Percentage of consolidated operating revenues or consolidated total assets: If the account is in the balance sheet, it was calculated by dividing the ending balance by the consolidated total assets; if the account is in the income statement, it was calculated by dividing the interim cumulative balance by the consolidated operating revenue.

Note 4: All transactions listed in the table have been eliminated in the preparation of the consolidated statements.

59 -

TABLE 5

BIOSTAR MICROTECH INT’L CORP. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31, 2023	As of December 31, 2023	As of December 31, 2023	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2023	December 31, 2022	Shares	%	Carrying Amount
Biostar Microtech Int’L Corp. Biostar Microtech Europe Holding B.V.	Garnet International Corp. Biostar Microtech (U.S.A.) Corp. Biostar Microtech Europe Holding B.V. Immense Wealth International Limited. Biostar Microtech Netherlands B.V.	British Virgin Islands USA Netherlands Samoa Netherlands	Manufacture and sale of mainboard, industrial computers, and display card Manufacture and sale of mainboard, industrial computers, and display card Investment business Investment business Manufacture and sale of mainboard, industrial computers, and display card	$ 73,463 (US$ 2,400) 93,990 (US$ 3,000) 47,270 (EUR 1,000) 20,659 (US$ 700) 47,270 (EUR 1,000)	$ 327,523 (US$ 10,700) 93,990 (US$ 3,000) 47,270 (EUR 1,000) 20,659 (US$ 700) 47,270 (EUR 1,000)	2,400 3,000 10 1,000 10	100 100 100 100 100	$ 30,300 2,832 55,759 9,411 57,900 (US$ 1,904)	$ 101 (13,984) (1,494) (211) (1,494) (US$ 47)	$ 101 372 8,812 (211) (1,494) (US$ 47)	Subsidiary Subsidiary Subsidiary Subsidiary Sub-subsidiary

Note: The share of profit or loss among investee companies and the net worth between investor and investee companies under the equity method are all eliminated at the time the consolidated financial statements are prepared.

60 -

TABLE 6

BIOSTAR MICROTECH INT’L CORP. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

The name of investee company, main business and products, paid-in capital, investment method, remittance of funds, shareholding ratio, investment gain (loss), carrying amount, and repatriation of investment income of mainland China.

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2023	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2023	Net Income (Loss) of the Investee (Note 1)	% Ownership of Direct or Indirect Investment	Investment Profit (Loss)	Carrying Amount as of December 31, 2023	Accumulated Repatriation of Investment Income as of December 31, 2023
					Outward	Inward
Dong Guan Biomax Technology Co., Ltd. Hong Ren Yi Medical Equipment (Dongguan) Co., Ltd.	Electronic technology consulting services Manufacture and sale of medical supplies and equipments	US$ 125 (RMB 764) RMB 4,500	Indirect investment in mainland China through companies registered in a third region. (Notes 2 and 3) Indirect investment in mainland China through companies registered in a third region. (Note 4)	$ - 20,043 (RMB 4,500)	$ - -	$ - -	$ - 20,043 (RMB 4,500)	$ (151) (RMB -34) (17) (RMB -3)	100 -	$ (151) (RMB -34) (17) (RMB -3) (Note 8)	$ 2,820 (RMB 651) -	$ - -

Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2021	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
US$655 (RMB4,500) NT$20,043	US$780 (RMB5,264) NT$23,950 (Note 5)	60% of net equity is $1,287,323 (Note 6)

Note 1: Calculated based on the financial statement audited by the accountant in the same period and shareholding percentage.

Note 2: Investment capital are from the investment in the third region, not remitted from Taiwan.

Note 3: The investment company in the third region is Garnet International Corp.

Note 4: The investment company in the third region is Immense Wealth International Limited.

Note 5: The investment amount approved by the Investment Review Committee of the Ministry of Economic Affairs is converted from the exchange rate of NT$30.705 to US$1 on December 31, 2023.

Note 6: Calculated according to the third point of the Ministry of Economic Affairs’ review principles for investment and technical cooperation in the mainland, the higher one between the company’s net income and the combined net income is used.

Note 7: All transactions listed in the table have been eliminated in the preparation of the consolidated statements.

Note 8: Hong Ren Ren Medical Equipment (Dongguan) Co., Ltd. completed the deregistration registration on March 22, 2023, and the remaining liquidation funds were remitted back to Immense Wealth International Limited on October 17, 2023.

61 -

AI assistant

BIOSTAR — Audit Report / Information 2023

52055_rns_2023-11-14_abdb9c88-e130-4523-97af-f5089687087e.pdf

Biostar Microtech Int'L Corp. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Other Matter

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

BIOSTAR MICROTECH INT'L CORP. AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

Effective Date New IFRSs Announced by IASB (Note 1)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

e. Inventories

f. Investments in subsidiaries

1) Financial assets

2) Financial liabilities

k. Provisions

1) Onerous contracts

m. Leases

1) The Group as lessor

2) The Group as lessee

n. Employee benefits

1) Short-term employee benefits

2) Retirement benefits

o. Taxation

1) Current tax

2) Deferred tax

3) Current and deferred taxes

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Key Sources of Estimation Uncertainty

Write-down of inventories

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in Debt Instruments at FVTOCI

9. FINANCIAL ASSETS AT AMORTIZED COST

10. TRADE RECEIVABLES AND OTHER RECEIVABLES

a. Trade receivables

b. Other receivables

11. INVENTORIES

12. SUBSIDIARIES

13. PROPERTY, PLANT AND EQUIPMENT

14. LEASE ARRANGEMENTS

a. Right-of-use assets

b. Lease liabilities

c. Other lease information

15. INVESTMENT PROPERTIES

16. OTHER ASSETS

17. NOTES PAYABLE AND TRADE PAYABLES

18. OTHER LIABILITIES

19. PROVISIONS

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

b. Defined benefit plans

21. EQUITY

Ordinary shares

b. Capital surplus

c. Retained earnings and dividends policy

e. Other equity items

22. REVENUE

BIOSTAR Audit Report / Information 2023